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2019 (5) TMI 328 - Tri - Insolvency and BankruptcyInitiation of Corporate Insolvency Resolution Process - corporate debtor - financial creditor - HELD THAT - Section 7(5) of the Code provides for admission of the application where the Adjudicating Authority is satisfied that (a) a default has occurred; (b) the application under sub-section (2) of Section 7 is complete; (c) there is no disciplinary proceedings pending against the proposed Resolution Professional. In view of the satisfaction of the conditions provided for in Sections 7(5) of the Code, the petition for initiation of CIRP in the case of M/s Agri Best Limited is admitted - moratorium declared.
Issues Involved:
1. Jurisdiction of the Tribunal. 2. Authorization for filing the petition. 3. Default occurrence and completeness of the application. 4. Disciplinary proceedings against the proposed Resolution Professional. 5. Admission of the Corporate Insolvency Resolution Process (CIRP) petition. 6. Declaration of moratorium. 7. Appointment and duties of the Interim Resolution Professional (IRP). Issue-wise Detailed Analysis: 1. Jurisdiction of the Tribunal: The Tribunal confirmed its territorial jurisdiction over the matter as the registered address of the corporate debtor falls within its domain. The corporate debtor's CIN and other registration details were verified to establish this jurisdiction. 2. Authorization for Filing the Petition: The petition was filed by M/s Hero Fincorp Limited through Mr. Jaspreet Singh Chawla, who was authorized by a Board Resolution dated 29.01.2018 and a subsequent letter of authority dated 20.04.2018. However, it was later observed that the initial letter of authority did not explicitly authorize filing before the Tribunal. This was rectified by submitting a new letter of authority dated 10.12.2018, which ratified all previous applications filed by Mr. Chawla. 3. Default Occurrence and Completeness of the Application: The Tribunal examined the financial agreements and supporting documents, including sanction letters, Master Facility Agreements, and the bill register. The financial creditor demonstrated that the corporate debtor defaulted on the payment of ?6,89,00,745.37. The corporate debtor's contention that not all amounts were received was unsupported by evidence. The Tribunal found the application complete and noted that no objections were raised by the corporate debtor. 4. Disciplinary Proceedings Against the Proposed Resolution Professional: The proposed Interim Resolution Professional (IRP), Mr. Jitendra Bakshi, provided Form 2, certifying no pending disciplinary proceedings against him. The Tribunal verified and accepted this certification, ensuring compliance with the Code. 5. Admission of the CIRP Petition: Based on the satisfaction of the conditions under Section 7(5) of the Insolvency and Bankruptcy Code, 2016, the Tribunal admitted the petition for initiating the Corporate Insolvency Resolution Process against the corporate debtor. 6. Declaration of Moratorium: The Tribunal declared a moratorium as per Section 14(1) of the Code, which included: - Suspension of suits or proceedings against the corporate debtor. - Prohibition on transferring or disposing of assets. - Prevention of actions to enforce security interests. - Protection of the corporate debtor's property from recovery actions. 7. Appointment and Duties of the Interim Resolution Professional (IRP): Mr. Jitendra Bakshi was appointed as the IRP. His duties include: - Taking over the management of the corporate debtor. - Exercising powers of the Board of Directors. - Making a public announcement of the CIRP. - Constituting a Committee of Creditors and filing a report within thirty days. - Convening the first meeting of the Committee within seven days of the report. - Submitting regular progress reports to the Tribunal every fortnight. The Tribunal directed all parties and personnel associated with the corporate debtor to cooperate with the IRP in managing the affairs and accessing necessary records. The order was communicated to both parties, and the IRP was instructed to act in accordance with the Code and relevant regulations.
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