2019 (1) TMI 839 - Tri - Insolvency and Bankruptcy

Corporate insolvency resolution process against the corporate debtor - outstanding debt - Application barred by limitation - Held that - Instant application has been filed on February 26, 2018 which is within three years reckoning from December 1, 2016 and the amendment by which the Limitation Act has been applicable to the I and B Code, was brought into force on June 6, 2018 which operates prospectively. Therefore, keeping in view the facts and circumstances of the case and the legal position stated above, it is held that the instant application is not barred by limitation, the plea taken by counsel for the corporate debtor that the application is suffering from delay and laches is devoid of merits and stands rejected. The operational creditor has fulfilled all the requirements of law for admission of the application. This Bench is satisfied that the corporate debtor has committed default in making payment of the outstanding debt claimed by the operational creditor. Therefore, petition is admitted and the commencement of the corporate insolvency resolution process is ordered which ordinarily shall get completed within 180 days, reckoning from the day this order is passed.

Summary

Issues involved:
Adjudication of application under section 9 of the Insolvency and Bankruptcy Code, 2016 for initiation of corporate insolvency resolution process, declaration of moratorium, appointment of interim resolution professional.

Analysis:
1. The operational creditor filed an application under section 9 of the Insolvency and Bankruptcy Code, 2016 seeking admission to initiate the corporate insolvency resolution process against the corporate debtor. The outstanding debt claimed was &8377; 4,30,34,092 along with interest. The operational creditor provided cranes on hire/rental basis to the corporate debtor for wind energy generation projects.

2. The corporate debtor made partial payments but failed to clear the remaining amount. Correspondences between the parties were exchanged regarding the outstanding debt. The corporate debtor admitted a portion of the debt but failed to make payments despite proposals outlined for payment.

3. The corporate debtor contended that the demand notice was improper and defective, and the application was time-barred under the Limitation Act. However, the Tribunal held that the application was filed within the limitation period, as per legal precedents and amendments to the I and B Code, rejecting the plea of delay and laches by the corporate debtor.

4. The operational creditor fulfilled all legal requirements for admission of the application. The Tribunal found the corporate debtor in default and admitted the application, ordering the commencement of the corporate insolvency resolution process and declaring a moratorium to protect the debtor's assets during the resolution process.

5. An interim resolution professional (IRP) was appointed to manage the corporate debtor's affairs. The IRP was directed to file necessary statements, take charge of management, and comply with the provisions of the I and B Code. The directors and associated persons were instructed to cooperate with the IRP.

6. The Tribunal ordered the operational creditor and the registry to inform the IRP of the decision and directed communication of the order to all relevant parties. The order was pronounced in open court in the presence of counsels for both parties.

This detailed analysis covers the key aspects of the judgment, including the legal arguments, factual background, application of legal principles, and the final orders issued by the Tribunal.