TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Future Retail Limited: Insolvency Petition Admitted, Corporate Resolution Process Initiated</h1> The Tribunal admitted the Company Petition under section 7 of the Insolvency and Bankruptcy Code, 2016, filed by Bank of India against Future Retail ... 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 Amazon.com NV Investment Holdings LLC has filed an Intervention Petition/1/2022 in CP/527/MB/2022 seeking investigation into fraudulent and malicious intention of the present proceedings by the Financial Creditor and to dismiss the present petition by imposing penalty on the Financial Creditor and the Corporate Debtor in accordance with Section 65(1) of the Code, same has been dealt separately vide order dated 20.07.2022. Moreover, the Corporate Debtor on the payment obligation under the OTR scheme, admitted the default of its repayment as on 31.12.2021. Further, on 04.02.2022, the Corporate Debtor admitted in its meeting with the Lenders that the Events of default continue to subsist. Furthermore, the Corporate Debtor issued an intimation under Regulation 30 and other regular regulations of Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015 admitting the default of its repayment obligations under the Framework Agreement as on 31.03.2022 as well as 31.12.2021. This Bench is of the view that the existence of debt and default has been proved - petition admitted - CIRP is ordered to be initiated - moratorium declared. Issues Involved:1. Initiation of Corporate Insolvency Resolution Process (CIRP) under section 7 of Insolvency and Bankruptcy Code, 2016.2. Default in repayment by the Corporate Debtor to the Financial Creditor.3. Dispute regarding pending adjudication before the Hon'ble Supreme Court.4. Allegations of impact on Corporate Debtor's business due to Lenders' decision.5. Intervention petition filed by Amazon.com NV Investment Holdings LLC alleging fraudulent intentions.6. Admission of debt and default by the Corporate Debtor.Issue 1: Initiation of Corporate Insolvency Resolution Process (CIRP) under section 7 of Insolvency and Bankruptcy Code, 2016:The Financial Creditor, Bank of India, filed a Company Petition under section 7 of the IBC against the Corporate Debtor, Future Retail Limited, for defaulting on repayment of Rs. 856.10 Crores. The Financial Creditor provided various credit facilities to the Corporate Debtor, which were restructured under a Framework Agreement dated 26.04.2021. The Corporate Debtor defaulted on repayment, leading to the downgrade of the facilities to 'NPA' status. The Tribunal admitted the Company Petition and appointed an Interim Resolution Professional (IRP) to initiate the CIRP process.Issue 2: Default in repayment by the Corporate Debtor to the Financial Creditor:The Corporate Debtor defaulted on repayment, triggering an automatic downgrade of the loan account to an NPA as per the terms of the Framework Agreement and RBI Circular. The Financial Creditor submitted various agreements, documents, and communications to establish the existence of financial debt and default. The Corporate Debtor's contentions regarding pending adjudication before the Supreme Court were dismissed, emphasizing that the existence of debt and default was admitted and established, leading to the admission of the Company Petition by the Tribunal.Issue 3: Dispute regarding pending adjudication before the Hon'ble Supreme Court:The Corporate Debtor raised objections based on a pending Writ Petition before the Supreme Court, seeking relief and interim orders. However, the Financial Creditor argued that the pendency of the Writ Petition does not stay the proceedings under the IBC. The Tribunal held that the existence of a dispute does not prevent the admission of a Petition under Section 7 of the Code, especially when the debt and default are admitted and established.Issue 4: Allegations of impact on Corporate Debtor's business due to Lenders' decision:The Corporate Debtor alleged that the Lenders' decision to refuse to continue Holding on operations impacted its business and repayment obligations. The Petitioner's Counsel argued that the first payment default occurred before the Lenders' decision, and the Corporate Debtor cannot dictate the actions of the Lenders in exercising their rights.Issue 5: Intervention petition filed by Amazon.com NV Investment Holdings LLC alleging fraudulent intentions:Amazon.com NV Investment Holdings LLC filed an Intervention Petition seeking investigation into fraudulent intentions in the proceedings. The Tribunal dealt with this separately, emphasizing the admission of default by the Corporate Debtor and the proof of debt and default presented by the Financial Creditor, leading to the admission of the Company Petition.Issue 6: Admission of debt and default by the Corporate Debtor:The Corporate Debtor admitted default in repayment obligations, both in meetings with Lenders and through regulatory disclosures. The Tribunal found the existence of debt and default proven, leading to the admission of the Company Petition and the appointment of an IRP to manage the CIRP process.This detailed analysis of the judgment highlights the key issues involved in the Tribunal's decision to admit the Company Petition and initiate the Corporate Insolvency Resolution Process against the Corporate Debtor based on default in repayment and established debt obligations.
TaxTMI 
TaxTMI 
