2022 (8) TMI 504 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence od debt and dispute or not - HELD THAT - The applicant clearly comes within the definition of Financial Creditor. The material placed on record as state confirms that respondent has debt due and has committed default in repayment of the outstanding financial debt. On a perusal of Form-I filed under Section 7 of the Code read with Rule 4 of the Rules shows that the form is complete and there is no infirmity in the same. It is also seen that there is no disciplinary proceeding pending against the proposed Interim Resolution Professional. The present application is complete in all respect. The applicant financial creditor is entitled to move the application against the corporate debtor in view of admitted outstanding financial debt and default of the same by the corporate debtor. The default in repayment of the financial debt is not refuted by the Corporate Debtor. In terms of Section 7(5)(a) of the Code, the present application is hereby, admitted - Moratorium declared.

Issues:
1. Application under Section 7 of the Insolvency and Bankruptcy Code, 2016 for Corporate Insolvency Resolution Process.
2. Territorial jurisdiction of the Tribunal over the NCT of Delhi.
3. Default in repayment by the Corporate Debtor.
4. Appointment of Interim Resolution Professional.
5. Documents submitted by the applicant.
6. Admission of the application under Section 7.
7. Declaration of moratorium.
8. Public announcement by the Interim Resolution Professional.
9. Deposit required by the Financial Creditor.
10. Functions and obligations of the Interim Resolution Professional.

Detailed Analysis:

1. The applicant, CVR Holdings Private Limited, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking Corporate Insolvency Resolution Process against the respondent, M/s. Intense Fitness and Spa Private Limited, for default in repayment of a financial facility.

2. The Tribunal, having territorial jurisdiction over the NCT of Delhi, acknowledged the location of the registered office of the respondent Corporate Debtor and its implications on the adjudicating authority.

3. The applicant claimed that the respondent had defaulted on repayment of a significant sum, leading to the initiation of the insolvency resolution process. The respondent's replies highlighted the impact of COVID-19 and lockdown restrictions on their ability to repay the debt.

4. The Tribunal approved the appointment of Mr. Jagdish Singh Nain as the Interim Resolution Professional, meeting the requirements of Section 7(3)(b) of the Code, with no pending disciplinary proceedings against him.

5. Various documents submitted by the applicant, including agreements and correspondences, were reviewed to substantiate the claim of default by the respondent.

6. After thorough examination, the Tribunal found the application complete and admitted it under Section 7, considering the admitted outstanding financial debt and default by the Corporate Debtor.

7. A moratorium was declared under Section 14 of the Code, imposing restrictions on legal actions against the Corporate Debtor and asset transfers, among other prohibitions.

8. The Interim Resolution Professional was directed to make a public announcement regarding the admission of the application, as mandated by Section 13(2) of the Code.

9. The Financial Creditor was instructed to deposit a specified amount with the Interim Resolution Professional to cover expenses related to the resolution process.

10. The obligations and functions of the Interim Resolution Professional were outlined, emphasizing compliance with the Code, Rules, and Regulations, along with the cooperation expected from all involved parties in managing the affairs of the Corporate Debtor.

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