2017 (7) TMI 1234 - Tri - Insolvency and Bankruptcy

Trigger Insolvency Process - Held that - The petition has been filed in the required format through a duly authorized person and the total amount claimed to be in default is almost to the tune of ₹ 185 crores. As per the guidelines of the Reserve Bank of India the said account of the Corporate Debtor maintained with the financial creditor has been declared as an NPA. The Corporate Debtor who had been availing various facilities since December 2006 has not been able to reduce its liability despite restructuring of the loans from time to time. As the last restructuring of the loan upon which documents were executed was in 2016, the entitlement to recover the debt is within limitation. The Financial Creditor has also taken the consent of the proposed Insolvency Resolution Professional, Mr. Sanjay Gupta, AAA Insolvency Professionals LLP, E- IOA, Kailash Colony, New Delhi- 110048 (Email ID. [email protected]) who has certified that there is no disciplinary proceeding pending against him and that he is duly empanelled with the IBBI vide Registration No. IBBI/IPA- 001/IP-P00117/2017-18/10252. As the petition fulfils the required criterion for invoking the Resolution Process, this petition stands Admitted. Moratorium in terms of Section 14 of the Code comes into effect. The Interim Resolution Professional is directed to take necessary steps as per Sections 15, 17 & 18 and file his report within the statutory period.

Summary

Issues:
1. Petition filed by State Bank of India under Section 7 of the Insolvency Bankruptcy Code, 2016.
2. Default in repayment of loans by the Corporate Debtor.
3. Restructuring of loans and credit facilities provided by the Petitioner Bank.
4. Initiation of SARFAESI action.
5. Declaration of the Corporate Debtor's account as an NPA.
6. Appointment of Insolvency Resolution Professional.
7. Admittance of the petition and imposition of moratorium.

Analysis:

1. The petition filed by the State Bank of India under Section 7 of the Insolvency Bankruptcy Code, 2016, seeks to trigger the insolvency process against the respondent Corporate Debtor due to a significant default in loan repayment.

2. The Corporate Debtor, engaged in the business of steel, has availed various credit facilities from the Petitioner Bank, necessitating the restructuring of loans from time to time to address financial challenges. Despite the last restructuring in 2016, the Corporate Debtor failed to reduce its liability, resulting in the account being declared as a Non-Performing Asset (NPA).

3. While SARFAESI action has been initiated, the Financial Creditor believes that resorting to a Resolution process would be beneficial for both parties, considering the insufficient guarantees and mortgages to cover the outstanding debt.

4. Despite notice, the Corporate Debtor did not appear, leading to the petition being filed in the prescribed format through an authorized person, claiming a default amount of nearly ?185 crores.

5. The appointment of an Insolvency Resolution Professional, Mr. Sanjay Gupta, from AAA Insolvency Professionals LLP, has been certified to meet the necessary requirements without any pending disciplinary proceedings, in compliance with IBBI regulations.

6. The Tribunal found the petition to fulfill the criteria for invoking the Resolution Process, leading to its admittance and the imposition of a moratorium under Section 14 of the Code. The Interim Resolution Professional is directed to proceed as per Sections 15, 17, and 18, with a requirement to submit a report within the statutory period.

7. The order is to be communicated to both parties, and the petition is disposed of in accordance with the above directives.