2022 (5) TMI 310 - Tri - Insolvency and Bankruptcy

Financial Creditor Initiates Corporate Insolvency Process, Tribunal Orders Moratorium & Asset Protection

The Financial Creditor filed for Corporate Insolvency Resolution Process under Section 7 of the Insolvency and Bankruptcy Code, 2016 against the Corporate ... Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - Time Limitation - HELD THAT:- In the instant matter, the Corporate Debtor had time and again acknowledged the debt within limitation period which resulted in fresh period of limitation. The Corporate Debtor never disputed the bank statement or any other documents annexed by the Applicant. There is a payment of 50 lakhs has not been denied and the Financial Creditor has also annexed in the petition year vise ledger account of Corporate Debtor in which the interest has also been charged. Therefore, the present Application is within the period of limitation and not barred by law. Application admitted - moratorium declared. Issues involved:Initiation of Corporate Insolvency Resolution Process under Section 7 of the Insolvency and Bankruptcy Code, 2016 based on financial aid provided by the Financial Creditor to the Corporate Debtor, objections raised by the Corporate Debtor, determination of debt acknowledgment within the limitation period, appointment of Interim Resolution Professional, imposition of Moratorium under Section 14, protection of Corporate Debtor's assets, continuation of essential goods or services supply during Moratorium, duties and obligations of the Interim Resolution Professional, deposit requirement by the Financial Creditor, communication of order to relevant parties, and effective date of Corporate Insolvency Resolution Process.Detailed Analysis:- The Financial Creditor filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 seeking initiation of Corporate Insolvency Resolution Process against the Corporate Debtor based on financial aid provided amounting to Rs. 50,00,000/-.- The Corporate Debtor acknowledged the debt within the limitation period, leading to the fresh period of limitation, and did not dispute the documents provided by the Financial Creditor, including bank statements and ledger accounts.- The Tribunal found the application within the period of limitation and not barred by law, admitting the application and appointing an Interim Resolution Professional (IRP) for the Corporate Debtor.- The Moratorium under Section 14 of the Code was imposed from the date of the order until the completion of the Corporate Insolvency Resolution Process or other specified events.- The Tribunal prohibited the institution of suits or proceedings against the Corporate Debtor, safeguarding its assets, and ensuring the supply of essential goods or services during the Moratorium period.- The IRP was directed to perform various functions as per the Code, with all personnel associated with the Corporate Debtor obligated to cooperate with the IRP.- The Financial Creditor was instructed to deposit a sum of Rs. 2,00,000/- with the IRP to cover expenses, and the order was to be communicated to relevant parties and authorities promptly.- The Corporate Insolvency Resolution Process was deemed effective from the date of the order, and the case was allowed and disposed-off.This detailed analysis covers the key legal aspects and outcomes of the judgment delivered by the National Company Law Tribunal, Ahmedabad Bench, regarding the initiation and management of the Corporate Insolvency Resolution Process in the specified case.