Lead bank authorized to initiate CIRP against Corporate Debtor following default.

The Tribunal found the lead bank competent to initiate Corporate Insolvency Resolution Process (CIRP) on behalf of the consortium members. The Corporate Debtor had defaulted multiple times, leading to the confirmation of a substantial defaulted amount. The petitioner was duly authorized to file the application. Any discrepancy in the defaulted amount was deemed a matter for the Committee of Creditors. The Tribunal rejected the objection of delay in rectifying defects, admitted the petition, appointed an Interim Resolution Professional, and imposed a moratorium under Section 14 of the Code, initiating CIRP against the Corporate Debtor.

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Issues Involved:
1. Competency of the Financial Creditor to initiate Corporate Insolvency Resolution Process (CIRP).
2. Occurrence of default by the Corporate Debtor.
3. Authorization of the petitioner to file the application.
4. Discrepancy in the defaulted amount.
5. Timeliness of defect rectification in the application.

Issue-wise Detailed Analysis:

1. Competency of the Financial Creditor to initiate CIRP:
The Tribunal examined whether the petitioner, Bank of India, as a lead Bank in a consortium, was competent to initiate CIRP under Section 7 of the Insolvency and Bankruptcy Code, 2016. The Tribunal concluded that the lead bank is competent to file the application on its own behalf and on behalf of other consortium members, fulfilling the requirement of Section 7 (1) of the Code.

2. Occurrence of default by the Corporate Debtor:
The Tribunal considered the definition of 'default' under Section 3 (12) of the Code, which includes non-payment of debt when due. The Tribunal noted that the Corporate Debtor defaulted multiple times, including during restructuring attempts in 2011 and 2013, and was finally classified as Non-Performing Asset (NPA) on 30.09.2014. The defaulted amount was confirmed to be over Rs. 1,09,32,72,312.86 as per the affidavit filed on 07.06.2017.

3. Authorization of the petitioner to file the application:
The Tribunal addressed the objection regarding the authorization of Shri Rahulendu Singh, who filed the petition on behalf of the Financial Creditor. It was confirmed that he was duly authorized by the General Managers of Bank of India through a resolution passed on 27.05.2016, and the power of attorney dated 05.01.2017 supported his authorization. Thus, the Tribunal found the petition to be validly instituted.

4. Discrepancy in the defaulted amount:
The Tribunal examined the objection raised by the Corporate Debtor about the mismatch in the defaulted amount mentioned in Form-1 and the affidavit. The Tribunal clarified that any discrepancy in the amount is not within its purview to determine but should be addressed by the Committee of Creditors. The Tribunal emphasized that the occurrence of default involving Rs. 1 lakh or more is sufficient to trigger the Insolvency Resolution Process.

5. Timeliness of defect rectification in the application:
The Tribunal considered the objection regarding the delay in rectifying defects in the application. The Tribunal noted that no formal notice was issued by the registry as required under the proviso to Section 7 (5) of the Code. It was concluded that the order dated 30.05.2017 could not be regarded as a formal notice, and the affidavit filed on 07.06.2017 was within the permissible timeframe. Thus, the Tribunal rejected the objection of delay.

Conclusion:
The Tribunal admitted the petition, appointed Shri Anil Kohli as the Interim Resolution Professional, and directed the public announcement of the CIRP. A moratorium was declared under Section 14 of the Code, prohibiting suits, asset transfers, and recovery actions against the Corporate Debtor. The personnel connected with the Corporate Debtor were instructed to cooperate with the Interim Resolution Professional, who is tasked with managing and preserving the Corporate Debtor's property.

Disposition:
The petition was disposed of in the above terms, with the CIRP initiated against the Corporate Debtor.

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