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2021 (9) TMI 794 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of financial debt in terms of Debenture Trust Deed (DTD) and default committed by the Corporate Debtor as envisaged in the events of default - HELD THAT:- The execution of DTD dated 08.03.2019 and Supplementary Trust Deed dated 22.03.2019 demonstrate existence of Financial Debt in pursuance of Section 5(c) of the Code and the essential ingredients of debt which is disbursed against consideration of time value and money is thus satisfied. It is undisputed fact that an amount of ₹ 72 crores was disbursed by the Petitioner No. 3 to the Corporate Debtor as on 11.03.2019. The Petitioner No. 3 further was not able to disburse the second tranche and sought amendment of the DTD vide email dated 26.07.2019. The first coupon was payable by the Corporate Debtor as on 11.09.2019, however, despite extension of grace period till 15.10.2019, the Corporate Debtor failed to make the payment of ₹ 2,18,95,890.41/- as on 15.10.2019 - The events of default as contemplated under the DTD stipulate that on occurrence of default and nonpayment of coupon, the entire amount of outstanding loan became due and payable. Thus, the rights of the Debenture Holder/Debenture Trustee crystallized immediately upon default and the rights of the Petitioners are well defined under the DTD. The essential ingredients of Section 7 Application, i.e., financial debt under Section 5(8) of the Code and the default under Section 3(2) of the Code are met. The Petition was filed on 28.11.2019. Thereafter, the Corporate Debtor has invoked the Arbitration Clause under Section 9 of the Code and the Arbitrator was appointed by the Bombay High Court. The Interim Award was passed by the Arbitrator wherein he has directed the Corporate Debtor to pay an amount of ₹ 72,06,99,224/- with further interest - this petition is not maintainable under section 7 and has to be treated as an application of section 9 of the code, the petition was filed prior in time before the commencement of arbitration proceedings and the Petitioners have exercised their rights of initiation of CIRP against the Corporate Debtor under the Code. There has been a debt and non-payment of coupon interest as on 15.10.2019 which triggered the event of default and the rights of claiming redemption of entire amount is guaranteed under DTD. Therefore, this Bench notes that the passing of Interim Award only confirms the debt by the Arbitrator and thus, all the allegations regarding wrong invocation of pledge etc. are misconceived and the Petitioners has the right to affect the sale of pledge share in any manner it deems fit. This Bench is of the opinion that there is a clear debt and default on the part of the Corporate Debtor and the Petition deserves admission - Petition admitted - moratorium declared.
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