Corporate Insolvency Process Initiated, Moratorium Declared

The court admitted the application for initiation of Corporate Insolvency Resolution Process (CIRP) filed by the Financial Creditor against the Corporate Debtor. The court declared a moratorium under Section 14 of the Insolvency & Bankruptcy Code, 2016, prohibiting legal actions against the Corporate Debtor and asset transfers. An Interim Resolution Professional (IRP) was appointed to manage the process, including calling for creditor claims and convening a Committee of Creditors meeting. The court scheduled a progress report for September 27, 2019, and directed issuance of certified copies of the order to relevant parties.

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Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP)
2. Authorization to file the petition
3. Default and classification as Non-Performing Asset (NPA)
4. Barred by law of limitation
5. Corporate guarantee and mortgage
6. Appointment of Interim Resolution Professional (IRP)
7. Declaration of moratorium

Detailed Analysis:

1. Initiation of Corporate Insolvency Resolution Process (CIRP):
The petition was filed by the Financial Creditor, Oriental Bank of Commerce, against the Corporate Debtor, M/s. RDH Technologies Private Limited, to initiate CIRP. The Financial Creditor had granted a term loan of Rs. 23 crores to the Corporate Debtor, which was accepted and secured by pledging shares and creating an equitable mortgage on fixed assets.

2. Authorization to File the Petition:
The Financial Creditor authorized Mr. Pankaj Kumar Verma, the Chief Manager, to file and pursue the proceedings. The Corporate Debtor disputed this, claiming Mr. Verma was not duly authorized. However, the Financial Creditor provided evidence of authorization through a Board Resolution and delegation by the General Manager.

3. Default and Classification as Non-Performing Asset (NPA):
The Financial Creditor claimed an outstanding amount of Rs. 7,54,68,438 as of 30th September 2018, with the account classified as NPA since 15th December 2012. The Corporate Debtor had also guaranteed loans for five other companies, leading to a total outstanding amount of Rs. 19,04,12,812.21. Despite some payments made towards loan recovery, the default persisted.

4. Barred by Law of Limitation:
The Corporate Debtor argued that the claim was barred by the law of limitation. However, the Financial Creditor provided documentary evidence, including bank statements and correspondences, proving that the claim was within the limitation period.

5. Corporate Guarantee and Mortgage:
The Corporate Debtor had guaranteed loans for five other companies and mortgaged its assets to secure these loans. The Financial Creditor provided a Certificate of Registration for modification of charge, confirming the mortgage on the Corporate Debtor's properties.

6. Appointment of Interim Resolution Professional (IRP):
The Financial Creditor proposed Mr. Ajay Kumar Agarwal as the IRP, who confirmed that no disciplinary proceedings were pending against him. The Tribunal appointed Mr. Agarwal to ascertain the particulars of creditors and convene a meeting of the Committee of Creditors.

7. Declaration of Moratorium:
Upon admitting the petition, the Tribunal declared a moratorium under Section 14 of the Insolvency & Bankruptcy Code, 2016. This moratorium prohibits:
- Institution or continuation of suits or proceedings against the Corporate Debtor.
- Transferring, encumbering, or disposing of any assets or legal rights.
- Foreclosure or enforcement of any security interest.
- Recovery of any property occupied by the Corporate Debtor.

The moratorium will remain effective until the completion of the CIRP, unless a resolution plan is approved or a liquidation order is passed.

Orders:
1. The application under Section 7 of the Insolvency & Bankruptcy Code, 2016, is admitted.
2. A moratorium is declared for the purposes referred to in Section 14.
3. The IRP is to make a public announcement and call for claims.
4. The IRP is to convene a meeting of the Committee of Creditors within 105 days.
5. The Registry is directed to communicate the order to the concerned parties.
6. The matter is listed for a progress report on 27th September 2019.
7. Certified copies of the order may be issued to all concerned parties upon compliance with requisite formalities.

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