Tribunal dismisses Corporate Applicant's insolvency application for lack of evidence and malicious intent.

The tribunal dismissed the application filed by the Corporate Applicant under Section 10 of the Insolvency & Bankruptcy Code, 2016, as it failed to prove default in payment of financial debts and was found to have filed the application with malicious intent to defraud creditors. The change in the company's name and registered office was viewed as an attempt to deceive creditors. Additionally, the non-production of a special resolution rendered the application non-maintainable. Operational creditors and shareholders were allowed intervening applications, with each party bearing their respective costs.

---

---

List of Issues:
1. Whether the Corporate Applicant succeeds in proving default in payment of debt due to its creditors.
2. Whether the Corporate Applicant has filed the application with malicious intent and to defraud the creditors.
3. Whether the Corporate Applicant has changed the name of the company and its registered office with malicious intention to deceive the creditors.
4. Whether the application is maintainable for want of production of special resolution as per Section 10(3)(c) of the Code.
5. Reliefs and costs.

Detailed Analysis:

Issue 1: Default in Payment of Debt
The Corporate Applicant, Sri. Munisuvrata Agri International Limited, filed an application under Section 10 of the Insolvency & Bankruptcy Code, 2016, citing inability to continue business due to an RBI circular and pre-existing debts. The corporate applicant claimed a default on financial debts amounting to Rs. 536,92,00,000/-. However, the tribunal found that there was no sufficient evidence to prove the occurrence of default. The financial creditors did not produce loan agreements or demand notices, and the corporate applicant's financial statements indicated profitability. Therefore, the tribunal concluded that the corporate applicant failed to prove the existence of default on financial debt.

Issue 2: Malicious Intent and Fraud
The tribunal examined whether the application was filed with malicious intent to defraud creditors. The corporate applicant had changed its name and registered office shortly before filing the application, which was not disclosed properly. The tribunal found that the application was filed to misuse the moratorium period, thereby frustrating ongoing recovery proceedings by operational creditors and shareholders. The tribunal concluded that the corporate applicant filed the application with malicious intent and ulterior motives.

Issue 3: Change of Name and Registered Office
The tribunal considered the change of the company's name and registered office as an act to deceive creditors. The corporate applicant changed its name and address just days before filing the application, which was not properly communicated to creditors. This action was seen as an attempt to conceal the insolvency proceedings from creditors, supporting the allegation of malicious intent.

Issue 4: Special Resolution Requirement
The tribunal addressed the requirement under Section 10(3)(c) of the Code, which mandates a special resolution by shareholders for initiating insolvency proceedings. The corporate applicant did not produce such a resolution, as this requirement was introduced after the application was filed. However, the tribunal held that procedural laws apply retrospectively and non-compliance with this requirement rendered the application incomplete and non-maintainable.

Reliefs and Costs
Given the findings on the above issues, the tribunal dismissed the application filed by the corporate applicant under Section 10 of the Insolvency & Bankruptcy Code, 2016. The intervening applications filed by operational creditors and shareholders were allowed. The tribunal directed that each party bear their respective costs.

Conclusion:
- CA(IB) No. 635/KB 2018, CA(IB) No. 652/KB/2018, CA(IB) No. 722/KB/2018, and CA(IB) No. 778/KB/2018 were allowed.
- CP(IB) No. 615/KB/2018 was dismissed.
- Inv. A. No. 800/KB/2018 was dismissed.
- No order as to costs.

Urgent certified copies of the order were to be issued upon compliance with requisite formalities.

---