Tribunal admits Financial Creditor's petition for insolvency due to Corporate Debtor's default

The Tribunal admitted the petition filed by the Financial Creditor under Section 7 of the Insolvency & Bankruptcy Code, 2016, due to the Corporate Debtor's default in repaying a loan amount. The evidence presented by the Creditor established the debt and default, leading to the initiation of the Corporate Insolvency Resolution Process. The Tribunal declared a moratorium, appointed an Interim Resolution Professional, and directed the public announcement of the insolvency resolution process, effective until the completion of the CIRP or approval of a resolution plan.

---

---

Issues:
1. Default in loan repayment by the Corporate Debtor leading to the initiation of Corporate Insolvency Resolution Process (CIRP) under Section 7 of the Insolvency & Bankruptcy Code, 2016.

Analysis:
The Financial Creditor filed a Company Petition under Section 7 of the Insolvency & Bankruptcy Code, 2016, stating that the Corporate Debtor defaulted in repaying a loan amount of Rs. 7,90,71,611 as of 06.03.2018, seeking initiation of CIRP against the Debtor. The Creditor detailed the loan agreement dated 08.10.2014, where the Debtor received funds from three separate accounts at an interest rate of 14% per annum. Various documents, including the Loan Agreement, Memorandum of Title Deeds, Pledge Agreement, and financial records, were submitted to support the claim of default. The Debtor failed to repay the principal and interest amounts since 31.05.2016, leading to the initiation of the CIRP on 24.04.2018. The Creditor provided evidence of the charge created on assets, balance sheets, notes, and statement of accounts to substantiate the claim.

Decision:
The Tribunal found no defense from the Debtor's side and acknowledged the evidence presented by the Creditor, establishing the existence of debt and default. As a result, the petition was deemed fit for admission. The Tribunal declared a moratorium, prohibiting various actions against the Corporate Debtor, appointed an Interim Resolution Professional, and directed the public announcement of the insolvency resolution process. The order of moratorium was effective from 20.03.2019 until the completion of the CIRP or approval of a resolution plan. The Registry was instructed to communicate the order to the parties involved promptly.

This detailed analysis outlines the legal proceedings, evidence presented, and the Tribunal's decision regarding the default in loan repayment by the Corporate Debtor, leading to the initiation of the Corporate Insolvency Resolution Process under the Insolvency & Bankruptcy Code, 2016.

---