2021 (5) TMI 754 - Tri - Insolvency and Bankruptcy

Tribunal Admits Petition for Corporate Insolvency, Appoints Interim Resolution Professional

The Tribunal admitted the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, initiating the Corporate Insolvency Resolution Process ... Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - time limitation - HELD THAT:- The CD has defaulted in making repayment of the credit facilities to the Petitioner Bank due on 31.03.2018 and 06.04.2019. The Total Debt as per the Statement of Accounts and the Affidavit filed on behalf of the Petitioner Bank confirms the defaulted amount of ₹ 32,59,99,856.25 - Further, the CIBIL/CRILIC Reports submitted by the Petitioner Bank confirm the existence of liability to the Financial Creditor and default committed by the Corporate Debtor. Time Limitation - HELD THAT:- The Petitioner Bank has filed the petition within the period of limitation, as the last payment into the account has come on 04.03.2019 and the amended petition has been filed on 30.12.2020. It is a settled legal position that the pendency of SARFAESI proceeding or other dispute does not prevent a Financial Creditor to trigger the CIRP because the nature of remedy being sought for under the provisions of the IB Code is “Remedy in Rem” in respect of the CD - present IB Petition is filed by the duly authorised official of the Petitioner Bank in a prescribed format under Section 7 of the IB Code annexing copies of loan documents confirming the existence of debt due, payble and defaulted and proposed a name of a Resolution Professional to act as an Interim Resolution Professional (IRP). Petition admitted - moratorium declared. Issues Involved:1. Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 7 of the Insolvency and Bankruptcy Code, 2016.2. Amalgamation of United Bank of India with Punjab National Bank and its implications on the CIRP.3. Default and non-payment by the Corporate Debtor.4. Limitation period for filing the CIRP application.5. Appointment of Interim Resolution Professional (IRP).6. Declaration of moratorium.Detailed Analysis:1. Initiation of CIRP under Section 7 of the Insolvency and Bankruptcy Code, 2016:The Financial Creditor, Punjab National Bank, filed an Insolvency Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking the initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, M/s. Megha Granules Pvt. Ltd., due to default in repayment of various credit facilities availed from the bank.2. Amalgamation of United Bank of India with Punjab National Bank:Initially, the petition was filed by United Bank of India, which later amalgamated with Punjab National Bank. The amended petition included debts from both banks, and necessary amendments were made to reflect this change. The Tribunal allowed the correction of the debt amount due to a typographical error, and the amended petition was filed accordingly.3. Default and Non-Payment by the Corporate Debtor:The Corporate Debtor had availed credit facilities from a consortium of banks, including United Bank of India and Punjab National Bank. The total consortium loan amount was Rs. 117.98 Crores. The Corporate Debtor defaulted in making repayments, and the accounts were classified as Non-Performing Assets (NPA) on 31.03.2018. Despite various notices and demand letters, the Corporate Debtor failed to make payments, leading to the filing of this petition.4. Limitation Period for Filing the CIRP Application:The Corporate Debtor had acknowledged the debt through various documents, including a Letter of Acknowledgment of Debt cum Balance Confirmation dated 31.07.2017. The application was filed within the prescribed limitation period, as the last payment was made on 04.03.2019, and the amended petition was filed on 30.12.2020.5. Appointment of Interim Resolution Professional (IRP):The Petitioner Bank suggested the name of Mr. Sandeep Khaitan as the Interim Resolution Professional (IRP), who provided his consent. The Tribunal appointed him as the IRP and directed him to make a public announcement of the moratorium and follow the provisions under Sections 13 and 14 of the Insolvency and Bankruptcy Code.6. Declaration of Moratorium:The Tribunal declared a moratorium with effect from the date of the order, prohibiting:- The institution or continuation of suits or proceedings against the Corporate Debtor.- Transferring, encumbering, or disposing of any assets of the Corporate Debtor.- Actions to foreclose, recover, or enforce any security interest created by the Corporate Debtor.- Recovery of any property occupied by the Corporate Debtor.Observations and Order:The Tribunal found that the Petitioner Bank had provided sufficient documents to establish the debt and default. The petition was filed within the limitation period, and the Corporate Debtor had acknowledged the debt. The Tribunal admitted the petition and directed the commencement of the CIRP. The IRP was instructed to adhere to the time limits and perform duties as specified under the Insolvency and Bankruptcy Code.Conclusion:The Tribunal admitted the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, and initiated the Corporate Insolvency Resolution Process against the Corporate Debtor, M/s. Megha Granules Pvt. Ltd., appointing Mr. Sandeep Khaitan as the Interim Resolution Professional. The moratorium was declared, and the IRP was directed to follow the provisions of the Code. The total outstanding debt was established as Rs. 32,59,99,856.25.