2017 (9) TMI 1615 - Tri - Insolvency and Bankruptcy

Indian Bank's Insolvency Petition Admitted Against Corporate Debtor |

Indian Bank Versus Infinitas Energy Solutions Pvt. Ltd.

The National Company Law Tribunal, Chennai, admitted a Company Petition filed by Indian Bank against a Corporate Debtor under section 7 of the Insolvency ... Corporate insolvency process - Held that:- The supply of essential goods or services of the Corporate Debtor shall not be terminated or suspended or interrupted during moratorium period. The provisions of Sub-section (1) of Section 14 shall not apply to such transactions, as notified by the Central Government. The IRP shall comply with the provisions of Sections 13(2), 15, 17 & 18 of the Code. The directors, Promoters or any other person associated with the management of Corporate Debtor are directed to extend all assistance and cooperation to the IRP as stipulated under Section 19 and for discharging his functions under Section 20 of the I & B Code, 2016. Accordingly, the application is admitted. The Petitioner/FC as well as the Registry is directed to send the copy of this Order to IRP so that he could take charge of the Corporate Debtor's assets etc. and make compliance with this Order as per the provisions of I & B Code, 2016. The Registry is also directed to communicate this Order to the Financial Creditor and the Corporate Debtor. Issues involved:1. Maintainability of the Company Petition under section 7 of the Insolvency and Bankruptcy Code, 2016.2. Applicability of section 10 of CPC in relation to the simultaneous proceedings before DRT and NCLT.3. Dispute regarding the quantum of the claim made by the Financial Creditor.4. Compliance with the requirements of the Insolvency and Bankruptcy Code, 2016.Issue 1: Maintainability of the Company Petition:The National Company Law Tribunal, Chennai, considered a Company Petition filed by Indian Bank against a Corporate Debtor under section 7 of the Insolvency and Bankruptcy Code, 2016. The Petitioner, a Banking Company, provided loans to the Respondent, a Private Unlimited Company in the renewable energy sector. The Petitioner contended that the Respondent defaulted on payments, leading to the initiation of the insolvency resolution process. The Respondent opposed the petition, citing premature filing and parallel proceedings under the SARFAESI Act. The Tribunal found overwhelming evidence of default and admitted the petition, ordering the commencement of the Corporate Insolvency Resolution Process.Issue 2: Applicability of section 10 of CPC:The Respondent argued that the petition was not maintainable due to ongoing proceedings before the Debt Recovery Tribunal (DRT) and invoked section 10 of the Civil Procedure Code (CPC) to stay the NCLT proceedings. The Petitioner countered, citing Supreme Court judgments that section 10 of CPC does not apply to Tribunals. The Tribunal concurred, emphasizing the distinct nature of the insolvency petition and the DRT proceedings, ultimately admitting the petition to prevent delays in resolving insolvency matters.Issue 3: Dispute regarding the quantum of the claim:A dispute arose concerning the quantum of the claim made by the Petitioner. The Respondent argued that the amount claimed was in dispute and should be determined before admission. The Petitioner asserted that the claim was supported by documentary evidence and contended that the Insolvency Resolution Professional (IRP) could ascertain the claim as per the IB Code 2016. The Tribunal rejected the dispute as a defense, emphasizing the IRP's authority to determine the claim during the resolution process.Issue 4: Compliance with IB Code requirements:The Tribunal reviewed the evidence, including loan documents, guarantees, and account statements, to establish the default by the Corporate Debtor. It noted that the Petitioner had fulfilled all requirements under the Insolvency and Bankruptcy Code, 2016. The Tribunal highlighted the public purpose of swift resolution of insolvency matters and admitted the petition to initiate the Corporate Insolvency Resolution Process. An Interim Resolution Professional was appointed, and a moratorium was declared to facilitate the resolution process.In conclusion, the Tribunal admitted the Company Petition, ordered the commencement of the Corporate Insolvency Resolution Process, and appointed an Interim Resolution Professional to manage the affairs of the Corporate Debtor during the resolution period. The decision aimed to uphold the objectives of the Insolvency and Bankruptcy Code, 2016, and expedite the resolution of insolvency matters.