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2021 (4) TMI 160 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - time limitation - restraint order against SIB - HELD THAT - Since the Hon'ble NCLAT, by considering the findings of this Adjudicating Authority mentioned in the impugned order, has inter alia held that the AA has erred in directing South Indian Bank to go and get directions from the High court or to await decision of issue by the High Court, when SIB was not even party in the Writ Petition. It is also observed that CD is aware that both the orders were against SBI as portions reproduced from its statement of objections (Diary No. 18701), and held that it was difficult to accept that there was restraint order against SIB. Therefore, the contentions raised again on behalf of Respondents, with respect to those issues are not being adverted to or to decide them again, as the Hon'ble NCLAT has set aside the impugned order. Time Limitation - HELD THAT - The Corporate Debtor vide letter dated 29.11.2014 to the SBI with copy to the SIB (Assignee Bank) acknowledged the payments made to SIB in discharge of its liability to SIB and the Corporate Debtor, vide its certificate dated 20.11.2015 certified the 'Debt' owed and payment against such 'Debt' to SBI 85 SIB. The account of the Corporate Debtor was declared as 'Non-performing Asset' on 30.01.2014. However, the instant Petition/Application is filed on 23.11.2017. Therefore, the question is whether limitation starts from date of NPA or from subsequent dates of acknowledgement of debt and part-payments made, and what is law on the issue. Debt and default - HELD THAT - There is hardly any dispute raised by the Respondent except raising that matter is pending before Hon'ble High court, DRT, stay is granted and continuing etc, which are already considered by the Hon'ble NCLAT in the said Appeal and negative also, and thus there are no more res Integra. Therefore, there is no other alternative for Adjudicating Authority except to initiate Insolvency proceedings against the Corporate Debtor. Application admitted - moratorium declared.
Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP) 2. Limitation period for filing the application 3. Acknowledgement of debt and part payments 4. Pending proceedings in other forums 5. Appointment of Insolvency Resolution Professional (IRP) 6. Declaration of moratorium Detailed Analysis: 1. Initiation of Corporate Insolvency Resolution Process (CIRP): The application was filed by M/s. Pegasus Assets Reconstruction Private Limited under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, seeking to initiate CIRP against M/s. Yashomati Hospital Private Limited for a default amounting to ?14,61,02,892.63 as of 30.01.2014. The Financial Creditor was an assignee of South Indian Bank, which had initially provided the term loan to the Corporate Debtor. 2. Limitation Period for Filing the Application: The Corporate Debtor's account was declared as a Non-Performing Asset (NPA) on 30.01.2014. The application was filed on 23.11.2017. The petitioner argued that the application was within the limitation period due to acknowledgments of debt and part-payments made by the Corporate Debtor on 27.11.2014 and 28.11.2014, and a certificate dated 20.11.2015. The tribunal referred to Section 18 of the Limitation Act, which allows the limitation period to restart from the date of acknowledgment of debt. 3. Acknowledgement of Debt and Part Payments: The Corporate Debtor acknowledged the debt through letters and payments made on 27.11.2014 and 28.11.2014, and a certificate dated 20.11.2015. The tribunal held that these acknowledgments and payments reset the limitation period, making the application filed on 23.11.2017 within the permissible period. 4. Pending Proceedings in Other Forums: The Corporate Debtor raised objections based on ongoing proceedings before the Debt Recovery Tribunal (DRT) and the High Court of Karnataka. However, the tribunal noted that these proceedings did not bar the initiation of CIRP under the IBC. The Hon'ble NCLAT had previously held that the Financial Creditor or its assignor bank were not restrained by any orders from pursuing remedies under the IBC. 5. Appointment of Insolvency Resolution Professional (IRP): The petitioner suggested Ms. Medha Kulkarni as the IRP, who had filed the necessary written communication and declared that there were no disciplinary proceedings pending against her. The tribunal found her suitable for the role and appointed her as the IRP. 6. Declaration of Moratorium: The tribunal declared a moratorium prohibiting: a) Institution or continuation of suits or proceedings against the Corporate Debtor. b) Transfer, encumbrance, or disposal of the Corporate Debtor's assets. c) Foreclosure or enforcement of security interests. d) Recovery of property by owners or lessors. e) Termination or suspension of essential goods or services to the Corporate Debtor. The moratorium would be effective from the date of the order until the completion of the CIRP. The IRP was directed to follow all provisions of the IBC and report progress to the tribunal. Conclusion: The tribunal admitted the petition, initiated CIRP against M/s. Yashomati Hospitals Private Limited, appointed Ms. Medha Kulkarni as the IRP, and declared a moratorium. The decision was based on the acknowledgment of debt and part payments resetting the limitation period, making the application timely and in accordance with the law.
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