Tribunal asserts jurisdiction, admits insolvency application, appoints Interim Resolution Professional

The Tribunal confirmed jurisdiction over the corporate debtor's registered office in New Delhi, admitted the application under Section 7 of the Insolvency and Bankruptcy Code, 2016, appointing Shri Vijender Sharma as the Interim Resolution Professional. A moratorium was declared under Section 14 of the Code, prohibiting certain actions against the corporate debtor. The debt amount of Rs. 46,28,29,952.44 was established, and the respondent's claims of solvency were dismissed. The Tribunal found the application complete and maintainable, emphasizing the evidence of default.

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Issues Involved:
1. Jurisdiction and Admissibility
2. Financial Debt Definition
3. Default and Debt Amount
4. Solvency of Corporate Debtor
5. Procedural Completeness
6. Appointment of Interim Resolution Professional (IRP)
7. Moratorium and Consequences

Issue-wise Detailed Analysis:

1. Jurisdiction and Admissibility:
The application was filed by ICICI Bank Limited under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against M/s VIL Limited. The Tribunal confirmed its territorial jurisdiction over the NCT of Delhi as the registered office of the corporate debtor is located in New Delhi.

2. Financial Debt Definition:
The respondent argued there was no "Financial Debt" under Section 5(8) of the IBC, 2016, as there was no consideration for the time value of money. The Tribunal found that the credit facilities extended by the applicant were recoverable with applicable interest, thus constituting a financial debt. The debt included both principal and interest, satisfying the definition of "Financial Debt."

3. Default and Debt Amount:
The respondent claimed no sum was due or payable and disputed the quantum of debt. The Tribunal noted that the applicant provided overwhelming evidence, including loan agreements, guarantee deeds, and bank statements, proving the default. The respondent's account was classified as a Non-Performing Asset (NPA) on 30 September 2017, with a total default amount of Rs. 46,28,29,952.44 as of 30.09.2018.

4. Solvency of Corporate Debtor:
The respondent contended that it was a solvent company affected by market conditions and internal disagreements among lenders. The Tribunal held that mere assertions of solvency were insufficient. The applicant's claim of outstanding dues around INR 463 million indicated significant default, triggering the Code for defaults of Rs. 1 lakh or more.

5. Procedural Completeness:
The respondent alleged defects in the petition. The Tribunal found the application complete, filed in "Form-I" under Section 7 of the Code, with all required details and evidence of default. The Tribunal emphasized that an application under Section 7 is maintainable if the debt is due, and there is a default of at least Rs. 1 lakh.

6. Appointment of Interim Resolution Professional (IRP):
The applicant proposed Shri Vijender Sharma as the IRP, who agreed to the appointment and provided necessary declarations. The Tribunal appointed him as the IRP, finding no pending disciplinary proceedings against him.

7. Moratorium and Consequences:
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.
- Foreclosure or enforcement of security interest.
- Recovery of property occupied by the corporate debtor.

The moratorium did not apply to transactions notified by the Central Government or essential goods/services. The IRP was directed to perform duties under Sections 15, 17, 18, 19, 20, and 21 of the Code, with all personnel connected with the corporate debtor required to cooperate.

Conclusion:
The Tribunal admitted the application under Section 7 of the Code, appointing Shri Vijender Sharma as the IRP and declaring a moratorium. The office was directed to communicate the order to relevant parties and update the status of the corporate debtor on the Registrar of Companies' website.

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