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2019 (11) TMI 447 - Tri - IBCMaintainability of application - initiation of CIRP - Corporate Debtor failed to make payment of loan - Dates of default are 20.10.2018 and 16.01.2019. The Petition was filed on 03.05.2019 - amount is due and payable by the Corporate Debtor to the Financial Creditor - HELD THAT - The Hon ble Supreme Court in the matter of Innoventive Industries Limited V. ICICI Bank Anr. 2017 (9) TMI 58 - SUPREME COURT , has held that the provisions of section 7 become applicable as soon as financial debt is established and there is an existence of a default. The Hon ble court hadobserved that the moment the Adjudicating Authority is satisfied that a default inrepayment of debt had occurred, the process of insolvency is to be triggered unless the application is incomplete. This Petition reveals that there is a debt as defined in section 3(11) of IBC; there is a default within the meaning of section 3(12) of IBC; the application of the Financial Creditor is complete; an amount of more than Rupees One Lakh is due and payable and in default and no disciplinary proceedings are pending against the proposed resolution professional. Therefore, this petition deserves to be admitted. Petition admitted - moratorium declared.
Issues:
1. Initiation of Corporate Insolvency Resolution Process under section 7 of the Insolvency & Bankruptcy Code, 2016 (IBC) by a Financial Creditor against a Corporate Debtor for non-payment. 2. Examination of debt details and default by the Financial Creditor. 3. Arguments presented by the Corporate Debtor regarding financial distress and inability to repay. 4. Legal analysis of the petition, including debt, default, and completeness of the application. 5. Appointment of an Interim Resolution Professional and declaration of moratorium under section 14 of the IBC. Issue 1: Initiation of Corporate Insolvency Resolution Process The Company Petition was filed by the Financial Creditor, American Express Banking Corp., against the Corporate Debtor, Dhanvantari Milk Products Private Limited, under section 7 of the IBC due to non-payment of the principal amount of &8377; 44,40,859.50. The petition was filed on the grounds of default occurring on 20.10.2018 and 16.01.2019. Issue 2: Examination of Debt Details and Default The Financial Creditor detailed the outstanding debt of &8377; 44,40,859.50, specifying amounts related to two card numbers and their respective default dates. The Corporate Debtor was stated to have defaulted on repayment, with the Financial Creditor waiving off the interest component. The Corporate Debtor, in response, cited market conditions affecting its financial stability and liquidity. Issue 3: Corporate Debtor's Financial Distress The Corporate Debtor explained its financial challenges, including reduced demand, market price fluctuations, and delays in receiving government subsidies. It acknowledged the debt but expressed an inability to commit to repayment due to financial distress and lack of funds. Issue 4: Legal Analysis of the Petition The Tribunal analyzed the petition, finding the existence of debt and default as defined in the IBC. The completeness of the Financial Creditor's application, the amount due, and the absence of pending disciplinary proceedings against the proposed resolution professional were considered for admission of the petition. Issue 5: Appointment of Interim Resolution Professional and Moratorium The Tribunal admitted the petition, declared a moratorium under section 14 of the IBC, and appointed an Interim Resolution Professional. The moratorium included restrictions on legal actions against the Corporate Debtor and asset transfers. Essential supplies were protected during the moratorium, and the management vested in the IRP/RP for the Corporate Debtor's resolution process. The Operational Creditor was directed to deposit funds for public notice expenses, and necessary communications were ordered to relevant parties and authorities.
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