Tribunal Admits CIRP Application, IRP Appointed under Insolvency Code

The tribunal admitted the application under Section 7 of the Insolvency and Bankruptcy Code, 2016, initiating Corporate Insolvency Resolution Process (CIRP) against the corporate debtor. Mr. Anupam Tiwari was appointed as the Interim Resolution Professional (IRP), and a moratorium was declared to facilitate the resolution process. Compliance with the provisions of the Code was mandated, with a progress report filing scheduled for November 13, 2019.

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Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 7 of the Insolvency and Bankruptcy Code, 2016.
2. Financial debt and default by the corporate debtor.
3. Limitation period for filing the application.
4. Appointment of Interim Resolution Professional (IRP).
5. Declaration of moratorium.

Issue-wise Detailed Analysis:

1. Initiation of Corporate Insolvency Resolution Process (CIRP):
The applicant, Union Bank of India, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of CIRP against the corporate debtor, M/s. U.P. State Spinning Co. Ltd. The application was supported by various documents, including sanction letters, balance confirmation letters, and statements of account, to establish the existence of a financial debt and default.

2. Financial Debt and Default by the Corporate Debtor:
The applicant provided evidence of financial assistance extended to the corporate debtor, including cash credit and other facilities. The total outstanding amount as of August 1, 2018, was Rs. 5,09,91,686.20. The corporate debtor admitted the debt but cited financial difficulties and ongoing efforts to settle the dues. The corporate debtor's acknowledgment of debt through letters and partial payments was noted.

3. Limitation Period for Filing the Application:
The corporate debtor argued that the application was barred by limitation, citing the Supreme Court decision in Gaurav Hargovindbhai Dave v. Asset Reconstruction Co. (India) Ltd., which held that the limitation period starts from the date of NPA declaration. The corporate debtor claimed the NPA was declared on March 7, 2013. However, the tribunal found that the corporate debtor's acknowledgment of debt on July 30, 2018, and subsequent payments extended the limitation period under Section 18 of the Limitation Act, making the application timely.

4. Appointment of Interim Resolution Professional (IRP):
The applicant proposed the name of Mr. Anupam Tiwari as the IRP. The tribunal found that the proposed IRP met the necessary qualifications and no disciplinary proceedings were pending against him. Consequently, Mr. Anupam Tiwari was appointed as the IRP.

5. Declaration of Moratorium:
Upon admitting the application, the tribunal declared a moratorium under Sections 13 and 14 of the Insolvency and Bankruptcy Code. The moratorium prohibited the institution or continuation of suits, transferring or disposing of assets, and recovery actions against the corporate debtor. Essential goods or services to the corporate debtor were to remain uninterrupted during the moratorium period.

Conclusion:
The tribunal admitted the application under Section 7 of the Insolvency and Bankruptcy Code, 2016, and initiated the CIRP against the corporate debtor. Mr. Anupam Tiwari was appointed as the IRP, and a moratorium was declared to facilitate the resolution process. The tribunal directed compliance with the provisions of the Code and scheduled a progress report filing for November 13, 2019.

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