2022 (2) TMI 416 - Tri - Insolvency and Bankruptcy

Tribunal Admits IBC Application, Imposes Moratorium: Default Established, IRP Appointed

C.D. Sharma and Ors. Versus Orior Developers And Infrastructure Pvt. Ltd.

The Tribunal admitted the application under Section 7 of the IBC, finding that the Financial Creditors had proven the default by the Corporate Debtor. A ... Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- The financial creditor has furnished the receipts proving the payments, as per the directions given by the Hon'ble Supreme Court, has annexed the list of the 101 applicants and the amount claimed by them, and proof of the payments made by them and received by the Corporate Debtor, has placed various documents substantiating the demand by them. But Financial Creditor have not received any response from Corporate debtor - there exists a default and evidence of default has already been placed by the financial Creditor. According to Sec. 7(5) if the Adjudicating Authority is satisfied that a default has occurred and the Application is Complete in Accordance to Sec. 7(2) and 7(3) Then Adjudicating Authority may admit such Application. The Application is complete in all respects and there is a denial of the refunds of payment made by financial creditors and application is within the limitation Period - application admitted - moratorium declared. Issues Involved:Initiation of Corporate Insolvency Resolution Process under Section 7 of the Insolvency & Bankruptcy Code, 2016 based on default by the Corporate Debtor.Detailed Analysis:1. Application Initiation by Financial Creditors:The Financial Creditors jointly initiated the application against the Corporate Debtor under Section 7 of the Insolvency & Bankruptcy Code, 2016, alleging default. The Corporate Debtor was identified as M/s. Orior Developers and Infrastructure Private Limited. The Financial Creditors provided details of payments made towards a residential project named 'Bhaskar Enclave-II' in Rajasthan, supported by documents such as receipts, deposit registration forms, and communication with the Corporate Debtor.2. Existence of Default and Financial Debt:The Financial Creditors argued that the absence of a formal builder-buyer agreement does not negate the financial debt owed by the Corporate Debtor. They presented evidence of payment receipts and communications indicating the Corporate Debtor's liability. The Financial Creditors also highlighted delays in project completion and fraudulent activities by the Corporate Debtor, leading to the initiation of the insolvency resolution process.3. Corporate Debtor's Defense:The Corporate Debtor contested the application, alleging non-disclosure of facts by the Financial Creditors and mismanagement by one of the directors. They claimed to have sufficient funds and offered alternative plots in Maharashtra. The Corporate Debtor disputed the completeness of the Financial Creditors' records and accused them of using the application as a recovery tool.4. Adjudication and Decision:The Tribunal reviewed the submissions and evidence from both parties. It emphasized the importance of establishing a default for admitting an application under Section 7 of the IBC. The Tribunal found that the Financial Creditors had demonstrated the existence of default and met the requirements of the application. Consequently, the Tribunal admitted the petition, imposed a moratorium, and appointed an Insolvency Resolution Professional (IRP) to oversee the resolution process.5. Moratorium and IRP Appointment:The Tribunal ordered a moratorium under Section 14 of the IBC, prohibiting certain actions against the Corporate Debtor. It appointed Mr. Prabhakar Kumar as the IRP to manage the insolvency resolution process. The Financial Creditor was directed to deposit funds for the IRP's immediate expenses, to be reimbursed by the Committee of Creditors.6. Conclusion:The Tribunal's decision to admit the application and initiate the Corporate Insolvency Resolution Process was based on the evidence presented by the Financial Creditors, establishing the default by the Corporate Debtor. The appointment of an IRP and imposition of a moratorium aimed to facilitate the resolution of the insolvency issue in compliance with the provisions of the Insolvency & Bankruptcy Code, 2016.