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2022 (3) TMI 864 - 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 - The Corporate Debtor failed to pay the outstanding amount as per the terms and conditions of the sanction letter dated 26.09.2016. Thereafter, the Financial Creditor issued a recall notice, as well as legal notice for the repayment of the outstanding amount but the Corporate Debtor failed to pay the outstanding loan amount - It is also noted that the respondent, Corporate Debtor chose not to appear and contest this application even after sufficient opportunities were given whereby this Adjudicating Authority, vide order dated 26.11.2021, passed an order to proceed ex-parte against the respondent Corporate Debtor. It is established from the record that there is default of amount of ₹ 89,75,40,237.91/-, along with the interest thereon, and the respondent Corporate Debtor has failed to pay the amount even after number of reminders and notice. Moreover, the Corporate debtor had itself admitted the debt of the Financial Creditor vide letter dated 25.08.2018. This application is otherwise complete and defect-free. The amount of default meets the threshold limit as prescribed under Section 4 of the Code and is within the limitation to initiate the CIRP against the Corporate Debtor. Application admitted - moratorium declared.
Issues:
Admission of Corporate Debtor in CIRP under Section 7 of the Insolvency and Bankruptcy Code, 2016. Analysis: The Financial Creditor, a bank, filed an application under Section 7 of the Insolvency and Bankruptcy Code against the Corporate Debtor, a company, for the outstanding amount of ?81,78,54,736.50 as on 31.01.2019. The loan was sanctioned to the borrower Wearit Global Ltd., and the Corporate Debtor provided a corporate guarantee for the loan amount. Despite various notices and reminders, the Corporate Debtor failed to repay the outstanding amount, leading to the initiation of the insolvency resolution process. The Adjudicating Authority noted the default amount of ?89,75,40,237.91, along with interest, and the admission of debt by the Corporate Debtor in a letter dated 25.08.2018. The Corporate Debtor did not contest the application, resulting in an ex-parte order against them. The Authority found the application complete and defect-free, meeting the requirements under Section 4 of the Code to initiate CIRP. Consequently, the Corporate Debtor was admitted into the Corporate Insolvency Resolution Process. The Authority appointed an Interim Resolution Professional (IRP) proposed by the Financial Creditor to manage the CIRP. A moratorium under Section 14 of the Code was imposed, prohibiting suits or proceedings against the Corporate Debtor and restricting actions on its assets. The IRP's duties, including protecting the Corporate Debtor's property value and managing operations, were outlined. The Financial Creditor was directed to pay the IRP fees and expenses, pending approval by the Committee of Creditors (COC). The order directed communication to relevant parties, commencement of CIRP from the order date, and upload of the order on the website. The judgment emphasized the importance of cooperation with the IRP and compliance with legal obligations. The resolution process was set in motion, ensuring continuity of essential services to the Corporate Debtor during the moratorium period.
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