Tribunal Admits Insolvency Application, Appoints IRP, Declares Moratorium

The Tribunal admitted the application under Section 7 of the Insolvency and Bankruptcy Code, appointed an Interim Resolution Professional, and declared a moratorium. The appointed IRP was directed to fulfill duties diligently in compliance with relevant laws. The order was to be communicated to the financial creditor, corporate debtor, and IRP within seven days.

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Issues Involved
1. Jurisdiction and Admissibility of the Application.
2. Loan Sanction and Default.
3. Evidence of Financial Debt and Default.
4. Appointment of Interim Resolution Professional (IRP).
5. Declaration of Moratorium.

Issue-wise Detailed Analysis

1. Jurisdiction and Admissibility of the Application
The application was filed by Andhra Bank under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s Kalptaru Steel Rolling Mills Limited. The Tribunal had territorial jurisdiction as the registered office of the corporate debtor is in New Delhi. The application was complete, and there were no disciplinary proceedings against the proposed IRP.

2. Loan Sanction and Default
The applicant bank had sanctioned various loan facilities to the respondent company, including an OCC limit of Rs. 2.50 crores and ILC limit of Rs. 2.50 crores, which were later increased to a total of Rs. 22.00 crores. The respondent company accepted the terms and conditions, executed necessary loan documents, and created a mortgage over properties to secure the loans. Despite these arrangements, the respondent defaulted on repayment, leading to the classification of the account as NPA on 30.06.2013.

3. Evidence of Financial Debt and Default
The applicant bank provided voluminous evidence, including Board resolutions, loan agreements, demand promissory notes, and certified statements of account. The respondent company had borrowed various credit facilities against the payment of interest, and the debt included both the principal and interest components. The default amount exceeded Rs. 1 lakh, making the application maintainable under Section 4 of the Code.

4. Appointment of Interim Resolution Professional (IRP)
Shri Prabhakar Nandiraju was proposed as the IRP, and he satisfied the requirements under Section 7(3)(b) of the Code. The Tribunal appointed him as the IRP and directed him to make a public announcement regarding the admission of the application within three days.

5. Declaration of Moratorium
The Tribunal declared a moratorium 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 by an owner or lessor.

The moratorium does not apply to transactions notified by the Central Government or the supply of essential goods or services to the corporate debtor.

Conclusion
The Tribunal admitted the application under Section 7 of the Code, appointed Shri Prabhakar Nandiraju as the IRP, and declared a moratorium. The IRP was directed to perform his duties with utmost dedication and in accordance with the provisions of the Code, Rules, and Regulations. The office was instructed to communicate the order to the financial creditor, the corporate debtor, and the IRP within seven days.

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