2022 (3) TMI 1171 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - time limitation - HELD THAT - Existence of debt is above One Crore - Debt is due, payable and defaulted; Credit Information reports as generated from Trans Union CIBIL has been filed. Application has been filed within the limitation period, as the date of default is 27.12.2018, when the Application under Section 7 of the IBC has been filed by the FC i.e. Indian Bank on 23.09.2021; Debt Liability has been acknowledged on 22.03.2016, 24.01.2017 and 04.12.2018 - Copy of the Application filed before this Bench has been sent to the Corporate Debtor, though returned but the notice was published in two News Papers for the appearance of the Respondent and the application filed by the Applicant Bank under Section 7 of the IBC is found to be complete for the purpose of initiation of Corporate Insolvency Resolution Process in respect of the Corporate Debtor; Hence, the present IB Petition is admitted. Petition admitted - moratorium declared.

Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 7 of the Insolvency and Bankruptcy Code, 2016.
2. Default in repayment of a Term Loan by the Corporate Debtor.
3. Classification of the loan account as Non-Performing Asset (NPA).
4. Submission of evidence and documentation by the Financial Creditor.
5. Non-appearance of the Corporate Debtor despite notices.
6. Appointment of Interim Resolution Professional (IRP).
7. Declaration of moratorium under Sections 13 and 14 of the Insolvency and Bankruptcy Code, 2016.

Detailed Analysis:

1. Initiation of Corporate Insolvency Resolution Process (CIRP):
The petition was filed by the Financial Creditor (Indian Bank) under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking the initiation of CIRP against the Corporate Debtor (M/S Guwahati Construction Private Limited). The application was found to be complete and within the limitation period, with the debt acknowledged by the Corporate Debtor on multiple occasions.

2. Default in Repayment of a Term Loan:
The Corporate Debtor had defaulted on a Term Loan amounting to ?3,41,41,590.00 as of 23.06.2021. The loan account was declared NPA on 27.12.2018. Despite multiple reminders and notices from the Financial Creditor, the Corporate Debtor failed to regularize the loan account.

3. Classification of Loan Account as Non-Performing Asset (NPA):
The loan account was classified as NPA on 26.08.2017, and despite a renewal of the credit facility on 21.10.2017, the Corporate Debtor defaulted again, leading to the account being declared NPA on 27.12.2018.

4. Submission of Evidence and Documentation by the Financial Creditor:
The Financial Creditor submitted comprehensive documentation, including loan agreements, mortgage details, hypothecation agreements, and acknowledgments of debt. These documents were provided to substantiate the existence of financial debt and default.

5. Non-appearance of the Corporate Debtor Despite Notices:
The Corporate Debtor did not appear in the proceedings despite multiple notices, including publication in newspapers. The Tribunal proceeded ex-parte and reserved the order after hearing the Counsel for the Petitioner.

6. Appointment of Interim Resolution Professional (IRP):
The Tribunal appointed Mr. Purshotam Gaggar as the Interim Resolution Professional (IRP). The IRP was directed to make a public announcement of the moratorium and to adhere to the duties and timelines stipulated under the Insolvency and Bankruptcy Code.

7. Declaration of Moratorium:
Upon admission of the petition, the Tribunal declared a moratorium effective from the date of the order. The moratorium prohibits:
- Institution or continuation of suits or proceedings against the Corporate Debtor.
- Transferring, encumbering, or disposing of any assets of the Corporate Debtor.
- Foreclosure or enforcement of any security interest.
- Recovery of any property by an owner or lessor.

The moratorium ensures the preservation of the Corporate Debtor's assets during the CIRP.

Conclusion:
The Tribunal admitted the petition for initiating CIRP against the Corporate Debtor under Section 7 of the Insolvency and Bankruptcy Code, 2016. The moratorium was declared, and an IRP was appointed to manage the process. The commencement of the CIRP was effective from the date of the order, 24/03/2022. The Tribunal emphasized the importance of finding a viable resolution plan for the Corporate Debtor, considering the competitive market conditions.

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