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Judgment
[Per : Bench]
This Application is filed by the Corporate Applicant M/s. Infiniti Techlabs LLP (hereinafter referred to as the Corporate Debtor/Petitioner) under Section 10 read with Rule 7(1) of the Insolvency and & Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP), against itself.
The facts on the basis of which, the CIRP was sought to be initiated in respect of the Corporate Debtor (CD) are as follows:
The founder of the Corporate Debtor Mr. K. Ashish Dev passed away unexpectedly in the month of September, 2018 due to cardiac arrest. The balances were lying to the credit to his wife. Thereafter, the partners appointed Mr. Ajay Kaushik as CEO. The firm started scouting for buyers. Mr. Veda Vyas Gangula had advanced an unsecured loan with an understanding that the same will be repaid in short term, but due to the unforeseen and unexpected turn of events, the repayment was getting delayed. It was later agreed to compensate him by paying an interest of 18% from 2019 onwards to get consent for sale of the division. Due to the continuing mismatch in the operational cash flows, Mr. Veda Vyas Gangula was not paid the agreed amount as per the agreement and hence he demanded repayment of entire loan along with outstanding interest. The firm was hopeful of paying the interest and correcting the default by somehow managing higher realization from operations from expected confirmed orders of Rs.2+ crores from products divisions sales leads by April-May of 2020. However, with the onset of Covid-19, the revenues of the firm had dwindled drastically, requiring infusion of additional funds.
By mid May 2020, it has become clear that the expected sales orders from various clients have got delayed indeterminately. The CEO resigned, as he decided to move back to his hometown in Delhi.
In the meeting held on 28.05.2020, it is noted that the LLP has defaulted in payments to the tune of Rs.1,30,41,351/- to various Financial Creditors and Statutory dues to be paid mounted to Rs.85,96,888/-. The Company was choked for funds and there was a severe financial crunch. The firm, in such a situation, does not have viability to honour its liabilities in a timely manner. Hence, this application.
The Respondents did not appear and were set ex-parte. No counter was filed.
Heard the Petitioner’s Counsel and perused the written submissions filed by the Petitioner’s Counsel in which, the contents of the Application are reiterated. Considering that the reasons put forth by the Petitioner would suffice to order CIRP against the Petitioner/Corporate Debtor, this Application is allowed with the following directions:
The Application is admitted and this Adjudicating Authority orders the commencement of the Corporate Insolvency Resolution Process, which shall ordinarily be completed within the timelines stipulated in the Code, 2016 (as amended), reckoning from the date on which this order is passed.
The Applicant has proposed the name of Mr. Kedari Narsimha Rao as the Interim Resolution Professional (hereinafter referred to as the "IRP"). Accordingly, this Adjudicating Authority appoints Mr. Kedari Narsimha Rao, Registration Number of IP: IBBI/IPA-001/IP-P01531/2018-2019/12397, H.No.16-2-721/3/1, Akbar Bagh, Malakpet Colony, Hyderabad – 500 036, Phone No.9966408229, E-mail ID: kedarinarsimha@yahoo.co.in as the Interim Resolution Professional. The IRP is directed to file Authorization for Assignment within three days from the date of this order.
The IRP is directed to take charge of the management of the Corporate Debtor, immediately. He is also directed to cause public announcement as prescribed under Section 15 of the Code, 2016, within three days from the date of receipt of this order, and call for submissions of claim in the manner as prescribed.
Moratorium is, hereby, declared and shall have effect from the date of this order till the completion of the CIRP, for the purposes referred to in Section 14 of the Code, 2016. It is hereby ordered that all of the following are prohibited:
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 or law, tribunal arbitration panel or other authority;
Transferring, encumbering, alienating or disposing of by the Corporate Debtor any of its assets or any legal rights 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.
Notwithstanding anything contained in any other law for the time being in force, a license, permit, registration, quota, concession, clearances or a similar grant or right given by the Central Government, State Government, local authority, sectoral regulator or any other authority constituted under any other law for the time being in force, shall not be suspended or terminated on the grounds of insolvency, subject to the condition that there is no default in payment of current dues arising for the use or continuation of the license, permit, registration, quota, concessions, clearances or a similar grant or right during the moratorium period.
The supply of essential goods or services to the Corporate Debtor shall not be terminated, suspended or interrupted during the moratorium period. Further, if the IRP considers supply of any goods or services critical to protect and preserve the value of the Corporate Debtor and manage the operations of such Corporate Debtor as a going concern, then the supply of such goods or services shall not be terminated, suspended or interrupted during the period of moratorium, except where such Corporate Debtor has not paid dues arising from such supply during the moratorium period. Furthermore, the provisions of Sub-section (1) of Section 14 shall not apply to such transactions, agreements or other arrangement as may be notified by the Central Government in consultation with any financial sector regulator or any other authority.
The IRP shall comply with the provisions of Sections 13(2), 15, 17 & 18 of the Code, 2106. The Directors, Promoters or any other person associated with the management of Corporate Debtor are directed to extend all assistance and co-operation to the IRP as stipulated under Section 19 for discharging his functions under Section 20 of the Code, 2016.
The Corporate Applicant as well as the Registry is directed to send the copy of this Order to the IRP, to enable him to take charge of the assets etc. of the Corporate Debtor, and comply with this order as per the provisions of the Code, 2016.
The Registry is directed to communicate this Order to the Corporate Applicant.
The Registry shall also communicate this Order to the Registrar of Companies, Hyderabad, for updating the status of the Corporate Debtor in the website of the Ministry of Corporate Affairs.
Accordingly, this C.P. No. 112/10/HDB/2021 is allowed and stands disposed of.