2017 (7) TMI 926

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....9;) 2016 against the 'corporate debtor' , namely, M/s. Clutch Auto Limited. In the second Petition, filed under section 10 of 'the Code', the 'corporate debtor' (M/s. Clutch Auto Limited) has come forward with a prayer to initiate insolvency process against itself. The second Petition was filed earlier than that of the first Petition. IB 15 (PB)/2017 : 2. M/s. Clutch Auto Limited has approached this Tribunal under Section 10 of 'the Code' read with Rule 7 of Insolvency and Bankruptcy (Application to Adjudication Authority) Rules, 2016 (for brevity 'the Rules'). According to averments made in the petition, the 'corporate debtor' was incorporated as a private limited company on 13.05.1971 ....

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....ial year ending 31.03.2016 and 31.03.2015 along-with certified provisional financial statement as on 31.01.2017 has also been placed on record (Annexure-6). The statement of affairs has also been filed along with documents as on 31.12.2016, list of assets and liabilities as on 31.1.2017 (P-7), details of the financial/operational creditors (Annexure-3), particulars of any debt owed by or to the 'corporate debtor' or by persons connected to it (Annexure-8) have also been placed on record along with guarantees given in relation to the debts (Annexure P-9). It has also given details of the members of the 'corporate debtors' along with their share holding as on 31.01.2017 (Annexure P-10). An affidavit in support of the Petition ....

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....on 14 of the Code. 14. Moratorium - (1) Subject to provisions of sub-sections (2) and (3), on the insolvency commencement date, the Adjudicating Authority shall be order declare moratorium for prohibiting all of the following, namely :- (a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any Court of law, tribunal, arbitration panel or other authority; (b) transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein ; (c) any action to foreclose, recover or enforce any security interest created by the corporate de....

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....e use to be registered with BIFR, there was automatic Moratorium in terms of S.22 of Sick Industrial Companies (Special Provisions) Act, 1985 (see KSL & Industries Ltd. v. Arihant Threads Ltd. 2008 INSC 1421; Rishabh Agro Industries Ltd. v. PNB Capital Services Ltd. (2000) 5 SCC 515. (SC). We have made these observations keeping in view the object of the 'Code' namely to get rid of 'NPA' accounts and allow the dead investment to come into circulation. We were in fact disposed to the view of refusing Moratorium in the present case for the above reasons but have not taken that extreme view. However, the resolution in the present case must conclude within 180 days. No further time would be warranted unless creditors decide othe....