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2017 (7) TMI 1352 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of ts debt - corporate debtor has filed objection mainly on the ground that no specific power of attorney has been granted by the applicant BOB for initiation of corporate insolvency process - HELD THAT - On the basis of documents filed by the financial creditor, it is clear that corporate debtor has committed default in making payment of ₹ 97,71,34,082/- and, therefore, the financial creditor has filed the application under Sec. 7 of the Code for initiating corporate insolvency resolution process. So, the petition deserves to be admitted. Financial creditor has proposed the name of Mr. Vijaykumar V. lyer as IRP who is competent to work as IRP. Therefore, he also deserves to be appointed as Interim Resolution Professional. Petition is admitted.
Issues Involved:
1. Authorization to initiate corporate insolvency resolution process. 2. Validity of Power of Attorney. 3. Proper service of notice. 4. Compliance with NCLT Rules regarding Vakalatnama. 5. Default by the corporate debtor. Issue-wise Detailed Analysis: 1. Authorization to initiate corporate insolvency resolution process: The corporate debtor objected to the initiation of the corporate insolvency process on the grounds that no specific power of attorney was granted by Bank of Baroda (BOB) for this purpose. The debtor argued that the petition was verified by Shri Ram Autar Pal based on a Power of Attorney executed by Mr. Jayeshkumar Vasantray Mehta, which predated the Insolvency and Bankruptcy Code (IBC), 2016. The Tribunal clarified that the power of attorney executed in favor of Mr. Jayeshkumar Vasantray Mehta authorized him to appoint one or more attorneys to act on behalf of BOB, including matters related to insolvency. Hence, the authorization was deemed valid. 2. Validity of Power of Attorney: The corporate debtor contended that the Power of Attorney dated 9/10/2015, based on an earlier Power of Attorney dated 16/2/2015, could not form the basis for filing proceedings under the IBC, 2016. The Tribunal found that the Power of Attorney executed by BOB in favor of Mr. Jayeshkumar Vasantray Mehta included specific authority for matters incidental to or arising out of insolvency. Therefore, the subsequent Power of Attorney in favor of Ram Autar Pal was valid and effective for initiating the insolvency process. 3. Proper service of notice: The corporate debtor argued that no notice was issued by the adjudicating authority. The Tribunal confirmed that notice was served on the corporate debtor through Speed Post on 16/6/2017, and the debtor was represented by counsel in subsequent hearings. The Tribunal held that the service of notice was proper and the corporate debtor had ample opportunity to present its case. 4. Compliance with NCLT Rules regarding Vakalatnama: The corporate debtor objected that the Vakalatnama authorizing the advocate was in the name of a law firm rather than an individual advocate, as required by NCLT Rules, 2016. The Tribunal found that the Vakalatnama was properly executed by BOB in favor of the law firm S.N. Sen & B.M. Law & Co., with Advocate Souvik Majumdar accepting it as a partner of the firm. Thus, the Vakalatnama was deemed proper and in compliance with the rules. 5. Default by the corporate debtor: The Tribunal reviewed the documents filed by the financial creditor, including statements of account and agreements, and found that the corporate debtor had defaulted on payments amounting to ?97,71,34,082/-. Consequently, the application under Sec. 7 of the IBC, 2016 for initiating the corporate insolvency resolution process was admitted. Order: The Tribunal admitted the petition filed by the financial creditor under Sec. 7 of the IBC, 2016, initiating the Corporate Insolvency Resolution Process (CIRP) and declared a moratorium as per Sec. 13 and Sec. 14 of the IBC, 2016. Mr. Vijaykumar V. Iyer was appointed as the Interim Resolution Professional (IRP) to manage the CIRP, make a public announcement, and convene a Committee of Creditors to evolve a resolution plan. The moratorium prohibits the institution or continuation of suits, transferring of assets, foreclosure actions, and recovery of property by owners or lessors during the CIRP period. The order's effect will last until the completion of the CIRP or until a resolution plan is approved or liquidation is ordered. The matter was listed for further proceedings on 11th August 2017.
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