2017 (8) TMI 1317 - Tri - Insolvency and Bankruptcy

Corporate Insolvency Resolution Process - Held that - Since the Application filed by the Operational Creditor is complete in all respect, we admit the Application CP 537/1B/CB/2017 and order the commencement of the Corporate Insolvency Resolution commencement of the Corporate Insolvency Resolution process which ordinarily shall get completed within 180 days, reckoning from the day this order is passed. We appoint Mr. C. Ramasubramaniam, as Interim Resolution Professional (IRP) as proposed by the Operational Creditor

Summary

Issues:
1. Application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 for Corporate Insolvency Resolution Process.
2. Validity of the demand for outstanding debt and the Arbitral Award.
3. Challenges raised by the Corporate Debtor against the Award.
4. Compliance with the Insolvency and Bankruptcy Code provisions.
5. Appointment of Interim Resolution Professional and declaration of moratorium.

Issue 1: Application under Section 9 of the Insolvency and Bankruptcy Code:
The Tribunal received an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process against the Corporate Debtor due to default in payment of an outstanding debt along with interest and expenses for an Arbitral Award. The Operational Creditor demanded the debt related to the delivery of parabolic mirrors, which were not collected, and an Arbitral Tribunal awarded in favor of the Operational Creditor, making the Corporate Debtor liable for the outstanding amount.

Issue 2: Validity of the demand and Arbitral Award:
The Operational Creditor's demand for the outstanding debt was based on the Arbitral Award dated 12.02.2015, which was challenged by the Corporate Debtor in the High Court. The High Court dismissed the challenge, affirming the Award's validity. Subsequently, the High Court declared the Award as a decree, further establishing the Operational Creditor's right to claim the debt.

Issue 3: Challenges raised by the Corporate Debtor:
The Corporate Debtor raised objections against the Application, including the filing by the proper person, admissibility of the Bank statement, and the finality of the Arbitral Award. The Tribunal rejected these objections as the Application was duly authorized, the Bank statement was valid, and no evidence of pending appeal against the Award was presented.

Issue 4: Compliance with the Insolvency and Bankruptcy Code provisions:
The Tribunal found that the Operational Creditor's Application complied with all relevant provisions of the Insolvency and Bankruptcy Code, 2016. Therefore, the Tribunal admitted the Application, initiated the Corporate Insolvency Resolution Process, and declared a moratorium on certain actions against the Corporate Debtor.

Issue 5: Appointment of Interim Resolution Professional and declaration of moratorium:
The Tribunal appointed an Interim Resolution Professional as proposed by the Operational Creditor to manage the Corporate Debtor's affairs during the resolution process. The moratorium was declared to protect the Corporate Debtor's assets and prevent actions that could harm the resolution process. The IRP was directed to comply with specific provisions of the Insolvency and Bankruptcy Code and receive assistance from the Corporate Debtor's directors and associated persons.

Overall, the Tribunal's judgment upheld the Operational Creditor's claim, dismissed the Corporate Debtor's objections, and initiated the Corporate Insolvency Resolution Process in accordance with the Insolvency and Bankruptcy Code, 2016.