2019 (8) TMI 1486 - Tri - Insolvency and Bankruptcy

Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - Default of debt - HELD THAT - The petitioner-financial creditor has disbursed money to the respondent-corporate debtor. Though a considerable long period has lapsed the amount due has not been repaid the financial creditor- petitioner. It is accordingly held that the respondent-corporate debtor has committed default in repayment of the outstanding financial debt which exceeds the statutory limit of rupees one lakh - Application admitted - moratorium declared.

Summary

Issues:
1. Revival of proceedings based on the order of the Appellate Tribunal
2. Compliance with Section 7 of the Insolvency and Bankruptcy Code
3. Appointment of Interim Resolution Professional
4. Declaration of moratorium under Section 14 of the Code
5. Public announcement and deposit of funds by the Financial Creditor
6. Direction to provide documents and information by ex-management
7. Addressing complaints against financial creditors regarding claims

Revival of Proceedings:
The petition was revived following the order of the Appellate Tribunal, with details of the financial debt provided in the prescribed form. Despite notice to the corporate debtor, they did not appear, leading to an ex parte proceeding.

Compliance with Section 7 of the Code:
The petitioner argued that all requirements of Section 7 for initiating Corporate Insolvency Resolution Process were met. The Tribunal found compliance with Section 7(2) and Section 7(5) of the Insolvency and Bankruptcy Code, as discussed in a previous order.

Appointment of Interim Resolution Professional:
An Interim Resolution Professional (IRP) was appointed, and a moratorium was declared under Section 14 of the Code. The IRP was directed to make a public announcement and the Financial Creditor was instructed to deposit funds with the IRP for expenses.

Declaration of Moratorium:
The Tribunal declared a moratorium under Section 14, specifying exceptions for certain transactions and supplies of essential goods or services to the Corporate Debtor during the moratorium period.

Public Announcement and Deposit of Funds:
The Interim Resolution Professional was directed to make a public announcement, and the Financial Creditor was instructed to deposit a sum with the IRP to cover expenses, subject to adjustment by the Committee of Creditors.

Direction to Provide Documents and Information:
The ex-management was directed to provide all documents and information within a week from the admission of the petition to the IRP, with coercive steps to follow in case of non-compliance.

Addressing Complaints Against Financial Creditors:
The Tribunal acknowledged complaints against financial creditors regarding claimed amounts, interest rates, and penal charges. It emphasized the role of Resolution Professionals in addressing such issues to prevent injustice to the corporate debtor.

Communication and Compliance:
The office was directed to communicate the order to relevant parties promptly. Additionally, a copy of the order was to be sent to the Registrar of Companies for updating the Master Data, with a compliance report to be submitted to the National Company Law Tribunal Registrar.