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2019 (6) TMI 1154 - Tri - Insolvency and BankruptcyInitiation of Corporate Insolvency Resolution Process - Section 7 of Insolvency and Bankruptcy Code, 2016 - Default in repayment of loans - agreement with Foreign Countries - HELD THAT - Section 234-235 of IBC, 2016 deals with the matter regarding the agreement with foreign countries and the letter of request to a country outside India in the insolvency Resolution Process where the assets of the corporate debtor exist outside India - The above provision of IB Code is yet to be notified hence not enforceable. Therefore, we as the Adjudicating Authority are not empowered to entertain the order passed by the foreign jurisdiction in the case, where the registered office of the Corporate Debtor company is situated in India, and the jurisdiction specifically lies with this court. Therefore, we cannot pass any order to withhold the Insolvency proceedings pending in our court based on the order of insolvency passed by any other jurisdiction, which is not authorised to pass order for the company, which is registered in India and the jurisdiction solely lies with this court. In this case, the Indian Government has no such reciprocal arrangement with the Government of Netherland. Therefore, none of the courts has any jurisdiction to pass an order under IBC, where the assets and properties of the Corporate Debtor are situated in a country outside their country. This petition filed under Section 7 of I B Code, 2016, filed by State Bank of India , Financial Creditor / Petitioner, under section 7 of I B Code against Jet Airways (India) Limited , Corporate Debtor for initiating corporate insolvency resolution process at this moment admitted - Moratorium declared. List this matter on 5th July 2019.
Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 7 of the Insolvency and Bankruptcy Code (I&B Code), 2016. 2. Claims by Operational Creditors under Section 9 of I&B Code. 3. Financial exposure and default by the Corporate Debtor. 4. Security interests and loan agreements. 5. Recognition and impact of foreign insolvency proceedings. 6. Appointment of Interim Resolution Professional (IRP). 7. Declaration of moratorium under Section 14 of I&B Code. 8. Procedural directions for CIRP. Detailed Analysis: 1. Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 7 of the I&B Code: The Company Petition (CP) No. 2205/2019 was filed by State Bank of India (SBI), the Financial Creditor, under Section 7 of the I&B Code for initiating CIRP against Jet Airways (India) Limited, the Corporate Debtor. The petition was filed on 17th June 2019, and the default amount was stated to be ?462,39,38,604.55, representing the overdrawn amount over the sanctioned limit of the cash credit facilities granted by the Financial Creditor. 2. Claims by Operational Creditors under Section 9 of I&B Code: Two other petitions under Section 9 of the I&B Code were filed by Gaggar Enterprises Private Limited and Shaman Wheels Private Limited, claiming to be Operational Creditors of the Corporate Debtor. These petitions were listed for argument on 20.06.2019 and were dealt with in a common order due to their relation to the same Corporate Debtor. 3. Financial Exposure and Default by the Corporate Debtor: The Petitioner granted a term loan of ?1090 Cr. and additional term loans, along with working capital facilities. The aggregate amount of default as on 15.06.2019 was ?462,39,38,604.55. The default occurred as the amounts remained overdrawn for more than 30 days. The Petitioner provided evidence of the default, including CRILC reports and letters from the Corporate Debtor requesting financial assistance and deferral of loan repayments. 4. Security Interests and Loan Agreements: The loan facilities were secured by various security interests, including first ranking pari-passu charge on Domestic Credit Card Receivables and other assets. The Petitioner annexed several agreements and certificates of registration of charges issued by the Registrar of Companies, establishing the existence of the debt. 5. Recognition and Impact of Foreign Insolvency Proceedings: Insolvency proceedings against the Corporate Debtor had already been initiated in the Netherlands, with Mr. R. Mulder appointed as the Administrator in Bankruptcy. However, the Tribunal noted that there is no provision in the I&B Code to recognize foreign insolvency judgments. The objections raised by the Intervener based on the foreign court's order were not sustainable, as the order was considered a nullity in the eye of law. 6. Appointment of Interim Resolution Professional (IRP): The Petitioner proposed Mr. Ashish Chhawchharia as the IRP, and his appointment was accepted. The Tribunal directed the IRP to submit fortnightly progress reports and to take immediate control of the Corporate Debtor's assets. 7. Declaration of Moratorium under Section 14 of I&B Code: The Tribunal declared a moratorium, prohibiting the institution or continuation of suits or proceedings against the Corporate Debtor, transferring or disposing of its assets, and recovery actions by owners or lessors. The supply of essential goods or services to the Corporate Debtor was to continue uninterrupted during the moratorium period. 8. Procedural Directions for CIRP: The Tribunal emphasized the importance of resolving insolvency in a time-bound manner, considering the significant number of employees and the national importance of the Corporate Debtor. The IRP was directed to expedite the CIRP and submit the first progress report by 5th July 2019. The Tribunal also directed immediate communication of the order to the Financial Creditor, Corporate Debtor, and IRP. Order: The petition filed under Section 7 of the I&B Code by SBI was admitted, initiating the CIRP against Jet Airways (India) Limited. The petitions filed under Section 9 by the Operational Creditors were dismissed as infructuous, with the Petitioners given liberty to file their claims before the resolution professional. The Tribunal declared a moratorium and appointed Mr. Ashish Chhawchharia as the IRP, directing expedited proceedings and immediate control of the Corporate Debtor's assets. The matter was listed for further hearing on 5th July 2019.
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