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TMI Blog2017 (12) TMI 1036X X X X Extracts X X X X X X X X Extracts X X X X ..... Asis Plywood Private Limited on 02.11.2010. Thereafter, the name of the Corporate Applicant has been changed to Asis Plywood Ltd. on 12.10.2017. The Applicant Company has its registered office at Plot No. 94/7, Block-2 WHS Kirti Nagar Near, DSIDC Complex-New Delhi-10015. Since the registered office of the respondent company is in Delhi, this Tribunal having territorial jurisdiction over the place is the Adjudicating Authority in relation to the prayer for initiation of Corporate Insolvency Resolution Process in respect of applicant corporate debtor under sub-section (1) of Section 60 of the Code. 3. The present application has been filed by one Mr. S.N. Gupta, Authorised Representative of the applicant company for and on behalf of the applicant, M/s Asis Plywood Limited. Certified copy of the Board resolution dated 12.10.2017 of the applicant, M/s Asis Plywood Limited, has been filed, wherein Mr. S.N. Gupta, Authorised Representative was authorised to file the present application under Section 10 of the Code. 4. On commission of default a corporate applicant can file an application with the adjudicating authority under Section 10 of the Code for initiation of Corporate Insolvenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank Ltd. (JSBL) and State Bank of India (SBI) in the form of term loan and cash credit limits etc. Initially, the Corporate Applicant had maintained all the accounts regular and was releasing the payment as per terms of agreements entered into. In view of various reasons behind the control of the Corporate Applicant, the operations of the unit of the Corporate Applicant were adversely affected and as a result of which, the corporate applicant had become a sick industrial company and its net worth became negative. In fact the company was earlier referred to the BIFR. However, before the Corporate Applicant is declared sick and consequent upon rehabilitation scheme could have been formulated, the BIFR has been dissolved by the Central Govt. of India vide Notification dated 25.11.2016. 9. It is contended that the applicant company had also given Corporate Guarantee in respect of secured credit availed by M/s. Shirdi Industries Limited from consortium of seven banks (lead by Union Bank of India which has been subsequently assigned to JM financial Asset Reconstruction Company (Limited). The accounts of the secured creditors of both Corporate Debtor and M/s. Shirdi Industries Limited al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reditor that the applicant has committed default in payment of dues. It has also been submitted that the applicant is not debarred as per Section 11 of the Code. It is further contended that the basic premise of the Code is default only, and once the application is complete as per Section 10 of the Code it should be allowed. 14. In connection with the execution of recovery certificate obtained by the financial creditor, it is pertinent to refer here the case of Annapurna Infrastructure (P.) Ltd. v. SORIL Infra Resources Ltd. [Company Appeal (AT) (Insolvency) No. 32 of 2017], wherein vide judgment dated 29.08.2017 Hon'ble Appellate Tribunal framed an issue that whether pendency of a proceeding for execution of an award or a judgment and decree bar an operational creditor to prefer any petition under the Code. In the said judgment by a speaking order Hon'ble Appellate Tribunal answered the issue in the negative against the respondent - 'Corporate Debtor'. In the same judgment following observations have also been made by Hon'ble Appellate Tribunal: "23. Form 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (hereinafter referred to as the 'Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the corporate applicant deserved to be admitted, if otherwise complete in all respect. 16. That apart in view of the overriding effect given by the provisions of Section 238 of the Code, the initiation and pendency of recovery certificate proceeding is no bar for initiation of resolution and insolvency proceedings under the Code. Hence, the objection raised by the financial creditor in this regard cannot sustain. 17. The provisions of Insolvency & Bankruptcy Code, 2016 have been notified by the Central Government on 01.12.2016 for the objects as can be gleaned from the Statement of Objects and Reasons as given below: "An act to consolidate and amend the laws relating to reorganisation and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximization of value of assets of such persons, to promote entrepreneur ship, availability of credit and balance the interests of all the stakeholders including alteration in the order of priority of payment of Government dues and to establish an Insolvency and Bankruptcy Board of India, and for matters connected therewith of incidental thereto" 18. A perusal of the above object discl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the financial creditors and recovery certificate issued against Applicant Company can be termed as conclusive proof of default. There has been admission of default also. In the light of default in payment of such huge debt, it has been submitted that the applicant company is in dire need of a resolution plan in the interest of all the stakeholders. The present application has been filed in requisite form-6 containing the required particulars in terms of sub-section (2) of Section 10 of the Code. The applicant satisfies all the statutory requirements. Therefore, we are inclined to admit the application. 22. In view of the above, we are satisfied that the present application is complete and that the applicant corporate debtor has committed a default. Therefore, as the application is complete the present application is admitted under section 10(4)(a) of the Code. The corporate insolvency resolution process shall commence from the date of this order as per sub-section (5) of Section 10 of the Code. 23. A moratorium in terms of section 14 of the Code is being issued prohibiting the following: * Institution of suits or continuation of pending suits or proceedings against the corpor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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