Financial Creditor's Petition Admitted for Loan Default: Corporate Insolvency Resolution Process Initiated

The court admitted the petition filed by the Financial Creditor under Section 7 of the Insolvency and Bankruptcy Code, 2016, against the Corporate Debtor for defaulting on a loan amounting to INR 2944,57,70,156.22. An Interim Resolution Professional (IRP) was appointed, a moratorium was declared, and the Corporate Insolvency Resolution Process (CIRP) was ordered to be completed within 180 days from the date of the order.

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Issues Involved:
1. Default in repayment of loan by the Corporate Debtor.
2. Admissibility of the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016.
3. Appointment of Interim Resolution Professional (IRP).
4. Declaration of moratorium.

Detailed Analysis:

1. Default in Repayment of Loan by the Corporate Debtor:
The Corporate Debtor, M/s. Athena Chhattisgarh Power Limited, availed various loan facilities from the Financial Creditor, State Bank of India (SBI), amounting to INR 2150 Crore under a Common Term Loan Agreement dated 30.01.2011, which was later amended. The loans were disbursed in multiple tranches, with the last tranche disbursed on 29.01.2016. The Corporate Debtor defaulted in repayment, with the total amount in default as on 31.08.2018 being INR 2944,57,70,156.22. Several notices were sent to the Corporate Debtor by the Financial Creditor for appearance and submissions, but there was no representation by the Corporate Debtor or its Directors.

2. Admissibility of the Petition Under Section 7 of the Insolvency and Bankruptcy Code, 2016:
The petition was filed by SBI under Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. The Financial Creditor provided documentary evidence, including sanction letters, loan documents, guarantee agreements, and copies of entries in Bankers' Books as per the Bankers' Books Evidence Act, 1891, to prove the default. The Adjudicating Authority was satisfied with the submissions and evidence provided by the Financial Creditor, fulfilling all requirements under the Insolvency and Bankruptcy Code.

3. Appointment of Interim Resolution Professional (IRP):
The Financial Creditor proposed Mr. C. Bala Mouli as the Interim Resolution Professional (IRP), and his name was reflected on the IBBI website with no disciplinary proceedings pending against him. The Adjudicating Authority appointed Mr. C. Bala Mouli as the IRP and directed him to take charge of the Corporate Debtor's management immediately. The IRP was also directed to cause a public announcement within three days from receiving the order and call for submissions of claims as prescribed.

4. Declaration of Moratorium:
A moratorium was declared effective from the date of the order until the completion of the Corporate Insolvency Resolution Process (CIRP). The moratorium prohibits:
a) The institution or continuation of suits or proceedings against the Corporate Debtor.
b) Transferring, encumbering, alienating, or disposing of any assets of the Corporate Debtor.
c) Any action to foreclose, recover, or enforce any security interest created by the Corporate Debtor.
d) The recovery of any property by an owner or lessor where such property is occupied by the Corporate Debtor.

The supply of essential goods or services to the Corporate Debtor shall not be terminated or suspended during the moratorium period. The IRP must comply with Sections 13(2), 15, 17, and 18 of the Code, and the directors, promoters, or any person associated with the management of the Corporate Debtor are expected to extend all assistance and cooperation to the IRP.

Conclusion:
The petition was admitted, and the commencement of the Corporate Insolvency Resolution Process against M/s. Athena Chhattisgarh Power Limited was ordered, to be completed within 180 days from the date of the order. The Registry was directed to communicate the order to the Financial Creditor and the Corporate Debtor.

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