2017 (9) TMI 1779 - Tri - Insolvency and Bankruptcy

Initiating Corporate Insolvency Resolution Process - Held that - As decided in ICICI BANK LTD. VERSUS M/S. INNOVENTIVE INDUSTRIES LIMITED 2017 (1) TMI 1218 - NATIONAL COMPANY LAW TRIBUNAL, MUMBAI Adjudicating Authority has to satisfy only about the existence of the default and whether the Application is complete in all respects or not. In the case on hand, the Application is complete in all respects. As can be seen from the Written Communication, no disciplinary proceedings are pending against the Interim Resolution Professional proposed by the Applicant. Respondent Company committed default in repayment of the loan amount-Financial Debt. In view of the above discussion, this Application deserves to be admitted and it is accordingly admitted under section 7(5) of the Code.

Summary

Issues:
1. Application under section 7 of the Insolvency and Bankruptcy Code, 2016 for Corporate Insolvency Resolution Process.
2. Existence of default in repayment of loan amount by the Respondent.
3. Validity of objections raised by the Respondent.
4. Appointment of Interim Resolution Professional.
5. Moratorium under section 13(1)(a) of the IB Code.

Analysis:
1. The Punjab National Bank filed an Application under section 7 of the Insolvency and Bankruptcy Code, 2016 seeking Corporate Insolvency Resolution Process against the Respondent, Siddhi Vinayak Logistics Ltd., for defaulting on a Term Loan Facility of &8377; 100.00 Crores. The Respondent had hypothecated vehicles and pledged Fixed Deposits with the Bank as security. The Applicant provided evidence of default and non-payment by the Respondent, leading to classification as a Non Performing Asset.

2. The objections raised by the Respondent regarding the validity of the Application and the classification as 'NPA' were dismissed by the Adjudicating Authority. It was established that the Respondent had indeed defaulted on the loan repayment, justifying the initiation of insolvency proceedings. The Respondent's claims of being handicapped due to external investigations were not deemed sufficient to invalidate the default.

3. The Adjudicating Authority referred to a judgment by the National Company Law Appellate Tribunal to emphasize that the existence of default and completeness of the Application were crucial for admission. As the Application fulfilled all requirements and the default was proven, the Application was admitted under section 7(5) of the Code.

4. Shri Dushyant C. Dave was appointed as the Interim Resolution Professional to oversee the Corporate Insolvency Resolution Process. The Authority directed the public announcement of the initiation of the process and called for submission of claims. A moratorium was ordered under section 13(1)(a) of the IB Code, prohibiting certain actions against the corporate debtor, with exceptions for essential services and notified transactions.

5. The moratorium declared did not apply to criminal proceedings under the Prevention of Money Laundering Act, 2002, or cases initiated by the Central Bureau of Investigation against the Respondent. The Application was disposed of with no order as to costs, concluding the legal proceedings in this matter.