2022 (9) TMI 564 - 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 - requirements for admitting an application under section 10 of the Code, 2016, complied with or not - HELD THAT - The existence of debt and default is established and no winding up proceedings are pending against the Corporate Applicant and Corporate Applicant is not covered by the ineligibilities provided under Section 11 of the Code, 2016. The Corporate Applicant is entitled to move an application under Section 10 of the Code in view of the admitted outstanding financial debt and default of the same by the Corporate Applicant. As a sequel of the above discussion and in terms of Section 10(4) of the Code, 2016, the instant Petition is admitted in terms of Section 10 of the Code and CIRP is initiated against M/s. IT Power Consulting Private Limited. Petition admitted.

Issues Involved:
1. Default in meeting financial obligations.
2. Eligibility under Section 10 of the Insolvency and Bankruptcy Code, 2016.
3. Appointment of Interim Resolution Professional.
4. Declaration of moratorium.
5. Obligations and duties of the Interim Resolution Professional.

Detailed Analysis:

1. Default in Meeting Financial Obligations:
The Corporate Applicant, M/s. IT Power Consulting Private Limited, filed an application under Section 10 of the Insolvency and Bankruptcy Code, 2016, due to its inability to meet financial obligations to its Financial Creditor, Operational Creditors, and other creditors. The company defaulted on payments amounting to Rs. 10,42,15,081/- which includes Rs. 6,23,34,969/- as financial debt and Rs. 4,18,80,112/- as operational debt. The application was supported by audited financial statements and other relevant documents evidencing the default.

2. Eligibility under Section 10 of the Insolvency and Bankruptcy Code, 2016:
The application was filed in Form-6 under Rule-7 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. The Tribunal noted that the Corporate Applicant had provided all necessary information and was not ineligible under Section 11 of the Code. The Tribunal referred to the judgment in Unigreen Global Pvt. Ltd. VS. Punjab National Bank & Ors., emphasizing that if the application is complete and the default is established, the application must be admitted unless it is incomplete.

3. Appointment of Interim Resolution Professional:
The Corporate Applicant initially proposed the name of Mr. Yogesh Kumar Gupta as the Interim Resolution Professional (IRP). However, his registration was suspended. Consequently, the Tribunal appointed Mr. Vijay Kumar Sharma as the IRP, subject to the condition that no disciplinary proceedings are pending against him. The IRP is required to file the authorization for assignment and specific consent in Form 2 as per the applicable rules.

4. Declaration of Moratorium:
The Tribunal declared a moratorium as per Section 14 of the Code, imposing prohibitions on:
- The institution or continuation of suits or proceedings against the corporate debtor.
- Transferring, encumbering, or disposing of any assets of the corporate debtor.
- Actions to foreclose or enforce any security interest.
- Recovery of property by an owner or lessor.
The moratorium does not apply to transactions notified by the Central Government or the supply of essential goods or services to the Corporate Debtor.

5. Obligations and Duties of the Interim Resolution Professional:
The IRP is directed to perform functions as per Sections 15, 17, 18, 19, 20, and 21 of the Code. The personnel connected with the Corporate Debtor are legally obligated to assist the IRP. The IRP must protect and preserve the value of the Corporate Debtor's property and manage its affairs with utmost dedication and honesty. The Tribunal also instructed the Corporate Applicant to deposit Rs. 2 Lakhs with the IRP to cover expenses related to the resolution process.

Conclusion:
The Tribunal admitted the application under Section 10 of the Insolvency and Bankruptcy Code, 2016, initiated the Corporate Insolvency Resolution Process against M/s. IT Power Consulting Private Limited, appointed Mr. Vijay Kumar Sharma as the Interim Resolution Professional, declared a moratorium, and outlined the duties and obligations of the IRP. The office was directed to communicate the order to the relevant parties within seven days.

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