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2021 (7) TMI 188 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make payment of its dues - corporate person is the applicant - Corporate Person keeping in view the interest of all stakeholders, filed this petition for revival of the Company CIRP under Section 10 of IBC - HELD THAT - Due to the loss, the Company could not pay the banks and other creditors. As a result, the account became Non-Performing Asset (N.P.A.). The applicant further submits that the financial debt owed to Punjab National Bank was sanction on 30.03.2017. The said facility was utilised from time to time as and when the funds were required. Due to the severe incident of the fire and several losses, the Directors of the company were of the view that company will not be able to repay the defaults. Hence, the Corporate Person, keeping in view the interest of all stakeholders, filed this petition for revival of the Company CIRP U/s. 10 of the Code. Perusal of records shows that the Corporate Person furnished/disclosed all information relating to all Books of Account. The applicant has produced on record the Board Resolution dated 03.10.2020 authorising the Director i.e., Mr. Subhash Agrawal/applicant to file this application U/s. 10 of the Code for initiation of the CIRP - Corporate Person suggested/proposed name of one Mr. Pratim Bayal for appointment as Interim Resolution Professional. The application is defect free and deserves to be accepted - application admitted - moratorium declared.
Issues:
1. Application filed under Section 10 of Insolvency and Bankruptcy Code, 2016 for Corporate Insolvency Resolution Process initiation. 2. Financial crisis due to fire incident leading to inability to pay debts. 3. Submission of necessary documents and appointment of Interim Resolution Professional. 4. Admittance of application and issuance of moratorium order. 5. Prohibitions under Section 14 of the Insolvency & Bankruptcy Code, 2016. 6. Appointment and duties of Interim Resolution Professional. 7. Payment of fees to Interim Resolution Professional and time-bound conduct of CIRP. 8. Convening a meeting of the Committee of Creditors and submission of Resolution Plan. Detailed Analysis: 1. The application was filed under Section 10 of the Insolvency and Bankruptcy Code, 2016 by a Corporate Person seeking to start the Corporate Insolvency Resolution Process due to the inability to pay a debt of ?27,33,57,528.36. The Company faced financial crisis after a fire incident, resulting in non-payment to creditors and classification as a Non-Performing Asset (N.P.A). 2. The applicant submitted that the loss from the fire incident led to the Company's inability to repay debts, causing the Directors to doubt the Company's ability to recover. The application included all necessary information and documents, such as the Board Resolution authorizing the application and the proposed Interim Resolution Professional. 3. The Tribunal admitted the application and issued a moratorium order as per Section 13 and 14 of the Insolvency & Bankruptcy Code, 2016. The moratorium prohibits various actions against the Corporate Debtor, including instituting suits, transferring assets, or enforcing security interests. 4. An Interim Resolution Professional was appointed to oversee the process, with specific duties such as convening a meeting of the Committee of Creditors, ascertaining creditors' particulars, and evolving a Resolution Plan. The applicant was directed to pay an advance fee to the Interim Resolution Professional as per regulations. 5. The Resolution Professional was instructed to conduct the Corporate Insolvency Resolution Process in a time-bound manner and submit progress reports. The Interim Resolution Professional was further directed to convene a meeting of the Committee of Creditors and file necessary reports as per the regulations. 6. The Registry was tasked with communicating the Order to the Corporate Applicant/Debtor and the Interim Resolution Professional. The Order outlined the necessary steps to be taken for the resolution process, ensuring compliance with the legal requirements and procedures.
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