Tribunal Admits Petition for Moratorium: Financial Creditor Proves Default

The Tribunal found that the financial creditor adequately demonstrated the default of the corporate debtor through various notices and account statements. The defects in the application under Section 7(2) were rectified by the financial creditor, making the application complete. Mr. Hemanshu Jetley was appointed as the Interim Resolution Professional after the Tribunal found no pending disciplinary proceedings against him. Consequently, the petition was admitted, leading to the declaration of a moratorium under Section 14 of the Code, including the suspension of actions against the corporate debtor and the appointment of an Interim Resolution Professional to manage the debtor's assets.

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Issues Involved:
1. Whether a default has occurred.
2. Whether the application under Section 7(2) is complete.
3. Whether any disciplinary proceedings are pending against the proposed Resolution Professional.

Detailed Analysis:

1. Occurrence of Default:
The Tribunal examined the financial facilities granted to the corporate debtor, which included loans and credit limits totaling Rs. 65,48,00,000. As of 31.10.2017, the outstanding amount was Rs. 83,10,72,467.80, inclusive of interest and expenses. The financial creditor provided account statements and certificates under the Bankers Books Evidence Act. Notices under Section 13(2) of the SARFAESI Act were issued, stating the account was classified as Non-Performing Asset (NPA) on 31.03.2014. Despite the corporate debtor's objections, the Tribunal found that the financial creditor had adequately demonstrated the default through various notices and account statements.

2. Completeness of Application Under Section 7(2):
The Tribunal addressed defects pointed out by the corporate debtor, such as the absence of a certificate of registration of charge and the computation of default in a tabular form. These defects were rectified by the financial creditor, who provided the necessary documents, including certified copies of registration of charge and detailed computation of default. The Tribunal noted that the financial creditor had complied with the requirements, making the application complete. The Tribunal also dismissed the corporate debtor's argument regarding the need for updated valuation of securities, stating that such valuation is not mandatory for determining the application’s admission.

3. Disciplinary Proceedings Against Proposed Resolution Professional:
The financial creditor proposed Mr. Hemanshu Jetley as the Interim Resolution Professional, providing his registration certificate and Form II, where he affirmed his eligibility and stated no disciplinary proceedings were pending against him. The Tribunal found this satisfactory and appointed Mr. Jetley as the Interim Resolution Professional.

Conclusion:
The Tribunal concluded that the requirements of Section 7(5)(a) were satisfied, leading to the admission of the petition and the declaration of a moratorium under Section 14 of the Code. The moratorium included the suspension of suits, proceedings, and actions against the corporate debtor, and the prohibition of transferring or disposing of assets. The Tribunal directed the Interim Resolution Professional to take control of the corporate debtor’s assets, constitute a Committee of Creditors, and report progress to the Tribunal regularly. The order was communicated to both parties and the Interim Resolution Professional.

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