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2020 (2) TMI 867 - Tri - IBCAdmissibility of Winding up petition - the liquidation proceeding are at the stage of holding meeting between the Financial Creditor and the Corporate Debtor-the company in liquidation - HELD THAT - The law laid down by Hon'ble Supreme Court in FORECH INDIA LTD. VERSUS EDELWEISS ASSETS RECONSTRUCTION CO. LTD. 2019 (1) TMI 1442 - SUPREME COURT is that there is no bar by admission of a petition under Section 433(e) and (f) read with section 434 and 439 of the Companies Act, 1956 - In other words, the remedy of filing a petition under Section 7 IBC would continue to be available to a financial creditor. After a reading of section 7 of the Code along with Rule 4(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, we are satisfied that a default has occurred and the application under sub-section (2) of section 7 is complete. The IRP proposed does not have any disciplinary proceedings pending against him. Petition admitted - moratorium declared in terms of section 14 of the Code.
Issues:
1. Application of Insolvency & Bankruptcy Code (IBC) despite winding up petition being admitted. 2. Compliance with requirements of Section 7 of IBC for admission of a petition. 3. Appointment of Interim Resolution Professional. 4. Declaration of moratorium under Section 14 of IBC. 5. Deposit of funds by Financial Creditor for expenses. 6. Direction to provide documents and information to Interim Resolution Professional. 7. Handling discrepancies in the statement of account. Analysis: Issue 1: Application of IBC despite winding up petition The judgment clarifies that the remedies under the IBC are not suspended by the admission of a winding-up petition under the Companies Act, 1956. The Supreme Court's approval of the Bombay High Court's judgment confirms that IBC provisions, including the moratorium under Section 14, can be imposed even after a winding-up petition is admitted. Issue 2: Compliance with Section 7 requirements The court found the petition satisfied the requirements of Section 7 of IBC. The debt was due, default had occurred, and the petition detailed the debt history, restructuring agreements, and acknowledgments. The petition was within the limitation period, supported by evidence, and the proposed Interim Resolution Professional met the necessary criteria. Issue 3: Appointment of Interim Resolution Professional Mr. Desh Deepak was appointed as the Interim Resolution Professional after meeting the requirements of Rule 9(1) of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016. The court directed immediate public announcement of the application's admission under Section 7 of the Code. Issue 4: Declaration of moratorium A moratorium was declared under Section 14 of the Code, with exceptions for specified transactions and essential supplies. The court emphasized the continuation of essential services during the moratorium period. Issue 5: Deposit of funds by Financial Creditor The Financial Creditor was directed to deposit a sum with the Interim Resolution Professional to cover expenses. The amount was subject to adjustment by the Committee of Creditors and had to be repaid to the Financial Creditor. Issue 6: Direction for document provision Ex-Management, Auditors, and the Official Liquidator were directed to provide documents and information to the Interim Resolution Professional within a week, failing which coercive measures would be taken. Issue 7: Handling discrepancies in the statement of account The court acknowledged discrepancies in the account statement but deferred the determination of the exact amount due to the Information Utility's pending functionality. The Resolution Professional was tasked with addressing any corrections with the ex-promoter/director for fair resolution. The judgment concluded by directing communication of the order to relevant parties and updating the Registrar of Companies' website promptly.
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