Tribunal Admits Insolvency Application, Appoints IRP, Imposes Moratorium

The Tribunal admitted the application under Section 7 of the Insolvency and Bankruptcy Code, finding the debt default and appointing an Interim Resolution Professional. A moratorium was imposed under Section 14 of the Code, prohibiting actions against the Corporate Debtor. The IRP was tasked with managing the Debtor's operations and preserving its assets. The Tribunal issued consequential orders for the CIRP process to proceed, without costs awarded.

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Issues Involved:
1. Application under Section 7 of the Insolvency and Bankruptcy Code, 2016
2. Existence of Debt and Default
3. Admission of Corporate Insolvency Resolution Process (CIRP)
4. Appointment of Interim Resolution Professional (IRP)
5. Moratorium under Section 14 of the I & B Code

Issue-wise Detailed Analysis:

1. Application under Section 7 of the Insolvency and Bankruptcy Code, 2016
The application was filed by a Financial Creditor under Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, to initiate an Insolvency Resolution Process against the Corporate Debtor. The Financial Creditor claimed that a sum of Rs. 3,50,000/- was advanced to the Corporate Debtor, which was not repaid after the due date, thereby constituting a default.

2. Existence of Debt and Default
The Financial Creditor provided detailed information about the loan disbursed, including the date of disbursement and the amount claimed to be in default, which totaled Rs. 5,66,946/- (including principal and interest). The Corporate Debtor, through its director, admitted the debt and expressed no objection to the initiation of the CIRP, citing financial difficulties and hardships. The Tribunal verified the default of debt as per Sections 3(11) and 3(12) of the I & B Code.

3. Admission of Corporate Insolvency Resolution Process (CIRP)
The Tribunal examined the statutory provisions of Section 7 of the I & B Code and found that the application was complete. The relevant provisions of Section 7 were cited, including the criteria for the Adjudicating Authority to ascertain the existence of a default and the conditions under which the application can be admitted or rejected. The Tribunal referred to the judgment in Innoventive Industries Ltd. v. ICICI Bank & Anr., which clarified the scheme of the Code and the process for triggering the CIRP.

4. Appointment of Interim Resolution Professional (IRP)
The Financial Creditor proposed the name of Shri Prawin Charan Dwary as the Interim Resolution Professional (IRP), and the Tribunal found that there were no disciplinary proceedings pending against him. The Tribunal appointed Shri Prawin Charan Dwary as the IRP, satisfying the requirement of Section 7(3)(b) of the I & B Code.

5. Moratorium under Section 14 of the I & B Code
The Tribunal ordered a moratorium under Section 14 of the I & B Code, effective from 25th April 2019, until the completion of the CIRP or until the approval of a Resolution Plan or an order for liquidation. The moratorium prohibits the institution or continuation of suits or proceedings against the Corporate Debtor, transferring or disposing of assets, and actions to foreclose or enforce any security interest. The IRP is directed to make a public announcement of the CIRP and call for submissions of claims. The IRP is also tasked with protecting and preserving the value of the Corporate Debtor's property and managing its operations as a going concern.

Conclusion
The Tribunal found the application complete and admitted it under Section 7 of the I & B Code. The Tribunal issued several consequential orders, including the appointment of an IRP, the imposition of a moratorium, and directions for the IRP to perform specific functions. The Registry was directed to communicate the order to all relevant parties, and no order was made as to costs. The CP (IB) No. 120/7/NCLT/AHM/2019 was thus admitted.

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