2021 (8) TMI 1298 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT - This Adjudicating Authority is satisfied that, a) The Corporate Debtor availed the loan/ credit facilities from the Financial Creditor; b) Existence of debt is above Rupees One Lac; c) Debt is due, payable and defaulted; d) Default occurred on 28.01.2020; e) Application has been filed within the limitation period, as the date of default is 28.01.2020, when the Application under Section 7 of the IBC has been filed by the FC i.e. State Bank of India on 18.03.2021; f) Copy of the Application/Amended Application filed before this Bench has been sent to the Corporate Debtor and the application filed by the Applicant Bank under Section 7 of the IBC is found to be complete for the purpose of initiation of Corporate Insolvency Resolution Process in respect of the Corporate Debtor; Hence, the present IB Petition is admitted with the following directions/observations. The date of admission of this petition is 26/08/2021. Petition admitted - moratorium declared.

Summary

Issues Involved:
1. Maintainability of the application under Section 7 of the Insolvency and Bankruptcy Code, 2016.
2. Existence and classification of the debt.
3. Default and its date.
4. Authorization to file the application.
5. Limitation period for filing the application.
6. Appointment of the Interim Resolution Professional (IRP).
7. Declaration of moratorium under Section 13 and 14 of the Insolvency and Bankruptcy Code, 2016.

Detailed Analysis:

1. Maintainability of the application under Section 7 of the Insolvency and Bankruptcy Code, 2016:
The Financial Creditor, State Bank of India, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, Nayak Infrastructure Private Limited. The Corporate Debtor contested the maintainability, arguing that the application was not as per the provisions of Rule 4 of the Insolvency and Bankruptcy Code and that simultaneous applications against the Principal Borrower and Corporate Guarantors for the same claim are not permissible. The Tribunal found the application maintainable, as it was filed according to the prescribed forms and rules.

2. Existence and classification of the debt:
The Tribunal confirmed the existence of debt above Rupees One Lac, which was due, payable, and defaulted. The Financial Creditor provided evidence including sanction letters, statements of accounts, and certified entries in a Bankers Book, proving the claim against the Corporate Debtor. The Corporate Debtor's arguments that the amount advanced was not a financial debt were rejected.

3. Default and its date:
The Tribunal established that the default occurred on 28.01.2020, when the accounts were classified as Non-Performing Assets (NPA). The application was filed on 18.03.2021, within the limitation period, thus satisfying the requirement under the Insolvency and Bankruptcy Code.

4. Authorization to file the application:
The Corporate Debtor challenged the authorization of the person filing the application, arguing that it was not filed by an authorized person. The Tribunal referred to Regulations 76 and 77 of the State Bank of India General Regulations, 1955, which empower the Chief Manager to sign and verify documents on behalf of the bank. Therefore, the application was deemed to be filed by a duly authorized person.

5. Limitation period for filing the application:
The Corporate Debtor argued that the application was barred under Article 137 of the Limitation Act as the default occurred over three years prior to the filing date. However, the Tribunal found that the default date was 28.01.2020, and the application was filed within the permissible period, thus not barred by limitation.

6. Appointment of the Interim Resolution Professional (IRP):
The Tribunal appointed Mr. Vishal Ghisulal Jain as the Interim Resolution Professional, as proposed by the Financial Creditor. The IRP was directed to make a public announcement of the moratorium and follow the provisions under Sections 13 and 14 of the Insolvency and Bankruptcy Code.

7. Declaration of moratorium under Section 13 and 14 of the Insolvency and Bankruptcy Code, 2016:
The Tribunal declared a moratorium with immediate effect, prohibiting the institution or continuation of suits or proceedings against the Corporate Debtor, transferring or disposing of its assets, and recovering any property by an owner or lessor. The moratorium will remain in effect until the completion of the Corporate Insolvency Resolution Process.

Conclusion:
The Tribunal admitted the application under Section 7 of the Insolvency and Bankruptcy Code, 2016, and initiated the Corporate Insolvency Resolution Process against Nayak Infrastructure Private Limited. The moratorium was declared, and Mr. Vishal Ghisulal Jain was appointed as the Interim Resolution Professional. The Tribunal directed all relevant parties to extend full cooperation to the IRP and adhere to the provisions of the Insolvency and Bankruptcy Code. The commencement of the Corporate Insolvency Resolution Process was effective from the date of the order, 26/08/2021.