State Bank of India Vs. Indo Alusys Industries Pvt. Ltd. - (NATIONAL COMPANY LAW APPELLATE TRIBUNAL) (03 May 2021)

Application filed by Financial Creditor has to be admitted on satisfaction that, default has occurred and application is complete, and no disciplinary proceeding against proposed IRP is pending

MANU/NC/1053/2021

Insolvency

The present application is filed under Section 7 of The Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 by State Bank of India, claiming to be 'Financial Creditor' (FC) ('Applicant') has filed present application, with a prayer for initiation of Corporate Insolvency Resolution Process ("CIRP"), in respect of Respondent Company, Indo Alusys Industries Ltd. ('Respondent'.

The FC has succeeded to make out a case for triggering the CIRP. The material on record clearly goes to show that, the CD had availed the loan facility and has committed default in the payment of the said debt amount. The FC has placed on record evidence in support of the claim as well as to prove the default. The CD by its own admission in reply acknowledges the existence of financial debt. Merely because the CD has stated that, it is willing to settle the debt and in spite of being given various opportunities for repayment, the CD failed to reach an OTS with the JLF members. There is no bar for FC from proceedings under the provisions of IBC. There is no document placed on record by CD to show that payment of debt, as claimed by the FC, is made or is not due and payable.

Under sub-section (5)(a) of Section 7 of the IBC, the application filed by the Applicant, Financial Creditor ("FC") has to be admitted on satisfaction that: (i) Default has occurred; (ii) Application is complete, and (iii) No disciplinary proceeding against the proposed IRP is pending.

It is evident from the record that, the application has been filed on the proforma prescribed under Rule 4(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 read with Section 7 of the IBC. Present Tribunal is satisfied that, a default has occurred and debt has remained unpaid. Thus, the application warrants admission as it is complete in all respects and is admitted initiating CIRP as prescribed under the Code.

The 'Financial Creditor'- applicant has proposed the name of Insolvency Resolution Professional, Mr. Vikram Bajaj. A written communication sent by him in terms of Rule 9(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 has also been placed on record. There is a declaration made by him that no disciplinary proceedings are pending against him in the Insolvency and Bankruptcy Board of India or ICSI. In addition, further necessary disclosures have been made by Mr. Vikram Bajaj as per the requirement of the IBBI Regulations. Accordingly, he satisfies the requirement of Section 7(3)(b) of the IBC.

As a consequence of the application being admitted in terms of Section 9(5) of IBC, 2016 moratorium as envisaged under the provisions of Section 14(1) shall follow in relation to the Respondent prohibiting the Respondent as per proviso (a) to (d) of section 14(1) of the IBC. However, during the pendency of the moratorium period, terms of Section 14(2) to 14(3) of the IBC shall come in force.

Present Tribunal directs the Financial Creditor to deposit a sum of Rs. 2 lacs with the Interim Resolution Professional Vikram Bajaj to meet out the expenses to perform the functions assigned to him in accordance with Regulation 6 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Person) Regulations, 2016.

Tags : DEFAULT APPLICATION ADMISSION