Tribunal Upholds Creditor's Right to Insolvency Process: Jurisdiction, Moratorium, and Debt Amount Determined

The Tribunal found that Mr. Meghraj Deshmukh was duly authorized to initiate the corporate insolvency process against the debtor. As the assignee of SBI, the petitioner had the right to file the petition under the Insolvency and Bankruptcy Code. The Tribunal asserted its jurisdiction despite parallel proceedings in other forums, emphasizing the moratorium under the I&B Code. The petition was deemed admissible, with a total default amount of Rs. 127,03,68,411/-. Consequently, the petition was admitted, an Interim Resolution Professional appointed, and a moratorium declared as per the I&B Code.

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Issues Involved:
1. Authorization of Mr. Meghraj Deshmukh to initiate the corporate insolvency process.
2. Petitioner's right to file the petition as an assignee of SBI.
3. Jurisdiction of the Tribunal in light of parallel proceedings.
4. Admissibility of the petition.

Issue-wise Detailed Analysis:

Issue No. 1: Authorization of Mr. Meghraj Deshmukh to initiate the corporate insolvency process

The Tribunal examined whether Mr. Meghraj Deshmukh had the specific authorization to initiate the corporate insolvency process against the corporate debtor. The respondent argued that the Board Resolution did not reflect authority for Mr. Deshmukh to file the petition and that the affidavit was prepared for NCLT, Bengaluru Bench. The Tribunal allowed the petitioner to file a supplementary affidavit to correct the cause title, which was duly done. The Board Resolution dated 08.02.2017 authorized Mr. Deshmukh to represent the company before quasi-judicial bodies and courts in India, which the Tribunal found sufficient. The Tribunal cited the NCLT, Chandigarh Bench in Macquarie Bank Ltd. Vs. Uttam Galva Metallics Ltd., holding that authorization to file winding-up petitions includes authority to file insolvency resolution processes. Therefore, the Tribunal concluded that Mr. Deshmukh was duly authorized to file the petition.

Issue No. 2: Petitioner's right to file the petition as an assignee of SBI

The Tribunal considered whether the petitioner, as an assignee of SBI, could file the petition under Section 7 of the Insolvency and Bankruptcy Code (I&B Code), 2016. The respondent contended that the assignment deed was under challenge before the Debt Recovery Tribunal (DRT), Kolkata. The Tribunal noted that Section 5(7) of the I&B Code includes assignees within the definition of a financial creditor. Despite the challenge to the assignment deed, the Tribunal found that the petitioner could file the petition based on the assignment deed, as the respondent had acknowledged the debt and expressed willingness to settle it in various letters. The Tribunal referenced several judgments, including Punjab National Bank and Ors. CP(IB)No.15/Chd/CHD/2017, Alchemist Asset Reconstruction Company Ltd. Vs. M/s Hotel Gaudavan Pvt. Ltd., and Union Bank Of India Vs. Guruashish Construction Pvt. Ltd., which supported the petitioner's right to file the petition despite pending proceedings before other forums.

Issue No. 3: Jurisdiction of the Tribunal in light of parallel proceedings

The Tribunal addressed whether it had jurisdiction to entertain the petition given the pending proceedings before the DRT and the High Court of Kolkata. The Tribunal reiterated that the pendency of proceedings under the SARFAESI Act before the DRT does not debar a financial creditor from filing an application under Section 7 of the I&B Code. The Tribunal examined the pending winding-up petitions before the High Court and concluded that the pendency of such petitions does not bar the Tribunal from entertaining an insolvency resolution petition. The Tribunal referenced Section 14(1) of the I&B Code, which imposes a moratorium on pending suits and proceedings against the corporate debtor upon the commencement of insolvency proceedings. The Tribunal also cited the Companies (Removal of Difficulties) Fourth Order, 2016, which mandates the transfer of certain proceedings to the Tribunal. The Tribunal found that no winding-up order had been passed nor an official liquidator appointed by the High Court, thus affirming its jurisdiction to entertain the petition.

Issue No. 4: Admissibility of the petition

The Tribunal considered whether the petition was liable to be admitted. The Tribunal found that the petition was filed in the required format and that Mr. Deshmukh was duly authorized to file it. The total amount claimed in default was Rs. 127,03,68,411/-. The accounts of the corporate debtor had been declared as Non-Performing Assets (NPA), and the corporate debtor had admitted its liability in various letters, expressing willingness to settle the debt. The Tribunal noted that the petitioner had proposed the name of Mr. Kuldeep Verma as the Interim Resolution Professional (IRP), who had no disciplinary proceedings pending against him. Therefore, the Tribunal concluded that the petition was complete and the existence of default was established. The petition was admitted, and the IRP was appointed to proceed with the insolvency resolution process.

Final Order:
The Tribunal admitted the petition, approved the appointment of the IRP, and declared a moratorium in terms of Section 14 of the I&B Code. The IRP was directed to take necessary steps as per Sections 15, 17, and 18 of the Code and file a report within the statutory period. Public announcement as per Section 15 of the IBC, 2016 was to be made. Copies of the order were to be sent to both parties and the IRP. The petition was disposed of accordingly.

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