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2020 (12) TMI 323 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its financial dues - existence of debt and dispute or not - time limitation - HELD THAT - The application filed on behalf of financial creditor/Applicant under Section 7 of IBC is found complete. The present petition being filed in 22.10.2019 is well within limitation and the date of default is 30.03.2017., in which date the corporate debtor declared as NPA is much prior to the amendment made in Insolvency and Bankruptcy Code on 05th of June, 2020 whereby Sec. 10A was inserted. In the present application the date of default in the present application is 13.03.2017, thus the amendment made will not be applicable in the present petition. This adjudicating Authority is inclined to admit this petition and initiate CIRP of the Respondent Company. Accordingly, this petition is admitted - Moratorium declared.
Issues:
1. Initiation of Corporate Insolvency Resolution Process under Section 7 of the Insolvency & Bankruptcy Code, 2016. 2. Substitution applications filed by Alchemist Asset Reconstruction Company Ltd. 3. Impact of proceedings for oppression and mismanagement on the insolvency process. Issue 1: Initiation of Corporate Insolvency Resolution Process The financial creditor, Siemens Financial Services Pvt. Ltd., filed a petition under Section 7 of the Insolvency & Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process against Panacealife Healthzone Private Limited due to its inability to repay financial debt. The debtor had entered into finance agreements and issued guarantee agreements and promissory notes but failed to repay the outstanding amount despite repeated demands. The Tribunal allowed the substitution applications filed by Alchemist Asset Reconstruction Company Ltd., allowing the substitution of the financial creditor's name and the Interim Resolution Professional's name. Issue 2: Substitution Applications Alchemist Asset Reconstruction Company Ltd. filed two substitution applications seeking to replace the name of the financial creditor and the Interim Resolution Professional due to the assignment of debt. The Tribunal granted the applications as the debt had been assigned to Alchemist Asset Reconstruction Company Ltd., and the proposed IRP was changed accordingly. Issue 3: Impact of Proceedings for Oppression and Mismanagement The Tribunal noted that the shareholders and directors of the respondent company were involved in proceedings for oppression and mismanagement. It was highlighted that the pendency of such proceedings would not hinder the insolvency process under Section 7 of the IBC. The Tribunal referred to relevant judgments and upheld the admission of the petition. The application was found complete and within the limitation period, with the date of default preceding the relevant amendment to the Code, ensuring its applicability to the case. In conclusion, the Tribunal admitted the petition, initiating the Corporate Insolvency Resolution Process and imposing a moratorium as per Section 14 of the Insolvency & Bankruptcy Code, 2016. The appointment of Mr. Devendra Singh as the Interim Resolution Professional was confirmed, with directions for further steps under the statute. The registry was instructed to communicate the order to the relevant parties, and the case was listed for a progress report on a specified date.
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