2021 (6) TMI 48 - Tri - Insolvency and Bankruptcy

Seeking substitution of the proposed Interim Resolution Professional - proposed Interim Resolution Professional shows reluctance due to COVID-19 and weak immune system - It is deposed by the Interim Resolution Professional that there are no disciplinary proceedings pending against him with the Board or ICSI Institute of Insolvency Professionals - HELD THAT - The instant application is allowed and the name of the earlier proposed Interim Resolution Professional Mr. Sameer Rastogi be substituted with Mr. Vekas Kumar Garg . Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditor - existence of debt or not - service of demand notice - HELD THAT - An affidavit dated 29.03.2019 (Annexure A-10) has been furnished by the petitioner stating that no reply to demand notice has been received nor any notice of dispute has been received by Operational Creditor. The demand notice in Form No. 3/4 was properly delivered by the Operational Creditor and no pre-existing dispute is proved. It has been shown that the corporate debtor has failed to make payment of the aforesaid amount due as mentioned in the statutory notice till date. It is also observed that the conditions under Section 9 of the Code stand satisfied. The petitioner-operational creditor states that from the above mentioned facts it is clear that the liability of the respondent-corporate debtor is undisputed. Accordingly, the petitioner proved the debt and the default, which is more than ₹ 1 lakh by the respondent-corporate debtor. Application admitted - moratorium declared.

Issues Involved:
1. Substitution of the proposed Interim Resolution Professional.
2. Initiation of Corporate Insolvency Resolution Process (CIRP).
3. Proper service of demand notice.
4. Dispute regarding the operational debt.
5. Satisfaction of conditions under Section 9 of the Insolvency and Bankruptcy Code, 2016.
6. Declaration of moratorium.
7. Appointment and duties of the Interim Resolution Professional.

Issue-wise Detailed Analysis:

1. Substitution of the proposed Interim Resolution Professional:
The application filed by E2E Telelink India Pvt. Ltd. under Section 60(5) of the Insolvency & Bankruptcy Code, 2016 sought the substitution of the proposed Interim Resolution Professional in CP (IB) No. 138/Chd/Hry/2019. The initially proposed Interim Resolution Professional, Mr. Sameer Rastogi, showed reluctance due to COVID-19 and a weak immune system. Consequently, the applicant proposed Mr. Vekas Kumar Garg as the new Resolution Professional, and his consent was attached. The Tribunal allowed the substitution and disposed of IA No. 71/2021.

2. Initiation of Corporate Insolvency Resolution Process (CIRP):
E2E Telelink India Pvt. Ltd. filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, for initiating CIRP against Cambridge Energy Resource Pvt. Ltd. The petition was supported by an affidavit and filed in Form 5, with authorization from the operational creditor's Board of Directors.

3. Proper service of demand notice:
The demand notice in Form No. 3/4 dated 08.03.2019 was served upon the Corporate Debtor by hand and speed post. The acknowledgment of receipt and postal tracking reports were attached to the petition, confirming proper service.

4. Dispute regarding the operational debt:
The Corporate Debtor admitted the debt but cited bad financial conditions as the reason for non-payment. No dispute regarding the operational debt was raised by the Corporate Debtor, confirming the liability towards the Operational Creditor.

5. Satisfaction of conditions under Section 9 of the Insolvency and Bankruptcy Code, 2016:
The Tribunal found the application in Form 5 to be complete, with a total unpaid operational debt of ?22,16,365/-. Various invoices, reminder letters, and a letter confirming the outstanding amount were provided as evidence. The demand notice was properly delivered, and no pre-existing dispute was proven. The conditions under Section 9 of the Code were satisfied, and the debt and default were established.

6. Declaration of moratorium:
The Tribunal declared a moratorium under Section 14(1) of the Code, prohibiting:
a) Institution or continuation of suits or proceedings against the corporate debtor.
b) Transfer, encumbrance, alienation, or disposal of any assets or beneficial interest by the corporate debtor.
c) Foreclosure, recovery, or enforcement of any security interest by the corporate debtor.
d) Recovery of any property by an owner or lessor in possession of the corporate debtor.
The supply of essential goods or services to the corporate debtor was to continue uninterrupted during the moratorium period.

7. Appointment and duties of the Interim Resolution Professional:
Mr. Vekas Kumar Garg was appointed as the Interim Resolution Professional. His credentials were verified, and no adverse findings were reported. The Tribunal directed him to:
i) Follow the provisions of Section 16(5) of the Code.
ii) Assume management of the corporate debtor's affairs, with the powers of the Board of Directors suspended.
iii) Act in accordance with the Code and the rules framed thereunder, maintaining high ethical standards.
iv) Make a public announcement of the CIRP initiation and call for claims against the corporate debtor.
v) Ensure cooperation from the corporate debtor's management and access to books and records.
vi) Constitute a Committee of Creditors and file a report within thirty days, convening the first meeting within seven days of filing the report.
vii) Send regular progress reports to the Tribunal every fortnight.

Conclusion:
The Tribunal admitted the petition for CIRP initiation against Cambridge Energy Resource Pvt. Ltd., declared a moratorium, and appointed Mr. Vekas Kumar Garg as the Interim Resolution Professional with specific directions. The order was communicated to both parties, and the Registry was directed to send a copy to the Interim Resolution Professional.

← Previous Next →