Tribunal asserts jurisdiction over insolvency case involving Axis Bank and UCO Bank

The Tribunal confirmed jurisdiction over the case due to the Applicant Company's location in Delhi. The insolvency application was authorized by the company's director. Financial creditors like Axis Bank and UCO Bank were involved, with Axis Bank not opposing the application. The Applicant faced historical financial difficulties and had been declared sick by BIFR previously. The petition was admitted, a moratorium declared, and an Interim Resolution Professional appointed. The resolution process was directed to be completed within 100 days, considering the Applicant's prior moratorium under SICA.

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Issues Involved:
1. Jurisdiction of the Tribunal
2. Authorization for filing the insolvency application
3. Financial creditors and their claims
4. Operational creditors and debtors
5. Historical financial difficulties and previous BIFR proceedings
6. Entitlement to file the insolvency petition under the SICA Repeal Act
7. Declaration of sickness and appointment of an operating agency
8. Proposal of Interim Resolution Professional (IRP)
9. Service of notice to financial creditors
10. Objections from financial creditors
11. Compliance with statutory requirements for initiating CIRP
12. Admission of the petition and declaration of moratorium

Detailed Analysis:

1. Jurisdiction of the Tribunal:
The Tribunal confirmed its jurisdiction over the case as the registered office of the Applicant Company is located in Delhi.

2. Authorization for filing the insolvency application:
The Applicant Company, M/s Amit Spinning Industries Ltd., authorized Mr. Vijay Bhan Singh, Director, through a Board resolution dated 12.05.2017, to file the insolvency application.

3. Financial creditors and their claims:
- Axis Bank Ltd.: Granted a loan facility of Rs. 5365 lakhs in 2006. Security was created in favor of Axis Bank.
- UCO Bank Ltd.: Granted a loan facility of Rs. 1250 lakhs in 2011, later assigned to JM Financial Asset Reconstruction Company Pvt. Ltd. in 2014.

4. Operational creditors and debtors:
The list of operational creditors and the total receivables as of 20.05.2017 were provided.

5. Historical financial difficulties and previous BIFR proceedings:
The Applicant Company faced losses due to erratic demand, uncertain raw material prices, foreign currency fluctuation, and changes in Government Policy. It was declared sick by BIFR on 18.07.2012, and UCO Bank was appointed as the operating agency. However, no revival plan was filed before BIFR.

6. Entitlement to file the insolvency petition under the SICA Repeal Act:
The Corporate Applicant is entitled to file the insolvency petition as per section 4(b) of the SICA Repeal Act read with Sec. 252 of the Insolvency and Bankruptcy Code, 2016, without any fees, as the petition was filed within 180 days from the date of the SICA Repeal Act coming into force.

7. Declaration of sickness and appointment of an operating agency:
The Corporate Applicant was declared sick by BIFR on 18.07.2012, and UCO Bank was appointed as the operating agency.

8. Proposal of Interim Resolution Professional (IRP):
Initially, Mr. Manish Garg was proposed as the IRP, but was later replaced by Shri Praveen Bansal. The written communication by the proposed IRP in Form-2 was attached.

9. Service of notice to financial creditors:
The Corporate Applicant served a copy of the insolvency petition along with the Tribunal's Order dated 02.06.2017 to the financial creditors, namely Axis Bank and JM Financial Asset Reconstruction Company Pvt. Ltd.

10. Objections from financial creditors:
- Axis Bank: Did not oppose the application.
- JM Financial Asset Reconstruction Company Pvt. Ltd.: Highlighted that the Corporate Applicant had enjoyed moratorium under SICA for over five years without presenting a viable revival scheme and suggested that the resolution process should be concluded within 100 days.

11. Compliance with statutory requirements for initiating CIRP:
The Tribunal confirmed that the Applicant complied with all statutory requirements under Section 10 of the Code and Rule-7 of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016. The details of financial creditors, operational creditors, assets, liabilities, and the proposed IRP were adequately disclosed.

12. Admission of the petition and declaration of moratorium:
The petition was admitted, and a moratorium was declared under Section 14 of the Code. The Interim Resolution Professional was directed to make a public announcement and call for the submission of claims. The Tribunal emphasized that the Insolvency Resolution Process should be completed preferably within 100 days due to the Applicant's previous moratorium under SICA.

Conclusion:
The petition was disposed of with the admission of the insolvency application, declaration of moratorium, and instructions for a swift resolution process.

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