Tribunal Grants Amendment in Default Date, Admits Creditor's CIRP Application

The Tribunal granted permission to amend the date of default in Application IBA/706/2020 to 19.03.2015. The Financial Creditor's Application for initiation of Corporate Insolvency Resolution Process (CIRP) was admitted, declaring a moratorium and appointing an Interim Resolution Professional (IRP). The Application was found to be within the limitation period, and the debt and default were proven based on financial records. The IRP was tasked with managing the Corporate Debtor's operations and reporting progress to the Tribunal, with the next hearing scheduled for 16.08.2022.

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Issues Involved:
1. Amendment of Application (IA/756/CHE/2021)
2. Initiation of Corporate Insolvency Resolution Process (CIRP) (IBA/706/2020)
3. Limitation Period
4. Debt and Default Proof
5. Moratorium and Appointment of Interim Resolution Professional (IRP)

Issue-wise Detailed Analysis:

1. Amendment of Application (IA/756/CHE/2021):
The Applicant Financial Creditor filed IA/756/CHE/2021 under Section 60(5) of the IBC, 2016, read with Rule 11 of the NCLT Rules, 2016, to amend the date of default in Application IBA/706/2020. The Tribunal granted permission to rectify the date of default to 19.03.2015 and directed the Applicant to serve the amended copy to the Respondent Corporate Debtor. Consequently, IA/756/CHE/2021 stands closed.

2. Initiation of Corporate Insolvency Resolution Process (CIRP) (IBA/706/2020):
The Financial Creditor filed IBA/706/2020 under Section 7 of the IBC, 2016, against the Corporate Debtor, seeking to initiate CIRP, declare moratorium, and appoint an IRP. The Financial Creditor is a public company incorporated under the Companies Act, 1956, and claimed a sum of Rs. 255,45,22,996/- due from the Corporate Debtor, with the default date as 19.03.2015. The Application included various documents such as the Loan Agreement, Supplemental Loan Agreement, and demand notices.

3. Limitation Period:
The Respondent argued that the Application is barred by limitation, citing the Supreme Court judgment in BABULAL VARDHARJI GUJAR VS. VEER GURJAR ALUMINIUM INDUSTRIES PRIVATE LIMITED, which states that the limitation period for filing an application under Section 7 of the IBC, 2016, is three years. However, the Tribunal noted that the acknowledgment of debt in the Corporate Debtor's balance sheet extends the limitation period, as per the Supreme Court judgment in ASSET RECONSTRUCTION COMPANY (INDIA) LIMITED VS. BISHAL JAISWAL & ANR. Thus, the Application filed on 20.11.2020 is within the limitation period.

4. Debt and Default Proof:
The Tribunal found that the debt and default were proven beyond reasonable doubt, supported by the audited financial statements of the Corporate Debtor for the years ending 31.03.2015, 31.03.2016, and 31.03.2018. The Supreme Court in ASSET RECONSTRUCTION COMPANY (INDIA) LIMITED VS. BISHAL JAISWAL & ANR held that entries in the balance sheet amount to acknowledgment of debt. The Tribunal, therefore, concluded that the Corporate Debtor defaulted in repaying the financial debt to the Financial Creditor.

5. Moratorium and Appointment of Interim Resolution Professional (IRP):
Upon admitting the Application under Section 7 of the IBC, 2016, the Tribunal declared a moratorium as per Section 14(1), prohibiting suits, asset transfers, and recovery actions against the Corporate Debtor. The Tribunal appointed Ms. J. Karthiga as the IRP, directing her to take charge of the Corporate Debtor's management, make a public announcement, and call for claims from creditors. The IRP must comply with Sections 13(2), 15, 17, and 18 of the IBC, 2016, and file a report within 30 days. The Tribunal scheduled the next hearing for 16.08.2022.

Conclusion:
The Tribunal admitted the Application IBA/706/2020, initiated CIRP against the Corporate Debtor, declared a moratorium, and appointed an IRP. The IRP is required to manage the Corporate Debtor's operations and report progress to the Tribunal. The Application was found to be within the limitation period, and the debt and default were established based on financial records.

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