ABP Apparels Pvt. Ltd.

The Corporate Applicant was incorporated on 14/05/2016 to carry out business of apparels and was involved in business of designing, manufacturing and sale of wide range of apparels etc. and for that purpose, to operate the business, the Company availed loans from various banks and started stores on franchisee model. The authorised share capital of Company is Rs. 2,00,000/- & paid up share capital of the Company is Rs. 1,29,180/-.

In the year 2019-20 the Company used to purchase raw materials for the purpose of manufacturing of goods and used to supply finished goods in the ordinary course of business. The manufacturing (stitching job) was outsourced. For that purpose, the Company used to purchase raw materials and accordingly invoices were raised on the Company by creditors. The copy of MoA & AoA are annexed with the application.

The Corporate Applicant used to make timely payments to the entities from whom the corporate applicant used to purchase raw materials for the purpose of operating it’s business. However, since last one year the Company started facing financial hardships. Thereafter, on account of lockdown imposed by Govt. of India, the entire stock manufactured in last year became unsaleable and profits could not be generated. Corporate applicant tried its best to settle the issues. However, on account of the continued failure of the retail sector and on account of mounting liabilities, the corporate applicant could not generate enough revenues to keep its operations running. That any continuation of business would have required a fresh investment in the tune of crores of rupees with no certainty of revenues from the market.

The Corporate applicant was unable to pay monthly instalments due towards financial creditors. The rentals for the franchisee stores, which were paid either in the form of rental or commission to the franchisees, were mounting and further affecting the reputation of the company. Continuation of operations would only lead to further loss to the company and its creditors.

Aware of the financial conditions of the corporate applicant, an Extra Ordinary General Meeting (hereinafter referred to as “EOGM”) of the shareholders was called upon on 31^st October, 2020 to discuss and deliberate upon the issue, whether to apply for and file the resolution application u/s 10 of the Insolvency & Bankruptcy Code, 2016. A copy of the minutes of the meeting of EOGM is annexed with the application.

The Corporate Applicant failed to pay the amount towards outstanding dues, hence, the members of the Corporate applicant resolved to apply for Resolution u/s 10 of the Insolvency & Bankruptcy Code, 2016 in their EOGM dated 31/10/2020. The Special Resolution was also passed unanimously by the members of the corporate applicant as under:

It is submitted by the Corporate Applicant that as per the part-III of the application, there are 34 Operational Creditors and 7 Financial Creditors in the Corporate Applicant and the amounts owed to them is as under :

I. This Adjudicating Authority hereby appoints Mr. Mr. Santanu Bhattacharjee, having Reg. No. IBBI/IPA-001/IP-P01443/2018-2019/12194, email id : [email protected], having address at : Godrej Central Tower D, Flat No. 1001, Shell Colony, Chembur (East) Mumbai City-Maharastra- 400071, as the “Interim Resolution Professional (IRP)” under Section 13(1) (c) of the Code.

II. That the order of Moratorium under Section 14 of the Code shall come to effect from the date of this order, till the completion of the Corporate Insolvency Resolution Process (CIRP) or until this Bench approves the Resolution Plan under Sub-section (1) of Section 31 or passes an order for ‘Liquidation’ of the Corporate applicant under Section 33 as, the case may be.

III. The moratorium prohibits the institution of suits or continuation of pending suit or proceedings against the Corporate Applicant including execution of any judgment, decree or order in any Court of law. Tribunal, Arbitration Panel or other Authority(s), transferring, encumbering, alienating or disposing of by the Corporate applicant any of its assets or any legal right or beneficial interest therein; any action to foreclose, recover or enforce any security interest created by the Corporate Applicant in respect of its property occupied by or in current possession of the Corporate Debtor.

IV. Further, litigation or any application, if any, pending before any competent Court of law under the provisions of the SARFEASI Act and RDB Act, prior to pronouncement of this order, such proceedings are expected to be dealt with in accordance with law r.w. Section 14 and Section 238 of the Insolvency & Bankruptcy Code, 2016.

V. That the Supply of essential goods or services to Corporate Debtor, if continuing, shall not be terminated or suspended or interrupted during the moratorium period. The Corporate Applicant to provide effective assistance to the IRP as and when he takes charge of the Corporate applicant.

VI. That the Provisions of Section 14 sub-section (1) shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator.

VII. The IRP so appointed shall make Public announcement of Corporate Insolvency Resolution Process (CIRP) immediately as specified under Section 13 of the Code and will call for submissions of claims under Section 15 of the Code.

VIII. The IRP shall perform all his functions which are contemplated, inter-alia, by Sections 17,18,20 & 21 of the Code. It is further made clear that all personnel connected with Corporate Applicant, its Promoter or any other person associated with management of the Corporate applicant are under legal obligation under Section 19 of the Code to extend every assistance and co-operation to the Interim Resolution Professional. Where any personnel of the Corporate Applicant, its Promoters or any other person required to assist or co-operate with IRP, does not assist or Co-operate, IRP is at liberty to make application to this Tribunal with a prayer for passing an appropriate order.

IX. The IRP shall be under duty to protect and preserve the value of the property of the ‘Corporate applicant’ and manage the operations of the Corporate Applicant as a going as a part of its obligation imposed by Section 20 of the Insolvency & Bankruptcy Code, 2016.

X. The Corporate Person shall pay to IRP sum of Rs. 2,00,000/- by Demand Draft/Cheque towards part of fees & advance for initial expenses etc.

XI. The Petitioner-Corporate Applicant, is directed to communicate a copy of this order to the IRP, the Corporate applicant and the Registrar of Companies (MP).

XII. The Registry is directed to communicate a copy of this order to the Petitioner-Corporate Applicant, all the concerned parties including Statutory Authorities namely, Income Tax Department and Registrar of Companies, IBBI and to the Interim Resolution Professional, Mr. Santanu Bhattacharjee for completion of necessary formalities.

XIII. The commencement of Corporate Insolvency Resolution Process (CIRP) shall be effective from the date of this order.