9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (10) TMI 1078 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT - It is apparent from the records that a loan of ₹ 1,70,00,000/- was sanctioned by the Financial Creditor to the Corporate Debtor the repayment of which has been defaulted - Corporate Debtor first defaulted in payment of interest in January 2018. After this, the Financial Creditor requested payment on 15.04.2018. Upon request from the Corporate Debtor, on 03.05.2018 the Financial Creditor extended the period of repayment till the first week of July 2018. Having not received any amount, the Financial Creditor finally recalled its loan on 10.07.2018. As per Part IV of Form I, the date of default is 01.04.2018. The present Petition was filed on 30.01.2021, it is therefore within the limitation period - The Corporate Debtor has also admitted the existence of debt time and again. The only defence taken by the Corporate Debtor is its inability to pay due to the continuous losses incurred by it. The Petition made by the Financial Creditor is complete in all respects as required by law. It clearly shows that the Corporate Debtor is in default of a debt due and payable, and the default is more than the minimum amount as stipulated under section 4(1) of the Code at the relevant time. Therefore, the default stands established and there is no reason to deny the admission of the Petition. Given this, this Adjudicating Authority admits this Petition and orders initiation of CIRP against the Corporate Debtor. Petition admitted - moratorium declared.
Issues Involved:
1. Jurisdiction and constitution of the Special Bench. 2. Petition under section 7 of the Insolvency and Bankruptcy Code, 2016. 3. Default in loan repayment by the Corporate Debtor. 4. Arguments and defenses presented by the Corporate Debtor. 5. Examination of the petition's completeness and adherence to the Code. 6. Admission of the petition and initiation of Corporate Insolvency Resolution Process (CIRP). Issue-wise Detailed Analysis: 1. Jurisdiction and Constitution of the Special Bench: The Special Bench was constituted following the recusal of a member, with approval from the Hon'ble Acting President as per the order dated 06.09.2021. The Bench has jurisdiction to deal with the petition as the Corporate Debtor's registered office is located in Kolkata, West Bengal. 2. Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016: Anit Finvest Private Limited, a financial creditor, filed the petition under section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate CIRP against Riga Sugar Co Ltd. The petition was represented by its directors, duly authorized by a Board Resolution. 3. Default in Loan Repayment by the Corporate Debtor: The Corporate Debtor, a listed public company, defaulted on a loan of ?1,70,00,000/- sanctioned by the Financial Creditor. The loan was initially sanctioned on 15.06.2015, with a repayment term of one year at an interest rate of 12% per annum. The Corporate Debtor first defaulted in January 2018, leading to a series of communications and extensions granted by the Financial Creditor. 4. Arguments and Defenses Presented by the Corporate Debtor: The Corporate Debtor argued that the petition was an arm-twisting tactic and was misusing section 7 of the Code as a substitute for civil recovery. They claimed the petition was time-barred and highlighted their financial struggles, including being declared a Non-Performing Asset (NPA) and incurring continuous losses since 2011. They also mentioned the severe liquidity crunch due to operational constraints imposed by their bankers and the government. 5. Examination of the Petition's Completeness and Adherence to the Code: The Tribunal examined the records and found that the loan default was evident. The petition was filed within the limitation period, as the date of default was 01.04.2018, and the petition was filed on 30.01.2021. The Corporate Debtor's admission of debt and inability to pay due to financial losses were noted. 6. Admission of the Petition and Initiation of CIRP: The Tribunal found the petition complete and in compliance with the law. The default was established, and the petition was admitted. The Tribunal ordered the initiation of CIRP against the Corporate Debtor and appointed Mr. Neeraj Jain as the Interim Resolution Professional (IRP). A moratorium under section 14 of the Code was declared, and public announcement of the CIRP was directed. The Financial Creditor was instructed to deposit ?3,00,000 with the IRP for expenses related to public notice and claims. Order Details: - The petition was admitted, and CIRP against Riga Sugar Co Ltd was initiated. - A moratorium was declared, effective until the completion of CIRP or approval of the resolution plan. - Public announcement of CIRP to be made immediately. - Mr. Neeraj Jain appointed as IRP, subject to valid Authorisation for Assignment. - Management of the Corporate Debtor to vest in the IRP during the CIRP period. - Financial Creditor to deposit ?3,00,000 with the IRP for expenses. - The order to be communicated to relevant parties and compliance reports to be submitted. The matter was scheduled to come up on 22.12.2021 for filing the progress report. A certified copy of the order could be issued upon compliance with requisite formalities.
|
