2018 (5) TMI 693 - Tri - Insolvency and Bankruptcy

Appointment of Interim Resolution Professional & Suspension of Board Powers

The Tribunal appointed Mr. Anjum Goyal as the Interim Resolution Professional for a specified term. The respondent's offer to pay outstanding amounts was ... Appointment of Resolution Professional as the Interim Resolution Professional - Held that:- The petitioner named Mr.Anjum Goyal, registered Resolution Professional having allotted Registration No. IBBI/IPA-002/IP-N00251/2017-18/10765 has filed written communication in Form 2 which is found in order. As Advocate for respondent-corporate debtor submits that the respondent is prepared to pay the outstanding amount and has also brought the cheque/demand draft for delivering the same to the petitioner. Having heard learned counsel for respondent, we find that this submission cannot be acceded to in view of Rule 8 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 which says that “The Adjudicating Authority may permit withdrawal of the application made under rules 4, 6 or 7, as the case may be, on a request made by the applicant before its admission.” Also while admitting the application on 12.03.2018, moratorium in accordance with Section 14(1) of the Insolvency and Bankruptcy Code, 2016 was declared. Issues involved: Appointment of Interim Resolution Professional, Outstanding amount payment, Suspension of Board of Directors' powers, Duties of Interim Resolution Professional, Constitution of Committee of Creditors, Public announcement of Corporate Insolvency Resolution Process, Reporting obligations of Interim Resolution ProfessionalAppointment of Interim Resolution Professional:The Tribunal appointed Mr. Anjum Goyal as the Interim Resolution Professional based on the petitioner's nomination and written communication found in order. The term of Mr. Goyal's appointment was set for 30 days from the date of his appointment or as determined by the committee of creditors, whichever is earlier.Outstanding amount payment:The respondent expressed readiness to pay the outstanding amount and presented a cheque/demand draft. However, the Tribunal noted that withdrawal of the application is not permitted after admission as per Rule 8 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. Additionally, a moratorium under Section 14(1) of the Insolvency and Bankruptcy Code, 2016 was declared upon admission of the application on 12.03.2018.Suspension of Board of Directors' powers:Upon Mr. Goyal's appointment as the Interim Resolution Professional, the powers of the Board of Directors were suspended as per Section 17 of the Insolvency and Bankruptcy Code, 2016. The management of the affairs was vested with the Interim Resolution Professional, who was directed to take control and custody of the assets of the Corporate Debtor.Duties of Interim Resolution Professional:The Interim Resolution Professional was mandated to strictly adhere to the Insolvency and Bankruptcy Code, related rules, and the Code of Conduct governing the profession of an Insolvency Professional. It was emphasized that the Interim Resolution Professional should maintain high standards of ethics and moral conduct.Constitution of Committee of Creditors:The Interim Resolution Professional was directed to constitute the Committee of Creditors expeditiously, within three weeks from the date of the order. The Corporate Debtor and its associates were instructed to cooperate with the Interim Resolution Professional in managing the affairs and accessing necessary information.Public announcement of Corporate Insolvency Resolution Process:The Interim Resolution Professional was required to make a public announcement within three days of the initiation of the Corporate Insolvency Resolution Process, calling for the submission of claims against the Corporate Debtor as per the relevant regulations.Reporting obligations of Interim Resolution Professional:The Tribunal directed the Interim Insolvency Resolution Professional to submit a report of events related to the Corporate Debtor to the Tribunal every seventh day. The order was to be communicated to both parties, with the petitioner responsible for informing the Interim Resolution Professional, and the Registry tasked with sending a copy of the order to the Interim Resolution Professional's email address.This detailed analysis of the judgment covers the various issues addressed by the Tribunal, providing a comprehensive overview of the legal proceedings and directives issued in the case.