2021 (4) TMI 582 - Tri - Insolvency and Bankruptcy

Maintainability 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 - HELD THAT - The CD has defaulted in making repayment of credit facilities to the Petitioner Bank and the date of default is 30.03.2018. The statement of accounts as on 19.12.2019 along with the Banker's Book Evidence Certificate annexed with the Petition confirms the default is ₹ 11,88,32,338.00. The petitioner Bank has filed the petition within the period of limitation, as the default has occurred as on 30.03.2018 and the application has been filed on 08.01.2021. The acknowledgment of debts have been submitted by the CD to the FC on 27/01/2015, 28/06/2017 and 19/07/2019. Charges have been filed with ROC on 25/03/2013 and thereafter charges have been modified on 21/04/2014 - The date of mortgage of the property is on 02-04-2013, SARFAESI proceeding has been initiated by the Financial Creditor and notice dated has been served on the CD. It is settled legal position that the pendency of SARFAESI proceeding or other dispute does not prevent a Financial Creditor to trigger the C.I.R.P, because the nature of remedy being sought for under the provisions of the I.B Code is Remedy in Rem in respect of the CD. The Respondent Company has violated the terms and conditions of the sanction letters and as such also made the accounts irregular, consequence thereof the said accounts were classified as Non Performing Asset w.e.f. 30.03.2018 - The Financial Creditor has issued Demand Notice dated 06.01.2020 in respect of unpaid debts, due from the CD i.e. M/s. Cleanopolis Energy Systems India Private Limited under the Insolvency and Bankruptcy Code, 2016 - The present I.B Petition is filed by the duly authorized official of the Applicant Bank in a prescribed format under section 7 of the I.B Code annexing copies of loan documents confirming the existence of debt due, payable and defaulted and proposed a name of Resolution Professional to act as an Interim Resolution Professional (IRP). Petition is complete and deserves to be admitted - petition admitted - moratorium declared.

Summary

Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP)
2. Existence and Default of Financial Debt
3. Period of Limitation
4. Moratorium Declaration
5. Appointment of Interim Resolution Professional (IRP)
6. Compliance with Insolvency and Bankruptcy Code (IBC) Provisions

Issue-wise Detailed Analysis:

1. Initiation of Corporate Insolvency Resolution Process (CIRP):
The Financial Creditor, Indian Bank (erstwhile Allahabad Bank), filed an Insolvency and Bankruptcy (I.B.) Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of CIRP against the Corporate Debtor, Cleanopolis Energy Systems India Private Limited, due to default in repayment of various credit facilities. The application was filed by an authorized officer of the bank.

2. Existence and Default of Financial Debt:
The Financial Creditor provided details of the financial debt granted to the Corporate Debtor, including term loans and cash credit loans, with a total sanctioned amount of ?7,43,15,000.00 and an outstanding debt of ?11,88,32,383.00 (including interest up to 01.01.2020). The date of default was 30.03.2018. The Financial Creditor submitted relevant documents, including loan agreements, security details, and statements of accounts, to support the claim of default.

3. Period of Limitation:
The petition was filed within the limitation period. The default occurred on 30.03.2018, and the petition was filed on 08.01.2021. The Corporate Debtor had acknowledged the debts on 27.01.2015, 28.06.2017, and 19.07.2019, which confirmed the existence of the debt within the limitation period.

4. Moratorium Declaration:
Upon admission of the petition, the Tribunal declared a moratorium as per Sections 13 and 14 of the IBC, 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) Actions to foreclose or enforce security interests.
d) Recovery of property occupied by the Corporate Debtor.
The moratorium would be effective from the date of the order until the completion of the CIRP.

5. Appointment of Interim Resolution Professional (IRP):
The Tribunal appointed Mr. Amit Pareek as the IRP, directing him to make a public announcement of the moratorium and to perform duties as specified under the IBC. The IRP was instructed to file a declaration disclosure statement within two days and to manage the day-to-day affairs of the Corporate Debtor. The Special Officer appointed earlier was relieved, and all documents were to be handed over to the IRP.

6. Compliance with Insolvency and Bankruptcy Code (IBC) Provisions:
The Tribunal noted that the Financial Creditor had filed the petition in the prescribed format, annexing copies of loan documents confirming the existence of debt and default. The Tribunal emphasized the necessity of adhering to the time limits for completing the CIRP and the legal obligations of the Corporate Debtor's management to cooperate with the IRP. The Tribunal also highlighted the importance of considering viable resolution plans for the Corporate Debtor, especially given its status as an MSME unit.

Order:
The Tribunal admitted the I.B. Petition on 07.04.2021, declaring the commencement of the CIRP and imposing a moratorium. The IRP was appointed, and the Special Officer was relieved. The Tribunal directed the Registry to communicate the order to relevant parties and emphasized the importance of exploring feasible resolution plans for the Corporate Debtor.