Tribunal admits Company Petition for insolvency against Corporate Debtor for repayment default.

The tribunal admitted the Company Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against the Corporate Debtor for defaulting on repayment. The debt owed to the petitioner, including interest and penalties, led to the initiation of the Corporate Insolvency Resolution Process (CIRP). The tribunal dismissed the intervener application and appointed an Interim Resolution Professional, declaring a moratorium under Section 14 of the Code. The order directed essential supplies to continue to the Corporate Debtor and mandated the provision of necessary documents to the Interim Resolution Professional.

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Issues Involved:
1. Default in repayment by the Corporate Debtor.
2. Assignment of debt to the petitioner.
3. Intervener's claims and the binding nature of agreements.
4. Jurisdiction and the effect of pending legal proceedings.
5. Validity of the Facility Agreement and the Debenture Trust Deeds.
6. Appointment of Interim Resolution Professional and declaration of moratorium.

Detailed Analysis:

1. Default in Repayment by the Corporate Debtor:
The petition was filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, against the Corporate Debtor for defaulting on repayment of Rs. 462,34,02,742. Altico Capital India Ltd. disbursed Rs. 375,00,00,000 through two Debenture Trust Deeds and one Facility Agreement. The Corporate Debtor failed to repay the amount, leading to the initiation of the Corporate Insolvency Resolution Process (CIRP).

2. Assignment of Debt to the Petitioner:
The debt was assigned to the petitioner via an Assignment Agreement dated 23.03.2019. The petitioner also filed an Amended and Restated Declaration of Trust appointing the Financial Creditor as the trustee. The Corporate Debtor owes Rs. 462,34,027,742, including interest and penalties. Despite notice, the Corporate Debtor failed to make payments, prompting the petitioner to seek CIRP initiation.

3. Intervener's Claims and the Binding Nature of Agreements:
SARE Public Company Ltd., through its Receiver, filed an intervener application, claiming that an agreement between Wafra Capital Partners L.P and SARE Public prohibited subsidiaries from creating any lien or encumbrance on their properties. The intervener argued that the Corporate Debtor, being a subsidiary, was bound by this agreement, and thus, the petition should be dismissed.

4. Jurisdiction and the Effect of Pending Legal Proceedings:
The Hon'ble High Court of Delhi had passed an interim order restraining the Corporate Debtor from creating any third-party rights. However, it was clarified that subsidiaries are not bound by the agreements entered into by the holding company. The tribunal noted that IBC proceedings focus on the existence of debt and default, regardless of other pending legal proceedings.

5. Validity of the Facility Agreement and the Debenture Trust Deeds:
The tribunal considered whether the Assignment Deed dated 23.03.2019 was valid. It was noted that the loans were given before the High Court's order on 12.10.2018. The tribunal concluded that the petitioner proved the existence of debt and default under both the Debenture Trust Deeds and the Facility Agreement. The Facility Agreement issue was pending before the High Court, but the default on debentures was sufficient for CIRP initiation.

6. Appointment of Interim Resolution Professional and Declaration of Moratorium:
The tribunal appointed CA Ajit Gyanchand Jain as the Interim Resolution Professional. A moratorium was declared as per Section 14 of the Code, ensuring the continuation of essential supplies to the Corporate Debtor. Directions were issued to the Ex-Management and Auditors to provide necessary documents and information to the Interim Resolution Professional within a week.

Conclusion:
The tribunal admitted the Company Petition and dismissed the intervener application (IA 3783-2020). The order was to be communicated to relevant parties and authorities, and the Registrar of Companies was directed to update the status of the Corporate Debtor. The petition was admitted, initiating the CIRP against the Corporate Debtor.

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