2018 (7) TMI 41 - Tri - Insolvency and Bankruptcy

Corporate Debtor's Insolvency Process Initiated, Moratorium Declared to Facilitate Resolution

Tek Chand Versus M/s. Premia Projects Ltd.

The petition was admitted, and the Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor. An Interim Resolution ... Corporate Insolvency Resolution Process - satisfaction of default - Held that:- Form and manner of the application has to be the one as prescribed. It is evident from the record that the application has been filed on the proforma prescribed under Rule 4(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 read with Section 7 of IBC. A default has occurred and the application under sub-section 2 of Section 7 is complete. The name of the IRP has been proposed and there are no disciplinary proceedings pending against the proposed Interim Resolution Professional. Application admitted. Interim Insolvency Resolution Professional shall immediately make public announcement with regard to admission of this application under Section 7 of the Code. We also declare moratorium in terms of Section 14 of the Code. Issues Involved:1. Whether the petitioner qualifies as a financial creditor under Section 7 of the Insolvency and Bankruptcy Code, 2016.2. Whether the Corporate Debtor defaulted on the payment of assured returns as per the Memorandum of Understanding (MOU).3. Whether the application for initiating Corporate Insolvency Resolution Process (CIRP) meets the requirements under Section 7 of the Code.4. Appointment of an Interim Resolution Professional (IRP) and declaration of moratorium under Section 14 of the Code.Issue-wise Detailed Analysis:1. Qualification as Financial Creditor:The petitioner claimed to be a financial creditor under Section 7 of the Insolvency and Bankruptcy Code, 2016 (the Code), seeking to trigger the Corporate Insolvency Resolution Process (CIRP) against M/s. Premia Projects Limited (the Corporate Debtor). The petitioner had entered into a sale/purchase MOU on 11-10-2013 for the purchase of 3500 sq. ft. constructed space, with an assured return plan. The Hon'ble NCLAT in the case of Nikhil Mehta & Sons (HUF) & Ors v. AMR Infrastructures Ltd. held that those who have a commitment to pay 'assured return' are covered by the expression 'financial creditor'.2. Default on Payment of Assured Returns:The Corporate Debtor was obliged to pay a monthly sum of Rs. 3,04,167/- to the petitioner until 50 months or offer of possession, whichever is later. The debtor stopped making these payments since April 2016. The petitioner provided detailed amounts disbursed to the Corporate Debtor and the defaulted payments. The MOU and subsequent letters confirmed the booking and assured returns, establishing the financial debt and default.3. Application Requirements under Section 7:The petition was filed in the prescribed proforma as per Rule 4(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. The petitioner provided comprehensive details of the debt, default, and supporting documents. The application was deemed complete under Section 7(2) of the Code. The Tribunal was satisfied that a default had occurred, and the application met all statutory requirements.4. Appointment of IRP and Declaration of Moratorium:The petitioner proposed Mr. Alok Kumar Kuchhal as the IRP, who provided the necessary disclosures and confirmed no pending disciplinary proceedings against him. The Tribunal admitted the petition and appointed Mr. Kuchhal as the IRP. A moratorium was declared under Section 14 of the Code, prohibiting:- Institution or continuation of suits or proceedings against the Corporate Debtor.- Transferring or disposing of any assets of the Corporate Debtor.- Actions to foreclose or enforce any security interest.- Recovery of any property occupied by the Corporate Debtor.The IRP was directed to make a public announcement and perform duties as per Sections 15, 17, 18, 19, 20, and 21 of the Code. The Tribunal emphasized the IRP's obligation to protect the value of the Corporate Debtor's property and ensure cooperation from all personnel associated with the Corporate Debtor.Conclusion:The petition was admitted, and the CIRP was initiated against the Corporate Debtor. The IRP was appointed, and a moratorium was declared to facilitate the resolution process. The Tribunal directed communication of the order to all relevant parties within three days.