2018 (12) TMI 224 - Tri - Insolvency and Bankruptcy

Tribunal Validates Insolvency Petition, Appoints Resolution Professional

The Tribunal confirmed jurisdiction over the insolvency petition, admitted it, authorized Oriental Bank of Commerce to file based on specific authority, ... Initiating the insolvency resolution process against the respondent-corporate debtor - default in repayment of loan - Held that:- Corporate debtor has defaulted, reference has been made to various documents which are already referred while narrating the facts of the case. All the relevant documents regarding sanction of the loan facilities as well as execution of the documents by the respondent-corporate debtor have been relied upon. As the petitioner submits that loan has been secured by hypothecation of assets for which the documents have already been referred. In Part IV and V of Form No.1 the particulars of the amount of debt granted with date of disbursement are given in detail. The amount claimed to be defaulted and the date on which the default occurred are also mentioned in column No.2 of Part IV of the application. In Form -I statement of account of the respondent-corporate debtor for the period of 17.06.2015 to 31.01.2018 has been attached which has been certified by the Assistant General Manager who is also In-charge of the Computer Systems Bank of the Financial Creditor in order to comply with the requirements of Section 2(A) of the Bankers Books Evidence Act, 1891. This certificate is at page 978 of the paper book. The petitioner has also filed the CIBIL report in order to support the evidence of default and that report is at Annexure A/79. The requirements of Clause (a) of Section 7(3) of the Code have been fulfilled. Interim Resolution Professional/Resolution Professional appointed. In view of the above the petition is admitted Issues Involved:1. Jurisdiction and admissibility of the insolvency petition.2. Authorization to file the petition.3. Financial facilities and default by the corporate debtor.4. Compliance with procedural requirements under the Insolvency and Bankruptcy Code, 2016.5. Appointment and duties of the Interim Resolution Professional (IRP).6. Declaration of moratorium.Issue-wise Detailed Analysis:1. Jurisdiction and Admissibility of the Insolvency Petition:The Tribunal confirmed its territorial jurisdiction over the matter as the corporate debtor's registered office is located in Gurugram, Haryana. The Tribunal acknowledged the incorporation date of the respondent-corporate debtor as 25.06.2008, with a paid-up share capital of Rs. 15,00,00,000/-. The petition was admitted after verifying the necessary amendments and details provided by the petitioner.2. Authorization to File the Petition:The petition was filed by Oriental Bank of Commerce through Mr. Harmeet Singh Phillip, Chief Manager, based on a Power of Attorney dated 04.09.2003. The Tribunal required the petitioner to submit documents giving specific authority to file the petition under the Insolvency and Bankruptcy Code, 2016. The petitioner complied by submitting an authority letter dated 20.07.2018 and a resolution passed by the Board of Directors on 16.12.2017.3. Financial Facilities and Default by the Corporate Debtor:The corporate debtor was granted financial facilities amounting to Rs. 350 crores, later reduced to Rs. 280 crores, for operational and business expansion. The corporate debtor executed various security documents, including agreements for term loans, hypothecation of assets, and counter guarantees. The last payment made by the corporate debtor was on 09.05.2017, and the account was classified as NPA on 31.08.2017. A demand notice under SARFAESI Act, 2002, was issued on 24.01.2018 for an outstanding amount of Rs. 85,31,21,039/-.4. Compliance with Procedural Requirements under the Insolvency and Bankruptcy Code, 2016:The application was filed in Form 4 as prescribed in Form 1 Rule 4 of the Rules, complying with Section 7(1) and (2) of the Code. The petitioner furnished records of default, proposed the name of Mr. Vikram Kumar as the Interim Resolution Professional (IRP), and provided a CIBIL report and certified statement of account. The Tribunal found the requirements of Section 7(3)(a) and (b) of the Code to be fulfilled.5. Appointment and Duties of the Interim Resolution Professional (IRP):Mr. Vikram Kumar was appointed as the Interim Resolution Professional. His appointment was found to be in order, with no disciplinary proceedings pending against him. The IRP was directed to exercise powers vested under Section 17 of the Code, manage the corporate debtor's affairs, and prepare an inventory of assets. The IRP was also instructed to make a public announcement, constitute a committee of creditors, and file regular progress reports.6. 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. The moratorium would remain effective until the completion of the corporate insolvency resolution process or until further orders. The supply of essential goods or services to the corporate debtor was not to be terminated during the moratorium period.Conclusion:The Tribunal admitted the petition, appointed Mr. Vikram Kumar as the IRP, and declared a moratorium. The IRP was directed to manage the corporate debtor's affairs and report progress to the Tribunal. The order emphasized compliance with the Insolvency and Bankruptcy Code, 2016, and the cooperation of the corporate debtor's management with the IRP.