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of <h1>Tribunal admits CIRP petition, appoints Interim Resolution Professional & declares moratorium</h1> The Tribunal admitted the petition to initiate the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, appointed Mr. Kuldeep ... Initiation of corporate insolvency resolution process by financial creditor - Held that:- A conjoint reading of the aforesaid provision would show 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. We are satisfied that a default has occurred and the application under sub-section (2) of Section 7 is complete; and no disciplinary proceedings are pending against the proposed Interim Resolution Professional. Thus, the application warrant admission. As a sequel to the above discussion, this petition is admitted and Mr. Kuldeep Kumar Bassi, 410, Level IV, Centrum Plaza, Golf Course Road, Sector 53, Gurgaon, Haryana-122011, Mobile No. 9417027233, e-mail id [email protected], Registration No. IBBI/1PA-001/IP-P00280/2017-2018/10524 is appointed as an Interim Resolution Professional. In pursuance of Section 13(2) of the Code, we direct that Interim Insolvency Resolution Professional shall immediately make public announcement with regard to admission of this application under Section 7 of the Code. The expression ‘immediately’ means within three days as clarified by Explanation to Regulation 6 (1) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. Issues Involved:1. Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 7 of the Insolvency and Bankruptcy Code, 2016.2. Authorization to file the petition.3. Default and Non-Performing Asset (NPA) status.4. Evidence of default and compliance with the Bankers Books Evidence Act, 1891.5. Objections regarding the proposed Interim Resolution Professional (IRP).6. Impact of ongoing negotiations with potential investors.7. Intervention applications by third parties.Issue-Wise Detailed Analysis:1. Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 7 of the Insolvency and Bankruptcy Code, 2016:The Financial Creditor, State Bank of India, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the CIRP against the Corporate Debtor, Asian Colour Coated Ispat Limited. The application was deemed complete and satisfied the requirements under Section 7(2) and Section 7(5) of the Code, warranting admission.2. Authorization to file the petition:The petition was signed and submitted by Mr. Abhishek Kumar, AGM/Relationship Manager of the Financial Creditor-Bank, authorized by the Chairman of State Bank of India as per Section 27 of the State Bank of India General Regulations, 1955. The Tribunal found the authorization valid, rejecting the Corporate Debtor's objection regarding the lack of authority.3. Default and Non-Performing Asset (NPA) status:The Corporate Debtor's account was declared NPA on 04.06.2016. The total amount in default with regard to State Bank of India (group) as on 30.11.2017 was Rs. 1283.46 Crores. The Tribunal noted that the default had occurred multiple times, satisfying the criteria for initiating CIRP under Section 3(12) of the Code.4. Evidence of default and compliance with the Bankers Books Evidence Act, 1891:The Financial Creditor provided overwhelming evidence of default, including entries in Bankers Books in accordance with the Bankers Books Evidence Act, 1891. The affidavit dated 26.04.2018 complied with the provisions of Section 2 and Section 2(A) of the Act, confirming that the accounts were maintained in the bank's computer systems with adequate safeguards.5. Objections regarding the proposed Interim Resolution Professional (IRP):Initially, the Financial Creditor proposed Mr. Savan Godiawala as the IRP, but due to objections raised by the Corporate Debtor, Mr. Kuldeep Kumar Bassi was proposed as the replacement. The Tribunal accepted the appointment of Mr. Kuldeep Kumar Bassi, finding no conflict of interest or disciplinary proceedings against him.6. Impact of ongoing negotiations with potential investors:The Corporate Debtor argued that ongoing negotiations with a potential strategic investor should be considered. However, the Tribunal found these negotiations irrelevant to the admission of the petition, as there was no concrete proposal in place. The Tribunal noted that any potential investment could be examined by the Committee of Creditors after the admission of the petition.7. Intervention applications by third parties:Several intervention applications were filed, including by Power2SME Private Limited, Andhra Bank, and the Employees Union of the Corporate Debtor. The Tribunal directed that these claims and interests be considered by the Interim Resolution Professional/Resolution Professional during the CIRP.Conclusion:The Tribunal admitted the petition for initiating the CIRP against the Corporate Debtor, appointed Mr. Kuldeep Kumar Bassi as the Interim Resolution Professional, and declared a moratorium under Section 14 of the Code. The Tribunal directed the Interim Resolution Professional to make a public announcement and perform his duties as per the Code. The admission of the petition was made subject to the outcome of a pending Writ Petition before the Hon'ble Delhi High Court.
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