Tribunal Admits Company Petition for Insolvency, PNB's Claim Accepted

The Tribunal admitted the Company Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, initiating the Corporate Insolvency Resolution Process against the Corporate Debtor due to default in loan repayment. Punjab National Bank's claim for outstanding loan repayment of Rs. 13,05,11,934 was accepted, leading to the appointment of an Interim Resolution Professional to manage the affairs of the Corporate Debtor during the moratorium period. The Tribunal directed compliance with the order, including depositing funds for expenses and providing progress reports on the resolution process.

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Issues: Application under Section 7 of the Insolvency and Bankruptcy Code, 2016 for initiation of Corporate Insolvency Resolution Process (CIRP) due to default in loan repayment by Corporate Debtor.

Analysis:
1. Financial Creditor's Claim: Punjab National Bank, the Applicant, filed the application against the Corporate Debtor, Atlas Alloy (India) Private Limited, claiming default in loan repayment. The Applicant provided details of credit facilities availed by the Corporate Debtor and the outstanding amount due as of 31.05.2019, amounting to Rs. 13,05,11,934.

2. Jurisdiction and Consideration: The Tribunal noted the default in payment by the Corporate Debtor and confirmed its jurisdiction to entertain the application. It was observed that the matter falls within the purview of the Law of Limitation, leading to the decision to initiate the CIRP against the Corporate Debtor.

3. Appointment of Interim Resolution Professional: Mr. Satyendra Prasad Khorania was named by the Applicant to be appointed as the Interim Resolution Professional. The Tribunal approved the appointment and outlined the duties and responsibilities of the IRP under the provisions of the IBC, 2016. The initiation of CIRP invoked a moratorium under Section 14 of the IBC, 2016, and the IRP was directed to manage the affairs of the Corporate Debtor.

4. Compliance and Communication: The Applicant was directed to deposit a sum of Rs. 2,00,000 to the account of the IRP for expenses. The IRP was instructed to provide status reports on the progress of the CIRP. All personnel of the Corporate Debtor were required to cooperate with the IRP, and the management of the Corporate Debtor's affairs was vested with the IRP. The order was to be communicated to all relevant parties promptly.

5. Admission of Company Petition: The Tribunal admitted the Company Petition, signaling the commencement of the Corporate Insolvency Resolution Process against the Corporate Debtor. The order was to be communicated to the Applicant, Corporate Debtor, and the appointed IRP for immediate action, with a copy sent to the Insolvency and Bankruptcy Board of India (IBBI) for record-keeping.

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