2018 (2) TMI 1164 - Tri - Insolvency and Bankruptcy

Corporate insolvency procedure - Insolvency Professionals appointment - Held that - 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. 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 IBC we direct that public announcement shall be immediately made by the Interim Resolution Professional with regard to admission of this application under Section 7 of IBC. We also declare moratorium in terms of Section 14 of IBC. The consequences of imposing the moratorium flows from the provisions of Section 14(1)(a),(b),(c) 8 & (d).

Summary

Issues:
1. Whether the Operational Creditor's claim against the Corporate Debtor is valid under the Insolvency and Bankruptcy Code, 2016.
2. Whether the Operational Creditor has fulfilled all legal requirements for initiating insolvency proceedings.
3. Whether the appointment of an Interim Resolution Professional is necessary in this case.

Analysis:
Issue 1:
The Operational Creditor filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, claiming that the Corporate Debtor owed a debt of ?3,96,16,509 for manpower outsourcing services. The Operational Creditor provided detailed evidence, including agreements, invoices, emails, and a demand notice, to establish the debt owed by the Corporate Debtor. The Tribunal found that the Corporate Debtor had defaulted on payments since July 2016, acknowledging the debt through email communications. The Tribunal determined that the Operational Creditor's claim fell within the definition of operational debt as per the Code, leading to the admission of the petition.

Issue 2:
The Tribunal examined the legal requirements for initiating insolvency proceedings, including the service of a demand notice and compliance with procedural rules. It noted that the demand notice was duly delivered to the Corporate Debtor and that the Operational Creditor had made efforts for service through various means. Subsequently, the Tribunal allowed substituted service as per the rules, leading to the ex-parte proceedings against the Corporate Debtor. The Tribunal also appointed an Interim Resolution Professional based on the recommendation of the Insolvency and Bankruptcy Board of India to expedite the process and ensure compliance with the Code.

Issue 3:
In appointing the Interim Resolution Professional, the Tribunal considered the recommendations of the Insolvency and Bankruptcy Board of India and appointed Mr. Navneet Kumar Gupta to oversee the insolvency resolution process. The Tribunal directed the Interim Resolution Professional to make a public announcement, declare a moratorium, and ensure compliance with the provisions of the Code. It emphasized the importance of the Interim Resolution Professional's role in managing the affairs of the Corporate Debtor and protecting its assets during the insolvency resolution process. The Tribunal instructed strict adherence to the provisions of the Code and cooperation from all parties involved.

In conclusion, the Tribunal admitted the petition, appointed an Interim Resolution Professional, and imposed a moratorium to facilitate the insolvency resolution process in accordance with the Insolvency and Bankruptcy Code, 2016.