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2017 (8) TMI 1478 - Tri - Insolvency and BankruptcyCorporate Insolvency Resolution - pendency of winding up petition - Held that - In the case on hand there is material on record to substantiate that default has occurred. Application filed by corporate debtor is complete in all respects. It is evident from the written communication filed for appointment of Insolvency Resolution Professional that no disciplinary proceedings are pending against him. In view of the aforesaid decision, this adjudicating authority need not look into any other factor. In view of clause (a) of sub-section (i) of section 14 of the Code of proceedings against corporate debtor shall stand stayed on the commencement of insolvency resolution process. In view of section 238 of the code the provisions of insolvency code shall have overriding effect over any other law which is inconsistent with the provisions of this code. This adjudicating authority in CP (IB) in case of Alok Industries Ltd. also took the same view. The financial debtor is a company. The material placed on record by the applicant clearly show that money was lent to the respondent on interest. Therefore, the amount due from the respondent to the applicant is a financial debt. The applicant is a financial creditor. Respondent is a corporate debtor. This application is admitted under section 7(5)(a) of the insolvency code. This adjudicating authority is appointing Mr. Sundaresh Bhat, B-905, National Seaqueen Excellency, Sector 44A, Seawood, Nerul West, Navi Mumbai 400 076 as interim resolution professional. The applicant is directed to make public announcement about initiation of Corporate Insolvency Resolution process as required by Section 13(1)(b) of the Code.
Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016. 2. Default and outstanding debt details. 3. Security documents and guarantees executed. 4. Pending winding up petition and its impact on CIRP. 5. Appointment of Interim Resolution Professional (IRP). 6. Declaration of moratorium under Section 13(1)(a) of the Code. Issue-wise Detailed Analysis: 1. Initiation of Corporate Insolvency Resolution Process (CIRP): ICICI Bank Ltd., as the financial creditor, filed an application to initiate CIRP against ABG Shipyard Ltd., the corporate debtor, under Section 9 of the Insolvency and Bankruptcy Code, 2016. The application was submitted through the General Power of Attorney holder Bhairavi Deshpande and was supported by Rule 4 and 9 of The Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. 2. Default and Outstanding Debt Details: The corporate debtor had availed several loan facilities from the financial creditors under various agreements, including the Master Restructuring Agreement (MRA) and its amendments. The corporate debtor defaulted on multiple facilities, with the total amount of default as of June 21, 2017, being ?4291.90 crores. The defaults included term loans, priority loans, FITL facilities, and restructured working capital facilities, among others. The date of default for all mentioned facilities was October 20, 2016. 3. Security Documents and Guarantees Executed: The corporate debtor executed several guarantee deeds and letters of comfort in favor of the financial creditor for various facilities granted to its group companies. These included guarantee deeds dated June 27, 2012, June 28, 2011, and April 13, 2012, and letters of comfort dated April 18, 2011, and August 31, 2010. However, these guarantees and letters of comfort were not invoked by the financial creditors. 4. Pending Winding Up Petition and Its Impact on CIRP: A winding-up petition (Company Petition No. 375 of 2016) was filed against the corporate debtor and admitted by the Hon'ble High Court of Gujarat on June 19, 2017. Despite the admission, no winding-up order or appointment of a provisional liquidator was made. The adjudicating authority concluded that Section 446 of the Companies Act, 1956, was not applicable, and Section 238 of the Insolvency and Bankruptcy Code, 2016, provided overriding effect over any inconsistent law. Therefore, the pendency of the winding-up petition did not bar the initiation of CIRP. 5. Appointment of Interim Resolution Professional (IRP): The financial creditor proposed Mr. Sundaresh Bhatt as the Interim Resolution Professional (IRP), and his written communication in Form No. 2 confirmed no pending disciplinary proceedings against him. The adjudicating authority appointed Mr. Sundaresh Bhatt as the IRP and directed the applicant to make a public announcement about the initiation of CIRP as required by Section 13(1)(b) of the Code. 6. Declaration of Moratorium: The adjudicating authority declared a moratorium under Section 13(1)(a) of the Code, prohibiting the institution or continuation of suits or proceedings against the corporate debtor, transferring or disposing of assets, foreclosure or enforcement of security interests, and recovery of property by owners or lessors. The moratorium order would remain in force until the completion of the Corporate Insolvency Resolution Process, subject to the provisions of sub-section (4) of Section 14. Conclusion: The application to initiate CIRP was admitted under Section 7(5)(a) of the Insolvency and Bankruptcy Code, 2016. The adjudicating authority appointed Mr. Sundaresh Bhatt as the IRP and declared a moratorium, thereby prohibiting various actions against the corporate debtor. The application was disposed of accordingly, and copies of the order were communicated to the applicant, respondent, and the IRP.
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