2022 (3) TMI 814 - 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 - This is a fit case to close the CIRP in the case of New Town Grand Realtors, L.L.P (Corporate Debtor) as ordered in CP(IB) 466/KB/2019 vide order dated 31.10.2019 passed by this Adjudicating Authority. It is ordered that the CIRP in respect of the Corporate Debtor shall stand closed from the date of this order and the IRP stands relieved - the Operational Creditor at whose instance, the CIRP of the Corporate Debtor was initiated shall pay a sum of ₹ 1,85,150/- towards the CIRP costs and expenses and ₹ 1,00,000/- towards fees of the IRP. CIRP process initiated against the Corporate Debtor New Town Grand Realtors LLP is closed - application dismissed.

Summary

Issues:
Initiation of corporate insolvency resolution process under Section 9 of the Insolvency and Bankruptcy Code, 2016.

Detailed Analysis:

1. The petition was filed by Spectrum Artcomm Private Limited seeking initiation of the corporate insolvency resolution process against New Town Grand Realtors LLP. The Adjudicating Authority had earlier initiated CIRP against the Corporate Debtor and appointed an IRP. However, the IRP faced challenges in contacting the Corporate Debtor and obtaining necessary information and records.

2. The IRP made efforts to contact the Corporate Debtor but received no response. Public announcements were made to invite claims, but due to the nationwide lockdown, there was a lack of response. The IRP filed applications under Section 19(2) of the Code, but no claims were received, hindering the formation of a CoC.

3. The financial statements of the Corporate Debtor showed closed bank accounts and lack of debtor and creditor lists or charges. The CIRP period ended, and the IRP incurred costs amounting to ?2,85,150. The Operational Creditor did not submit any claim, indicating a lack of intention to participate in the process.

4. Citing legal precedents, the IRP argued that expenses incurred by the RP should be borne by the applicant until ratified by the CoC. In a similar case, the CoC's lack of interest led to the termination of the CIR Process. The Adjudicating Authority decided to close the CIRP for the Corporate Debtor and relieve the IRP of duties.

5. The Operational Creditor was directed to pay ?1,85,150 towards CIRP costs and expenses and ?1,00,000 towards IRP fees. All related applications were dismissed, and certified copies of the order were to be issued to concerned parties upon request.