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Judgment
ORDER
Per: Balraj Joshi, Member (Technical)
This Court convened through hybrid mode today.
The present Petition has been filed by Kosons Forest Products Private Limited, CIN: U36104WB1996PTC079781, the Corporate Applicant, under section 10 of the Insolvency and Bankruptcy Code, 2016 (the Code) for initiation of Corporate Insolvency Resolution Process (CIRP) against itself. The Application has been filed through its Authorised Representative, Mr. Naresh Kothari, duly authorised vide Board Resolution dated 17 November 2021. A copy of the Board Resolution dated 17 November 2021 is annexed to the Petition and marked as Annexure- B on Page 39.
The total debt is owed to the
Financial Creditors is Rs.3,86,93,236/- (Rupees Three Crore Eighty Six Lakh Ninety Three Thousand Two Hundred and Thirty Six only)
Operational Creditors is Rs.58,81,499/- (Rupees Fifty Eight Lakh Eighty One Thousand and Four Hundred and Ninety Nine only).
In 2004, Government of India started a mission to support such unit which were based on Bamboo as input under Ministry of Science & Technology named: "National Mission on Bamboo Applications". Under the mission it was decided to set up a Bamboo Flooring & Panel Board manufacturing unit in Guwahati. NMBA was to provide financial support to the extent of Rs.250 Lacs for purchase of machines. The Corporate Applicant had proposed to produce 20% of its total requirement of bamboo strip and the balance was to be supplied by four separate units set up by different entrepreneurs.
No such unit came into existence leading to shortage of strips of bamboo which was raw material for Corporate Applicant, leading to operations below the break even point, which in turn led to losses. Corporate Applicant operated the unit for little more than five years but had to ultimately shut the unit due to severe financial crunch which led to default in repaying its liabilities.
The reasons for applying for initiation of the CIRP by the Corporate Applicant are as follows: -
The Corporate Applicant defaulted in payment to Indian Bank, loan has been reassigned to Reliance Asset Reconstruction Company Limited.
The loan account was declared as NPA and thereafter assigned to Reliance Asset Reconstruction Company Limited.
The Technology Information Forecasting and Assessment Council sent a demand notice on 10 June 2011 and on 21 February 2013.
The members of the Corporate Applicant have given their consent by way of a resolution passed in the Annual General Meeting held 20 October 2021 to file the application under section 10 of the Code. A copy of the Resolution dated 20 October 2021 is annexed to the Petition and marked as Annexure- C at Page 40.
That the Corporate Person has two Financial Creditors, viz. Reliance Asset Reconstruction Company Limited and Technology Information Forecasting and Assessment Council and eight Operational creditors viz. Assam Industrial Development Corporation, Bharat Sanchar Nigam Limited, Sunn, Shillong, Swati Mining Private Limited, Provident Fund (payable), ESIC (payable), P Tax (payable) and CST (payable).
In support of its Application, the Corporate Applicant has submitted, inter alia, the following documents: -
Memorandum and Articles of Association of the Corporate Applicant.
Financial statements of the Corporate Debtor for the Financial Year being 20116-17 to 2020-2021.
List of financial creditors and operational creditors.
Copy of MGT 14 filed before the Ministry of Corporate Affairs.
The Corporate Applicant has proposed the name of Mr. Neeraj Kejriwal (Regn. No. IBBI/IPA-001/IP-P00392/2017-2018/10710) to function as the Interim Resolution Professional (IRP). Mr. Neeraj Kejriwal has submitted his written communication in Form 2. The written communication is annexed to the Petition and marked as Annexure-D on Pages 51-53.
We have heard the learned Counsel appearing for the Corporate Applicant and have perused the documents on record.
There is no dispute from any quarter towards the fact that the debt is due and payable by the Corporate Applicant to various creditors and that the Corporate Applicant is unable to pay the same.
The Corporate Applicant has furnished the books of accounts for the relevant period under section 10(3)(a); the Corporate Applicant has proposed the name of the IRP who has submitted its written consent (section 10(3)(b)); the Corporate Applicant has also filed the Special Resolution passed by shareholders in General meeting dated 20 October 2021 under section 10(3)(c).
The application is free from defects and complete in all aspects as required under the law. The Application shows that the Corporate Debtor is in default of a debt that is due and payable, and the default is more than the threshold amount as stipulated under section 4(1) of the Code at the relevant time. The default stands established and there is no reason to deny the admission of the present Application.
Therefore, in the light of the facts stated in the application and the evidence placed on record, this Adjudicating Authority admits this Application and orders initiation of CIRP against the Corporate Debtor under the following terms: -
The Application bearing C.P.(IB)No. 25/KB/2022 filed by the Corporate Applicant under section 10 of the Insolvency & Bankruptcy Code, 2016, is hereby admitted for initiating the Corporate Insolvency Resolution Process in respect of Shree Kosons Forest Products Private Limited [CIN: U36104WB1996PTC079781].
There shall be a moratorium under section 14 of the IBC.
The moratorium shall have effect from the date of this order till the completion of the CIRP or until this Adjudicating Authority approves the resolution plan under sub-section (1) of section 31 of the IBC or passes an order for liquidation of Corporate Debtor under section 33 of the IBC, as the case may be.
Public announcement of the CIRP shall be made immediately as specified under section 13 of the Code read with regulation 6 of the Insolvency & Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.
As per the proposal given by the Corporate Applicant, Mr. Neeraj Kejriwal (Regn. No. IBBI/IPA-001/IP-P00392/2017-2018/10710), having email id. nkejriwal.ip@gmail.com is appointed as the IRP for ascertaining the particulars of Creditors and convening a Committee of Creditors for evolving a Resolution Plan.
During the CIRP period, the management of the Corporate Person shall vest in the IRP or the RP, as the case may be, in terms of section 17 of the IBC. The officers and managers of the Corporate Person shall provide all documents in their possession and furnish every information in their knowledge to the IRP within one week from the date of receipt of this Order, in default of which coercive steps will follow.
The IRP/RP shall submit to this Adjudicating Authority periodical reports on quarterly basis with regard to the progress of the CIRP in respect of the Corporate Debtor.
The Corporate Applicant to pay to IRP a sum of Rs.3,00,000/-(Rupees Three Lakh only) to meet the initial costs, as per Regulation 33(3) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, which amount shall be adjusted at the time of final payment.
The Resolution Professional shall conduct CIRP in a time-bound manner as per Regulation 40A of IBBI (Insolvency Resolution Process for Corporate Persons) Regulation, 2016.
The Court Officer of this Court is hereby directed to communicate this Order to the Corporate Person and the IRP by Speed Post, email and WhatsApp immediately, and in any case, not later than two days from the date of this Order.
Additionally, the Corporate Person shall serve a copy of this Order on the IRP and on the Registrar of Companies, West Bengal, Kolkata by all available means for updating the Master Data of the Corporate Person. The said Registrar of Companies shall send a compliance report in this regard to the Registry of this Court within seven days from the date of receipt of a copy of this order.
CP (IB) No. 25/KB/2022 to come up on 29.07.2022 for filing the first periodical report.
A certified copy of this order may be issued, if applied for, upon compliance with all requisite formalities.