2017 (6) TMI 1051 - Tri - Insolvency and Bankruptcy

Insolvency Resolution Process - admission of this Petition and appointment of the Interim Resolution Professional - order of moratorium - Held that - In view of the commencement of the Insolvency Resolution Process with the admission of this Petition and appointment of the Interim Resolution Professional, this Adjudicating Authority hereby passes the order declaring moratorium under Section 13(l)(a) prohibiting the following as laid down in Section 14 of the Code; (i) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; (ii) transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein; (iii) any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002); (iv) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor. (a) However, the supply of goods and essential services to the corporate debtor shall not be terminated or suspended or interrupted during moratorium period. The moratorium order in respect of (i), (ii), (iii) and (iv) above shall not apply to the transactions notified by the Central Government. This order of moratorium shall be in force from the date of order till the completion of Corporate Insolvency Resolution Process subject to the Proviso under sub-section (4) of Section 14.

Summary

Issues:
1. Filing of insolvency petition under Section 10 of The Insolvency and Bankruptcy Code, 2016.
2. Appointment of Interim Insolvency Resolution Professional.
3. Declaration of moratorium under Section 13 of the Code.

Analysis:
1. The petitioner, a company registered under the Companies Act, 1956, filed a petition under Section 10 of The Insolvency and Bankruptcy Code, 2016, citing State Bank of India as a financial creditor. The petitioner provided details of debts due to secured creditors, operational creditors, and statutory liabilities. The petitioner also mentioned actions taken by the bank under the SARFAESI Act and pending proceedings before the DRT and BIFR.

2. The petitioner named an Interim Insolvency Resolution Professional and submitted necessary documents. After objections from the State Bank of India regarding the proposed professional, an alternate name was suggested and accepted. The Adjudicating Authority appointed the new professional and directed the petitioner to make a public announcement as required by Section 13 of the Code.

3. The Adjudicating Authority declared a moratorium under Section 13(l)(a) of the Code, prohibiting various actions against the corporate debtor, including suits, asset transfers, and enforcement of security interests. Essential services to the corporate debtor were to continue during the moratorium period. The moratorium order was to remain in force until the completion of the Corporate Insolvency Resolution Process, subject to statutory provisions.

In conclusion, the petition was admitted under Section 10(4)(a) of the Code, an Interim Insolvency Resolution Professional was appointed, and a moratorium was declared to facilitate the Corporate Insolvency Resolution Process. The order was communicated to the concerned parties for compliance.