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of <h1>Tribunal admits creditor's petition, appoints IRP for Corporate Insolvency Resolution Process</h1> The tribunal admitted the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, filed by financial creditors against the corporate debtor ... Corporate Insolvency Resolution Process - Held that:- Application is complete as per the requirements of Section 7 (2) of the Code and other conditions prescribed by Rule 4 (1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. 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 pro forma 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. The name of the IRP has been proposed and there are no disciplinary proceedings pending against the proposed Interim Resolution Professional. As a sequel to the above discussion, this petition is admitted and Mr. Rohit Sehgal with the address AAA Insolvency Professionals LLP, E-10A, Kailash Colony, Greater Kailash-1, New Delhi-110048 and email-id [email protected] and having registration number IBBI/IPA-001/IP-P00528/2017-18/10953 is appointed as the Interim Resolution Professional. Issues Involved:1. Financial Creditor's Claim and Default2. Nature of Investment Scheme3. SEBI's Involvement and Orders4. Corporate Debtor's Objections5. Admissibility of Petition under Section 7 of IBC6. Appointment of Interim Resolution Professional (IRP)7. Declaration of MoratoriumIssue-wise Detailed Analysis:1. Financial Creditor's Claim and Default:The petitioners, claiming to be financial creditors, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against the corporate debtor. The financial debt amounted to Rs. 45,80,000, with an assured return of Rs. 91,60,000, which remained unpaid post the maturity date of 29.03.2017.2. Nature of Investment Scheme:The corporate debtor engaged in dairy farming and floated an investment scheme inviting customers to invest in cattle. SEBI classified this scheme as a 'Collective Investment Scheme' (CIS) in its order dated 12.02.2015, upheld by the SAT on 28.06.2017. The scheme involved assured returns, and the financial creditors invested under Category I plans, which required lump sum payments.3. SEBI's Involvement and Orders:SEBI received a complaint from RBI regarding illegal fund mobilization by the corporate debtor. After investigation, SEBI issued orders against the corporate debtor for unauthorized CIS operations. The corporate debtor's appeals to SAT were dismissed, and SEBI initiated recovery proceedings, attaching 41 properties of the corporate debtor to recover Rs. 1,136 crores.4. Corporate Debtor's Objections:The corporate debtor argued that the petitioners were joint venturers, not financial creditors, and that the claims should be settled by SEBI. The petitioners countered that SEBI and SAT had already determined the corporate debtor's default and that the IBC provisions should prevail. The tribunal rejected the corporate debtor's objections, citing the non-obstante clause in Section 238 of IBC.5. Admissibility of Petition under Section 7 of IBC:The tribunal examined Sections 7(2) and 7(5) of IBC, confirming that the application was complete, default had occurred, and no disciplinary proceedings were pending against the proposed IRP. The petitioners provided overwhelming evidence of default and fulfilled all requirements for initiating CIRP.6. Appointment of Interim Resolution Professional (IRP):Mr. Rohit Sehgal was appointed as the IRP, with instructions to make a public announcement and declare a moratorium as per Section 13(2) and Section 14 of the Code. The IRP was directed to perform duties under Sections 15, 17, 18, 19, 20, and 21 of the Code, with the ex-management required to cooperate fully.7. Declaration of Moratorium:The tribunal declared a moratorium, prohibiting the institution or continuation of suits, transferring or disposing of assets, and recovery actions against the corporate debtor. Essential supplies like water and electricity were to continue uninterrupted during the moratorium period.Conclusion:The petition was admitted, and the tribunal directed the IRP to proceed with the CIRP while ensuring the corporate debtor's management cooperates and adheres to the Code's provisions. The office was instructed to communicate the order to the relevant parties within seven days.
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