2018 (11) TMI 1646 - Tri - Insolvency and Bankruptcy

Admissibility of petition - Initiation of Corporate Insolvency Resolution process - existence of default - HELD THAT - A default has occurred and the present application under Section 10 is complete and that the applicant is not ineligible under Section 11 of the Code. Further all requirements prescribed under sub-section 3 (a) and (b) of Section 10 of the Code have also been complied with. The Insolvency and Bankruptcy Code, 2016 is a complete Code in itself. The provisions of the Code are to be mandatorily followed. Adherence to the statutory requirements has to be in toto. Section 10 (4) (a) of the Code mandates the Adjudicating Authority to admit the application if it is complete. When the language of the Code is clear and explicit, the Adjudicating Authority must give effect to it, whatever be the consequences. The present application is complete and that the applicant corporate debtor has committed a default. Therefore, as the application is complete the present petition is Admitted - Moratorium also declared.

Summary

Issues Involved:
Application under Section 10 of the Insolvency and Bankruptcy Code for Corporate Insolvency Resolution Process initiation, Default committed by the Corporate Debtor, Compliance with statutory requirements under Section 10 of the Code, Appointment of Interim Resolution Professional, Admittance of the application, Issuance of moratorium under Section 14 of the Code.

Analysis:
The judgment pertains to an application filed under Section 10 of the Insolvency and Bankruptcy Code seeking initiation of Corporate Insolvency Resolution Process by the applicant company itself. The applicant company, incorporated under the Companies Act, faced operational difficulties due to damage to its solar generation plant, leading to financial distress. The applicant availed financial assistance but struggled to repay loans post the plant damage, resulting in default. Despite efforts to restructure debts with lenders, no agreement was reached, and the loan account was declared a Non-Performing Asset (NPA).

The applicant satisfied the minimum default amount requirement under the Code and affirmed compliance with Section 11 provisions. Financial statements were submitted as per Code requirements, along with the proposal for an Interim Resolution Professional. The application also included a special resolution by shareholders ratifying the decision. The Tribunal emphasized the mandatory adherence to statutory requirements, especially the completeness of the application under Section 10(4)(a), leading to the admission of the petition.

Subsequently, a moratorium was issued under Section 14 of the Code, prohibiting various actions against the corporate debtor and ensuring the supply of essential goods or services. The Interim Resolution Professional was appointed to undertake necessary steps as per the Code, including submitting an interim report and notifying creditors. The moratorium order was to remain in effect until the completion of the insolvency resolution process.

In conclusion, the judgment upheld the completeness of the application, acknowledged the default by the corporate debtor, and directed the appointment of an Interim Resolution Professional along with the issuance of a moratorium to facilitate the resolution process effectively. The case was scheduled for further proceedings on a specified date.