2022 (8) TMI 319 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Personal Guarantors to Corporate Debtor - existence of debt and dispute or not - HELD THAT - There does not appear any request of the Resolution Professional for issuance of instruction for the purpose of conducting negotiations between the debtors and the creditors for arriving at the repayment plan. Therefore, based on the reasons recorded in the report submitted by the Resolution Professional, the application filed under the provisions of Section 94 of IBC, 2016 is hereby admitted under Section 100 of the IBC, 2016. The Insolvency Resolution Process is initiated against the Applicant/Debtor and the moratorium is declared, which begins with the date of admission of the application and shall cease to have effect at the end of the period of 180 days, as provided under Section 101 of IBC, 2016. The Resolution Professional in exercise of the powers conferred under Section 104 shall prepare a list of creditors within 30 days from the date of the notice. The debtor shall prepare a repayment plan in consultation with the Resolution Professional as provided under Section 105 which shall include the provisions for payment of fee to the Resolution Professional. The Resolution Professional shall submit the repayment plan along with his report on the plan to this Authority within a period of 21 days from the last date of submission of claims, as provided under Section 106. Petition filed under Section 94(1) of the IBC, 2016 is allowed admitted.

Issues Involved:
1. Application for initiation of Insolvency Resolution Process (IR Process) under Section 94 of the Insolvency and Bankruptcy Code, 2016.
2. Compliance with procedural requirements for filing the application.
3. Appointment and actions of the Resolution Professional.
4. Examination of the debtor's financial status and liabilities.
5. Admission of the application and initiation of the IR Process.
6. Declaration of moratorium.
7. Directions for public notice and claims registration.
8. Preparation of the list of creditors and repayment plan.
9. Conducting the meeting of creditors.
10. Submission of the repayment plan to the Adjudicating Authority.

Issue-Wise Detailed Analysis:

1. Application for initiation of Insolvency Resolution Process (IR Process):
The petition was filed by Monica Bansal, the Personal Guarantor, under Section 94 of the Insolvency and Bankruptcy Code, 2016, seeking an order for initiation of the Insolvency Resolution Process against her. She is the personal guarantor to M/s. Orchid Textiles Private Limited, which has defaulted on loan facilities amounting to Rs. 1,25,08,386/-.

2. Compliance with procedural requirements:
The application was filed in the prescribed proforma, and a compliance affidavit was submitted, stating that the applicant is not an undischarged bankrupt, not undergoing any insolvency or bankruptcy process, and no application has been admitted against her in the preceding 12 months.

3. Appointment and actions of the Resolution Professional:
Upon presentation of the application, the Adjudicating Authority appointed Mr. Bishwa Ranjan Chatterjee as the Resolution Professional. Notice of the petition was issued to the creditors, and compliance affidavits were filed confirming that notices were served. No objections were filed by the respondent-creditor, Bank of India.

4. Examination of the debtor's financial status and liabilities:
The Resolution Professional sought detailed information from the Personal Guarantor, including personal assets and liabilities, guarantee deeds, mortgaged assets, income tax returns, bank statements, and other financial documents. The Personal Guarantor provided the required information, including a net worth certificate indicating a net worth of Rs. -6.85 Crores.

5. Admission of the application and initiation of the IR Process:
Based on the report submitted by the Resolution Professional, which recommended admission of the application, the Adjudicating Authority admitted the application under Section 100 of the IBC, 2016, and initiated the Insolvency Resolution Process against the Personal Guarantor.

6. Declaration of moratorium:
A moratorium was declared, effective from the date of admission and lasting 180 days. During this period, any pending legal action or proceeding in respect of any debt is stayed, creditors cannot initiate legal actions, and the debtor cannot transfer or dispose of any assets or legal rights.

7. Directions for public notice and claims registration:
The Resolution Professional was directed to publish a public notice within 7 days, inviting claims from all creditors, who must register their claims within 21 days. The notice should be published in widely circulated newspapers and contain necessary information as per Section 102(2) of IBC, 2016.

8. Preparation of the list of creditors and repayment plan:
The Resolution Professional must prepare a list of creditors within 30 days from the notice date. The debtor, in consultation with the Resolution Professional, must prepare a repayment plan, including provisions for the payment of fees to the Resolution Professional. This plan must be submitted to the Adjudicating Authority within 21 days from the last date of claim submission.

9. Conducting the meeting of creditors:
If the Resolution Professional deems it necessary, a meeting of creditors should be summoned, with details specified as per Section 106(3). The meeting should be conducted in accordance with Sections 108 to 111, and a report of the meeting should be submitted to the Adjudicating Authority.

10. Submission of the repayment plan to the Adjudicating Authority:
The Resolution Professional must submit the repayment plan along with his report on the plan to the Adjudicating Authority. The Resolution Professional must perform his duties in compliance with the code of conduct under Section 208 of the IBC, 2016.

Conclusion:
The application filed under Section 94(1) of the IBC, 2016, was allowed and admitted, initiating the Insolvency Resolution Process against the Personal Guarantor, Monica Bansal. The process includes a moratorium, public notice, claims registration, preparation of a list of creditors, and formulation of a repayment plan in consultation with the Resolution Professional.

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