2017 (9) TMI 1768 - Tri - Insolvency and Bankruptcy

Corporate insolvency resolution process - corporate debtor availed of loan facilities and thereafter having failed to repay the debt as per terms and agreements between them - Held that - The petitioner counsel filed certified copy of resolution dated July 14, 2017 reaffirming the Authority already given with an additional power to proceed under the I and B Code as well, therefore we have not found substance in the objection raised by the corporate debtor in respect to authority for filing this case. Moreover, the power of attorney holder is in the rank of chief manager of the Bank of Baroda, so it cannot be said that attorney-holder position is not sufficient enough to file this company petition, hence the objection raised by the corporate debtor is hereby rejected. Since the details and document given by the petitioner are ample enough to prove the existence of debt and occurrence of default, this company petition is hereby admitted.

Summary

Issues Involved:
Company petition filed by Bank of Baroda under section 7 of the Insolvency and Bankruptcy Code, 2016 against a corporate debtor for default on loan repayment.

Detailed Analysis:

1. Background and Petition Filing:
The Bank of Baroda, as a financial creditor, filed a company petition under section 7 of the Insolvency and Bankruptcy Code, 2016, against the corporate debtor for defaulting on loan repayments. The petitioner bank stated that the corporate debtor had availed loan facilities but failed to repay the debt as per the agreed terms, leading to the initiation of the insolvency resolution process.

2. Loan Facilities and Defaults:
The petitioner bank had sanctioned various loan facilities to the corporate debtor, totaling ?308 crores. The corporate debtor defaulted on repayments, with the total default amount reaching ?258,58,56,554 as of August 31, 2017. The bank provided detailed evidence of defaults and non-performing assets, including annual returns, reports from credit agencies, and a revival letter from the corporate debtor acknowledging the debt liability.

3. Arguments and Objections:
The corporate debtor raised objections regarding the authority to file the petition, citing a power of attorney issued before the enactment of the Insolvency and Bankruptcy Code. However, the petitioner presented a resolution reaffirming the authority to proceed under the Code, supported by the position of the attorney-holder as the chief manager of the Bank of Baroda. The objections were dismissed by the Tribunal.

4. Tribunal's Decision and Orders:
Based on the evidence provided by the petitioner, the Tribunal admitted the company petition. The Tribunal issued various reliefs, including prohibiting legal actions against the corporate debtor, appointing an interim resolution professional, and initiating a moratorium period to facilitate the corporate insolvency resolution process. The order specified the effective period of the moratorium and outlined the actions to be taken during this process.

5. Conclusion:
The Tribunal admitted the company petition, appointed an interim resolution professional, and imposed necessary restrictions to facilitate the insolvency resolution process. The detailed analysis of loan defaults, legal arguments, and Tribunal's orders highlighted the procedural and substantive aspects of the case, ensuring compliance with the provisions of the Insolvency and Bankruptcy Code.