2018 (7) TMI 2124 - Tri - Insolvency and Bankruptcy

Admissibility of petition - Section 10 of the Insolvency Bankruptcy Code, 2016 - HELD THAT - The petition is admitted - the moratorium is declared under Section 13 14 of the Code for prohibiting all of the following (a) The Institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; (b)Transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets to any legal right or beneficial interest therein; (c) Any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002(54 of 2002); (d) The recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor. (e) The supply of essential goods or services to the corporate debtor as may be specified shall not be terminated or suspended or interrupted during moratorium period. (f) The provision of sub-Section (I) shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator. (g) The order of moratorium shall have effect from the date of such order till the completion of the corporate insolvency resolution process.

Summary

Issues involved:
- Admission of the case under Section 10(4) of the Insolvency & Bankruptcy Code, 2016
- Declaration of moratorium under Section 13 & 14 of the Code
- Appointment of Interim Resolution Professional (IRP)
- Communication of the order to the IRP

Admission of the case under Section 10(4) of the Insolvency & Bankruptcy Code, 2016:
The Tribunal admitted CP (IB) 190/2018 under Section 10(4) of the Code, signifying the initiation of the insolvency resolution process against the corporate debtor. This admission triggers the application of provisions related to moratorium and other restrictions as outlined in the Code.

Declaration of moratorium under Section 13 & 14 of the Code:
The Tribunal declared a moratorium under Section 13 & 14 of the Code, imposing several prohibitions. These include the institution or continuation of suits or proceedings against the corporate debtor, transfer or disposal of the debtor's assets, enforcement of security interests, recovery of property by owners or lessors, and ensuring the supply of essential goods or services to the debtor is not terminated during the moratorium period. Exceptions to these restrictions may be notified by the Central Government in consultation with financial sector regulators.

Appointment of Interim Resolution Professional (IRP):
Upon filing a pursis expressing no objection, the corporate applicant allowed the appointment of an Interim Resolution Professional (IRP) proposed by a secured creditor, Axis Bank. The appointed IRP is tasked with initiating the Corporate Insolvency Resolution Process (CIRP), declaring and enforcing the moratorium under Section 15 of the Code, and undertaking necessary actions in accordance with the Code for the corporate debtor company.

Communication of the order to the IRP:
The Tribunal directed the corporate applicant to provide a copy of the order to the appointed IRP at the specified address, ensuring the seamless communication of the decision and facilitating the IRP's initiation of the resolution process as mandated by the Code. This communication step is crucial for the IRP to proceed with the necessary actions in line with the insolvency resolution framework.