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of <h1>Company Application Admitted for Insolvency Proceedings: Debt Default Case</h1> <h3>IDBI Bank Ltd. Versus Orchid Healthcare (P.) Ltd.</h3> The National Company Law Tribunal, Chennai Bench, admitted a Company Application under Section 7 of the Insolvency & Bankruptcy Code, 2016, filed by a ... Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of dues - existence of debt and dispute - HELD THAT:- The Principal borrower (Orchid Pharma Limited) availed loan of ₹ 191.24 Crores for which this Corporate Debtor stood as guarantor by extending corporate guarantee dated 02.07.2014, thereafter, since the Principal Borrower has not paid the loan amount and gone under CIRP in IBA/206/2019, now this Creditor Bank has initiated these proceedings against this Corporate Debtor, since the Corporate Debtor is falling within the definition u/s 5(8) Clause (i) of the Insolvency & Bankruptcy Code, the financial creditor can proceed against the corporate debtor. On perusal of the material papers placed by this Financial Creditor, this Bench, by looking at the documents furnished, being satisfied that debt and default are in existence and there being no objection from the Corporate Debtor side for this Bench initiating CIRP against the Corporate Debtor, this petition is admitted - petition admitted - moratorium declared. Issues:1. Initiation of Corporate Insolvency Resolution Process under Section 7 of the Insolvency & Bankruptcy Code, 2016.2. Existence of debt and default.3. Appointment of Interim Resolution Professional.4. Declaration of Moratorium.5. Direction for public announcement of the corporate insolvency resolution process.Issue 1: Initiation of Corporate Insolvency Resolution Process under Section 7 of the Insolvency & Bankruptcy Code, 2016:The Tribunal received a Company Application under Section 7 of the Insolvency & Bankruptcy Code, 2016, filed by the Financial Creditor, seeking to initiate Corporate Insolvency Resolution Process against the Corporate Debtor due to default in repaying a loan amount. The Corporate Debtor had defaulted in repaying a loan availed by the Principal borrower, and the corporate guarantee had been invoked against the Corporate Debtor. The Tribunal found the application admissible as the Corporate Debtor fell within the definition under Section 5(8) of the Code, allowing the financial creditor to proceed against the Corporate Debtor.Issue 2: Existence of debt and default:Upon examining the material papers provided by the Financial Creditor, the Tribunal was satisfied that the debt and default existed. The Corporate Debtor did not raise any objections to the initiation of Corporate Insolvency Resolution Process against them. Consequently, the Tribunal admitted the Company Application and appointed an Insolvency Resolution Professional to manage the resolution process.Issue 3: Appointment of Interim Resolution Professional:The Tribunal appointed Mr. Ramakrishnan Sadasivan as the Interim Resolution Professional to oversee the functions as mentioned in the Insolvency & Bankruptcy Code. The appointment was made based on the consent letter given by the Insolvency Resolution Professional and in compliance with the IBBI Regulations/Circulars/Directions regarding the fee payable to the IRP/RP.Issue 4: Declaration of Moratorium:The Tribunal declared a moratorium, prohibiting various actions such as instituting suits, transferring assets, foreclosing security interests, and recovering property against the Corporate Debtor. Essential goods or services supplied to the Corporate Debtor were not to be terminated during the moratorium period. The order of moratorium was to be effective until the completion of the corporate insolvency resolution process, approval of a resolution plan, or liquidation of the debtor.Issue 5: Direction for public announcement of the corporate insolvency resolution process:The Tribunal directed the immediate public announcement of the corporate insolvency resolution process as specified under the Insolvency & Bankruptcy Code. The Registry was instructed to communicate the order to the Financial Creditor, Corporate Debtor, and the appointed Interim Resolution Professional promptly via email or WhatsApp.This judgment from the National Company Law Tribunal, Chennai Bench, addressed the initiation of Corporate Insolvency Resolution Process under the Insolvency & Bankruptcy Code, 2016, ensuring the existence of debt and default, appointing an Interim Resolution Professional, declaring a moratorium, and providing directions for the public announcement of the resolution process.
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