NCLT Chandigarh: Insolvency Petition Admitted, Withdrawal Denied, Interim Resolution Professional Appointed

The National Company Law Tribunal, Chandigarh, admitted the insolvency resolution process petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, due to default by the Corporate Debtor. The request for withdrawal post-admission was denied, citing Rule 8 of the Insolvency and Bankruptcy Rules. Mr. Bhupesh Gupta was appointed as the Interim Resolution Professional with specified duties under Sections 17 and 18 of the Code, including asset inventory preparation and Committee of Creditors formation. The judgment underscores procedural compliance and the Interim Resolution Professional's pivotal role in managing the Corporate Debtor's affairs.

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Issues involved:
1. Admittance of insolvency resolution process under Section 9 of the Insolvency and Bankruptcy Code, 2016.
2. Request for withdrawal of the application after admission.
3. Appointment of Interim Resolution Professional and related directions.

Issue 1: Admittance of insolvency resolution process under Section 9 of the Insolvency and Bankruptcy Code, 2016:
The petition was filed by the Operational Creditor under Section 9 of the Code due to default in payment of debt by the Corporate Debtor. The Corporate Debtor failed to appear when the matter was admitted on 05.07.2017. The Adjudicating Authority observed that the petition was filed after service of demand notice and no caveat was filed by the respondent. The Authority issued directions for the appointment of an Interim Resolution Professional within 14 days from the date of admission, appointing Mr. Bhupesh Gupta for the role.

Issue 2: Request for withdrawal of the application after admission:
The Corporate Debtor, represented by Mr. Jitesh Gupta, sought an adjournment and requested time to pay the defaulting amount even by RTGS transfer. However, the Adjudicating Authority held that after admission of the petition, withdrawal cannot be permitted as per Rule 8 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. The Authority emphasized that no scope exists for accepting the submission made on behalf of the respondent/Corporate Debtor. The order of admission detailed the service of notice to the Corporate Debtor and the lack of representation at the time of admission.

Issue 3: Appointment of Interim Resolution Professional and related directions:
The Adjudicating Authority appointed Mr. Bhupesh Gupta as the Interim Resolution Professional, specifying the term of appointment and the powers vested in the role as per Section 17 and 18 of the Code. The Interim Resolution Professional was directed to prepare an inventory of the Corporate Debtor's assets and to act in accordance with the Code, relevant rules, and professional standards. Additionally, directions were issued for the Professional to constitute the Committee of Creditors promptly, make a public announcement of the initiation of the Corporate Insolvency Resolution Process, and file regular reports with the Tribunal regarding the Corporate Debtor's status.

This judgment by the National Company Law Tribunal, Chandigarh, underlines the procedural adherence and legal implications surrounding the initiation and management of the insolvency resolution process, emphasizing the role and responsibilities of the Interim Resolution Professional in overseeing the affairs of the Corporate Debtor.

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