Tribunal grants insolvency petition against corporate debtor for loan default.

The Tribunal admitted the petition under Section 7 of The Insolvency and Bankruptcy Code, 2016, filed by operational creditors against the corporate debtor for default in loan repayment. The objections raised by the respondent on limitation and maintainability were dismissed. The Tribunal found evidence of default in repayment of financial debt by the corporate debtor and appointed an interim resolution professional, declaring a moratorium. The moratorium was to continue until the completion of the insolvency resolution process or approval of a resolution plan, with directions for the supply of goods and services to the debtor.

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Issues:
1. Application under section 7 of The Insolvency and Bankruptcy Code, 2016 seeking reliefs under Section 7(5)(a) and Section 13(1)(a)(b)(c) of the Code.
2. Objection raised by the respondent on the grounds of limitation and maintainability of the joint petition.
3. Existence of default in repayment of financial debt by the corporate debtor.
4. Appointment of an interim resolution professional and declaration of moratorium.

Issue 1: Application under section 7 of The Insolvency and Bankruptcy Code, 2016
The petition was filed by operational creditors seeking reliefs under Section 7 of The Insolvency and Bankruptcy Code, 2016, for default in repayment of loans by the respondent corporate debtor. The loans had matured on 30.09.2017, with the corporate debtor being in default of a significant amount, including interest. The petitioners submitted various documents supporting their claim, including demand promissory notes and correspondence confirming the outstanding loans.

Issue 2: Objection raised by the respondent
The respondent raised objections on the grounds of limitation and maintainability of the joint petition filed by the two operational creditors. The Tribunal found that the objection of limitation was not sustainable as the demand promissory notes clearly outlined the repayment terms, and the application was filed within the limitation period. The objection regarding the joint filing of the petition was also dismissed as Section 7 of the Code allows for joint applications by financial creditors.

Issue 3: Existence of default in repayment of financial debt
The Tribunal examined the evidence presented by the petitioners, including acknowledgment of the debt by the corporate debtor in various correspondences. Despite promises and efforts by the respondent to resolve the issue, the loans remained unpaid. The Tribunal concluded that the corporate debtor had defaulted on the financial debt, as evidenced by the acknowledgment of liability and failure to repay the loans.

Issue 4: Appointment of an interim resolution professional and declaration of moratorium
The Tribunal appointed an interim resolution professional and declared a moratorium prohibiting various actions against the corporate debtor. The moratorium was to remain in effect until the completion of the corporate insolvency resolution process or until a resolution plan was approved. The order also directed the continuation of the supply of goods and essential services to the corporate debtor during the moratorium period.

In conclusion, the Tribunal admitted the petition, finding that all requirements under Section 7 of the Code were fulfilled. The order included the appointment of an interim resolution professional, declaration of a moratorium, and directions for communication of the order to the relevant parties.

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