2019 (11) TMI 1394 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT - After a reading of section 7 of the Code along with Rule 4 (2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, we are satisfied that a default has occurred and the application under sub-section 2 of section 7 is complete. The IRP proposed does not have any disciplinary proceedings pending against him - this petition is admitted and Mr. Aishwarya Mohan Gahrana is appointed as an Interim Resolution Professional.

Summary

Issues:
1. Admission of petition under section 7 of the Insolvency and Bankruptcy Code, 2016.
2. Compliance with the format prescribed under Rule 4 of the Bankruptcy Rules.
3. Dispute regarding the amount claimed to be in default.
4. Appointment of Interim Resolution Professional.
5. Declaration of moratorium under section 14 of the Code.
6. Direction for deposit by the Financial Creditor with the Interim Resolution Professional.
7. Furnishing of documents and information by Ex-Management/Auditors.
8. Discrepancies in the statement of account and role of Information Utility.

Analysis:
1. The Financial Creditor, LIC Housing Finance Limited, filed a petition under section 7 of the Insolvency and Bankruptcy Code seeking Corporate Insolvency Resolution Process against Durha Vitrak Private Limited. The total default amount claimed by the Petitioner was INR 39,97,98,092.27 as on January 31, 2019. The Respondent had executed various documents for financial assistance, and a settlement proposal was sent by the Corporate Debtor for repayment, which was not fulfilled, leading to bounced cheques and legal notices.

2. The Counsel for the Corporate Debtor raised objections regarding the authorization of the Petitioner's representative, format compliance, lack of proof for payments made, pre-existing disputes, and alleged false calculations. However, the Tribunal found that the settlement proposal and bounced cheques established the default amount due and payable.

3. The Tribunal noted compliance with section 7(2) and 7(5) of the IBC, as discussed in a previous case, confirming the completeness of the application. The appointment of an Interim Resolution Professional was deemed appropriate, and a public announcement was directed to be made. Moratorium under section 14 was declared, with exceptions for essential services, and a deposit of INR 2 lacs was ordered for the Professional's expenses.

4. Directions were issued for the provision of documents and information by Ex-Management/Auditors to the Interim Resolution Professional. The Tribunal acknowledged discrepancies in the statement of account but deferred the determination of the exact amount due to the Information Utility's pending functionality. The Resolution Professional was advised to seek corrections if necessary from the ex-promoter/director.

5. The order was to be communicated to relevant parties promptly, with the Registrar of Companies updating the status of the Corporate Debtor on their website. Overall, the petition was admitted, and necessary steps were taken to initiate the insolvency resolution process efficiently.