2019 (7) TMI 103 - Tri - Insolvency and Bankruptcy

Admission of the application - initiation of Corporate Insolvency Resolution Process against the Corporate Debtor - Section 7 of the Insolvency and Bankruptcy Code, 2016 r/w Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 - HELD THAT - The perusal of the Affidavit filed by the Corporate Debtor shows that the Corporate Debtor has fairly admitted that the loans were availed from the Financial Creditors and during the course of arguments, the Counsel for the Corporate Debtor has submitted that the Corporate Debtor has no objection in case the Application is admitted. Besides the admission made by the Counsel for the Corporate Debtor, the documentary evidence placed on the case file is sufficient in order to ascertain the existence of a default on the part of the Corporate Debtor. The Financial Creditors have fulfilled all the requirements and have proposed the name of a Resolution Professional for appointment as the IRP after obtaining his consent in Form- 2. Therefore, the Application stands admitted - commencement of the Corporate Insolvency Resolution Process is ordered - Mr. Anil Kumar Khicha is hereby appointed as IRP - moratorium declared.

Summary

Issues: Application under Section 7 of the Insolvency and Bankruptcy Code, 2016 for Corporate Insolvency Resolution Process against Corporate Debtor.

Analysis:
1. Admission of Application: The Financial Creditor filed an application seeking initiation of Corporate Insolvency Resolution Process against the Corporate Debtor for defaulting on loan repayments. The Corporate Debtor admitted to availing loans but cited financial crisis due to demonetization and GST as reasons for default. The Financial Creditors provided evidence of default, leading to the admission of the application.

2. Appointment of Interim Resolution Professional: An Interim Resolution Professional (IRP) was appointed to manage the affairs of the Corporate Debtor. The appointed IRP was directed to take immediate charge and initiate the resolution process. The moratorium period was declared to protect the Corporate Debtor's assets during the resolution process.

3. Moratorium Declaration: The Tribunal declared a moratorium to prevent any legal actions against the Corporate Debtor, including suits, asset transfers, or recovery proceedings. Essential services to the Corporate Debtor were to continue uninterrupted during this period.

4. Compliance and Cooperation: The Directors and management of the Corporate Debtor were instructed to cooperate with the IRP and provide necessary assistance for the resolution process. The IRP was directed to comply with specific sections of the Insolvency and Bankruptcy Code.

5. Communication and Compliance: The Registry was tasked with communicating the order to all relevant parties, including the IRP, Financial Creditor, and Corporate Debtor. Contact details of the appointed IRP were provided for immediate compliance and coordination.

This detailed analysis covers the key aspects of the judgment, including the admission of the application, appointment of the IRP, declaration of moratorium, compliance requirements, and communication directives for all parties involved in the insolvency resolution process.