2021 (9) TMI 384 - Tri - Insolvency and Bankruptcy

Tribunal Orders Corporate Insolvency Process for Ammanarul Spinners Pvt. Ltd.

Punjab National Bank Versus Ammanarul Spinners Pvt. Ltd.

The Tribunal found the Company Petition admissible and ordered the initiation of Corporate Insolvency Resolution Process against M/s. Ammanarul Spinners ... 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 Corporate Debtor made cash payments through NEFT into almost all the accounts in July 2017. The Company Petition being filed on 18.12.2019 is less than the 3 years from the date last payment and is within limitation. The counsel appearing for the Financial Debtor submitted that the debt and default are clearly established, and debt is also within limitation in the Company Petition. The learned counsel appearing for the Corporate Debtor was present at the time of final arguments on 06.08.2021, he did not raise any legal issues opposing the company petition except making statement that the Corporate Debtor has submitted One Time Settlement to the Financial Creditor. Thus, the present Company Petition satisfies all the necessary requirement for admission and the claim of Financial Creditor remained unchallenged. This tribunal is of the considered opinion that the company petition is liable to be admitted - petition admitted - moratorium declared. Issues: Initiation of Corporate Insolvency Resolution Process (CIRP) against M/s. Ammanarul Spinners Pvt. Ltd. based on default in payment by the Corporate Debtor to the Financial Creditor.Analysis:1. Petition Filing: Punjab National Bank, the Financial Creditor, filed a Company petition invoking Section 7 of the Insolvency and Bankruptcy Code, 2016, alleging default by the Corporate Debtor, M/s. Ammanarul Spinners Pvt. Ltd., in making payments amounting to Rupees Thirty-Three Crores Thirty-Three Lakhs Fifty-Five Thousand Eight Hundred Forty-Nine and Ninety-Seven Paisa only under loan facilities granted.2. Loan Facilities and Security: The Financial Creditor provided Term Loan and Working Capital to the Corporate Debtor, who hypothecated goods, book debts, assets, and executed various agreements and guarantees to secure the loans. The Corporate Debtor also created mortgages and undertakings in favor of the Financial Creditor to secure the loans.3. Submission and Default: The Financial Creditor presented loan documents, accounts, and payment history to establish the debt and default of the Corporate Debtor. The last payment was made in July 2017, and the Company Petition filed in December 2019 was within the limitation period, with the debt being clearly established and unchallenged by the Corporate Debtor.4. Legal Proceedings: The Corporate Debtor, despite appearing through counsel, did not file any reply opposing the Company Petition, leading to the forfeiture of their right to file a reply. The Corporate Debtor's advocate did not raise any legal issues except mentioning a One Time Settlement offer, which did not challenge the Financial Creditor's claim, resulting in the Company Petition meeting all requirements for admission.5. Judgment: The Tribunal found the Company Petition admissible and ordered the initiation of Corporate Insolvency Resolution Process against M/s. Ammanarul Spinners Pvt. Ltd. The Tribunal appointed an Interim Resolution Professional and directed the Financial Creditor to deposit an initial CIRP cost. Various prohibitions and directives were issued, including the moratorium period, supply of essential goods or services, and vesting of management in the IRP/RP during the CIRP period.This detailed analysis covers the legal aspects and proceedings leading to the judgment of initiating the Corporate Insolvency Resolution Process against the Corporate Debtor based on the default in payment to the Financial Creditor.