2020 (1) TMI 1380 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditor or not - existence of debt and dispute or not - HELD THAT - It is patent that all requirements of section 7 of the Code for initiation of corporate insolvency resolution process by a financial creditor stand fulfilled. In that regard, the application is complete as per the requirements of section 7(2) of the Code and other conditions prescribed by rule 4(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. There is overwhelming evidence to prove default and name of the resolution professional has also been clearly specified. The form and manner of the application has to be the one as prescribed. It is evident from the record that the application has been filed on the proforma prescribed under rule 4(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 read with section 7 of the Code. We are satisfied that a default amounting to lakhs of rupees has occurred within the meaning of section 4 of the Code and the application under sub-section (2) of section 7 is complete ; and no disciplinary proceedings are pending against the proposed interim resolution professional. Thus, the application warrant admission as it is complete in all respects. Petition admitted - moratorium declared.

Summary

Issues:
1. Application under section 7 of the Insolvency and Bankruptcy Code, 2016 for corporate insolvency resolution process.
2. Appointment of interim resolution professional.
3. Declaration of moratorium under section 14 of the Code.
4. Directions for the interim resolution professional's functions and responsibilities.

Analysis:
1. The Tribunal received an application from M/s. Sai Precious Traexim P. Ltd., a financial creditor, seeking to initiate the corporate insolvency resolution process against Pine View Portfolio Consultant P. Ltd. The respondent failed to respond to the legal notice or the application, leading to the Tribunal's consideration of the evidence presented by the applicant. The Tribunal found that all requirements under section 7 of the Code were met, including the presence of a default and a complete application, leading to the admission of the petition.

2. The Tribunal appointed Mr. Ajay Kumar Kathuria as the interim resolution professional in this case. Mr. Kathuria agreed to the appointment and fulfilled the necessary criteria, including the absence of any pending disciplinary proceedings against him. The Tribunal directed Mr. Kathuria to make a public announcement regarding the admission of the application within three days, as per the provisions of the Code.

3. In line with section 14 of the Code, the Tribunal declared a moratorium, imposing restrictions on various actions against the corporate debtor. These restrictions included the institution of suits, transferring assets, enforcing security interests, and property recovery. Exceptions to the moratorium were outlined, such as specific transactions notified by the Central Government and the supply of essential goods or services to the corporate debtor.

4. The Tribunal issued directions for the interim resolution professional to manage the affairs of the corporate debtor diligently and in compliance with the relevant provisions of the Code. The professional was instructed to follow best practices, act with integrity, and receive cooperation from all parties associated with the corporate debtor. Additionally, the Tribunal emphasized the importance of protecting and preserving the value of the corporate debtor's property and outlined the responsibilities of the interim resolution professional in this regard.

In conclusion, the Tribunal admitted the petition for initiating the corporate insolvency resolution process, appointed an interim resolution professional, declared a moratorium, and provided detailed directions for the professional's conduct and responsibilities in managing the affairs of the corporate debtor.