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2017 (8) TMI 507 - Tri - Insolvency and BankruptcyCorporate Insolvency Resolution Process - outstanding dues - Held that - The Corporate Debtor has disclosed that 20 Financial Creditors have filed cases before Debt Recovery Tribunal, Mumbai for recovery of the amount due to them. The Corporate Debtor has enclosed the audited financial statements for the year ended 31.03.2016 & 31.03.2017 and the provisional financial statement up to 17.05.2017. A list of assets and liabilities of the Corporate Debtor as on 17.05.2017 is also enclosed with the application. The Corporate Debtor also enclosed the list of Financial Creditors and Operational Creditors as on 17.05.2017. The Corporate Debtor has disclosed the particulars of debt owed by the Corporate Debtor to or by persons connected with it, the name and the address of the members of the Corporate Debtor with the details of their shareholdings, details of personal guarantees and the affidavit in support of the petition. On reading the petition and the supporting documents annexed with the petition, this Bench is of the view that the corporate debtor has committed default and the petition contains the particulars as required u/s 10 of the Code. Hence, this Bench hereby admits this petition, declaring moratorium with consequential directions.
Issues:
1. Initiation of Corporate Insolvency Resolution Process under Insolvency and Bankruptcy Code 2016. 2. Details of the Corporate Debtor's financial position and liabilities. 3. Appointment of Interim Resolution Professional. 4. Declaration of moratorium and consequential directions. Issue 1: Initiation of Corporate Insolvency Resolution Process under Insolvency and Bankruptcy Code 2016 The Company Petition was filed by the Corporate Debtor under Section 10 of the Insolvency and Bankruptcy Code 2016 for the initiation of the Corporate Insolvency Resolution Process. The Debtor Company had previous involvements with BIFR and AAIFR before filing this petition in 2017. The petition contained the necessary particulars as required under Section 10 of the Code, leading to its admission by the Tribunal. Issue 2: Details of the Corporate Debtor's financial position and liabilities The Corporate Debtor disclosed its registered office details, incorporation information, authorized and paid-up share capital, and liabilities. The liabilities included amounts payable to Financial Creditors, Operational Creditors, unpaid dividend, duties and taxes, and other liabilities, totaling to a significant amount. The Independent Auditors' Report highlighted the Company's failure to meet financial obligations, leading to legal actions by multiple Financial Creditors. Issue 3: Appointment of Interim Resolution Professional The Board of Directors authorized the Managing Director to file the application for Corporate Insolvency, and proposed an Interim Resolution Professional, who consented to the appointment. The appointed professional was tasked with specific responsibilities under the Insolvency and Bankruptcy Code, and no disciplinary proceedings were pending against him at the time of appointment. Issue 4: Declaration of moratorium and consequential directions Upon reviewing the petition and supporting documents, the Tribunal found that the Corporate Debtor had committed a default, leading to the declaration of a moratorium. The moratorium included prohibitions on legal actions against the Corporate Debtor, protection of essential goods and services supply, and specific directions regarding the effect and duration of the moratorium. Additionally, the appointment of the Interim Resolution Professional was crucial for carrying out the functions required under the Code. In conclusion, the Tribunal admitted the petition, declared a moratorium, appointed the Interim Resolution Professional, and issued consequential directions to facilitate the Corporate Insolvency Resolution Process in accordance with the Insolvency and Bankruptcy Code 2016.
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