Tribunal Admits Insolvency Application against ACIL Limited, Appoints Interim Resolution Professional

The Tribunal admitted the application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s. ACIL Limited, appointing Mr. Ravindra Loonkar as the Interim Resolution Professional. A moratorium was declared, prohibiting certain actions against the corporate debtor. The IRP was directed to fulfill duties as per the Code, with communication of the order to relevant parties within seven days.

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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 application.
3. Requirement of consent from consortium banks.
4. Completeness and legality of Form-2 for the Interim Resolution Professional (IRP).
5. Consideration of loan restructuring proposal.
6. Satisfaction of conditions under Section 7(5)(a) of the Code.
7. Declaration of moratorium under Section 14 of the Code.

Issue-Wise Detailed Analysis:

1. Initiation of Corporate Insolvency Resolution Process (CIRP):
IDBI Bank Limited, as the financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate CIRP against the respondent company, M/s. ACIL Limited. The application sought to trigger the insolvency process due to the respondent's failure to repay the outstanding debt.

2. Authorization to File the Application:
The respondent objected that Smt. Shivani Singla filed the application without proper authorization. The applicant bank provided extracts from the 134th Board Meeting and a letter of authorization from the Chief General Manager, confirming that Smt. Shivani Singla, as General Manager, had the authority to file the application. The Tribunal found this objection meritless.

3. Requirement of Consent from Consortium Banks:
The respondent argued that the application was invalid without the consent of other consortium banks. The Tribunal clarified that under Section 7(1) of the Code, a financial creditor can file an application individually or jointly with other creditors. The inter se agreement among creditors cannot override the Code, and the applicant bank had the right to file the application independently.

4. Completeness and Legality of Form-2 for the IRP:
The respondent claimed that Form-2 was incomplete. Initially, the applicant proposed Shri Pradeep Kumar Sethi as IRP, but after objections, proposed Mr. Ravindra Loonkar, who agreed to serve and confirmed no pending disciplinary proceedings. The Tribunal found that the initial irregularity was rectified, and the new proposal met legal requirements.

5. Consideration of Loan Restructuring Proposal:
The respondent contended that their loan restructuring proposal was under consideration, making the application premature. However, the respondent failed to provide evidence of such consideration. The Tribunal emphasized that without a binding compromise agreement, it could not delay or decline the application.

6. Satisfaction of Conditions under Section 7(5)(a) of the Code:
The Tribunal noted that the applicant provided overwhelming evidence of the financial debt and default, including loan agreements, security documents, and certified bank statements. The Tribunal confirmed that the application was complete, the default had occurred, and no disciplinary proceedings were pending against the proposed IRP. Thus, the conditions under Section 7(5)(a) were satisfied.

7. Declaration of Moratorium under Section 14 of the Code:
Upon admitting the application, the Tribunal declared a moratorium, prohibiting:
- Institution or continuation of suits or proceedings against the corporate debtor.
- Transfer, encumbrance, or disposal of the corporate debtor's assets.
- Actions to foreclose or enforce security interests.
- Recovery of property in possession of the corporate debtor.
The moratorium does not apply to transactions notified by the Central Government or essential goods/services, and sureties in a contract of guarantee.

Conclusion:
The Tribunal admitted the application under Section 7 of the Insolvency and Bankruptcy Code, 2016, and appointed Mr. Ravindra Loonkar as the Interim Resolution Professional. A moratorium was declared, and the IRP was directed to perform duties as per the Code. The office was instructed to communicate the order to the relevant parties within seven days.

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