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2022 (4) TMI 996 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - Non-performing asset - existence of debt and dispute or not - HELD THAT - This Application was filed on 19.10.2021 and notice was issued to the parties. When the matter was listed for admission on 30th November 2021 Adv. Peer Mohammed Khan appeared through Video Conferencing and stated that he represents the Corporate Debtor and has undertaken to file the vakkalath. He has also taken time to file a reply statement. The matter was adjourned to 20th December 2021. However, none appeared for the Respondents and no vakkalath has been filed. Thus, this Tribunal directed the Financial Creditor to issue fresh notice to the Corporate Debtor and the matter was adjourned to 19th January 2022 - The learned counsel for the Financial Creditor stated that the proof of publication has already been filed by him. However, the Corporate Debtor did not appear, and hence the Corporate Debtor was set ex-parte vide order dated 08th March 2022. In the absence of Corporate Debtor, reliance placed on Section 5 (7) and (8) of Insolvency and Bankruptcy Code, 2016 to satisfy the definition of Financial Creditor and Financial Debt. Further, reliance placed on Section 7 of the Code to determine whether the process for initiation of CIRP was followed by the Operational Creditor or not. It also appears that the claim amount in this application is ₹ 1,08,58,311.16/- which satisfies the minimum requirement of ₹ 1 Crore to file an Insolvency Application. Therefore, in all counts, the instant Application deserves to be admitted. Application admitted - moratorium declared.
Issues:
Initiation of Corporate Insolvency Resolution Process under Section 7 of I&B Code, 2016 by Financial Creditor against Corporate Debtor M/s. S.D. Pharmacy P. Ltd. Analysis: The Financial Creditor, Dhanlaxmi Bank Ltd., filed CP (IB)/34/KOB/2021 under Section 7 of the I&B Code, 2016 against the Corporate Debtor, M/s. S.D. Pharmacy P. Ltd., citing default in repayment of credit facilities. The Corporate Debtor's account was classified as a Non-Performing Asset (NPA) on 30.04.2019, with an outstanding amount of &8377; 1,08,58,311.16, including principal and interest. The Corporate Debtor, engaged in manufacturing and distribution of Ayurvedic Medicines, was granted a cash credit facility of &8377; 80,00,000, secured by land, factory, and other assets. Despite multiple notices and opportunities, the Corporate Debtor failed to repay the dues, leading to the Financial Creditor initiating proceedings under the SARFAESI Act, 2002. The Financial Creditor's application was filed on 19.10.2021, and after several adjournments due to non-appearance of the Corporate Debtor, the Tribunal proceeded ex-parte on 08.03.2022. Relying on relevant sections of the I&B Code, the Tribunal found the application admissible, meeting the minimum requirement of &8377; 1 Crore for insolvency filing. The Tribunal also approved the appointment of an Insolvency Professional, Shri. Jasin Jose, with no pending disciplinary proceedings, to oversee the Corporate Insolvency Resolution Process (CIRP). The Tribunal issued an order admitting the application, imposing a moratorium under Section 14 of the I&B Code, 2016, preventing legal actions against the Corporate Debtor's assets during the CIRP. Essential goods or services supply to the Corporate Debtor should continue during the moratorium. The order of moratorium remains effective until the completion of CIRP or liquidation approval. The public announcement of CIRP and appointment of the Interim Resolution Professional were also mandated by the Tribunal. The Financial Creditor was directed to deposit &8377; 2,00,000 with the Interim Resolution Professional to initiate proceedings. The management of the Corporate Debtor now vests in the IRP, with obligations for officers and managers to cooperate. The Registry was instructed to communicate the order promptly to all relevant parties. In conclusion, the Tribunal's detailed judgment admitted the application for initiating CIRP against the Corporate Debtor, setting forth necessary steps and safeguards in line with the I&B Code, 2016, to facilitate the resolution process effectively.
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