2019 (8) TMI 1480 - 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 - On perusal of the documents submitted on record, there is a debt due and payable by the Corporate Debtor to the Applicant. The outstanding amount that is in default is more than ₹1,00,000/- - the debt and default of more than ₹1,00,000/- is established and the application is complete in all respects - the objection of the Corporate Debtor regarding the insufficient authorisation of the Assistant General Manager of the applicant Bank to file the present application is not tenable. The Application under sub-section (2) of Section 7 of I B Code, 2016 filed by the financial creditor for initiation of CIRP in prescribed Form No1, as per the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 is complete - Application admitted - moratorium admitted.

Summary

Issues Involved:
1. Application under section 7 of Insolvency & Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process (CIRP) against Corporate Debtor.
2. Authorization of the applicant to file the application.
3. Debt due and payable by the Corporate Debtor.
4. Appointment of Interim Resolution Professional.
5. Declaration of moratorium under section 14 of I&B Code.
6. Compliance and communication of the order.

Analysis:

1. Application under Section 7 of I&B Code:
The judgment pertains to an application (CP 1003/2019) filed by a Financial Creditor, Allahabad Bank, against a Corporate Debtor, Suman Agritech Limited, under section 7 of the Insolvency & Bankruptcy Code, 2016. The application was filed on 11.03.2019, seeking initiation of the Corporate Insolvency Resolution Process (CIRP) due to default on a loan extended by the Bank to the Corporate Debtor.

2. Authorization of the Applicant:
The Corporate Debtor objected to the application, claiming that the applicant was not authorized to file it. However, the Tribunal found that the Assistant General Manager of the Bank, who filed the application, was duly authorized to do so. The debt due and payable by the Corporate Debtor was established through the documents submitted by the Applicant.

3. Debt Due and Payable:
The Applicant provided evidence of the outstanding amount in default, exceeding ?1,00,000, through documents such as the Consumer Credit Information Report, Bank Account Statements, and the notice under section 13(2) of SARFAESI Act. The Tribunal confirmed the debt and default, leading to the admission of the application.

4. Appointment of Interim Resolution Professional:
The Applicant proposed the name of Mr. Navin Khandelwal, a registered insolvency resolution professional, as the Interim Resolution Professional (IRP) to carry out the functions under the I&B Code. The Tribunal approved the appointment of Mr. Khandelwal as the IRP.

5. Declaration of Moratorium:
The Tribunal admitted the petition under section 7 of the I&B Code, declaring a moratorium under section 14. The moratorium included prohibitions on legal proceedings against the Corporate Debtor, asset transfers, enforcement of security interests, and ensured the continuity of essential goods or services to the Corporate Debtor.

6. Compliance and Communication of the Order:
The Tribunal directed immediate communication of the order to the Financial Creditor, Corporate Debtor, and the appointed Interim Resolution Professional. The Registry was instructed to ensure compliance and submit a report promptly.

In conclusion, the judgment admitted the application for initiating CIRP against the Corporate Debtor, appointed an Interim Resolution Professional, declared a moratorium, and emphasized compliance and communication of the order to the relevant parties.