Tribunal admits petition under Insolvency Code, declares moratorium and appoints Resolution Professional

The tribunal found that the petition under Section 7 of the Insolvency and Bankruptcy Code was not barred by limitation as the Corporate Debtor had acknowledged the debt within the limitation period. It was established that there was a debt due and payable by the Corporate Debtor to the Financial Creditor, leading to the admission of the application under Section 7. A moratorium was declared, an Interim Resolution Professional appointed, and specific instructions were given regarding the deposit of funds and communication of the order to relevant parties. The case was scheduled for a periodical report filing on 29 July 2022, with the order pronounced on 10th June 2022.

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Issues Involved:
1. Whether the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 is barred by limitation.
2. Whether there is a debt due and payable by the Corporate Debtor to the Financial Creditor.
3. Whether the Corporate Debtor has acknowledged the debt within the limitation period.

Issue-Wise Detailed Analysis:

1. Whether the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 is barred by limitation:

The tribunal examined if the petition filed by the Financial Creditor is within the limitation period. The Corporate Debtor had acknowledged the debt through various letters dated 21 December 2015, 16 August 2017, 13 October 2017, 28 February 2018, 31 January 2019, and 2 March 2019. The tribunal referenced the Supreme Court's decision in Laxmi Pat Surana v. Union Bank of India & Anr, which held that the limitation period is extended with each acknowledgment of debt. The tribunal also cited Rajendra Narottamdas Sheth and Another v. Chandra Prakash Jain and Another, confirming that Section 18 of the Limitation Act applies to applications under Section 7 of the Code, thus extending the limitation period with each acknowledgment. Therefore, the petition is not barred by limitation.

2. Whether there is a debt due and payable by the Corporate Debtor to the Financial Creditor:

The tribunal reviewed the financial transactions between the parties, including the loan agreements, deeds of hypothecation, and mortgages executed by the Corporate Debtor. The Financial Creditor provided substantial evidence, including statements of accounts and various agreements, confirming the debt. The tribunal noted that the Corporate Debtor had defaulted on the repayment of the loan, which was declared as a non-performing asset (NPA). The tribunal acknowledged the debt amounting to Rs. 69,06,65,379 as of 10 February 2020, which was due and payable by the Corporate Debtor.

3. Whether the Corporate Debtor has acknowledged the debt within the limitation period:

The tribunal confirmed that the Corporate Debtor had acknowledged the debt through several communications, including letters proposing one-time settlements. These acknowledgments were made within the limitation period, thereby extending it. The tribunal referenced the Financial Creditor's evidence, including the Corporate Debtor's balance sheet for FY 2018-19, which admitted the dues.

Orders:

The tribunal admitted the application under Section 7 of the Insolvency and Bankruptcy Code, 2016, filed by the Financial Creditor. A moratorium under Section 14 of the IBC was declared, effective from the date of the order until the completion of the CIRP or approval of a resolution plan. Mr. Anil Agarwal was appointed as the Interim Resolution Professional (IRP). The tribunal directed the Financial Creditor to deposit Rs. 5,00,000 with the IRP to cover expenses for issuing public notice and inviting claims. The tribunal also instructed the Court Officer to communicate the order to relevant parties and ordered the Financial Creditor to serve a copy of the order on the Registrar of Companies, West Bengal, Kolkata.

The case was scheduled to come up on 29 July 2022 for filing the periodical report. The order was pronounced on 10th June 2022.

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