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2019 (12) TMI 1551 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate debtor failed to make repayment of its dues - Financial Creditors or not - nature of debt - Financial Debt or Operational Debt - debt due and payable and a default had occurred or not - maintainability of proceedings against a stuck off company - notice of recall / demand was given, but no reply was given by the Corporate Debtor - meeting out of obligations of proposal of name of IRP - HELD THAT - The Financial Creditor is allowed to propose the name of a qualified personnel to act as such. This plea of the Corporate Debtor stands rejected. Different dates mentioned at various places - HELD THAT - These are of technical nature and do not impact the maintainability of the petition filed under Section 7 of the IBC, 2016. Non submission of Board Resolution under Section 186 of the Companies Act, 2013 - HELD THAT - This plea is also devoid of merit in view of the provisions of Sections 238 of the IBC, 2013 and there being no such requirement under the provisions of IBC, 2016. Nature of debt - whether it is a financial debt or operational debt? - HELD THAT - The Corporate Debtor is trying to read only the words Advances , hence, there are no substance in her contention that it was a case of advance and not of loan especially when she has not brought any material on record to support her contention that it was a case of advance for purchase of goods. Similarly at other places the word loan conjunction with advance has been used. We are further of the view that absence of PDC or any written agreement does not alter the character of the transaction and other facts and material can establish the true nature of transaction. Maintainability of proceedings against a stuck off company - HELD THAT - The Hon ble NCLAT has held that proceedings against struck off company under Section 7 IBC, 2016 were valid - CIRP can be initiated against s struck off company. The Financial Creditor in the supplementary affidavit has proposed the name of the IRP who has given his consent and it has been claimed that no disciplinary proceedings are pending against him, his name is approved - the IRP / RP to file an application under Section 252(3) of the Companies Act, 2013 and serve the copy of the same to Registrar of Companies, West Bengal so that name of the struck off company can formally be restored by an appropriate order of the Tribunal. This Petition is otherwise complete and defect free - petition admitted.
Issues Involved:
1. Nature of the debt: Whether it is a financial debt or an operational debt. 2. Maintainability of proceedings against a struck-off company. 3. Compliance with procedural requirements, including the proposal of an Interim Resolution Professional (IRP). 4. The impact of typographical errors on the petition's maintainability. 5. Compliance with Section 186 of the Companies Act, 2013. 6. Issuance of notice under Section 8 of the IBC, 2016. 7. Admissibility of the petition under Section 7 of the IBC, 2016. Issue-wise Detailed Analysis: 1. Nature of the Debt: The Financial Creditor contended that a loan of ?50,00,000/- was given to the Corporate Debtor on 19 January 2017, supported by bank statements. The Corporate Debtor argued that the amount was an advance for the purchase of materials, not a loan, and highlighted the absence of a written agreement, promissory note, or security. However, the Tribunal found that the ledger account described the transaction as "being amount paid towards loan and advances," and thus, it was considered a financial debt. The absence of a written agreement did not alter the nature of the transaction. 2. Maintainability of Proceedings Against a Struck-off Company: The Corporate Debtor's name had been struck off from the Register of Companies, raising questions about the petition's maintainability. The Tribunal referred to the Hon’ble NCLAT's decisions, which held that proceedings under Sections 7 and 9 of the IBC, 2016 are maintainable against a struck-off company. The Tribunal directed the IRP to file an application under Section 252(3) of the Companies Act, 2013 to restore the company's name formally. 3. Compliance with Procedural Requirements: The Financial Creditor initially failed to propose the name of an IRP, which was deemed an incurable defect by the Corporate Debtor. The Tribunal allowed the Financial Creditor to rectify this by filing a supplementary affidavit proposing a qualified IRP, who was subsequently approved. 4. Impact of Typographical Errors: The Corporate Debtor pointed out inconsistencies regarding the dates of default and payment due. The Tribunal considered these discrepancies to be of a technical nature that did not impact the petition's maintainability under Section 7 of the IBC, 2016. 5. Compliance with Section 186 of the Companies Act, 2013: The Corporate Debtor argued that the requirements of Section 186, including the absence of a Board Resolution, were not met. The Tribunal held that this plea was devoid of merit due to the provisions of Section 238 of the IBC, 2016, which override other laws. 6. Issuance of Notice Under Section 8 of the IBC, 2016: The Financial Creditor admitted that the notice under Section 8 was inadvertently sent and was actually a recall/demand notice. Despite this, the Tribunal found that the debt was due and payable, and a default had occurred, meeting the conditions of Section 7 of the IBC, 2016. 7. Admissibility of the Petition Under Section 7 of the IBC, 2016: The petition was found to be complete and defect-free. The Tribunal admitted the petition for initiating the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. A moratorium was declared, and public announcements were ordered as per Sections 13 to 15 of the IBC, 2016. Order: 1. The petition under Section 7 of the IBC, 2016 is admitted. 2. A moratorium is declared, prohibiting suits, asset transfers, and recovery actions against the Corporate Debtor. 3. The supply of essential goods or services to the Corporate Debtor shall not be interrupted during the moratorium. 4. Mr. Sanjeev Jhunjhunwala is appointed as the Interim Resolution Professional (IRP). 5. The IRP is directed to convene a meeting of the Committee of Creditors and submit a resolution plan within 105 days. 6. The Financial Creditor is directed to deposit ?50,000/- in an ESCROW Account for preliminary expenses. 7. The Registry is directed to communicate the order to all concerned parties. The matter is listed for a progress report on 06.02.2020, and certified copies of the order may be issued upon compliance with requisite formalities.
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