Tribunal Approves Bank of Baroda's Insolvency Petition Against Amrapali Infrastructure

The Tribunal admitted the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, filed by Bank of Baroda against Amrapali Infrastructure Private Limited. The application was found to be complete and authorized, leading to the appointment of an Interim Resolution Professional. A moratorium was imposed under Section 14 of the Code, halting legal actions against the Corporate Debtor and safeguarding its assets. The IRP was tasked with managing the affairs of the Corporate Debtor to facilitate the Corporate Insolvency Resolution Process.

---

---

Issues Involved:
1. Application under Section 7 of the Insolvency and Bankruptcy Code, 2016.
2. Authorization and completeness of the application.
3. Default of financial debt by the Corporate Debtor.
4. Security interests and guarantees provided.
5. Admission of the application and appointment of Interim Resolution Professional.
6. Imposition of moratorium and its consequences.

Detailed Analysis:

1. Application under Section 7 of the Insolvency and Bankruptcy Code, 2016:
The 'Financial Creditor' - Bank of Baroda filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (the Code) to initiate the Corporate Insolvency Resolution Process (CIRP) against Amrapali Infrastructure Private Limited. The financial creditor is a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970.

2. Authorization and Completeness of the Application:
The application was presented by Ms. Archana Mishra, authorized by a letter dated 03.02.2017. The Corporate Debtor opposed the application, arguing that the demand amounts were arbitrary and questioned the authority of Ms. Mishra. However, the Tribunal found that the power of attorney executed in favor of Ms. Mishra was valid, and the application was complete in all respects, rejecting the objections raised by the Corporate Debtor.

3. Default of Financial Debt by the Corporate Debtor:
The Corporate Debtor defaulted on multiple loan facilities, including term loans, cash credit facilities, and letter of credit facilities. The principal amount in default under the term loan facility as of 30.04.2017 was Rs. 44,59,00,000, with additional overdue interest and penal interest aggregating to Rs. 7,18,50,626. The Corporate Debtor defaulted on the term loan on 31.07.2016, cash credit on 30.06.2016, and letter of credit on 23.05.2016. The total amount of default was Rs. 97,28,87,703.

4. Security Interests and Guarantees Provided:
The financial creditor provided overwhelming evidence of default, including details of security interests such as second pari passu charge over immovable assets, first charge by hypothecation of tangible/intangible movable properties, and first charge on bank accounts. Corporate guarantees were furnished by Ultra Home Construction Private Limited and Amrapali Smart City Private Limited, while personal guarantees were provided by key individuals.

5. Admission of the Application and Appointment of Interim Resolution Professional:
The Tribunal found that the petitioner satisfied the requirements of Section 7 of the Code. It was established that the default had occurred multiple times. The Tribunal admitted the petition and appointed Mr. Rajesh Samson as the Interim Resolution Professional (IRP). He was duly registered with the Insolvency and Bankruptcy Board of India and had no disciplinary proceedings pending against him.

6. Imposition of Moratorium and Its Consequences:
The Tribunal declared a moratorium under Section 14 of the Code, prohibiting:
- The institution or continuation of suits or proceedings against the Corporate Debtor.
- Transferring, encumbering, or disposing of any assets of the Corporate Debtor.
- Actions to foreclose, recover, or enforce any security interest.
- Recovery of any property by an owner or lessor occupied by the Corporate Debtor.

The IRP was directed to make a public announcement regarding the admission of the application and to perform all functions as per the Code. All personnel connected with the Corporate Debtor were legally obligated to assist and cooperate with the IRP.

Conclusion:
The petition was admitted, and the IRP was appointed with specific directives to manage the Corporate Debtor's affairs, ensuring compliance with the Code. The moratorium was imposed to protect the Corporate Debtor's assets and facilitate the CIRP.

---