2021 (4) TMI 219 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - Financial Creditors - HELD THAT - The Corporate Debtor admitted the fact that the Financial Debt of more than ₹ 1,00,000/ - (as per Sec.4 of IBC, 2016) is due and payable by them to the Financial Creditor and that they have committed default in paying the same. Application admitted - moratorium declared.

Summary

Issues:
1. Application filed under section 7 of IBC, 2016 by Financial Creditor against Corporate Debtor for default on Financial Debt.
2. Alleged inconsistencies in the claim amount and evidence submitted by the Financial Creditor.
3. Corporate Debtor's admission of debt and default through correspondence.
4. Decision on admitting the Corporate Debtor in CIRP and appointment of IRP.

Issue 1:
The Financial Creditor filed an application under section 7 of IBC, 2016 against the Corporate Debtor, alleging default on a Corporate Loan of &8377; 2.00 crores, repayable in 8 installments with interest. The Corporate Debtor failed to fulfill the loan obligations, leading to the application for Corporate Insolvency Resolution Process (CIRP).

Issue 2:
The Corporate Debtor raised concerns about inconsistencies in the claim amount and evidence submitted by the Financial Creditor. The Corporate Debtor argued that the Petitioner failed to provide proper records of default with an information utility, and except for an alleged unregistered loan agreement, no substantial evidence was presented.

Issue 3:
The Corporate Debtor's admission of debt and default was evident through correspondence where they acknowledged the debt, sought additional time for repayment, and cited financial constraints. The Corporate Debtor's letters confirmed the default on the financial debt, establishing the grounds for initiating CIRP.

Issue 4:
After reviewing the evidence and correspondence, the Tribunal admitted the Corporate Debtor in CIRP under section 7 of IBC, 2016. The Tribunal ordered the commencement of the Corporate Insolvency Resolution Process, appointed an Interim Resolution Professional (IRP), declared a moratorium, and directed compliance with various provisions of the Code. The decision aimed at resolving the financial distress and managing the operations of the Corporate Debtor effectively.

This detailed analysis covers the key issues addressed in the judgment, highlighting the legal proceedings and decisions made by the Tribunal in the case.