2017 (7) TMI 1071 - Tri - Insolvency and Bankruptcy

Corporate insolvency process - appointment of Insolvency Resolution Professional - Held that - We are conscious of the fact that the Corporate Debtor is in the business of publishing newspapers, periodicals, touching lives of lakhs of people and employing thousands of people directly or indirectly. The Corporate Debtor is also in important Sector i.e print media. Considering above, we have granted sufficient opportunities for both the parties and after satisfying that no disciplinary proceedings are pending against the proposed Insolvency Resolution Professional, we are inclined to appoint Insolvency Resolution Professional and grant moratorium under Insolvency and Bankruptcy Code, 2016.

Summary

Issues: Appointment of Insolvency Resolution Professional, Moratorium Declaration, Exemption of Essential Goods and Services, Public Announcement of Corporate Insolvency Resolution Process, Constitution of Committee of Creditors, Cooperation from Company Personnel, Adherence to Insolvency and Bankruptcy Code

The judgment delivered by the National Company Law Tribunal, Hyderabad, involved several key issues. Firstly, the Tribunal addressed the appointment of an Insolvency Resolution Professional for a Corporate Debtor operating in the print media sector. The Tribunal acknowledged the importance of the industry and the need to ensure the continuity of business operations during insolvency proceedings. Consequently, the Tribunal appointed an Interim Resolution Professional and granted a moratorium under the Insolvency and Bankruptcy Code, 2016.

Secondly, the Tribunal invoked various sections of the Insolvency and Bankruptcy Code, 2016, to pass specific orders. It appointed a designated individual as the Interim Resolution Professional and emphasized the importance of cautious actions to maintain the business as a going concern. Additionally, the Tribunal declared a moratorium, prohibiting certain actions such as instituting suits, transferring assets, or enforcing security interests against the Corporate Debtor.

Moreover, the Tribunal addressed the exemption of essential goods and services from the moratorium. It clarified that specific goods and services essential for the Corporate Debtor's operations, such as water, electricity, and printing materials, would be exempt from the moratorium to ensure continuity without disruptions.

Furthermore, the Tribunal directed the immediate public announcement of the initiation of the Corporate Insolvency Resolution Process and called for the submission of claims. It also instructed the Interim Resolution Professional to constitute a Committee of Creditors and hold the first meeting within a specified timeline.

Additionally, the Tribunal mandated cooperation from the personnel associated with the Corporate Debtor to assist the Interim Resolution Professional in managing the company's affairs and providing access to necessary documents and records.

Lastly, the Tribunal emphasized strict adherence to all provisions of the Insolvency and Bankruptcy Code, 2016, and the Insolvency and Bankruptcy Board of India regulations. The Interim Resolution Professional was required to report actions promptly to the Tribunal for oversight. The case was scheduled for a subsequent hearing on a specified date for further proceedings.