2017 (8) TMI 343 - Tri - Insolvency and Bankruptcy

Insolvency Resolution process - Held that - It is not the case of respondent that Hon ble NCLAT has directed stay of operation of the order dated 07.4.2017. Under section 16(1) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred as the Code the Adjudicating Authority is to appoint an Interim Insolvency Professional within 14 days from the insolvency commencement date. As per Section 9(6) of the Code the Insolvency commencement date in case of the application filed by the Operational Creditor is the date of the admission of the application under sub-section (5) thereof. It needs to be observed that there was a spell of holidays from 08.4.2017 to 16.4.2017 (both days inclusive) and 22.4.2017 and 23.4.2017, were weekly holidays which have to be excluded. It is further directed that the insolvency Resolution Professional shall positively file a report of events before this Tribunal every 10 days in relation to the Corporate Debtor . Copy of this order be supplied to the counsel or the Authorised Representative of applicants and be also supplied to the respondent or its counsel. The Registry is also directed to send copy of this order along with the order dated 7-4-2017 by email to Mr. Alok Yadav, the IRP.

Summary

Issues:
Admission of petitions by Operational Creditors, appointment of Interim Resolution Professional, compliance with Insolvency and Bankruptcy Code, suspension of powers of Board of Directors, constitution of Committee of Creditors, public announcement of Corporate Insolvency Resolution Process, filing of regular reports by Interim Resolution Professional.

Admission of Petitions by Operational Creditors:
The Tribunal admitted the petitions filed by Operational Creditors against the Corporate Debtor, declaring a moratorium as per the order. The Operational Creditors did not propose the name of the Interim Resolution Professional (IRP), leading to a reference to the Insolvency and Bankruptcy Board of India (IBBI) for recommendations. The IBBI recommended Mr. Alok Yadav as the Interim Insolvency Professional, with details of fees and necessary particulars provided.

Appointment of Interim Resolution Professional:
The Tribunal appointed Mr. Alok Yadav as the Interim Resolution Professional, specifying his contact details and responsibilities. The term of his appointment was set for 30 days from the date of his deemed appointment or as determined by the Committee of Creditors. The powers of the Board of Directors were suspended, and the management vested with the Interim Resolution Professional as per Section 17 of the Code.

Compliance with Insolvency and Bankruptcy Code:
The Interim Resolution Professional was directed to strictly adhere to the Code, rules framed by the Board or Central Government, and the Code of Conduct governing his profession. He was required to prepare an inventory of the Corporate Debtor's assets and act with high ethical standards and moral conduct.

Suspension of Powers of Board of Directors:
Following the appointment of the Interim Resolution Professional, the powers of the Board of Directors were suspended, and the management of the Corporate Debtor's affairs was entrusted to the IRP. The officers and managers of the Corporate Debtor were instructed to report to the IRP and cooperate in all matters.

Constitution of Committee of Creditors:
The Interim Resolution Professional was directed to constitute the Committee of Creditors within three weeks from the date of the order. The Corporate Debtor and all associated personnel were mandated to extend full cooperation to the IRP in managing the affairs of the Corporate Debtor and accessing relevant records and assets.

Public Announcement of Corporate Insolvency Resolution Process:
The Interim Resolution Professional was required to cause a public announcement within three days of his appointment, initiating the Corporate Insolvency Resolution Process. This announcement called for the submission of claims against the Corporate Debtor, in compliance with the relevant regulations.

Filing of Regular Reports by Interim Resolution Professional:
The Interim Resolution Professional was directed to file a report of events before the Tribunal every 10 days concerning the Corporate Debtor. The Tribunal ensured that copies of the order were supplied to all relevant parties and directed the Registry to send copies to the appointed IRP.

In conclusion, the Tribunal issued detailed directions regarding the appointment and responsibilities of the Interim Resolution Professional, compliance with the Insolvency and Bankruptcy Code, suspension of the powers of the Board of Directors, constitution of the Committee of Creditors, public announcement requirements, and regular reporting obligations to ensure the effective management of the Corporate Debtor's affairs during the insolvency resolution process.