TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Tribunal grants Insolvency Resolution, appoints Professional, orders moratorium & dismisses applications</h1> The Tribunal admitted the application under Section 7(5)(a) of the Insolvency and Bankruptcy Code, appointed an Interim Insolvency Resolution ... Maintainability of application - Initiation of CIRP - Corporate Debtor - Section 7 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- Considering the provisions of Section 7 of the IB Code read with Rule 4 of the IB Rules and the information contained in Form-1, the application is complete in all respects. It is clear that it is settled law that at the stage of admission of application under Section 7 of IB Code, only the applicant Financial Creditor and the Respondent Corporate Debtor is required to be heard. No other person including a shareholder, an operational creditor, an employee, guarantor or even a director of the Corporate Debtor is separately required to be heard. Application disposed off. Issues Involved:1. Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 7 of the Insolvency and Bankruptcy Code, 2016.2. Objections raised by the Corporate Debtor regarding the initiation of CIRP.3. Validity of the Assignment Agreement.4. Multiple Interim Applications (IAs) filed by the Corporate Debtor.Detailed Analysis:1. Initiation of Corporate Insolvency Resolution Process (CIRP):Application Filed: Asset Reconstruction Company (India) Limited, acting as Trustee of Arcil AST 002 - I and Arcil AST 002 - II Trust, filed an application 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 CIRP against Neesa Leisure Limited, the Corporate Debtor.Background: The Respondent Company, originally incorporated as a Private Limited Company in 1998 and later converted into a Limited Company in 2005, engaged in the hospitality business, approached ICICI Bank Limited in 2010 for a Term Loan of Rs. 140.00 crores. The loan was sanctioned and secured by various agreements and mortgages. Despite restructuring efforts in 2012, the Respondent Company defaulted, leading to the assignment of the debt to the Applicant Company by ICICI Bank Limited in 2015.Outstanding Debt: As of 24.08.2017, Rs. 1,69,99,90,456/- remained outstanding, with the date of default being 18.06.2015.2. Objections Raised by the Corporate Debtor:a. Non-Disclosure of Winding Up Petition: The Corporate Debtor objected that the Applicant Company did not disclose a pending winding-up petition. The Tribunal clarified that the pendency of other proceedings (winding up, SARFAESI, RDDB Act) is no bar to maintaining proceedings under the IB Code, citing the judgment in Unigreen Global (P.) Ltd. v. Punjab National Bank.b. Simultaneous Proceedings: The Tribunal reiterated that simultaneous proceedings under different laws do not affect the maintainability of an application under the IB Code.c. Jurisdictional Writ Petition: The objection regarding the writ petition on jurisdiction was dismissed as the petition was already disposed of as withdrawn.d. Authorization of Officer: The Tribunal found that the Financial Creditor provided sufficient authorization for Mr. Piyush Kumar Gupta, Chief Manager, to file the petition, supported by additional affidavits.e. Written Communication of Proposed IRP: The Tribunal noted that the written communication of the proposed Interim Resolution Professional (IRP) was annexed with the petition.f. Minutes of JLM Meeting: The objection regarding the non-annexure of JLM minutes was dismissed as the minutes were already on record.g. Consortium Member's Opinion: The Tribunal observed that the State Bank of India's opinion in the JLM meeting did not oppose the initiation of CIRP and was not necessary for filing the application.3. Validity of the Assignment Agreement:Corporate Debtor's Challenge: The Corporate Debtor contested the validity of the assignment of debt to the Applicant Company. The Tribunal referred to judgments from the NCLT Mumbai Bench and Hon'ble NCLAT, confirming that the assignment was valid and the Applicant Company, as an assignee, is a Financial Creditor entitled to file the application.Debt and Default: The Tribunal confirmed the existence of a financial debt and default by the Respondent Company, making it a Corporate Debtor under the IB Code.4. Multiple Interim Applications (IAs) Filed by the Corporate Debtor:Dismissal of IAs: The Tribunal dismissed several IAs filed by the Corporate Debtor, including those challenging the validity of the assignment, seeking inspection of original documents, alleging abuse of process, and requesting to join ICICI Bank Limited as a necessary party. The Tribunal emphasized that only the applicant Financial Creditor and the Respondent Corporate Debtor are required to be heard at the stage of admission of the application under Section 7 of the IB Code.Conclusion:Admission of Application: The Tribunal admitted the application under Section 7(5)(a) of the IB Code, appointed Shri R.D. Chaudhary as the Interim Insolvency Resolution Professional, and ordered a moratorium under Section 13(1)(a) of the IB Code, prohibiting certain actions against the Corporate Debtor.Directive for Public Announcement: The IRP was directed to make a public announcement of the initiation of CIRP and call for submission of claims.Communication: A copy of the order was directed to be communicated to the Applicant Financial Creditor, the Respondent Corporate Debtor, and the Interim Insolvency Resolution Professional.The detailed judgment meticulously addressed all objections raised by the Corporate Debtor and reaffirmed the principles governing the initiation of CIRP under the IB Code.
TaxTMI 
TaxTMI 
