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Judgment
The present petition has been filed on 03.10.2023, by the corporate applicant through its director, Mr. Samarendra Mohapatra under section 10 of the Insolvency and Bankruptcy Code, 2016 (the Code) for initiating Corporate Insolvency Resolution Process (CIRP) in respect of the applicant i.e. M/s CJ Infradevelopers Private Limited.
The averments made by the corporate applicant in its petition and presented/argued by the learned CS for the corporate applicant are summarized hereunder:
The corporate applicant was incorporated on 03.05.2012 under the provisions of the Companies Act, 1956, having CIN No. U70101OR2012PTC015337, its registered address is at Plot No.111, Sahid Nagar, Dist-Khordha, Odisha-751007.
The authorized share capital of the corporate applicant is of Rs 10,00,000/- and paid-up share capital of Rs 1,00,000/-.
The corporate applicant has been engaged in the real estate businesses and to acquire purchase, sell, own, improved, alter, let, take on lease or in exchange or mortgage of assigned or hire or otherwise acquire in any lawful manner and dispose of any lands and properties to act as contractor, Consultants, architects, manufacturer, dealers and distributors of all kinds of building materials and goods and services etc.
Corporate Applicant had no Financial Creditors but have fourty Four (44) Operational Creditors amounting to Rs 1,36,70,476/- as per the balance sheet year ending on 31.03.2023. The List of the Operational Creditors are as follows:
| SL.No | Name of Creditors | Amount (in Rs.) |
|---|---|---|
| 1 | E-1 Security Service Pvt. Ltd. | 65,428.00 |
| 2 | M/s Anu Agency | 28,603.14 |
| 3 | M/s Ceramic World | 17,732.06 |
| 4 | M/s Chakadola Sales | 1,39,771.59 |
| 5 | M/s ECE Industries Limited | 3,47,652.52 |
| 6 | M/s Fire Service | 3,01,500.00 |
| 7 | M/s Inland Construction | 1,93,108.00 |
| 8 | M/s Jgswar Fenestation Pvt. Ltd. | 5,87,123.15 |
| 9 | M/s Kalyani Sales | 8,51,790.35 |
| 10 | M/S Kishan Enterprises | 6,653.33 |
| 11 | M/s Lingaraj Granites Pvt. Ltd | 5,121.07 |
| 12 | M/s Mahaveer Electricals | 44,525.00 |
| 13 | M/s Maruti Commercials | 20,391.43 |
| 14 | M/s Nirmal Jal | 2,47,975.00 |
| 15 | M/s Pancham Enterprises | 34,24,799.00 |
| 16 | M/s Pooja Enterprisers | 11,699.00 |
| 17 | M/S Steel Industries of Orissa | 26,103.00 |
| 18 | M/s Universal Const. Care | 19,922.00 |
| 19 | Narulas Fitness | 5,000.00 |
| 20 | Mr. Biras Gonser Minz | 153.41 |
| 21 | Mrs. Dipti Panda & Mr. Kishore Panda | 4,144.00 |
| 22 | Mr. Tarasankar Mishra | 6,694.43 |
| 23 | Mrs. Sarmistha Bhuyan | 8,030.00 |
| 24 | Mrs. Sasmita Pattanaik & Mr. Ajit Mohanty | 8,158.00 |
| 25 | Mr. Manoj Kumar Das | 11,449.00 |
| 26 | Mr. Jayanta Kumar Dash | 13,829.00 |
| 27 | Mr. Swagat Tripathy | 15,517.00 |
| 28 | Mrs. Radha Kishorepuria | 16,581.00 |
| 29 | Mrs. Kanakalata Das | 17,683.00 |
| 30 | Mrs. Suchitra Maharana | 22,963.00 |
| 31 | Mr. Subhendu Pattanaik | 30,186.00 |
| 32 | Mrs. Swetapadma Rath | 30,699.00 |
| 33 | Mrs. Amruta Kar & Mr. Silpi Ranjan Mishra | 31,445.00 |
| 34 | Mrs Minati Patra | 35,184.00 |
| 35 | Mr. Sunil Kishorepuria | 37,007.00 |
| 36 | Mrs. Deepika Dash & Mr. Ansuman Mohapatra | 1,07,358.20 |
| 37 | Mr. Rupesh Kumar Dora | 1,07,558.00 |
| 38 | Mr. Jayanta Kumar Mishra | 1,94,039.00 |
| 39 | Mr. Subhankar Panigrahi & Mrs. Puspanjali Satpathy | 2,14,185.00 |
| 40 | Mr. Debasish Sahoo | 2,17,863.00 |
| 41 | Mr. Subrat Maharana | 5,05,259.00 |
| 42 | Mr. Devi Nandan Swain & Mrs. Rashmi Bijayita | 6,18,504.00 |
| 43 | Mrs. Deepanjali Mohanty | 8,15,089.39 |
| 44 | Deepak Poddar | 39,35,000.00 |
| Total | 1,33,49,476.07 |
Apart from this the Corporate Applicant has some other Liabilities:
| SL.No. | Name of the Parties | Amount(in Rs.) |
|---|---|---|
| 1 | GNS & Associates | 111100.00 |
| 2 | Mousumi Mohapatra | 39105.00 |
| 3 | Nihar Ranjan Pattnaik | 65845.00 |
| 4 | Rashmita Pattnaik | 39105.00 |
| 5 | Samarendra Mohapatra (Liability for Exp.) | 65845.00 |
| Total | 3,21,000.00 |
The Applicant carried on its projects and for the last several years due to paucity of funds, it could not carry on its business and its trying to carry on its objects in the real estate field and has been regular in filing statutory returns such as Income Tax return, GST returns and Annual Return with ROC. On account of dearth of funds for non realisation of debtor, it is not in a position to pay its debt and has defaulted in honouring the demand raised by the creditors and the GST departments. Thus, the applicant has defaulted in making payment of dues against it.
Further, there is a financial crunch in honouring its day to day payments on account of the fact the debtors have not been paying their dues and creditor are demanding their dues relentlessly. Security deposits from the Government Department named Bhubaneswar Development Authority, Odisha is not getting realized. There is no financial debt from any financial institution or NBFCs. For the year 2012-2013, the GST and Central Excise has issued show cause notice recently for service tax along with interest and penalty on the applicant. This has raised a contingent liability of Rs 1,08,70,465/- on the applicant. This Contigent Liability on the applicant has made it vulnerable to survive and the applicant don't have sufficient fund to honor this demand.
The special resolution passed in the Extraordinary General meeting dated 25.05.2023, and the Board Resolution dated 25.05.2023, resolved and authorized the director, Mr. Samarendra Mohapatra to file an application under section 10 of the Code, to initiate the CIRP against the corporate applicant.
The corporate applicant defaulted in repayment of the debts which amounts to more than Rs 1 Crore. Further, the default made during the period does not fall under section 10A of the Code.
This Adjudicating Authority vide order dated 09.10.2023 sought clarification from the corporate applicant regarding discrepancy in the Balance sheet and list of Creditors and directed to file audited Financial results for the year ending 31.03.2023, containing position in the loans and advances, debtors and inventory along with auditors report, to give the books of accounts in the pendrive, and undertakes to provide fees for the IRP or RP. An affidavit to the effect that it has not received any SARFAESI notice and that this application is not to defeat the purposes of law was also required to be filed. The Corporate Applicant was also directed to furnish the full address and contact particulars of the person from whom amounts are recievables and also to furnish the full address and contact particulars of the operational creditors and the same order was complied by the Corporate Applicant. The corporate applicant in compliance to the order dated 09.10.2023 by this Adjudicating Authority, has furnished the details of the assets in the name of the company, Applicant also furnished an affidavit to the effect that it has not received any notice under SARFAESI Act,2002 and also furnished an affidavit U/s 11 of the I&B Code to the effect that it does not suffer any disqualification and the Applicant also furnished an affidavit that Rs 6,00,000/- has already been deposited in bank account to provide the fees of IRP or RP.
The Applicant also futher stated that the work in progress of Rs 23,50,000/- as reflected in the balance sheet for the year ending 2023 is a flat of 1677 sq.ft held in the name of the Corporate Applicant and the current market value of the same flat is Rs. 65,00,000/-.Considering all the facts the Corporate Applicant has a liabilities of Rs. 1,36,70,476/- towards different Operational Creditors and Rs. 1,08,70,465/- towards claim from GST and Central Excise department pertaining to the Year 2012-13 and has a Long- Term Borrowings of Rs. 28,60,000.
We have heard the learned PCS appearing for the petitioner on the issue of admission of petition filed under section 10 of the Code and have perused the relevant records and documents. It is noted that the corporate applicant had taken loans from different Operational Creditors amounting to Rs. 1,33,49,476/- and recently the GST and Central Excise Department had issued a notice of Rs. 1,08,70,465/- towards some arrear pending for the Year 2012-13. We have also perused the provisional balance sheet and profit and loss account as on 31.3.2023 of the corporate applicant, which shows that there are some long -term borrowings amounting to Rs. 28,60,000 and also shows a loss of Rs. 2,07,327/- for the Year 2022-23.
The Balance Sheet as available on record is reproduced here as under:
| Particulars | As on 31.03.2023 | As on 31.03.2022 | |
|---|---|---|---|
| A | EQUITY AND LIABILITIES | ||
| 1. Shareholders fund | |||
| (a) Share Capital | 1,00,000.00 | 1,00,000.00 | |
| (b) Reserves and surplus | 38,92,241.42 | 40,99,568.42 | |
| (c) Money received against share warrants | - | - | |
| 2. Share application money pending allotments | |||
| 3. Non-current liabilities | 28,60,000.00 | 28,60,000.00 | |
| (a) Long-term borrowings | - | - | |
| (b) Deferred tax liabilities (net) | - | - | |
| (c) Other long term liabilities | - | - | |
| (d) Long term provision | - | - | |
| 3. Current liabilities | |||
| (a) Short-term borrowings | - | - | |
| (b) Trade payables | - | - | |
| (A) total outstanding dues of micro enterprises and small enterprises. | - | - | |
| (B) total outstanding dues of creditors other than micro enterprises and small enterprises. | 1,33,49,476.07 | 1,33,49,476.07 | |
| (c) Other current liabilities | 3,21,000 | 3,09,200 | |
| (d) Short-term provisions | - | - | |
| TOTAL | 2,05,22,717.49 | 2,07,18,244.49 | |
| B | ASSETS | ||
| 1. Non-current assets | |||
| (a) Property, Plant and Equipment and intangible assets | |||
| (i) Property, Plant and Equipment | - | - | |
| (ii) Intangible assets | - | - | |
| (iii) Capital work in progress. | - | - | |
| (iv) Intangible Assets under development. | - | - | |
| (b) Long-term loans and advances | 83,37,837.42 | 85,02,837.42 | |
| (c) Other Non-current assets | - | - | |
| 2. Current assets | |||
| (a) Current investments | - | - | |
| (b) Inventories | 23,50,000.00 | 23,50,000.00 | |
| (c) Trade receivables | 97,87,399.43 | 97,87,399.43 | |
| (d) Cash and cash equivalents | 47,480.64 | 78,007.64 | |
| (e) Short-term loans and advances | - | - | |
| (f) Other current Assets | - | - | |
| TOTAL | 2,05,22,717.49 | 2,07,18,244.49 |
After considering the above facts and circumstances, we are of the considered view that this application by the Corporate Applicant deserves to be Admitted. Accordingly, we pass the following Orders:
This application filed by the Corporate Applicant under section 10 of the Insolvency and Bankruptcy Code, 2016 is hereby ADMITTED for initiating the Corporate Insolvency Resolution Process against CJ INFRADEVELOPERS PRIVATE LIMITED (Corporate Applicant/Corporate Debtor). Moratorium order is passed for a public announcement as stated in Section 13 of the IBC, 2016.
As proposed by the Corporate Applicant, Mr. Chittaranjan Panda registered with the ICAI Insolvency Professionals Agency having Registration No.IBBI/IPA-001/IP-P01003/2017-2018/11650 resident of HIG-108, Kanan Vihar Phase-I, Patia, Bhubaneswar, Khorda, Odisha, Pin: 751031 having email ID: [email protected] is appointed as Interim ResolutionProfessional for ascertaining the particulars of creditors and convening a meeting of the Committee of Creditors for evolving a ResolutionPlan.
The moratorium is declared for the purposes referred to in Section 14 of the Insolvency & Bankruptcy Code, 2016. The IRP shall cause a public announcement of the initiation of Corporate Insolvency Resolution Process and call for the submission of claims under Section15. The public announcement referred to in clause (b) of sub-section (1) of Insolvency & Bankruptcy Code, 2016 shall be made immediately.
Moratorium under Section 14 of the Insolvency & Bankruptcy Code, 2016 prohibits the following: -
The institution of suits or continuation of pending suits or proceedings against the Corporate Debtor including execution of any judgment, decree or order in any Court of Law, Tribunal, Arbitration Panel or other Authority;
Transferring, encumbering, alienating or disposing of by the Corporate Debtor 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 Debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002;
The recovery of any property by an owner or lessor where such property is occupied by or in possession of the Corporate Debtor.
The supply of essential goods or services to the Corporate Debtor as may be specified shall not be terminated or suspended or interrupted during the moratorium period.
The provisions of sub-Section (1) shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator.
The order of moratorium shall take effect the date of admission till the completion of the Corporate Insolvency Resolution Process.
At any time during the Corporate Insolvency Resolution Process period, if the Adjudicating Authority approves the Resolution Plan under sub-section (1) of Section 31 or passes an order for liquidation of Corporate Debtor under section 33, the moratorium shall cease to have effect from the date of such approval or liquidation order, as the case may be.
Necessary public announcement as per Section 15 of the IBC, 2016 may be made by the Resolution Professional upon receipt of the copy of this order.
The Resolution Professional shall conduct CIRP in time boundmanner as per Regulation 40A of IBBI (Insolvency Resolution Process for Corporate Persons) Regulation, 2016.
The Interim Resolution Professional should convene a meeting of the Committee of Creditors and submit the resolution passed by the Committee of Creditors.
Registry is hereby directed to communicate the order to the Corporate Applicant/Corporate Debtor and to the Interim Resolution Professional and the concerned Registrar of Companies, within seven working days and upload the same on website immediately after pronouncement of the order.
The IRP shall also serve a copy of this order to the various departments such as Income Tax, GST, State Trade Tax, and Provident Fund etc. who are likely to have their claim against the Corporate Applicant/Corporate Debtor as well as to the trade union/employee's association so that they are informed of the initiating of CIRP against the Corporate Applicant/ Corporate Debtor timely.
The commencement of the Corporate Insolvency Resolution Process shall be effective from the date of this order.
Let the certified copy of the order be issued upon compliance with requisite formalities.
Accordingly, CP (IB) No. 46/CB/2023 is Allowed and Disposed off.