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Judgment
This application is filed by the Operational Creditor viz. Belgium Glass and Ceramics Private Limited under Section 9 of Insolvency and Bankruptcy Code 2016 (hereinafter referred to as "I&B Code, 2016") against the Corporate Debtor viz. Eurocoin Ceramics Pvt. Ltd seeking, inter alia, initiation of Corporate Insolvency Resolution Process (CIRP) as against the Corporate Debtor for having default an amount of Rs.1,75,26,455/- along with 24% rate of interest. The date of default is stated to be 03.09.2018.
This application was earlier dismissed as defective and not maintainable vide order dated 09.07.2024 as the respondent never was served in the matter and the Ld counsel for applicant could not file proof of service or proper address. The Hon'ble NCLAT, vide its order dated 03.12.2024, remanded the matter to this Tribunal setting aside the impugned order dated 09.07.2024 of this Tribunal, for re listing and a decision on merits.
The applicant submitted that in the year 2018 it had supplied raw materials to the corporate debtor and raised various tax invoices dated from 05.07.2018 to 11.02.2020. It is stated by a clarification affidavit sought on 03.04.2024 that the supply was made of goods on mutually orally decided with the respondents before placement of the order against 60 days credit period. It is further submitted that the corporate debtor had accepted the payment terms and conditions and raised no dispute against the quality of the raw materials supplied to the CD as per order received from the CD. The applicant sent Form 3 demand notice dated 31.08.2022 pursuant to section 8 of the I&B Code, 2016 demanding the payment of the outstanding operational debt of Rs.1,75,26,455/- along with 24% rate of interest from the corporate debtor. It further states that the debt fell due from 03.09.2018 to 14.03.2022.
In part V of the application the applicant submitted the details of the charge created on the book debts being Rs.25,00,00,000/- dated 27.03.2015, Rs.1,50,00,000/- dated 28.03.2014 and Rs.1,37,00,00,000/- dated 07.11.2013.
The Respondent/CD in its reply affidavit dated 07.01.2025 submitted that its registered office has not been in use for over two years due to severe financial constraints. No business operations have been conducted at the premises since December 2022, which resulted in the Respondent being unable to receive service in the proceedings before the Tribunal. Upon learning of the matter, the Respondent appeared before the Hon'ble National Company Law Appellate Tribunal (NCLAT) on 03.12.2024. The Hon'ble NCLAT, vide order dated 03.12.2024, remanded the matter to this Tribunal setting aside the impugned order dated 09.07.2024 of this Tribunal, for re listing and a decision on merits. Furthermore, the Respondent submitted by affidavit dated 14.02.2025 that it is facing financial distress and seeks to restructure its debt through the Corporate Insolvency Resolution Process (CIRP). The Respondent has no objection to the passing of appropriate orders as per the law.
Heard the learned counsel for the Operational Creditor and the corporate debtor, perused proof of purchase orders, invoices and other documents produced on record.
We observe that the debt fell due from 03.09.2018. The Operational Creditor has sent demand notice dated 31.08.2022 in pursuant to section 8 of the IBC, 2016. The present application was filed on 29.12.2022. Considering the suo moto COVID-19 exclusion period given by the Hon'ble Supreme Court, this application is filed well within the limitation. The amount defaulted is above Rs.1 Cr. which meets the threshold limit as per section 4 of the Code and the Respondent/Corporate Debtor has accepted the debt which as per the documents submitted is due to be paid along with interest. Accordingly, the application filed under section 9 of the Insolvency and Bankruptcy Code, 2016 for initiation of corporate insolvency resolution process against the Respondent/Corporate Debtor deserves to be admitted. Hence we pass the following orders:-
ORDER
I. The CP (IB) 21 of 2023 is allowed.
II. The Corporate Debtor - Eurocoin Ceramics Pvt. Ltd is admitted into Corporate Insolvency Resolution Process under section 9(5) of the Code.
III. 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 or until this Adjudicating Authority approves the Resolution Plan under sub-section (1) of section 31 or passes an order for liquidation of the corporate debtor under Section 33 of the IBC 2016, as the case may be.
IV. However, in terms of Section 14(2) to 14(3) of the Code, the supply of essential goods or services to the corporate debtor as may be specified, if continuing, shall not be terminated or suspended, or interrupted during the moratorium period.
V. We hereby appoint from the panel suggested by IBBI, Mr. Pawankumar Jagetia, Registered IP having IBBI registration no. as IBBI/IPA-001/IP-P00800/2017-2018/11366, [email protected], under section 13 (1)(c) of the Code to act as Interim Resolution Professional (IRP). He shall conduct the Corporate Insolvency Process as per the Insolvency and Bankruptcy Code, 2016 r.w. Regulations made thereunder. __________ /
VI. The IRP so appointed shall make a public announcement of the initiation of Corporate Insolvency Resolution Process and call for submissions of claims under section 15, as required by Section 13(1)(b) of the Code.
VII. The IRP shall perform all his functions as contemplated, inter-alia, by sections 17, 18, 20 and 21 of the Code. It is further made clear that all personnel connected with the corporate debtor, its promoters, or any other person associated with the management of the corporate debtor are under legal obligation as per section 19 of the Code to extend every assistance and cooperation to the IRP. Where any personnel of the corporate debtor, its promoters, or any other person required to assist or co-operate with IRP, do not assist or cooperate, the IRP is at liberty to make appropriate application to this Adjudicating Authority with a prayer for passing an appropriate order.
VIII. The IRP is expected to take full charge of the corporate debtor's assets, and documents without any delay whatsoever. He is also free to take police assistance in this regard, and this Court hereby directs the Police Authorities to render all assistance as may be required by the IRP in this regard.
IX. The IRP shall be under a duty to protect and preserve the value of the property of the 'corporate debtor company' and manage the operations of the corporate debtor company as a going concern as a part of obligation imposed by section 20 of the Code.
X. The IRP or the RP, as the case may be shall submit to this Adjudicating Authority periodical report with regard to the progress of the CIRP in respect of the Corporate Debtor.
XI. We direct the Operational Creditor to pay IRP a sum of Rs.2,00,000/- (Rupees Two Lakh Only) in advance within a period of 7 days from the date of this order to meet the cost of CIRP arising out of issuing public notice and inviting claims till the CoC decides about his fees/expenses.
XII. The Registry is directed to communicate this order to the Operational Creditor, corporate debtor, and to the Interim Resolution Professional, the concerned Registrar of Companies and the Insolvency and Bankruptcy Board of India after completion of necessary formalities, within seven working days and upload the same on the website immediately after pronouncement of the order. The Registrar of Companies shall update its website by updating the Master Data of the Corporate Debtor in MCA portal specific mention regarding admission of this Application and shall forward the compliance report to the Registrar, NCLT.
XIII. The commencement of the Corporate Insolvency Resolution Process shall be effective from the date of this order.