Tribunal Admits Creditor's Application for Corporate Insolvency Resolution Process

The Tribunal admitted the application under section 7 of the Insolvency & Bankruptcy Code, 2016, for initiating Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. The Financial Creditor's claim of Rs. 6,86,98,545/- for default was undisputed, leading to the declaration of a moratorium under section 14 of the I&B Code. An Interim Resolution Professional was appointed to oversee the resolution process, with specific restrictions on suits, asset transfers, and enforcing security interests against the Corporate Debtor during the moratorium period. Compliance measures were established for the resolution process until its completion.

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Issues Involved:
1. Application under section 7 of Insolvency & Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process (CIRP) against Corporate Debtor.

Analysis:
1. The Financial Creditor filed an application under section 7 of the Insolvency & Bankruptcy Code, 2016 against the Corporate Debtor for initiating the Corporate Insolvency Resolution Process (CIRP).

2. The Financial Creditor claimed a total default amount of Rs. 6,86,98,545/- against the Corporate Debtor, with the default date being 31.12.2018 and the petition filed on 25.08.2021.

3. The Financial Creditor entered into an agreement with the Corporate Debtor for the development/allotment of an apartment for Rs. 3,00,00,000/-, and subsequent default led to the demand for repayment along with interest.

4. The Corporate Debtor, in response, cited financial difficulties due to global economic slowdown and the Covid-19 pandemic, acknowledging the debt and seeking time for repayment.

5. The Tribunal noted the undisputed claim amount, the agreement between the parties, and the Corporate Debtor's admission of inability to pay the dues, leading to a default of more than Rs. 1,00,00,000/-.

6. The Tribunal found the application complete, within the limitation period, with a debt exceeding Rs. 1 crore, establishing the default by the Corporate Debtor, warranting admission of the application.

7. The Tribunal admitted the application, declared a moratorium under section 14 of the I&B Code, and appointed an Interim Resolution Professional to oversee the resolution process.

8. The moratorium included prohibiting suits against the Corporate Debtor, asset transfers, and enforcing security interests, ensuring the supply of essential goods/services, and specifying exceptions to the moratorium.

9. The order of moratorium was effective until the completion of the resolution process, with public announcement requirements and directions for the Financial Creditor to deposit funds for expenses related to the resolution process.

10. Compliance measures were outlined, including updating corporate data, communication of the order to relevant parties, and submission of a compliance report by the Registrar.

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