2019 (8) TMI 1556 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - Time limitation - HELD THAT - The Petitioner has annexed the Commercial Credit Information Report issued by TransUnion CIBIL, the Statement of Accounts and Balance Sheets of the Respondent for the period 2014-15 establishing the debt and default. Time Limitation - HELD THAT - The Respondent s contention that the petition is not maintainable as it is barred by limitation is unsustainable as rightly pointed out by the Petitioner and on account of proceedings bearing O.A No.48 of 2015 before the Ld. DRT, New Delhi already being initiated on 08.01.2015. The Application under sub-section (2) of Section 7 of I B Code, 2016 is complete. The existing financial debt of more than rupees one lakh against the corporate debtor and its default is also proved. Accordingly, the petition filed under section 7 of the Insolvency and Bankruptcy Code for initiation of corporate insolvency resolution process against the corporate debtor deserves to be admitted - Application admitted - moratorium declared.

Summary

Issues Involved:
1. Default in loan repayment.
2. Limitation period for filing the petition.
3. Acknowledgment of debt and default.
4. Appointment of Interim Resolution Professional (IRP).
5. Declaration of moratorium under Section 14 of I&B Code.

Issue-wise Detailed Analysis:

1. Default in Loan Repayment:
The Petitioner, Indian Renewable Energy Development Agency Limited, filed a petition under Section 7 of the Insolvency & Bankruptcy Code, 2016, against the Corporate Debtor, Shree Kedarnath Sugar and Agro Products Limited, for initiating Corporate Insolvency Resolution Process (CIRP). The Petitioner claimed a total default amount of ?57,38,92,106/- as of 31.03.2018, comprising principal, interest, LD, and IC amounts. The loan was sanctioned on 16.03.2007 for setting up a Bagasse Co-generation plant, and the Respondent accepted the terms via a Board Resolution on 20.03.2007. Despite various agreements and guarantees, the Respondent failed to implement the project successfully and defaulted on payments.

2. Limitation Period for Filing the Petition:
The Respondent contended that the petition was barred by limitation, citing the default date as 01.04.2011 and the petition filed in 2018, relying on the Supreme Court decision in B.K Educational Services Private Limited v. Parag Gupta and Associates. However, the Petitioner argued that the limitation period had not expired, as the loan repayment schedule extended until 30.06.2020. The Tribunal referenced previous decisions, including Oriental Bank of Commerce v. Sikka Papers Ltd and Punjab National Bank v. Anand Distilleries Pvt Ltd, to conclude that the limitation period had not lapsed due to ongoing legal proceedings and the registered charge on the property.

3. Acknowledgment of Debt and Default:
The Respondent, in its affidavit, admitted to the loan sanctioned and disbursed by the Petitioner. The Petitioner provided substantial documentation, including the Sanction Letter, Board Resolution, Loan Agreement, Guarantees, and other loan-related documents. The Commercial Credit Information Report, Statement of Accounts, and Balance Sheets further established the debt and default.

4. Appointment of Interim Resolution Professional (IRP):
The Petitioner proposed Mr. Bhuvnesh Maheshwari as the Interim Resolution Professional, with the necessary declaration of no pending disciplinary proceedings. The Tribunal accepted this proposal and appointed Mr. Maheshwari to carry out the functions as per the I&B Code.

5. Declaration of Moratorium under Section 14 of I&B Code:
The Tribunal declared a moratorium, prohibiting the institution or continuation of suits or proceedings against the corporate debtor, transferring or disposing of assets, enforcing security interests, and recovering property occupied by the corporate debtor. The supply of essential goods or services to the corporate debtor was to continue uninterrupted during the moratorium period. The moratorium would remain effective until the completion of the CIRP or until the Tribunal approved a resolution plan or ordered liquidation.

Order:
The petition filed under Section 7 of the I&B Code was admitted, and a moratorium was declared. The public announcement of the CIRP was to be made immediately, and Mr. Bhuvnesh Maheshwari was appointed as the Interim Resolution Professional. The Registry was directed to communicate the order to the Financial Creditor, Corporate Debtor, and IRP immediately.

This comprehensive analysis ensures that all relevant issues and significant legal terminologies are preserved from the original judgment.