2019 (3) TMI 1751 - Tri - Insolvency and Bankruptcy

Tribunal Admits Insolvency Petition, Initiates Resolution Process for Corporate Debtor

The Tribunal admitted the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, initiating the Corporate Insolvency Resolution Process ... Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and default - whether the application/petition filed is complete with supported evidence ; debt and default established ; suggested a qualified resolution professional to appoint as interim resolution professional, etc.? - HELD THAT:- On perusal of the instant company petition along with material documents filed and the objections raised by the respondents as briefly stated supra, and the law as cited above, we are satisfied that the instant company petition is filed by Dena Bank (financial creditor), under section 7 of the IBC, 2016 strictly in accordance with law, with substantial evidence produced in support of debt and default as per the bank statement. This is a fit case to initiate CIRP as prayed for. Petition admitted - moratorium declared. Issues Involved:1. Initiation of Corporate Insolvency Resolution Process (CIRP)2. Default in repayment of loan3. Limitation period under the Limitation Act, 19634. Maintainability of the petition5. Appointment of Interim Resolution Professional (IRP)6. Allegations of suppression of facts7. Admission of additional documentsDetailed Analysis:1. Initiation of Corporate Insolvency Resolution Process (CIRP):The petitioner, Dena Bank, filed the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate CIRP against the corporate debtor, M/s. Kavveri Telecom Infrastructure Ltd., for a default amounting to Rs. 69,18,44,425.03.2. Default in repayment of loan:The corporate debtor defaulted on a term loan of Rs. 45 crores sanctioned on December 23, 2011. The default occurred on September 30, 2013, and the account was classified as a non-performing asset on December 31, 2013. Despite several communications and legal notices, the corporate debtor failed to repay the loan.3. Limitation period under the Limitation Act, 1963:The respondent argued that the application is barred by limitation as the default occurred on September 30, 2013, and the petition was filed on October 1, 2018, which is beyond the three-year limitation period prescribed under Article 137 of the Limitation Act, 1963. However, the petitioner contended that the acknowledgment of debt in the balance sheets and part payments extended the limitation period.4. Maintainability of the petition:The respondent opposed the maintainability of the petition on the grounds of limitation and alleged suppression of facts. The petitioner argued that the proceedings under the IBC are independent and the cause of action subsists. The Tribunal found that the petition was filed in accordance with the law, supported by substantial evidence of debt and default.5. Appointment of Interim Resolution Professional (IRP):The petitioner suggested Shri B. Hariharan as the IRP, who provided his written consent and declared that he is a qualified resolution professional with no disciplinary proceedings pending against him. The Tribunal appointed Shri B. Hariharan as the IRP.6. Allegations of suppression of facts:The respondent alleged that the petitioner suppressed the filing of a writ petition before the High Court of Karnataka against the order of the Debts Recovery Tribunal dated March 27, 2017. The Tribunal held that the proceedings under the IBC are independent and all material documents were placed before the Tribunal.7. Admission of additional documents:The petitioner sought permission to place additional information and documents on record through I.A. No. 131 of 2019. The Tribunal allowed the application, stating that it is necessary to examine all relevant information and documents for a fair adjudication.Judgment:The Tribunal admitted the petition under Section 7 of the IBC, 2016, and initiated the CIRP against the corporate debtor. Shri B. Hariharan was appointed as the IRP. A moratorium was declared, prohibiting the institution or continuation of suits, transferring of assets, and recovery actions against the corporate debtor. The IRP was directed to file progress reports and adhere to the time schedule under the Code. The case was posted for the IRP's report on April 22, 2019.