Tribunal Admits Corporation Bank's Application for Insolvency Proceedings

The Tribunal admitted Corporation Bank's application under Section 7 of the Insolvency and Bankruptcy Code to initiate the Corporate Insolvency Resolution Process against the respondent company. Mr. Manish Agarwal was appointed as the Interim Resolution Professional, and a moratorium was declared. The Tribunal confirmed the existence of financial debt and default, directing the IRP to fulfill obligations under the Code. The application was deemed complete, and the Tribunal asserted its jurisdiction over the matter, ordering compliance with procedural requirements.

---

---

Issues Involved:
1. Jurisdiction and Admissibility of Application
2. Compliance with Procedural Requirements
3. Existence of Financial Debt and Default
4. Appointment of Interim Resolution Professional (IRP)
5. Declaration of Moratorium
6. Obligations of the Interim Resolution Professional (IRP)

Issue-wise Detailed Analysis:

1. Jurisdiction and Admissibility of Application:
The application was filed by Corporation Bank under Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against the respondent company. The Tribunal confirmed its territorial jurisdiction over the National Capital Territory of Delhi, as the registered office of the respondent company is located in New Delhi, satisfying the requirements under sub-section (1) of Section 60 of the Code.

2. Compliance with Procedural Requirements:
The application was submitted in the requisite FORM-1 and included all necessary information and documents, such as details of the financial debt, records, and evidence of default as required under sub-section 3(a) of Section 7 of the Code. The Tribunal found the application to be complete and without infirmity. The applicant also proposed the name of Mr. Manish Agarwal as the Interim Resolution Professional (IRP), who confirmed his willingness to serve and declared that no disciplinary proceedings were pending against him, fulfilling the requirement of Section 7(3)(b) of the Code.

3. Existence of Financial Debt and Default:
The applicant bank had sanctioned a loan of Rs. 50 Crores to the respondent company, which included a cash credit facility and an inland/import letter of credit/buyers credit facility. The respondent company defaulted on repayment, and a decree for Rs. 56,70,74,811.06/- was passed by the Debts Recovery Tribunal, Delhi, on 15.10.2018. Despite the enforceable decree, the respondent failed to pay the decreed amount. The Tribunal noted that the respondent's challenges and difficulties in operation were irrelevant to the CIRP proceedings, as the adjudicating authority's role is limited to ascertaining the occurrence of default and ensuring the application is complete.

4. Appointment of Interim Resolution Professional (IRP):
The Tribunal appointed Mr. Manish Agarwal as the Interim Resolution Professional, as proposed by the applicant. His appointment was confirmed based on his qualifications, willingness to serve, and the absence of any disciplinary proceedings against him. The Tribunal directed the IRP to make a public announcement regarding the admission of the application within three days as prescribed by the IBBI Regulations, 2016.

5. Declaration of Moratorium:
The Tribunal declared a moratorium in terms of Section 14 of the Code, imposing prohibitions on the institution or continuation of suits, transferring or disposing of assets, foreclosing or enforcing security interests, and recovering property from the corporate debtor. The moratorium does not apply to transactions notified by the Central Government or the supply of essential goods or services, nor to sureties in a contract of guarantee to the corporate debtor.

6. Obligations of the Interim Resolution Professional (IRP):
The IRP is required to perform functions as per Sections 15, 17, 18, 19, 20, and 21 of the Code, with utmost dedication and in accordance with the Code, Rules, and Regulations. The personnel connected with the corporate debtor are legally obligated to assist and cooperate with the IRP. The IRP must protect and preserve the value of the corporate debtor's property and can seek appropriate orders from the Tribunal in case of any violations by the ex-management or illegal transactions.

Conclusion:
The Tribunal admitted the application under Section 7(5)(a) of the Code, satisfied that the default had occurred, the application was complete, and no disciplinary proceedings were pending against the proposed IRP. The Tribunal directed the office to communicate the order to all relevant parties and update the status of the corporate debtor on the Registrar of Companies' website.

---