IDFC First Bank's Petition Against Ashapura Intimates Fashion Admitted Under Insolvency Code

The petition filed by IDFC First Bank Limited against Ashapura Intimates Fashion Limited under Section 7 of the Insolvency & Bankruptcy Code, 2016, due to a total default of &8377; 40,13,35,178 was admitted. A moratorium under Section 14 of the I&B Code was declared. The Corporate Debtor's failure to create and perfect security, leading to demands for repayment, resulted in legal actions by the Financial Creditor. The Corporate Debtor admitted liability, and an Interim Resolution Professional was appointed to initiate the corporate insolvency resolution process.

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Issues:
1. Petition under Section 7 of Insolvency & Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process (CIRP).
2. Default in repayment by the Corporate Debtor leading to the financial creditor's petition.
3. Failure of the Corporate Debtor to create and perfect security as required.
4. Legal actions taken by the Financial Creditor against the Corporate Debtor.
5. Admission of liability by the Corporate Debtor.
6. Appointment of an Interim Resolution Professional.

Issue 1: Petition under Section 7 of I&B Code for CIRP
The petition was filed by IDFC First Bank Limited against Ashapura Intimates Fashion Limited under Section 7 of the Insolvency & Bankruptcy Code, 2016, due to a total default of &8377; 40,13,35,178 as on 20.11.2018. The petition was admitted, and a moratorium under Section 14 of the I&B Code was declared.

Issue 2: Default in Repayment
The Corporate Debtor failed to create and perfect security in favor of the Financial Creditor, leading to demands for repayment. Despite multiple notices and demands, the Corporate Debtor did not make necessary payments, resulting in the Financial Creditor recalling the entire loan and invoking guarantees.

Issue 3: Failure to Create Security
The Corporate Debtor did not create security within the stipulated period, as required under the loan agreement. The Financial Creditor demanded repayment due to the failure to create security, and subsequent legal actions were taken against the Corporate Debtor and the guarantors.

Issue 4: Legal Actions Taken
The Financial Creditor took legal actions, including recalling the loan, demanding repayment, and invoking guarantees against the Corporate Debtor and the guarantors. The Corporate Debtor's failure to respond or make payments led to the initiation of insolvency proceedings.

Issue 5: Admission of Liability
The Corporate Debtor admitted its liability in a letter to the State Bank of India, confirming the financial debt taken from the Financial Creditor. The CRILC report and other documents supported the existence of the debt and default by the Corporate Debtor.

Issue 6: Appointment of Interim Resolution Professional
Mr. Kashyap Vaidya was proposed as the Interim Resolution Professional to carry out the functions under the I&B Code. The application under Section 7 of the I&B Code was deemed complete, and the petition for initiating the corporate insolvency resolution process was admitted.

This comprehensive analysis covers the key issues involved in the judgment, detailing the events leading to the initiation of insolvency proceedings against the Corporate Debtor.

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