2021 (12) TMI 1017 - Tri - Insolvency and Bankruptcy

Admission of CIRP Application: Key Points and Appointment of Interim Resolution Professional

The Adjudicating Authority admitted the application for Corporate Insolvency Resolution Process (CIRP) initiation under section 7 of the Insolvency and ... Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - dishonor of cheque which was issued in discharge of the liability - existence of debt and dispute or not - HELD THAT:- It is seen from the petition that the Corporate Debtor has admitted its liability towards Financial Creditor as it has issued the cheques in discharge of its liability and those cheques were dishonoured which clearly shows that there is default in payment. The evidence placed by the financial creditor is sufficient to establish the existence of debt as well as default in payment on the part of the Corporate Debtor. The Hon'ble Apex Court has clearly stated in M/S. INNOVENTIVE INDUSTRIES LTD. VERSUS ICICI BANK & ANR. [2017 (9) TMI 58 - SUPREME COURT] that the moment it is established that there is a default in payment of financial debt by the corporate debtor, which is due and payable and the application is complete and no disciplinary proceedings is pending against the proposed RP then the adjudicating authority has no option but to admit the application. The Financial Creditor has fulfilled all the requirements of law - this Adjudicating Authority is inclined to admit this application and initiate the process of CIRP of the Corporate Debtor - application admitted - moratorium declared. Issues:Application under section 7 of IBC for CIRP initiation against Corporate Debtor.Analysis:1. The Financial Creditor filed an application under section 7 of the IBC against the Corporate Debtor, alleging default in repayment of a loan amounting to Rs. 32,61,86,762. The Corporate Debtor had taken a loan of Rs. 15,50,00,000 from the Financial Creditor, confirmed through a loan confirmation agreement with another party. The Corporate Debtor issued cheques as a guarantee for the loan, which were dishonored due to insufficient funds.2. Despite various opportunities, the Corporate Debtor did not appear, leading to the ex-parte setting of the corporate debtor. The Financial Creditor presented evidence, including the loan confirmation agreement and dishonored cheques, establishing the default in payment by the Corporate Debtor. The Adjudicating Authority directed the Financial Creditor to file the Authorization for Assignment for the proposed IRP, which was duly complied with.3. The Adjudicating Authority found that the Corporate Debtor admitted its liability by issuing dishonored cheques, indicating default in payment. The evidence presented by the Financial Creditor was deemed sufficient to establish the debt and default. Citing the Innoventive Industries case, the Authority concluded that all legal requirements were met, and thus admitted the application for CIRP initiation.4. Mr. Pawan Kumar Goyal was appointed as the IRP, with no pending disciplinary proceedings against him. The IRP was directed to take immediate charge of the Corporate Debtor's management and initiate the public announcement for submission of claims. A moratorium was declared from the date of the order until the completion of CIRP, prohibiting various actions against the Corporate Debtor.5. The IRP was mandated to comply with specific sections of the IBC, and the Directors and associated persons of the Corporate Debtor were instructed to cooperate with the IRP. The Financial Creditor was directed to inform the IRP and the Corporate Debtor about the order promptly. The Registry was tasked with updating the Corporate Debtor's status with the Registrar of Companies for public information.6. The order was pronounced through a Virtual Hearing, ensuring the legal process was followed meticulously and the rights of all parties were upheld.