2022 (8) TMI 315 - Tri - Insolvency and Bankruptcy

Tribunal Admits IBC Application, Imposes Moratorium

State Bank of India Versus Jain Infraprojects Limited

The Tribunal admitted the application under Section 7 of the IBC, declaring a moratorium under Section 14. The moratorium would continue until the ... 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:- Suffice it to say there is a clear cut admission on the part of the Corporate Debtor regarding the loan amount. The loan was classified as NPA on 28th of July, 2013 - The application is well within the limitation period. It is clear that there is a debt due by the Corporate Debtor and there is a default by the Corporate Debtor. The amount of debt claimed is above the threshold limit of 1 Crore. Further, the debt due and payable by the Corporate Debtor is duly admitted through various communications placed on record - Application admitted - moratorium declared. Issues Involved:1. Barred by Limitation2. Validity of Supplementary Affidavit3. Parallel Proceedings before DRT4. Applicability of Section 10A MoratoriumIssue-Wise Detailed Analysis:1. Barred by Limitation:The Corporate Debtor argued that the application is barred by limitation. However, the Tribunal noted multiple acknowledgments of debt by the Corporate Debtor, including settlement proposals dated 14th January 2016, 25th July 2018, 12th December 2019, and 22nd September 2020. These acknowledgments extend the limitation period under Section 18 of the Limitation Act. The Tribunal cited the Supreme Court's decisions in *Laxmi Pat Surana v. Union Bank of India* and *Rajendra Narottamdas Sheth and Another v. Chandra Prakash Jain and Another*, confirming that acknowledgments in writing within the limitation period renew the limitation. Hence, the application was deemed within the limitation period.2. Validity of Supplementary Affidavit:The Corporate Debtor contended that the supplementary affidavit filed by Sandipan Mukherjee should not be considered as he was not authorized. The Tribunal rejected this argument, noting that the letter dated 25th July 2018, included in the affidavit, was not disputed by the Corporate Debtor. The Tribunal emphasized that the affidavit was filed by a senior officer of the bank, and no prejudice was caused to the Corporate Debtor. Thus, the affidavit was deemed admissible.3. Parallel Proceedings before DRT:The Corporate Debtor argued that parallel proceedings under Section 7 of the IBC are not permissible while proceedings under Section 19 of the Recovery of Debt Due to Banks and Financial Institutions Act, 1993, are pending before the Debt Recovery Tribunal (DRT). The Tribunal did not find merit in this argument and proceeded with the application under Section 7 of the IBC.4. Applicability of Section 10A Moratorium:The Corporate Debtor claimed that the application is barred by the moratorium under Section 10A of the IBC, which prohibits filings for defaults occurring on or after 25th March 2020. The Tribunal found that the default occurred much earlier, with the loan being classified as NPA on 28th July 2013. Therefore, Section 10A was not applicable, and the plea was rejected.Conclusion:The Tribunal concluded that there was a clear debt due by the Corporate Debtor, which was acknowledged through various communications. The amount of debt claimed exceeded the threshold limit of 1 Crore. Consequently, the application by the Financial Creditor, State Bank of India, for initiating the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor was admitted.Order:a. The application under Section 7 of the IBC was admitted.b. A moratorium under Section 14 of the IBC was declared.c. The moratorium would continue until the completion of the CIRP or approval of a resolution plan.d. Public announcement of the CIRP was ordered.e. Mr. Srigopal Choudhary was appointed as the Interim Resolution Professional (IRP).f. The management of the Corporate Debtor would vest in the IRP.g. The IRP/RP was required to submit progress reports.h. The Financial Creditor was directed to deposit Rs. 5,00,000/- with the IRP for expenses.i. The Court Officer was directed to communicate the order to relevant parties.j. The Financial Creditor was to serve a copy of the order on the IRP and the Registrar of Companies, West Bengal.The case was scheduled to come up on 31st August 2022 for filing the progress report. The order was pronounced on 18th July 2022.