2017 (8) TMI 1476 - Tri - Insolvency and Bankruptcy

Corporate Insolvency Resolution Process - Held that - The contents of Form-6 and the documents attached to Form-6 clearly indicate that the Applicant was unable to discharge the outstanding amounts due to the Financial Creditor as well as the Operational Creditors. Moreover, the Applicant furnished the required information as per sub-section (3) of Section 10. Therefore, the Application is complete. The material on record established that the Corporate Debtor has committed default in payment of financial debt as well as operational debts. In view of the above discussion, this Application is admitted under Section 10(4)(a) of the Code.

Summary

Issues:
1. Admissibility of the insolvency application under the Insolvency and Bankruptcy Code, 2016.
2. Appointment of an Interim Insolvency Resolution Professional.
3. Imposition of moratorium under Section 13(1)(a) of the Code.

Admissibility of the Insolvency Application:
The insolvency application was filed by the Director of the Company under the provisions of the Insolvency and Bankruptcy Code, 2016. The Company had defaulted on financial debt owed to State Bank of India and operational creditors. The Financial Creditor raised objections regarding the submission of audited financial statements for the current year and the last two financial years. However, the Adjudicating Authority found that the objections were not valid as the necessary financial statements were indeed filed. The Financial Creditor also alleged that the Company was delaying recovery proceedings under the SARFAESI Act, but the pendency of such proceedings was not a ground to reject the insolvency application. The Authority concluded that the Applicant had provided all required information, and the application was admitted under Section 10(4)(a) of the Code.

Appointment of an Interim Insolvency Resolution Professional:
The Applicant proposed the name of CA Prem Laddha as the Interim Resolution Professional, and the Adjudicating Authority appointed him accordingly. The Interim Professional was directed to initiate the Corporate Insolvency Resolution Process, call for submission of claims, and cause a public announcement as per the relevant regulations. The Authority specified the responsibilities and powers of the Interim Professional in managing the resolution process effectively.

Imposition of Moratorium under Section 13(1)(a) of the Code:
The Adjudicating Authority ordered a moratorium under Section 13(1)(a) of the Code, prohibiting certain actions against the corporate debtor, including suits, asset transfers, and enforcement of security interests. Exceptions were made for the supply of essential goods or services and transactions notified by the Central Government. The moratorium was to remain in force until the completion of the Corporate Insolvency Resolution Process, subject to specific provisions. The Authority detailed the scope and limitations of the moratorium, ensuring essential operations continued while protecting the resolution process.

In conclusion, the Tribunal admitted the insolvency application, appointed an Interim Insolvency Resolution Professional, and imposed a moratorium to facilitate the resolution process while safeguarding the interests of all stakeholders involved. The detailed analysis of the issues addressed in the judgment reflects the thorough consideration given to the legal and procedural aspects under the Insolvency and Bankruptcy framework.