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2022 (2) TMI 564 - 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 - In the present case, the occurrence of default is evidenced by the details furnished by the Petitioner - the Petition filed in the prescribed Form No. 1 is found to be complete. The present Petition being complete and having established the default in payment of the Financial Debt for the default amount is being above ₹ 1,00,000/-, the Petition is admitted in terms of Section 7(5) of the IBC and accordingly, moratorium is declared in terms of Section 14 of the Code - Petition admitted - moratorium declared.
Issues:
1. Initiation of Corporate Insolvency Resolution Process under Section 7 of the Insolvency and Bankruptcy Code, 2016. 2. Default in payment of financial debt by the Corporate Debtor. 3. Appointment of Interim Resolution Professional and constitution of Committee of Creditors. Issue 1: Initiation of Corporate Insolvency Resolution Process under Section 7 of the Insolvency and Bankruptcy Code, 2016 The Petition was filed under Section 7 of the IBC by the Financial Creditor to initiate the Corporate Insolvency Resolution Process against the Corporate Debtor. The Financial Creditor advanced a loan to the Corporate Debtor, which was not repaid, leading to the initiation of the insolvency process. The Corporate Debtor admitted its liability but expressed its inability to repay the debt due to financial difficulties. The Tribunal found the Petition complete and established the default in payment of the financial debt, leading to the admission of the Petition under Section 7(5) of the IBC. Consequently, a moratorium was declared under Section 14 of the Code, imposing various prohibitions on actions against the Corporate Debtor. Issue 2: Default in payment of financial debt by the Corporate Debtor The Financial Creditor provided an unsecured loan to the Corporate Debtor, which was not repaid as per the agreed terms. Despite issuing a demand letter for the principal and interest, the Corporate Debtor failed to make the payment, leading to the initiation of insolvency proceedings. The occurrence of default was evidenced by the details provided by the Petitioner, and the Petition, filed in the prescribed Form No. 1, was found to be complete. The Tribunal admitted the Petition due to the established default amounting to over ?1,00,000, in accordance with Section 7(5) of the IBC. Issue 3: Appointment of Interim Resolution Professional and constitution of Committee of Creditors An Interim Resolution Professional (IRP) was appointed to oversee the insolvency proceedings. Mr. Srinivas Thatikonda was appointed as the IRP, and his credentials were verified to be satisfactory. The IRP was directed to take necessary steps mandated under the IBC, including Sections 15, 17, 18, 20, and 21. The IRP was tasked with collating claims against the Corporate Debtor, determining its financial position, constituting a Committee of Creditors, and filing regular progress reports with the Tribunal. The Tribunal directed the IRP to convene the first meeting of the Committee of Creditors within seven days and submit a report certifying the constitution of the Committee within thirty days from the date of appointment. In conclusion, the Tribunal admitted the Petition for initiating the Corporate Insolvency Resolution Process against the Corporate Debtor due to default in payment of the financial debt. The appointment of the Interim Resolution Professional and constitution of the Committee of Creditors were crucial steps taken to facilitate the resolution process in accordance with the provisions of the Insolvency and Bankruptcy Code, 2016.
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