Kingbell Properties Private Limited vs R.D. Apparels Private Limited

Per Shri M.B. Gosavi, Member (J):

M/s. Kingbell Properties Pvt. Ltd., the Financial Creditor filed this application under Section 7 of Insolvency and Bankruptcy Code, 2016 against M/s R.D. Apparels Private Limited (Corporate Debtor) to start Corporate Insolvency Resolution Process (in short "CIRP") of the Corporate Debtor on the ground that the Corporate Debtor committed default in paying Financial debt of Rs. 10,76,333/- (Rupees Ten Lakh Seventy-Six Thousand Three Hundred Thirty Three Only).

The Financial Creditor states that it has granted and disbursed corporate advance of Rs. 10,00,000/- (Rupees Ten Lakh Only) to the Corporate Debtor vide RTGS through its Bank dated 19.11.2018. The loan was repayable on demand. The Corporate Debtor issued a cheque No. 438988 dated 16.08.2019 for Rs. 10,00,000/- drawn on Punjab National Bank to the Financial Creditor towards repayment. However, it was dishonored and returned unpaid on 11.11.2019 for reason stated as "Insufficient Funds". On 12.11.2019, the financial creditor sent notice to recall entire loan amount along with interest. Since, it is not paid, this Petition is filed.

Corporate Debtor appeared through one of its directors Mr. Ankur Agarwal. He filed affidavit in reply. We have gone through the contents of the reply. We find that the Corporate Debtor did not dispute that financial debt is due and payable by it to the Financial Creditor and it has committed default in paying the same. These are only facts which this Adjudicating Authority has to consider while admitting or rejecting the application.

Apart from that, the Financial Creditor produced on record his Bank Statement to show that on 19.11.2018, sum of Rs. 10 Lakh was paid to the Corporate Debtor by way of RTGS. It has also produced on record loan recall notice and the cheque which Corporate Debtor handed over to the Financial Creditor towards repayment of debt and the cheque was dishonored.

Since there is no dispute about the existence of debt and its default by the Corporate Debtor. We admit this application to initiate CIRP of the Corporate Debtor.

The Financial Creditor suggested name of one Mr. Rajendra Kumar Agarwal having registration no. IBBI/IPA-001/IP-N00324/2017-18/10594 for appointment of Interim Resolution professional (in short "IRP"). It appears from record that no disciplinary proceeding is pending against the IRP. From evidence on record, we hold that the Financial Creditor established that the Corporate Debtor committed default in paying the financial debt of more than Rs. 10 Lakh. This application is well within time. It is defect free. Hence, we admit the Corporate Debtor in CIRP with following orders: -

The application filed by the Financial Creditor under section 7 of the Insolvency & Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process against the Corporate Debtor, M/s R.D. Apparels Private Limited is hereby admitted. ii) We declare a moratorium and public announcement in accordance with Sections 13 and 15 of the IBC, 2016. iii) 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 Section 15. The public announcement referred to in clause (b) of sub-section (1) of Section 15 of Insolvency & Bankruptcy Code, 2016 shall be made immediately. iv) 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 Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002);

The recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor.

The supply of essential goods or services to the corporate debtor as may be specified shall not be terminated, suspended, or interrupted during moratorium period.

vi) 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.

vii) The order of moratorium shall have effect from the date of admission till the completion of the corporate insolvency resolution process.

viii) Provided that where 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.

ix) Necessary public announcement as per Section 15 of the IBC, 2016 may be made.

Mr. Rajendra Kumar Agarwal having registration no. IBBI/IPA-001/IP-N00324/2017-18/10594, email id. rkaco93@yahoo.co.in, having address for correspondence- Diamond Arcade, 3rd Floor, Suite No. 301A, 68 Jessore Road, Kolkata-700055 is appointed as Interim Resolution Professional for ascertaining the particulars of creditors and convening a Committee of Creditors for evolving a resolution plan.

xi) The Applicant/ Financial Creditor to pay sum of Rs. 5,00,000/- (Rupees Fifty Thousand Only) in the ESCROW Account in SBI to be operated through the Registrar, NCLT, Kolkata bench, for the purpose of meeting the preliminary expenses for initiating the CIRP by the IRP, as per Regulation 33(2) of IBBI (Insolvency Resolution Process for Corporate Persons) Regulation 2016.

xii) The Resolution Professional shall conduct CIRP in time bound manner as per Regulation 40A of IBBI (Insolvency Resolution Process for Corporate Persons) Regulation, 2016.

xiii) Registry is hereby directed under section 9(5) of the I.B. Code, 2016 to communicate the order to the Financial Creditor, the Corporate Debtor and to the I.R.P. by Speed Post as well as through e-mail.

List the matter on 01.05.2020 for the filing of the progress report.

Certified copy of the order may be issued to all the concerned parties, if applied for, upon compliance with all requisite formalities.