Tribunal Admits Insolvency Application, Initiates Resolution Process and Declares Moratorium

The Tribunal admitted the application under Section 7 of the Insolvency & Bankruptcy Code, initiating Corporate Insolvency Resolution Process against the Corporate Debtor. A moratorium was declared under Section 14 of the Code, appointing an Interim Resolution Professional to oversee the resolution process. The Tribunal found the debt and default established by the Applicant's documents, rejecting the Corporate Debtor's objections of pre-existing disputes. The application was deemed admissible, confirming the due and payable debt by the Corporate Debtor to the Applicant.

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Issues Involved:
Application under section 7 of Insolvency & Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process (CIRP) against a Corporate Debtor.

Detailed Analysis:

1. Admission of Application (Para 1-3):
The application CP 2242/2019 was filed by a Financial Creditor against the Corporate Debtor under section 7 of the Insolvency & Bankruptcy Code. The application was admitted by the Tribunal on 19.09.2019. The Director of the Applicant was duly authorized to file the application.

2. Debt and Default (Para 4-6):
The Applicant extended an unsecured loan to the Corporate Debtor, which was repayable on demand with interest. The Applicant claimed an amount due and outstanding, supported by documents like cheques, bank certificates, and ledger entries showing default in payment of interest by the Corporate Debtor.

3. Dispute and Default (Para 11):
The Corporate Debtor raised objections citing pre-existing disputes and instructions to stop paying interest. However, the Tribunal found no valid dispute as the debt and default were established by the Applicant's documents. Citing a Supreme Court decision, the Tribunal held that even disputed debt falls under section 7 of the I&B Code.

4. Admission of Application (Para 12-15):
The Tribunal confirmed the due and payable debt by the Corporate Debtor to the Applicant. The application filed by the Financial Creditor was found to be in proper form and complete. The proposed Interim Resolution Professional was also approved, and the application for initiation of CIRP was deemed admissible.

5. Order and Moratorium (Para 16):
The Tribunal admitted the petition under Section 7 of the I&B Code, initiating the Corporate Insolvency Resolution Process against the Corporate Debtor. A moratorium was declared under section 14 of the I&B Code, prohibiting various actions against the Corporate Debtor. An Interim Resolution Professional was appointed to oversee the resolution process.

This detailed analysis covers the key aspects of the Tribunal's judgment regarding the application for initiating CIRP against the Corporate Debtor under the Insolvency & Bankruptcy Code, 2016.

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