Tribunal Admits Insolvency Applications, Appoints Resolution Professional

The tribunal admitted all four applications under Section 7(5) of the Insolvency and Bankruptcy Code, appointing an Interim Resolution Professional. The liability of the Corporate Guarantor was confirmed, and a moratorium was declared, prohibiting various actions against the Corporate Debtor. The appointed Interim Resolution Professional was tasked with making a public announcement about the initiation of the Corporate Insolvency Resolution Process, ensuring continuity of essential goods and services to the Corporate Debtor during the moratorium period.

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Issues Involved:
1. Initiation of Insolvency Resolution Process under Section 7 of the Insolvency and Bankruptcy Code, 2016.
2. Existence of financial debt and default by the Corporate Debtor.
3. Liability of the Corporate Guarantor.
4. Appointment of Interim Resolution Professional.
5. Declaration of moratorium under Section 13(1)(a) of the Insolvency and Bankruptcy Code, 2016.

Detailed Analysis:

1. Initiation of Insolvency Resolution Process under Section 7 of the Insolvency and Bankruptcy Code, 2016:
All four applications were filed by different companies as Financial Creditors to initiate the Insolvency Resolution Process against M/s. Anil Limited under Section 7 of the IB Code, 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. The applications were consolidated and disposed of by a common order.

2. Existence of Financial Debt and Default by the Corporate Debtor:
- CP (IB) No. 66 of 2017: M/s. Reliance Commercial Finance Limited claimed that M/s. Anil Nutrients Limited borrowed Rs. 10,00,00,000 from M/s. Reliance Capital Limited, with M/s. Anil Limited acting as the Corporate Guarantor. The debt was transferred to the applicant following a demerger. Despite repeated requests and reminders, the loan amount was not repaid, leading to a default of Rs. 8,87,94,014 as of 12.10.2016.
- CP (IB) No. 69 of 2017: M/s. Kunal Finance and Credit Private Limited claimed a default of Rs. 42,00,000. The Corporate Debtor had previously issued cheques for settlement, which were dishonored.
- CP (IB) No. 70 of 2017: M/s. Oarsman Credit Private Ltd. claimed a default of Rs. 45,04,986. The Corporate Debtor had borrowed Rs. 40,00,000, which was not repaid.
- CP (IB) No. 71 of 2017: M/s. Socrato Capital Private Ltd. claimed a default of Rs. 39,41,863. The Corporate Debtor borrowed Rs. 35,00,000 and failed to repay.

3. Liability of the Corporate Guarantor:
The tribunal noted that the liability of the Corporate Guarantor (M/s. Anil Limited) is co-extensive with that of the Principal Borrower (M/s. Anil Nutrients Limited). The debt owed by M/s. Anil Nutrients Limited to the applicant is considered a 'financial debt' under Clause (i) of sub-section (8) of Section 5 of the IB Code. The tribunal confirmed the occurrence of default in repayment of the financial debt by the Corporate Guarantor.

4. Appointment of Interim Resolution Professional:
The applications proposed different individuals as Interim Resolution Professionals. Given that the financial debt due to M/s. Reliance Commercial Finance Limited was higher than the combined debts due to other applicants, the tribunal appointed Shri Pramod Bajranglal Kedia as the Interim Resolution Professional, as proposed by M/s. Reliance Commercial Finance Limited.

5. Declaration of Moratorium under Section 13(1)(a) of the Insolvency and Bankruptcy Code, 2016:
The tribunal declared a moratorium prohibiting:
- Institution or continuation of suits or proceedings against the Corporate Debtor.
- Transferring, encumbering, alienating, or disposing of any assets of the Corporate Debtor.
- Actions to foreclose or enforce any security interest created by the Corporate Debtor.
- Recovery of any property by an owner or lessor where such property is occupied by the Corporate Debtor.

The moratorium will be in effect from the date of the order until the completion of the Corporate Insolvency Resolution Process. The Interim Resolution Professional was directed to make a public announcement about the initiation of the Corporate Insolvency Resolution Process.

Conclusion:
All four applications were admitted under Section 7(5) of the IB Code, and the tribunal appointed Shri Pramod Bajranglal Kedia as the Interim Resolution Professional. The moratorium was declared, and the order was communicated to all relevant parties. The tribunal ensured that the supply of essential goods and services to the Corporate Debtor would not be interrupted during the moratorium period.

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