2019 (11) TMI 1426 - Tri - Insolvency and Bankruptcy

Tribunal Admits Insolvency Application: Corporate Debtor in Default

The tribunal admitted the insolvency application under section 7 of the Insolvency and Bankruptcy Code, 2016, finding the corporate debtor in default of ... Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- This Bench is of the view that the corporate debtor has defaulted in repaying outstanding debt of ₹ 76,64,72,470. The financial creditor counsel has filed proof of service for serving private notice through registered e-mail address of the respondent on October 3, 2019. Moreover, there was no representation on behalf of the corporate debtor side when the matter came up for hearing on September 25, 2019, October 9, 2019, October 15, 2019, October 18, 2019 and November 6, 2019 and they have not responded to the notice sent by the financial creditor and by this Tribunal. It appears that there is no defence on the part of the corporate debtor either to deny or dispute the total outstanding due. Application is admitted - moratorium declared. Issues:Insolvency and bankruptcy application under section 7 of the Insolvency and Bankruptcy Code, 2016 for default in repayment by the corporate debtor.Analysis:1. The financial creditor filed an insolvency application against the corporate debtor for defaulting on a significant amount, leading to the initiation of the corporate insolvency resolution process (CIRP).2. The financial assistance granted by IDBI to the corporate debtor was secured by various assets, and the loan agreement was later transferred to the financial creditor, making them the legal owner entitled to recover the debt.3. The corporate debtor defaulted on a one-time settlement proposal, leading to the financial creditor revoking the settlement and issuing a notice under the Securitisation and Reconstruction of Financial Assets Enforcement of Security Interest Act, 2002.4. Legal proceedings in different Debt Recovery Tribunals resulted in orders favoring the financial creditor, confirming their right to recover the debt from the corporate debtor.5. Detailed dates and events were presented by the financial creditor to establish the existence of debt and default by the corporate debtor.6. The tribunal found that the corporate debtor had indeed defaulted on the outstanding debt, and with no defense or response from the corporate debtor's side, the application was admitted.7. An interim resolution professional was appointed, and a moratorium was declared to prohibit certain actions against the corporate debtor during the insolvency resolution process.8. The order of moratorium was to remain in effect until the completion of the resolution process or liquidation, with specific directions regarding essential services, transactions, and public announcements.9. The appointment of the interim resolution professional was made with specific instructions regarding their responsibilities and compliance with relevant regulations.This detailed analysis of the judgment highlights the legal proceedings, financial transactions, defaults, and the tribunal's decision to admit the insolvency application and appoint an interim resolution professional for further proceedings.