2018 (11) TMI 1631 - Tri - Insolvency and Bankruptcy

Financial Creditor's Petition Admitted for Corporate Insolvency Resolution Process

M/s. Union Bank of India Versus M/s. Empee Distilleries Limited

The Tribunal admitted the petition under section 7 of the Insolvency and Bankruptcy Code, 2016, filed by a Financial Creditor against a Corporate Debtor, ... Initiation of Corporate Insolvency Resolution Process - section 7 of the Insolvency and Bankruptcy Code, 2016 (in short IB Code 2016) r/w rule 4 of Insolvency & Bankruptcy (Application to “Adjudicating Authority”) Rules, 2016 - default by the Corporate Debtor - HELD THAT:- Tribunal observes that there is a debt due payable by the Corporate Debtor and that a default has occurred which the Corporate Debtor was responsible to pay. The date of occurrence of default shall be 31.12.2015. We are of the opinion that the Applicant Bank has established that the amount in default committed by the Corporate Debtor is a fact and it is supported by the documentary evidence placed before this Adjudicating Authority. In this regard the Tribunal observes that the ₹ 1 Crore received from the CD shall be excluded in the amount claimed and the FC shall proceed against the CD for the remaining amount. (₹ 9,18,20,789). The instant petition is admitted and we order the commencement of the Corporate Insolvency Resolution Process which shall ordinarily get completed within 180 days, reckoning from the day this order is passed - Mr. V. Venkata Siva Kumar, as Interim Resolution Professional (IRP) as proposed by the Applicant is appointed - moratorium declared. Issues:1. Application under section 7 of the Insolvency and Bankruptcy Code, 2016 filed by a Financial Creditor against a Corporate Debtor.2. Debt default by the Corporate Debtor and establishment of default date.3. Appointment of Interim Resolution Professional and initiation of Corporate Insolvency Resolution Process.4. Declaration of moratorium and prohibition of certain actions during the resolution process.5. Compliance with various provisions of the Insolvency and Bankruptcy Code.Analysis:1. The Tribunal considered a Company petition filed by a Financial Creditor against a Corporate Debtor under section 7 of the Insolvency and Bankruptcy Code, 2016. The Financial Creditor claimed a default amount of Rs. 10,18,20,789 as of 31.12.2015, supported by documentary evidence.2. The Tribunal noted that the Corporate Debtor had not filed any counter, documents, or objections against the petition. It observed a debt due and a default by the Corporate Debtor, holding them responsible for the payment. The default date was determined as 31.12.2015, and the Tribunal excluded Rs. 1 crore already paid from the claimed amount, leaving Rs. 9,18,20,789 to be pursued.3. The Tribunal admitted the petition, ordering the commencement of the Corporate Insolvency Resolution Process. An Interim Resolution Professional (IRP) was appointed to manage the Corporate Debtor immediately. The IRP was directed to make a public announcement, call for claim submissions, and ensure compliance with the Insolvency and Bankruptcy Code.4. A moratorium was declared from the date of the order until the completion of the resolution process, prohibiting various actions against the Corporate Debtor's assets. Essential goods or services supply to the Corporate Debtor was protected during the moratorium period.5. The IRP was instructed to comply with specific sections of the Insolvency and Bankruptcy Code, and directors, promoters, or management associates of the Corporate Debtor were directed to cooperate with the IRP. The Registry was tasked with communicating the order to relevant parties and ensuring compliance with the Code.This detailed analysis covers the key issues addressed in the judgment, providing a comprehensive understanding of the legal proceedings and decisions made by the Tribunal.