2019 (4) TMI 1605 - Tri - Insolvency and Bankruptcy

Corporate Insolvency Resolution Process - Applicant/Corporate Debtor to make payment of outstanding debt failing which the Bank will be forced to take appropriate action for recovery of their dues - Corporate Insolvency Resolution Process is set in motion against the Applicant/Corporate Debtor which ordinarily shall get completed within 180 days, reckoning from the day this order is passed - HELD THAT - The documents placed on record are clearly evidencing that the Corporate Debtor has committed default in making payment of the amount of loans availed from various Financial Creditors. The Applicant/ Corporate Debtor has proposed the name of the IRP, after seeking consent in Form-2. Hence, the Applicant/Corporate Debtor has fulfilled all the requirements of law for admission of the Application. Therefore, Application filed under Section 10 of the I B Code, 2016, is admitted. The Corporate Insolvency Resolution Process is set in motion against the Applicant/Corporate Debtor which ordinarily shall get completed within 180 days, reckoning from the day this order is passed. Mr. Mathur Sabhapathy Viswanathan, is appointed as IRP. There are no disciplinary proceedings pending against him. The IRP is directed to take charge of the Corporate Debtor s assets and management immediately. The supply of essential goods or services of the Corporate Debtor shall not be terminated or suspended or interrupted during moratorium period. The provisions of Sub-section (1) of Section 14 shall not apply to such transactions, as notified by the Central Government. The IRP shall comply with the provisions of Sections 13(2), 15, 17 18 of the Code. The directors of the Corporate Debtor, its promoters or any person associated with the Management of the Corporate Debtor are/is directed to extend all assistance and cooperation to the IRP as stipulated under Section 19 and for discharging his functions under Section 20 of the I B Code, 2016. The Registry and the Corporate Debtor are directed to send the copy of this Order to the IRP for making compliance with this Order as per the provisions of I B Code, 2016. The Order is dictated and pronounced in the open Court in the presence of the Counsel for the Corporate Debtor and Counsel for the Indian Overseas Bank.

Summary

Issues Involved:
Application under Section 10 of the Insolvency and Bankruptcy Code, 2016 for Corporate Insolvency Resolution Process.

Analysis:
1. The Application was filed by the Corporate Debtor seeking admission under Section 10 of the Insolvency and Bankruptcy Code, 2016. The prayer included initiating the Corporate Insolvency Resolution Process, declaring moratorium, and appointing an Interim Resolution Professional. The Application was supported by a special resolution passed by the shareholders of the Corporate Debtor.

2. The Tribunal heard the Counsels for the Corporate Debtor and the Financial Creditor, Indian Overseas Bank, and examined the records submitted in the case.

3. The outstanding debt owed by the Corporate Debtor to the Financial Creditor was mentioned in the Application.

4. The Corporate Debtor was engaged in the manufacturing sector but faced financial difficulties and was unable to service its debts due to market conditions.

5. The Counsel for the Corporate Debtor explained that market conditions, specifically in the steel industry, led to losses for the Corporate Debtor, making it challenging to continue operations.

6. Financial statements and communication from the Indian Overseas Bank highlighted the financial distress of the Corporate Debtor, with significant losses and overdue payments.

7. Evidence showed default in loan payments by the Corporate Debtor, leading to the proposal for initiating the Corporate Insolvency Resolution Process.

8. The Tribunal admitted the Application under Section 10 of the Code, appointing an Interim Resolution Professional to manage the Corporate Debtor's assets and initiate the resolution process.

9. The moratorium was declared from the date of the order till the completion of the resolution process, prohibiting various actions against the Corporate Debtor, including legal proceedings and asset transfers.

10. The IRP was directed to comply with specific sections of the Code and receive cooperation from the Corporate Debtor's directors and associated persons.

11. The Order was pronounced in the presence of the Counsels for both the Corporate Debtor and the Indian Overseas Bank, with detailed instructions for compliance and communication with the appointed IRP.