2017 (2) TMI 1241 - Tri - Insolvency and Bankruptcy

Corporate insolvency procedure - petition u/s 7 of The Insolvency and Bankruptcy Code 2016 - Held that - The corporate debtor has been reminded of the fact of occurrence of default, the Petitioner has also filed the correspondence dated July 09,2015, August 19, 2015, September 11,2015, August 18,2016 and final notice dated February 06,2017 demanding payment of dues, failing which, the company would take recourse for remedial measures. To which, the Corporate Debtor, on August 20,2016 and on November 22,2016, responded to the notices given before November 22,2016 confirming the correctness of their indebtedness seeking extension of time for taking legal action for recovery. Thereafter, for the petitioner stated that the Corporate Debtor failed to discharge the liability till the date of filing this petition, this Bench believes that the corporate debtor committed default and it has remained in existence till date. The petitioner filed proof of service showing that notice has been served upon the corporate debtor before filing this petition i.e., on 08.02.2017. Looking at the Petition filed by the Financial Creditor u/s 7 of I&B Code, for this Bench being satisfied that the Corporate Debtor failed to discharge the liability mentioned in this Company Petition resulting occurrence of default for an amount of around ₹ 27.77crores, this Bench admits this petition u/s 7 of the Code declaring moratorium for the purposes referred to in section 14 of the Code

Summary

Issues involved:
1. Admission of petition under section 7 of The Insolvency and Bankruptcy Code 2016.
2. Realization of outstanding dues from the Corporate Debtor.
3. Declaration of moratorium on the Corporate Debtor.
4. Direction for public announcement of initiation of corporate insolvency process.
5. Call for the submission of claims under section 15.
6. Appointment of an interim resolution professional.

Detailed Analysis:
1. The petitioner, a financial creditor, filed a petition under section 7 of The Insolvency and Bankruptcy Code 2016 seeking admission of the petition to declare a moratorium on the Corporate Debtor, initiate the corporate insolvency process, and appoint an interim resolution professional. The petitioner, ICICI Bank, had granted various loan facilities to the Corporate Debtor, Starlog Enterprises Limited, including a Term Loan Facility (RTL Facility), Working Capital Term Loan Facility (WCTL Facility), and Working Capital Bank Guarantee Facility (BG Facility). The defaults occurred in these facilities, leading to outstanding dues amounting to approximately &8377; 27.78 crores, as detailed in the petition.

2. The petitioner submitted evidence to support the default claims, including a certificate from ICICI Bank, statements of loan accounts, and records from Credit Information Agency confirming the defaults. Additionally, the petitioner provided correspondence indicating reminders sent to the Corporate Debtor regarding the outstanding dues and default. The Corporate Debtor failed to discharge the liabilities despite reminders and notices, leading to the filing of the insolvency petition by the petitioner.

3. The Tribunal, after reviewing the evidence and submissions, found that the Corporate Debtor had indeed defaulted on the loan facilities provided by the petitioner. The Tribunal admitted the petition under section 7 of the Code, declared a moratorium on the Corporate Debtor, and issued directions to prohibit legal actions against the Corporate Debtor, ensure the supply of essential goods or services, and appoint an interim resolution professional to oversee the insolvency resolution process. The order of moratorium was to be effective from a specified date until the completion of the corporate insolvency resolution process.

4. The Tribunal also directed the Registry of NCLT, Mumbai to communicate the order to the petitioner and the Corporate Debtor. The petition was admitted, and the necessary steps were taken to initiate the corporate insolvency resolution process as per the provisions of the Code. The appointment of the interim resolution professional was made to facilitate the resolution of the outstanding dues and manage the insolvency proceedings effectively.