2019 (3) TMI 958 - Tri - Insolvency and Bankruptcy

Corporate Insolvency Resolution Process - Outstanding loan - respondent company has taken a loan from the applicant in the year 2010, however the respondent company failed to repay the loan amount as per the agreed terms and conditions - whether claim of the applicant is barred by the limitation? - HELD THAT - The applicant clearly come within the definition of Financial Creditors. The material placed on record further confirms that applicant financial creditor had disbursed various loan to the respondent corporate debtor and the respondent has availed the loan and committed default in repayment of the outstanding financial debt. On a bare perusal of Form - I filed under Section 7 of the Code read with Rule 4 of the Rules shows that the form is complete and there is no infirmity in the same. It is also seen that there is no disciplinary proceeding pending against the proposed IRP. Applicant has placed on record voluminous and overwhelming evidence in support of the disbursement as well as to prove the default. We are satisfied that the present application is complete in all respect and the applicant financial creditors are entitled to claim their outstanding financial debts from the corporate debtor and that there has been default in payment of the financial debt. As a sequel to the above discussion and in terms of Section 7(5)(a) of the Code, the present application is admitted.

Summary

Issues:
1. Application under Section 7 of the Insolvency and Bankruptcy Code, 2016 for Corporate Insolvency Resolution Process.
2. Jurisdiction of the National Company Law Tribunal over the matter.
3. Appointment of Interim Resolution Professional.
4. Claim of the applicant and objection raised by the respondent regarding limitation.
5. Application of the Limitation Act, 1963 to insolvency proceedings.
6. Definition of Financial Creditor and Financial Debt under the Code.
7. Admissibility of the application under Section 7.
8. Imposition of moratorium under Section 14 of the Code.

Analysis:

1. The applicant filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 seeking Corporate Insolvency Resolution Process against the respondent company, which had failed to repay a loan amount leading to a decree by the High Court. The Tribunal, being the Adjudicating Authority, considered the jurisdictional aspect due to the respondent company's location in Delhi.

2. The applicant proposed the appointment of an Interim Resolution Professional, Mr. Lekhraj Bajaj, who satisfied the necessary requirements under the Code. The Tribunal reviewed the documents provided by the applicant to establish the outstanding amount due from the respondent company, which formed the basis for the application.

3. The respondent raised objections regarding the limitation of the claim, citing court orders regarding status quo on its properties. However, the Tribunal analyzed the application of the Limitation Act, 1963 to insolvency proceedings and found the claim to be within the limitation period, rejecting the respondent's objections.

4. The Tribunal delved into the definitions of Financial Creditor and Financial Debt under the Code to ascertain the applicant's eligibility to file the application. It concluded that the applicant met the criteria of a Financial Creditor and had provided sufficient evidence to prove the default by the respondent.

5. After thorough examination, the Tribunal admitted the application under Section 7 of the Code, appointing Mr. Lekhraj Bajaj as the Interim Resolution Professional. It directed the public announcement and declared a moratorium under Section 14, imposing restrictions on legal actions against the corporate debtor during the resolution process.

6. The Tribunal outlined the duties and obligations of the Interim Resolution Professional, emphasizing compliance with the Code, Rules, and Regulations. It highlighted the importance of cooperation from all parties involved in managing the affairs of the Corporate Debtor to facilitate a smooth resolution process.

7. Lastly, the Tribunal instructed the communication of the order to the relevant parties within a specified timeframe to ensure transparency and adherence to the resolution process as per the Code.

This detailed analysis covers the key issues addressed in the judgment, providing a comprehensive understanding of the Tribunal's decision in the matter.