2018 (10) TMI 1687 - AT - Insolvency and Bankruptcy

Existence of default or not - Appellant submits that there is no debt payable by the Corporate Debtor to the Respondent - HELD THAT - Let notice be issued on newly impleaded 8th Respondent ( Resolution Professional ) by Speed post. Dasti service is permitted. Requisite along with process fee, if not filed, be filed by 30th October, 2018. If the Appellant provides the e-mail address of the 8th Respondent, let notice be also issued through e-mail. Post the appeal for admission on 6th December, 2018.

Summary

Issues:
Debt payable by Corporate Debtor to Financial Creditor; Default; Validity of documents submitted; Notice to Financial Creditors and Resolution Professional; Operation of company's bank account.

Debt Payable by Corporate Debtor to Financial Creditor:
The judgment addresses the argument presented by the Appellant that there is no debt payable by the Corporate Debtor to the Financial Creditor, thus negating the existence of default. The Senior Counsel for the Appellant refers to Form-1 to support the claim that the document of debt and default provided by the Respondent is not valid as it lacks the necessary signatures, including that of the Competent Authority. The Tribunal allows the Financial Creditors to file a reply affidavit within 10 days, and the Appellant is granted a week to file a rejoinder.

Notice to Financial Creditors and Resolution Professional:
The judgment directs that notice be issued to the newly impleaded 8th Respondent, the Resolution Professional, by Speed post, with Dasti service permitted. The Resolution Professional is instructed to ensure the company remains a going concern, with the suspended Board of Directors providing assistance. The Resolution Professional is authorized to allow the operation of the Corporate Debtor's bank account for essential day-to-day functions like supplier payments, employee salaries, and electricity bills. The appeal is scheduled for admission on a specified date.

Operation of Company's Bank Account:
The Tribunal orders that the Resolution Professional oversees the company's operations, with the suspended Board of Directors offering support. Cheques from the company's bank account can only be issued with the Resolution Professional's authorization. The bank account is permitted to be used for necessary business activities such as paying suppliers, employee wages, and utility bills to ensure the company's functioning continues smoothly.