2020 (11) TMI 514 - Tri - Insolvency and Bankruptcy

Tribunal Orders Insolvency Process for Non-Payment |

Oriental Bank of Commerce Versus Perfect Industries P. Ltd.

The Tribunal granted the financial creditor's petition to initiate the corporate insolvency resolution process against the corporate debtor due to ... Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- The application made by the financial creditor is complete in all respects as required by law. It clearly shows that the corporate debtor is in default of a debt due and payable, and the default is in excess of minimum amount of one lakh rupees stipulated under section 4(1) of the Insolvency and Bankruptcy Code at the relevant time. Therefore, the default stands established and there is no reason to deny the admission of the petition. In view of this, this Adjudicating Authority admits this petition and orders initiation of CIRP against the corporate debtor. Petition admitted - moratorium declared. Issues:1. Initiation of corporate insolvency resolution process under section 7 of the Insolvency and Bankruptcy Code, 2016 by a financial creditor against a corporate debtor.Analysis:The Tribunal, in this judgment, addressed the company petition filed by a financial creditor seeking to initiate the corporate insolvency resolution process (CIRP) against a private company limited by shares, the corporate debtor. The financial creditor claimed that the corporate debtor failed to make payment of a substantial sum as principal and interest, leading to the declaration of the account as a non-performing asset (NPA). The financial agreements and bank statements were submitted as evidence, establishing a debt due and payable amounting to over eight crores. Despite the corporate debtor's lack of response, the Tribunal examined the completeness of the application and found it in compliance with the Insolvency and Bankruptcy Code requirements, confirming the default and ordering the initiation of CIRP.The Tribunal noted the attempts made to serve notices on the corporate debtor, including hand delivery and email, as well as publication in newspapers. Despite granting multiple opportunities for the corporate debtor to respond and be represented, no submissions were made, indicating non-cooperation. The financial creditor proposed an interim resolution professional, whose appointment was approved by the Tribunal. The order admitted the petition, imposed a moratorium under section 14 of the Insolvency and Bankruptcy Code, and directed the public announcement of CIRP. The appointed interim resolution professional was tasked with managing the corporate debtor during the CIRP period, with specific reporting requirements outlined for monitoring the resolution process.Additionally, the Tribunal mandated the financial creditor to deposit a specified sum with the interim resolution professional for expenses related to public notices and claims. Communication of the order to relevant parties through various means was directed, emphasizing the importance of timely dissemination. Furthermore, instructions were issued for updating the corporate debtor's information with the Registrar of Companies, Maharashtra, ensuring compliance and data accuracy. The comprehensive order encompassed various aspects of the insolvency resolution process, safeguarding the interests of both the financial creditor and the corporate debtor within the legal framework of the Insolvency and Bankruptcy Code.