2021 (5) TMI 392 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT - In order to allow any application under Section 7 of the Code, the applicant has to proof that the application is maintainable as the applicant is a 'financial creditor', and the debts claimed in the application come within the purview of financial debt as defined under the Code - If the above principle is applied to the case in hand it is clear that in terms of Section 5(8)(f) of the IBC i.e. definition of financial debt, there exist a default on the part of the Corporate Debtor towards the 'Real Estate Allottee and therefore the Applicants herein are the Financial Creditors, and have complied with all requirements under the Insolvency and Bankruptcy Code for filling the present application. It is evident from the record that the application has been filed on the proforma prescribed under Rule 4(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 read with Section 7 of the Code. It is satisfied that a default amounting to lacs of rupees has occurred within the meaning of Section 4 of the Code and the application under sub-section 2 of Section 7 is complete; and no disciplinary proceedings are pending against the proposed Interim Resolution Professional. Thus, the application warrant admission as it is complete in all respects. Petition admitted - moratorium declared.

Summary

Issues:
1. Application under Section 7 of the Insolvency and Bankruptcy Code, 2016 for Corporate Insolvency Resolution Process.
2. Jurisdiction of the National Company Law Tribunal over the matter.
3. Appointment of Interim Resolution Professional.
4. Claim of financial debt and default by the Corporate Debtor.
5. Satisfaction of requirements under Section 7(5) of the IBC for admission of the application.
6. Admission of the petition and declaration of moratorium.
7. Directions for the Interim Resolution Professional and compliance with regulations.

Analysis:

1. The applicant, claiming as the financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking Corporate Insolvency Resolution Process against the respondent company. The respondent company, incorporated in 2012 with its registered office in New Delhi, falls under the territorial jurisdiction of the National Company Law Tribunal in Delhi.

2. The applicant proposed Mr. Mukesh Gupta for appointment as the Interim Resolution Professional, who agreed to the appointment and fulfilled the necessary requirements. The total due amount claimed from the respondent company was specified in the application.

3. The financial creditor's case detailed the transactions and agreements between the parties, highlighting the default by the Corporate Debtor in completing the project within the agreed timeline. Despite several opportunities, the Corporate Debtor did not appear, leading to an ex parte proceeding.

4. The Tribunal referred to the Supreme Court's ruling emphasizing limited inquiry requirements for financial creditors triggering the process, focusing on the existence of a financial debt, occurrence of default, and completeness of the application. The Tribunal found the application maintainable, meeting the criteria for financial debt and compliance with the IBC provisions.

5. With no representation from the Corporate Debtor during the final hearing, the Tribunal initiated the Corporate Insolvency Resolution Process immediately. The application satisfied the requirements of Sections 7(2) and 7(5) of the IBC, leading to the admission of the petition.

6. Following the admission, the Tribunal declared a moratorium under Section 14 of the Code, imposing restrictions on legal actions against the Corporate Debtor and asset transfers. Exceptions to the moratorium were specified, including essential services supply.

7. Directions were issued for the Interim Resolution Professional, including making a public announcement, depositing funds, and performing duties diligently. Compliance with regulations and obligations under the Code was emphasized, with a mandate for cooperation from all involved parties. Communication of the order to relevant parties and public notification were also mandated within specified timelines.