2018 (2) TMI 196 - Tri - Insolvency and Bankruptcy

Corporate insolvency procedure - Held that - The Insolvency and Bankruptcy Board of India vide its letter dated 01.01.2018 has recommended a panel of Insolvency Professionals for appointment as Insolvency Resolution Professional in compliance with Section 16(3)(a) of the Code in order to cut delay. The list of recommended Insolvency Professionals provides instant solution to the Adjudicating Authority to pick up the name and make appointment. It helps in meeting the time line given in the Code and the unnecessary time wasted firstly in asking the Insolvency and Bankruptcy Board of India to recommend the name and then to appoint such Interim Resolution Professional by Adjudicating Authority. Accordingly, we appoint Mr. Sachin Sapra, email id [email protected] (Mobile No. 9910219977) as an Interim Resolution Professional. His registration number is IBBI/IPA-002/IP-N00005/2016-17/10005. The aforesaid Interim Resolution Professional has no disciplinary proceeding pending against him nor anything else has been pointed out with regard to his antecedents. The Interim Resolution Professional has filed necessary declaration in accordance with the IBBI Regulations and the provisions of the Code. In pursuance of Section 13(2) of Code, we direct that Interim Insolvency Resolution Professional shall immediately on his appointment make public announcement with regard to admission of this application under Section 7 of the Code. We also declare moratorium in terms of Section 14 of the Code. A necessary consequence of the moratorium flows from the provisions of Section 14(1)(a), (b), (c) & (d).

Issues Involved:
1. Existence of operational debt
2. Default by the Corporate Debtor
3. Dispute regarding the debt
4. Pending petitions before the Delhi High Court
5. Appointment of Interim Resolution Professional
6. Declaration of moratorium

Analysis:

1. Existence of Operational Debt:
The petitioner, an Operational Creditor, claimed that it supplied industrial gases to the Corporate Debtor under a Liquid Supply Agreement (LSA) and Equipment License Agreement (ELA). The agreements were later revised, and the total outstanding liability was ?1,67,81,106/-. The invoices and emails exchanged between the parties confirmed the supply of goods, thus establishing the existence of operational debt as defined under Section 5(21) of the Insolvency and Bankruptcy Code, 2016.

2. Default by the Corporate Debtor:
The Corporate Debtor defaulted on payments, evidenced by the dishonored cheque of ?49,35,977/- issued on 11.01.2016. Proceedings under Section 138 of the Negotiable Instruments Act, 1881, were initiated due to the dishonored cheque. The default amount remained unpaid since 15.02.2017, meeting the criteria under Section 3(12) read with Section 4 and Section 9(1) of the Code.

3. Dispute Regarding the Debt:
The Corporate Debtor raised a dispute about the debt, citing issues like escalation charges and debit notes. However, the tribunal found these defenses illusory and unsupported by evidence. The tribunal referred to the Supreme Court's judgment in Mobilox Innovations (P.) Ltd. v. Kirusa Software Private Limited, which stated that the adjudicating authority must reject spurious defenses and only consider plausible contentions requiring further investigation. The tribunal concluded that the dispute raised by the Corporate Debtor was not genuine and rejected the argument.

4. Pending Petitions Before the Delhi High Court:
The tribunal noted the pending winding-up petitions before the Delhi High Court but clarified that these would not impede the initiation of insolvency proceedings. Citing precedents from the Hon'ble Appellate Tribunal, it was established that applications under Sections 7, 9, and 10 of the Code are maintainable unless a liquidation order has been passed in winding-up proceedings.

5. Appointment of Interim Resolution Professional:
The tribunal appointed Mr. Sachin Sapra as the Interim Resolution Professional (IRP) from a panel recommended by the Insolvency and Bankruptcy Board of India. The IRP was tasked with making a public announcement regarding the admission of the application and performing duties as per Sections 15, 17, 18, 19, 20, and 21 of the Code.

6. Declaration of Moratorium:
A moratorium was declared under Section 14 of the Code, prohibiting:
(a) Institution or continuation of suits or proceedings against the Corporate Debtor.
(b) Transferring, encumbering, or disposing of any assets of the Corporate Debtor.
(c) Actions to foreclose, recover, or enforce any security interest.
(d) Recovery of any property occupied by the Corporate Debtor.

The moratorium did not apply to transactions notified by the Central Government or the supply of essential goods or services.

Conclusion:
The tribunal admitted the petition, appointed an IRP, and declared a moratorium, thereby initiating the Corporate Insolvency Resolution Process against the Corporate Debtor. The tribunal directed all personnel associated with the Corporate Debtor to cooperate with the IRP and emphasized the IRP's duty to protect and preserve the value of the Corporate Debtor's property.

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