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2019 (4) TMI 820 - Tri - Insolvency and BankruptcyInitiation of Corporate Insolvency Resolution Process - Corporate Debtor - Section 7 of the Insolvency and Bankruptcy Code, 2016 - Held that:- In the present proceeding under Section 7(5)(a) of the Code, application of the financial creditor has to be admitted on satisfaction that default has occurred, the application is complete, and that no disciplinary proceeding against the proposed IRP is pending. Respondent corporate debtor has not disputed that the loan was availed and that loan and security documents were executed. Applicant financial creditor has placed on record renewal of working capital facility letter aggregating to ₹ 420 million dated 21.12.2012, which was confirmed and accepted by the respondent company by affixing its seal and also duly supported by its Board Resolution dated 20th December, 2012. The applicant 'financial creditor' has placed on record voluminous and overwhelming evidence in support of the claim as well as to prove the default. Respondent corporate debtor has failed to show that there is no debt or default. In the present case the bank had sanctioned and disbursed the loan amount recoverable with applicable interest by entering into loan agreements with the corporate debtor. The corporate debtor had borrowed the credit facility against payment of interest as agreed between the parties. The loan was disbursed against the consideration for time value of money with a clear commercial effect of borrowing. Moreover, the debt claimed in the present application includes both the component of outstanding principal and interest. In that view of the matter not only the present claim comes within the purview of 'Financial Debt' but also the applicant can clearly be termed as 'Financial Creditor' so as to prefer the present application under Section 7 of the Code. In the facts, it is seen that the applicant bank clearly comes within the definition of Financial Creditor. The material placed on record further confirms that applicant financial creditor had disbursed various loan facilities to the respondent corporate debtor and the respondent has availed the loan and committed default in repayment of the outstanding financial debt. In terms of Section 7(5)(a) of the Code, the present application is admitted - moratorium in terms of Section 14 of the Code also declared.
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