Bank of Baroda's Insolvency Application Approved for Doshion Water Solutions

The application under the Insolvency and Bankruptcy Code filed by Bank of Baroda against M/s. Doshion Water Solutions Private Limited for defaulting on a significant debt was found maintainable. The Corporate Debtor's default in repayment led to the appointment of an Interim Resolution Professional, Mr. Ketul Bhai Patel, to oversee the Insolvency Resolution Process. The Tribunal established the existence of debt and liability of the Corporate Debtor, implementing a Moratorium under Section 14 of the Code to protect the Debtor during the resolution process. The Interim Resolution Professional was tasked with public announcements and duties outlined in the Code for the resolution process.

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Issues:
1. Maintainability of the application under the Insolvency and Bankruptcy Code.
2. Default in repayment by the Corporate Debtor.
3. Existence of debt and liability of the Corporate Debtor.
4. Appointment of Interim Resolution Professional.
5. Implementation of Moratorium under Section 14 of the Code.
6. Public Announcement of the Insolvency Resolution Process.
7. Duties of the Interim Resolution Professional.

Analysis:

Issue 1: Maintainability of the application under the Insolvency and Bankruptcy Code
The Financial Creditor, Bank of Baroda, filed an application under Section 7 of the Code against the Corporate Debtor, M/s. Doshion Water Solutions Private Limited, for defaulting on a significant debt. The Financial Creditor invoked the provisions of the Code to initiate Corporate Insolvency Resolution Process (CIRP).

Issue 2: Default in repayment by the Corporate Debtor
The Corporate Debtor had availed loan facilities from the Financial Creditor but defaulted on repayment, leading to the account being classified as a Non-Performing Asset (NPA) since 31.08.2015. Despite demand notices and attempts at restructuring, the Debtor failed to make payments, prompting the Financial Creditor to file the application under Section 7 of the Code.

Issue 3: Existence of debt and liability of the Corporate Debtor
The Tribunal found that the Debt restructuring agreements between the consortium of Banks and the Debtor were not implemented, resulting in the debt remaining unpaid. The Debtor's default was established, and the Tribunal concluded that the Corporate Debtor was liable to make payments to the Financial Creditor as per the provisions of the Code.

Issue 4: Appointment of Interim Resolution Professional
The Tribunal admitted the Petition/Application, appointing an Insolvency Professional, Mr. Ketul Bhai Patel, as the Interim Resolution Professional to initiate the Insolvency Resolution Process. The provisions of Moratorium under Section 14 of the Code were implemented, prohibiting certain actions against the Corporate Debtor during the resolution process.

Issue 5: Implementation of Moratorium under Section 14 of the Code
The Moratorium prescribed under Section 14 of the Code was enforced, preventing legal actions and asset transfers against the Corporate Debtor. Essential supplies to the Debtor were to continue, and the Moratorium would remain in effect until the completion of the Insolvency Resolution Process or approval of the Resolution Plan.

Issue 6: Public Announcement of the Insolvency Resolution Process
Upon the declaration of Moratorium, the Interim Resolution Professional was tasked with making a Public Announcement of the Initiation of Corporate Insolvency Resolution Process as per the Code's provisions. This step was to be carried out promptly after the IRP's appointment.

Issue 7: Duties of the Interim Resolution Professional
The Interim Resolution Professional was directed to perform duties under Sections 18 and 15 of the Code, updating the Tribunal on the Progress of the Resolution Plan and compliance with the Order within 30 days. The IRP was granted liberty to provide updates earlier if necessary.

The Petition was admitted, and the Corporate Insolvency Resolution Process was set in motion effective from the date of the Order, with specific directions and actions outlined for the Interim Resolution Professional to follow.

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