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2019 (4) TMI 919 - Tri - Insolvency and BankruptcyInitiation of Corporate Insolvency Resolution Process - statutory form No. 6 as prescribed by sub-rule (1) of Rule 7 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 - HELD THAT - Under Section 10 of the Code the Adjudicating Authority is not empowered to go beyond the record as prescribed under section 10 and the information is required to be submitted in form 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 subject to ineligibility prescribed under Section 11 and if all the information is provided by the corporate debtor as also the mandatory requirements under Section 10 and form No. 6 are complete then it is to be admitted if otherwise not ineligible under Section 11. It is well settled that pendency of proceedings and initiation of action under SARFAESI Act cannot be an impediment or bar to initiate the Corporate Insolvency Resolution Process under Section 7 of the Code nor it can be a ground to reject the Resolution Petition. Admittedly, M/S. VHCL Limited is liable to pay financial debts to its Financial Creditors including the Central Bank. No other objection has been raised by the Financial Creditors or by any other person. The materials on record clearly establish that financial debt is due from the Corporate Debtor to the Financial Creditors and there is occurrence of debt by the Corporate Debtor in repayment of financial debt - this Adjudicating Authority is of the considered view that this is a fit case to admit the petition triggering Corporate Insolvency Resolution Process and accordingly this petition is admitted under Section IO(4)(a) of the Code. The Interim Insolvency Resolution Professional is hereby directed to cause a public announcement of the initiation of 'Corporate Insolvency Resolution Process' and call for submission of claims under Section 13(1)(b) read with Section 15 of the Code and Regulation 6 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. Application disposed off.
Issues Involved:
1. Filing of Petition under Section 10 of the Insolvency and Bankruptcy Code, 2016. 2. Objections raised by Financial Creditors. 3. Admissibility of the Petition. 4. Appointment of Interim Insolvency Resolution Professional. 5. Declaration of Moratorium. Issue-Wise Detailed Analysis: 1. Filing of Petition under Section 10 of the Insolvency and Bankruptcy Code, 2016: The petition was filed by VHCL Industries Limited through its Authorized Representative under Section 10 of the Insolvency and Bankruptcy Code, 2016, in statutory form No. 6. The Board of Directors of VHCL Industries Limited authorized the filing of this petition in their meeting held on 23rd January 2018. The petition included details of financial creditors, operational creditors, statutory liabilities, and contingent liabilities, along with the necessary supporting documents such as board resolution, ledger accounts, and provisional financial statements. 2. Objections raised by Financial Creditors: State Bank of India (SBI) objected to the petition, claiming it was misconceived and filed with ulterior motives to frustrate lawful recovery actions. SBI highlighted that the corporate applicant was not functional and had defaulted on significant debts. Central Bank of India and Bank of India also raised objections, arguing that the petition was intended to thwart the banks' statutory rights under the SARFAESI Act, 2002. They contended that the corporate debtor did not approach the tribunal with clean hands. 3. Admissibility of the Petition: The tribunal examined the petition and found it complete in all respects. The tribunal noted that VHCL Industries Limited was liable to pay financial debts to its creditors, including SBI, Central Bank of India, and Bank of India. The tribunal referred to the judgment passed by the Hon'ble NCLAT in the matter of M/S. Unigreen Global Private Limited Vs Punjab National Bank, which stated that the adjudicating authority must admit the application if it is complete and the corporate applicant is not ineligible under Section 11. The tribunal concluded that the petition met all mandatory requirements under Section 10 and Form No. 6. 4. Appointment of Interim Insolvency Resolution Professional: The tribunal appointed Mr. Kiran C. Shah as the Interim Insolvency Resolution Professional (IRP) under Section 13(1)(c) of the Code. The IRP was directed to make a public announcement of the initiation of the Corporate Insolvency Resolution Process (CIRP) and call for submission of claims. 5. Declaration of Moratorium: The tribunal ordered a moratorium under Section 13(1)(a) of the Code, prohibiting the institution or continuation of suits or proceedings against the corporate debtor, transferring or disposing of assets, and actions to foreclose or enforce security interests. The moratorium also ensured the uninterrupted supply of essential goods or services to the corporate debtor during the CIRP. Conclusion: The tribunal admitted the petition filed by VHCL Industries Limited, triggering the Corporate Insolvency Resolution Process. The tribunal appointed an Interim Insolvency Resolution Professional and declared a moratorium, effectively halting all recovery actions and legal proceedings against the corporate debtor. The application was disposed of accordingly, with no order as to costs.
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