Financial Creditor's Petition Admitted, Corporate Debtor under Moratorium

The petition for initiating the Corporate Insolvency Resolution Process against a Corporate Debtor by a Financial Creditor was admitted by the Tribunal. A moratorium under Section 14 of the Insolvency & Bankruptcy Code was imposed, protecting the Corporate Debtor from actions. An interim resolution professional was appointed to manage the process, with specific reporting requirements outlined. The Tribunal found merit in the unpaid claim of the Financial Creditor, leading to the initiation of insolvency proceedings.

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Issues:
Initiation of Corporate Insolvency Resolution Process based on financial creditor's claim.

Analysis:
The judgment concerns a petition filed for initiating the Corporate Insolvency Resolution Process against a Corporate Debtor by a petitioner claiming to be a Financial Creditor. The petitioner had booked an apartment in a project developed by the Corporate Debtor but due to non-commencement of construction leading to project cancellation by Noida Authority, the petitioner sought a refund of the amount paid. The petitioner issued 4 cheques towards return of payment, which were not deposited as the Corporate Debtor promised to settle the liability through RTGS. Since the amounts remained unpaid, the petitioner claimed to be a Financial Creditor and sought initiation of the insolvency process.

The respondents were duly served but did not appear, leading to ex-parte proceedings. The Counsel for the Financial Creditor argued that the right to seek payment constitutes a claim under the Insolvency & Bankruptcy Code, 2016, encompassing various types of rights to payment or remedies for breach of contract. The petition proposed an interim resolution professional who consented to the appointment and fulfilled the necessary requirements.

The Tribunal found merit in the petition, acknowledging the unpaid claim of the Financial Creditor against the Corporate Debtor. Consequently, the petition was admitted, and a moratorium under Section 14 of the Code was imposed, restraining various actions against the Corporate Debtor. The proposed interim resolution professional was confirmed and directed to fulfill statutory obligations, with a reporting deadline set. The order was to be communicated to relevant parties, and the case was scheduled for the IRP's report on a specified date.

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