Punjab National Bank initiates insolvency process against Parerhat Gas Industries Ltd. Debt default over Rs. 1,18,41,92,137.17

The Punjab National Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code to initiate the Corporate Insolvency Resolution Process against M/S Parerhat Gas Industries Ltd. The financial debt claimed to be in default was over Rs. 1,18,41,92,137.17. The tribunal appointed an Interim Resolution Professional and declared a moratorium effective from 30.11.2017. The Corporate Debtor and stakeholders were directed to cooperate with the IRP, and the CIRP process was initiated with a public announcement and submission of claims. The application was admitted and disposed of without costs.

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Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 7 of the Insolvency and Bankruptcy Code, 2016.
2. Verification of the financial debt and default by the Corporate Debtor.
3. Appointment of the Interim Resolution Professional (IRP).
4. Declaration of Moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016.
5. Directions to the Corporate Debtor and other stakeholders.

Issue-wise Detailed Analysis:

1. Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 7 of the Insolvency and Bankruptcy Code, 2016:
The Punjab National Bank (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the CIRP against M/S Parerhat Gas Industries Ltd. (Corporate Debtor). The application was found to be complete and in conformity with the provisions of Section 7 of the Code and applicable rules.

2. Verification of the financial debt and default by the Corporate Debtor:
The Financial Creditor provided detailed information about the financial debt disbursed to the Corporate Debtor, including various cash credit limits, term loans, and additional term loans granted between 2007 and 2012. The total amount of debt claimed to be in default was Rs. 1,18,41,92,137.17, which included interest up to 31.08.2017. The Corporate Debtor's accounts became Non-Performing Assets (NPA) on 28.02.2013. The Corporate Debtor acknowledged the debt but raised some reservations about the actual amount due.

3. Appointment of the Interim Resolution Professional (IRP):
The Financial Creditor proposed the name of Shri Anupam Tiwari as the Interim Resolution Professional (IRP), who met the requirements of Section 7(3)(b) of the Code. The IRP provided written consent and there were no disciplinary proceedings pending against him.

4. Declaration of Moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016:
The tribunal declared a moratorium effective from 30.11.2017 until the completion of the CIRP or until the resolution plan is approved or an order for liquidation is passed. The moratorium prohibits:
- Institution or continuation of suits or proceedings against the Corporate Debtor.
- Execution of any judgment, decree, or order against the Corporate Debtor.
- Transferring, encumbering, or disposing of any assets of the Corporate Debtor.
- Actions to foreclose, recover, or enforce any security interest created by the Corporate Debtor.
The supply of essential goods or services to the Corporate Debtor shall not be terminated or interrupted during the moratorium period.

5. Directions to the Corporate Debtor and other stakeholders:
The tribunal directed the Corporate Debtor to provide effective assistance to the IRP. The IRP was instructed to carry out functions as per Sections 17, 18, 20, and 21 of the Code. All personnel connected with the Corporate Debtor, including its promoters, were legally obligated to assist and cooperate with the IRP. The IRP was also tasked with protecting and preserving the value of the Corporate Debtor's property and managing its operations as a going concern.

The tribunal ordered the public announcement of the CIRP and called for the submission of claims under Section 15 of the Code. The Registry was directed to communicate the order to the Financial Creditor, the Corporate Debtor, the IRP, and the Insolvency and Bankruptcy Board of India for further action. The application was admitted and disposed of without any order as to cost.

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