2017 (11) TMI 1686 - Tri - Insolvency and Bankruptcy

Corporate insolvency resolution process - Held that - Bear in in mind the principle laid down in the NCALT judgment referred above, we are satisfied that petitioner succeeded in proving the compliance of all requirement on its side and established default in repayment of the debt by the respondent. Taking into consideration of all the above we are inclined to admit this petition under section 7 of I&B, Code. Being found this petition is liable to be admitted we hereby appoint the insolvency professional Shri Bhimal Agarwal as interim resolution professional.

Summary

Issues: Application under section 7 of IBC for corporate insolvency resolution process - Maintainability of petition due to lack of constitutional documents substantiating respondent as a corporate debtor.

Analysis:

Issue 1: Maintainability of the Petition
The petitioner, a Financial Creditor, filed a petition under section 7 of the IBC against the Corporate Debtor for defaulting on debt payments. The respondent contended that the petition was not maintainable due to lack of constitutional documents proving its status as a corporate debtor. The Tribunal examined the requirements under section 7(5) of the IBC, emphasizing the need for completeness in the application. Referring to the case law of "Neelkanth Township and Construction Pvt. Ltd. Vs. Urban Infrastructure Trustees Limited," the Tribunal highlighted the necessity of furnishing specific information and documents to establish default. The petitioner had submitted Form-I under Section 7 along with necessary particulars and supporting documents, including bank statements, agreement copies, ledger accounts, and demand notices, meeting the prerequisites for initiating insolvency proceedings.

Issue 2: Compliance with Requirements
The Tribunal assessed the petitioner's compliance with the prescribed rules and regulations for initiating insolvency proceedings. It noted that all essential documents, as required under Rule 4(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, were provided. The petitioner had enclosed Form 1 under Section 7 with detailed particulars and evidence of default, such as bank statements, agreement copies, and ledger accounts, demonstrating the debt and default by the Corporate Debtor. The Tribunal found that the petitioner had fulfilled all necessary requirements for commencing the corporate insolvency resolution process against the respondent.

Issue 3: Appointment of Insolvency Professional
Regarding the appointment of an Insolvency Professional, the petitioner proposed the name of Shri Bhimal Agarwal, a Chartered Accountant, and submitted a written communication from the proposed IRP in Form 2 as per the rules. The Insolvency Professional certified the absence of any pending disciplinary proceedings against him, meeting the criteria under section 7(5)(a) of the IBC. The Tribunal, satisfied with the compliance and qualifications of the proposed IRP, appointed Shri Bhimal Agarwal as the interim resolution professional for the case.

Conclusion
After thorough consideration of the submissions, documents, and legal provisions, the Tribunal found the petition maintainable, compliant with all necessary requirements, and appointed an Insolvency Professional for the corporate insolvency resolution process. The Tribunal issued directions for the moratorium period, prohibiting suits against the Corporate Debtor, ensuring the supply of essential goods/services, and declaring the commencement of the insolvency resolution process. The order was pronounced effective immediately, marking the beginning of the corporate insolvency resolution process.

This detailed analysis showcases the Tribunal's meticulous examination of the petition's maintainability, compliance with legal requirements, and the appointment of an Insolvency Professional, ensuring a comprehensive understanding of the judgment's key aspects and implications.