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2018 (8) TMI 138 - Tri - Insolvency and BankruptcyCorporate Insolvency Resolution Process - Held that - This Adjudicating Authority has ascertained the existence of a default on the part of the Corporate Debtor/ Guarantor. The Financial Creditor has fulfilled all the requirements of law and has also proposed the name of IRP after obtaining the written consent in Form-2. Therefore, CP/699/(IB)/CB/2017 is admitted and the commencement of the Corporate Insolvency Resolution Process is ordered which ordinarily shall get completed within 180 days, reckoning from the day this order is passed. Ms. Aishwarya Mohan Gahrana is hereby appointed as IRP, as has been proposed by the Financial Creditor.The moratorium is hereby declared which shall have effect from the date of this Order till the completion of corporate insolvency resolution process, for the purposes referred to in section 14 of the I&B Code, 2016
Issues Involved:
1. Admissibility of the application under Section 7 of the Insolvency and Bankruptcy Code, 2016. 2. Existence of debt and default by the Corporate Debtor/Guarantor. 3. Validity and enforceability of the ‘Deed of Guarantee’. 4. Jurisdiction and limitation. 5. Appointment of Interim Resolution Professional (IRP) and declaration of moratorium. Issue-wise Detailed Analysis: 1. Admissibility of the Application under Section 7 of the Insolvency and Bankruptcy Code, 2016: The Financial Creditor, M/s. Baobab Broadband Limited, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (I&B Code) against M/s. Gemini Communication Limited (Corporate Debtor/Guarantor). The application seeks to initiate the Corporate Insolvency Resolution Process (CIRP), declare a moratorium, and appoint an Interim Resolution Professional (IRP). 2. Existence of Debt and Default by the Corporate Debtor/Guarantor: The Financial Creditor claimed an outstanding amount of USD 19,57,441/-, which the Corporate Debtor failed to pay. The debt originated from a Loan Agreement dated 12.06.2010, where the Corporate Debtor executed a 'Deed of Guarantee' to secure repayment. The Tribunal examined various documents and email communications, concluding that there was a default on the part of the Corporate Debtor in making the payment. 3. Validity and Enforceability of the ‘Deed of Guarantee’: The Corporate Debtor argued that the guarantee was conditional on the transfer of shares and lacked approval from the RBI, rendering it unenforceable. However, the Tribunal found that the 'Deed of Guarantee' was independent and distinct from any other securities and did not require RBI approval. The Tribunal referred to Article 3 of the Loan Agreement, which assured the Financial Creditor of the Corporate Debtor's ability to provide the guarantee. 4. Jurisdiction and Limitation: The Corporate Debtor contended that the application was barred by limitation and that the 'Deed of Guarantee' was a nullity. The Tribunal rejected these objections, citing that the I&B Code does not suggest the applicability of limitation. The Tribunal relied on the judgment of the Hon’ble NCLAT in Neelkant Township & Construction (P.) Ltd. v. Urban Infrastructure Trustee Ltd., which held that the I&B Code does not impose a limitation period. 5. Appointment of Interim Resolution Professional (IRP) and Declaration of Moratorium: The Tribunal appointed Ms. Aishwarya Mohan Gahrana as the IRP and declared a moratorium, prohibiting actions against the Corporate Debtor's assets and legal proceedings. The IRP was directed to take charge of the Corporate Debtor's management and make a public announcement as prescribed under Section 15 of the I&B Code. The moratorium would remain in effect until the completion of the CIRP. Conclusion: The Tribunal admitted the application filed by the Financial Creditor, initiated the CIRP, declared a moratorium, and appointed an IRP. The objections raised by the Corporate Debtor were found to be without merit, and the Financial Creditor fulfilled all legal requirements. The order was pronounced in open court, and directions were given for compliance.
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