2017 (4) TMI 1520 - 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 - HELD THAT - This Bench admits this petition under section 10 of Insolvency and Bankruptcy Code, 2016, declaring moratorium with certain directions issued. Petition admitted.

Summary

Issues:
1. Initiation of Corporate Insolvency Resolution Process under Insolvency and Bankruptcy Code, 2016.

Analysis:
The Company Petition was filed by Suvarna Karnataka Cements Private Limited (Corporate Applicant) under Section 10 of the Insolvency and Bankruptcy Code, 2016, seeking the initiation of Corporate Insolvency Resolution Process. The Corporate Debtor, M/S Suvarna Karnataka Cements Private Limited, provided details of its incorporation, registered office, share capital structure, and financial position. The Board of Directors authorized the filing of the petition, appointing an Interim Resolution Professional. The Corporate Debtor disclosed financial creditors, default status, and liabilities, including non-current and current liabilities. The petition included audited financial statements, assets, liabilities details, and member information.

The Corporate Debtor defaulted with three Financial Creditors, namely SVC Cooperative Bank, SREI Equipment Finance Limited, and L&T Fincorp Limited. L&T Fincorp Limited, under the SARFAESI Act, issued a demand notice for payment. SVC Cooperative Bank assigned its financial assets to Reliance Asset Reconstruction Company Limited. The petition was heard under Section 10 of the Insolvency and Bankruptcy Code, 2016, declaring a moratorium. The Bench admitted the petition, imposing directions to prohibit legal actions against the corporate debtor, maintain the supply of essential goods or services, and appoint an Interim Resolution Professional. The order of moratorium was effective until the completion of the resolution process or liquidation approval, with a public announcement requirement.

In conclusion, the Tribunal admitted the petition for the initiation of the Corporate Insolvency Resolution Process, appointing an Interim Resolution Professional and imposing a moratorium to protect the corporate debtor's assets and facilitate the resolution process.