IBC Application Admitted: Moratorium Declared, IRP Appointed, CIRP Proceeds

The application under Section 7 of IBC, 2016 was admitted, and a moratorium was declared. Mr. Kamal Nayan Jain was appointed as the Interim Resolution Professional (IRP). The Financial Creditor was directed to pay an advance fee to the IRP, and the CIRP was to be conducted as per regulations. The matter was listed for a progress report on April 9, 2020, and the Registry was instructed to communicate the order to the concerned parties.

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Issues Involved:
1. Application under Section 7 of IBC, 2016.
2. Default in payment of outstanding debt.
3. Debt barred by limitation.
4. Acknowledgment of debt under Section 18 of the Limitation Act, 1963.
5. Technical deficiencies in the application.
6. Appointment of Interim Resolution Professional (IRP).

Issue-wise Detailed Analysis:

1. Application under Section 7 of IBC, 2016:
The application was filed by the Financial Creditor, Asset Reconstruction Company (India) Limited, to initiate Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, Raigarh Properties Private Limited, due to default in payment of outstanding debt.

2. Default in Payment of Outstanding Debt:
A loan was granted by Union Bank of India to the Corporate Debtor in 2010, and the Financial Creditor stepped in as the assignee in 2012. The loan was restructured on March 21, 2013, and recalled on February 3, 2015. Despite multiple correspondences and proposals for reschedulement from the Corporate Debtor, the Financial Creditor rejected these proposals and filed the application under Section 7.

3. Debt Barred by Limitation:
The Corporate Debtor argued that the debt was barred by limitation, as the application was filed beyond the three-year period from the last restructuring date (March 21, 2013). The Financial Creditor countered that the letters from the Corporate Debtor constituted an acknowledgment of debt, thus extending the limitation period.

4. Acknowledgment of Debt under Section 18 of the Limitation Act, 1963:
The Tribunal examined whether the letters written by the Corporate Debtor constituted an acknowledgment of debt under Section 18 of the Limitation Act, 1963. The Tribunal found that the letters, particularly the one dated July 23, 2015, clearly acknowledged the outstanding dues and requested reschedulement, thereby extending the limitation period. The Tribunal cited several precedents to support this interpretation, including the decisions in Hari Om Transport vs. MSP Metallics Ltd. and Trinetra Electronics Ltd. vs. McNally Bharat Engineering Co. Ltd.

5. Technical Deficiencies in the Application:
The Corporate Debtor also raised technical objections, such as the non-mentioning of the date of default in the application. The Tribunal dismissed these objections, emphasizing that technicalities should not undermine the substance of the claim, especially in the context of economic legislation like IBC, 2016.

6. Appointment of Interim Resolution Professional (IRP):
The Tribunal approved the name of the proposed IRP, Mr. Kamal Nayan Jain, and ordered the commencement of the CIRP. The Tribunal declared a moratorium and directed the IRP to make a public announcement and conduct the CIRP in a time-bound manner as per the regulations.

Order:
The application under Section 7 of IBC, 2016, was admitted. A moratorium was declared, and Mr. Kamal Nayan Jain was appointed as the IRP. The Financial Creditor was directed to pay an advance fee to the IRP, and the IRP was instructed to conduct the CIRP as per the regulations. The matter was listed for a progress report on April 9, 2020. The Registry was directed to communicate the order to the concerned parties.

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