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2017 (11) TMI 412 - Tri - Insolvency and BankruptcyCorporate insolvency procedure - proof of outstanding procedure - Held that - In the Instant case, facts specific to the case, where the case is filed either under section 7 or 9 would not have much difference since the Petitioner Company has already demanded Respondent to pay the outstanding dues and the Respondent also agreed for the same and to clear the outstanding dues within the stipulated period i.e. end of December 2016, vide letter dated 07-11-2016. Moreover, an IRP is also suggested by the Petitioner. Considering the fact that a huge amount is outstanding since 2015, inspite of various Affidavits filed/adjournments granted to Respondent not even a single rupee is paid so far even though petition was submitted under IBC on 22-03-2017. Moreover, the petitioner being a Government of India Enterprise taken steps for recovery of its dues from 2015 and considerable time had already lapsed therefore in the interest of time/both the parties, we have considered the present petition under section 9 of IBC, the petition filed is maintainable and petition is also complete in all respects as per provisions of section 9 of IBC and thus it is a fit case for admission. Therefore we have no hesitation to consider this petition under section 9 of IBC. Heard, Counsels for both the sides. Considering the facts and circumstances of the matter as discussed supra and we are also satisfied that there is no disciplinary proceedings pending against the proposed IRP. In the result, the Company Petition is admitted by exercising the powers conferred under section 9 of IBC, 2016.
Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP) under IBC, 2016. 2. Classification of the Petitioner as Financial Creditor or Operational Creditor. 3. Admissibility of the petition under Section 9 of IBC, 2016. 4. Appointment of Interim Resolution Professional (IRP). 5. Declaration of Moratorium under Section 14 of IBC, 2016. Detailed Analysis: 1. Initiation of Corporate Insolvency Resolution Process (CIRP) under IBC, 2016: The application was filed by the Petitioner, M/s. PEC Limited, to initiate CIRP against M/s. Sree Ramakrishna Alloys Limited (SRAL) under the Insolvency and Bankruptcy Code (IBC), 2016. The Petitioner sought to recover an outstanding amount of ?15,16,26,907, including interest, from the Respondent. 2. Classification of the Petitioner as Financial Creditor or Operational Creditor: The Respondent argued that the Petitioner should be classified as an "Operational Creditor" rather than a "Financial Creditor." The Tribunal examined the definitions under Sections 5(7), 5(20), and 5(21) of IBC. It was noted that the Petitioner had classified debtors secured against Inland Letter of Credit (ILC) as Trade Receivables in their balance sheet, indicating an operational nature. Consequently, the Tribunal considered the Petitioner as an Operational Creditor under Section 9 of IBC. 3. Admissibility of the petition under Section 9 of IBC, 2016: Despite the initial filing under Section 7, the Tribunal found that the facts specific to the case would not differ significantly if considered under Section 9. The Petitioner had demanded payment, and the Respondent had acknowledged the debt and agreed to clear the dues by December 2016. Given the substantial outstanding amount and the time already consumed, the Tribunal admitted the petition under Section 9 of IBC as it was complete in all respects. 4. Appointment of Interim Resolution Professional (IRP): The Petitioner proposed Mr. Vikram Kumar as the IRP, who had filed the necessary affidavit and declaration as required by law. The Tribunal, satisfied with the proposal and the absence of any disciplinary proceedings against the IRP, appointed Mr. Vikram Kumar to initiate appropriate actions under CIRP. 5. Declaration of Moratorium under Section 14 of IBC, 2016: The Tribunal declared a moratorium effective from the date of the order until the completion of CIRP or the passing of a liquidation order. The moratorium included: - Suspension of all suits or proceedings against the corporate debtor. - Prohibition on transferring or disposing of assets by the corporate debtor. - Prevention of foreclosure or enforcement of security interests. - Restriction on recovery of property from the corporate debtor's possession. The Tribunal directed the IRP to make a public announcement of the initiation of CIRP and to follow all relevant rules and regulations. Both parties were instructed to cooperate fully with the IRP. Conclusion: The Tribunal, after considering all facts and circumstances, admitted the Company Petition under Section 9 of IBC, 2016. It appointed an IRP and declared a moratorium to facilitate the CIRP, ensuring adherence to the principles of natural justice and cooperation from both parties. The case was scheduled for further review on 17th October 2017, with the IRP required to update the Tribunal on the progress of CIRP.
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