Tribunal Admits Insolvency Application, Appoints Resolution Professional Under Section 14

The Tribunal admitted the insolvency application filed by Punjab National Bank against Corporate Debtor M/s Concord Hospitality Pvt. Ltd., appointed an Interim Resolution Professional, and declared a moratorium under Section 14 of the Insolvency and Bankruptcy Code. The petition was disposed of with directions for cooperation with the Interim Resolution Professional in managing the affairs of the Corporate Debtor. Directors and guarantors were found unnecessary parties, loan default details were outlined, and objections by the Corporate Debtor were dismissed. The restructuring proposal by the Corporate Debtor was rejected, and the application was found maintainable without consortium approval.

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Issues Involved:
1. Impleading of directors and guarantors.
2. Initiation of insolvency resolution process.
3. Jurisdiction of the Tribunal.
4. Proposal of Interim Resolution Professional.
5. Loan details and default by the Corporate Debtor.
6. Objections by the Corporate Debtor.
7. Compliance with Bankers' Books Evidence Act.
8. Maintainability of application without consortium approval.
9. Restructuring proposal by the Corporate Debtor.
10. Admission of the petition and declaration of moratorium.

Issue-wise Detailed Analysis:

1. Impleading of Directors and Guarantors:
The Tribunal ordered that the directors and guarantors, listed as respondents No. 2 to 9, are not necessary parties and their names were struck off from the array of respondents.

2. Initiation of Insolvency Resolution Process:
Punjab National Bank, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the insolvency resolution process against the Corporate Debtor, M/s Concord Hospitality Pvt. Ltd. The application was filed in Form No.1 as prescribed under the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016.

3. Jurisdiction of the Tribunal:
The Corporate Debtor was incorporated with its registered office at Amritsar, which falls within the territorial jurisdiction of the National Company Law Tribunal, Chandigarh.

4. Proposal of Interim Resolution Professional:
The Financial Creditor proposed the name of C.A. Navneet Gupta as the Interim Resolution Professional, who filed the necessary written communication in Form No.2, which was found in order by the Tribunal.

5. Loan Details and Default by the Corporate Debtor:
The total loan granted to the Corporate Debtor was Rs. 25 crores, comprising different term loans and working capital facilities. The Corporate Debtor mortgaged various properties to secure the loans. Due to continuous default, the account was declared a Non-Performing Asset (NPA) on 14.07.2016, with a default amount of Rs. 13,34,38,741.78 as of 01.07.2016, which increased to Rs. 14,76,36,740.34 by 30.04.2017.

6. Objections by the Corporate Debtor:
The Corporate Debtor argued that the petition should be dismissed due to non-compliance with the Bankers' Books Evidence Act. They also contended that the application was incomplete and that approval from the consortium banks (State Bank of India and IDBI Bank) was not obtained. However, the Tribunal found no substance in these contentions, stating that the Financial Creditor is entitled to file the application independently.

7. Compliance with Bankers' Books Evidence Act:
The Tribunal noted that the Financial Creditor initially failed to certify the statements of account under the Bankers' Books Evidence Act. However, the defect was rectified within the granted time frame, and the Tribunal accepted the explanation for the delay due to the hospitalization of the petitioner's counsel.

8. Maintainability of Application without Consortium Approval:
The Tribunal dismissed the contention that the application was not maintainable without the approval of the consortium banks. It was held that the Financial Creditor could independently file an application for initiating the corporate insolvency process.

9. Restructuring Proposal by the Corporate Debtor:
The Corporate Debtor's proposal to restructure the loan by depositing Rs. 1.25 crores was not accepted, as the account had already been declared NPA, and preferential treatment could not be given over other Financial Creditors.

10. Admission of the Petition and Declaration of Moratorium:
The Tribunal admitted the petition, appointed C.A. Navneet Gupta as the Interim Resolution Professional, and declared a moratorium under Section 14 of the Code. The moratorium prohibits the institution or continuation of suits, transferring or disposing of assets, and recovery of property by owners or lessors. The Interim Resolution Professional was directed to make a public announcement and perform duties as per the Code.

Conclusion:
The petition was disposed of with the admission of the insolvency application, appointment of the Interim Resolution Professional, and declaration of a moratorium. The Corporate Debtor and associated personnel were directed to cooperate with the Interim Resolution Professional in managing the affairs of the Corporate Debtor.

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