2022 (9) TMI 137 - 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 - The Financial Creditor has satisfactorily established the existence of debt of Rs. 15,00,000/- and default of the outstanding dues aggregating to Rs. 17,84,219/- as evidenced by the records of the Financial Statements attached to this Petition. The date of default is 16th January 2017 and this Petition was filed on 8th November 2019 therefore it is noted that the Petition is not barred by Limitation. The Financial Creditor has thus successfully demonstrated and proved the debt and default in this case. Therefore, this Bench is of the view that that this Petition satisfies all the necessary requirements for admission under Section 7 of the Code. Petition admitted - moratorium declared.

Summary

Issues:
1. Initiation of Corporate Insolvency Resolution Process (CIRP) against Corporate Debtor for default in payment to Financial Creditor.

Detailed Analysis:
1. The Financial Creditor filed a Company Petition seeking to initiate CIRP against the Corporate Debtor under Section 7 of the Insolvency and Bankruptcy Code, 2016, alleging default in payment of Rs. 17,84,219 along with interest. The debt arose from a short-term loan agreement dated 20th July 2011, where the Corporate Debtor failed to repay the loan amount and created security over an immovable property. Despite various negotiations and acknowledgments of outstanding amounts, the Corporate Debtor failed to repay the debt, leading to the initiation of the CIRP.

2. The Tribunal examined the evidence presented, including the Loan Agreement, Ledger Accounts, and correspondence between the parties. The Financial Creditor successfully established the existence of the debt and default by the Corporate Debtor. The talks regarding the settlement and allotment of a new property broke down, and there was no repayment of the outstanding amount till the date of the petition. The Tribunal found the debt and default to be proven beyond doubt, satisfying the requirements for admission under Section 7 of the Code.

3. Consequently, the Tribunal admitted the Company Petition and ordered the initiation of CIRP against the Corporate Debtor. Mr. Kairav Trivedi was appointed as the Interim Resolution Professional, and the Financial Creditor was directed to deposit an amount towards the initial CIRP cost. Various prohibitions and directions were issued, including the moratorium period, management vesting in the IRP/RP, and public announcement of the CIRP process. The Tribunal directed the Registry to communicate the order to both parties and the IRP promptly.

This detailed analysis outlines the legal proceedings, evidence, and findings leading to the admission of the Company Petition and the initiation of CIRP against the Corporate Debtor based on the default in payment to the Financial Creditor.