Orator Marketing Pvt. Ltd. vs M/s Samtex Desinz Pvt. Ltd.

Per P.S.N. PRASAD, MEMBER (JUDICIAL)

This is an application filed by the Applicant, under section 60(5) of the IBC, 2016, read with Rule 11 of NCLT Rules, 2016 seeking a fresh decision in CP No. IB-908/ND/2020, wherein the Hon'ble Supreme Court of India has set aside the order of the Hon'ble NCLT and NCLAT. Thus, directing the Adjudicating Authority to decide the matter afresh in the light of findings given in the order by the Hon'ble Supreme Court of India, in Civil Appeal No. 2231/2021. The details leading to the filing of this application as averred by the Applicant are as follows:

This Tribunal has gone through the documents filed by the applicant and heard the arguments made by the counsel for the applicant. The applicant prayed to admit the IB no. 908/(ND)/2020 i.e., application under section 7 of IBC, 2016 and to direct the Commencement of CIR Process against the Respondent.

From the perusal of the Application, it is clear that the Hon'ble NCLT, vide its order dated 23.10.2020 in IB no. 908/ND/2020, is of the view that neither the present claim of the Financial Creditor can be termed to be a 'Financial Debt' nor does the Financial Creditor comes within the meaning of 'Financial Creditor' thereby dismissing the petition. However, the Hon'ble Supreme Court of India vide its order dated 26.07.2021 in Civil Appeal No. 2231/2021 at para 31 and 32 held that:

Thus, in view of the above said judgement by the Hon'ble Supreme Court of India the main petition under section 7 of the IBC, 2016 need to be decided afresh in light of the findings in the above said judgement.

Orator Marketing Pvt. Ltd. has filed the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (for brevity 'the Code'), read with rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (for brevity 'the Rules'), with a prayer to trigger Corporate Insolvency Resolution Process, in respect of respondent Company M/S Samtex Desinz Private Limited, referred to as the Corporate Debtor, on account of the default in payment of debt, by the Corporate Debtor, to the extent of Rs. 1,56,89340/- which had been extended to the Corporate Debtor.

The Respondent Company, M/S Samtex Desinz Private Limited, against whom initiation of Corporate Insolvency Resolution Process has been prayed for, was incorporated on 07.07.2017 having its registered office at Unit No 125. First Floor, Block Tribhuvan Complex, Ishwar Nagar, New Delhi.

The Applicant has filed the Application under section 7 of the Code in the Requisite Form-1, to initiate CIR Process against the Respondent under the code. The Applicant, as per Part- IV of the application, claimed that a sum of Rs. 1,56,89,470/- is due from the Respondent Company. it is pertinent to mention that as per order dated 28.09.2020 of the Hon'ble Tribunal, Mr. Sameer Bhardwaj, former representative and currently authorized signatory of the Respondent, has appeared along with the counsel and submitted that due to bad financial conditions they are unable to pay the amount.

The Applicant in the main petition has proposed the name of Mr. Rabindra Kumar Mintri to act as the Interim resolution Professional having Registration No. IBBI/IPA-001/IP-P00707/2017-18/11194 However, the Applicant vide IA no. 3682 of 2021 has prayed that, as Mr. Rabindra Kumar Mintri who had earlier given consent to act as the IRP, is now no longer able to continue thus, the Applicant proposed the name of Mr. Vimal Kumar, IRP having Registration No. IBBI/IPA-002/IP-N00995/2020-2021/13236 to act as IRP as Form 2 has been duly annexed with the Application.

In the light of the aforesaid facts, we find that the documents submitted by the Financial Creditor and the Corporate Debtor clearly substantiate the Financial Creditor's claim that the Corporate Debtor has defaulted on repayment of the debt amount also, as the Corporate Debtor himself submitted that due to poor financial condition they are unable to pay the amount. The Judgement of Hon'ble Supreme Court of India in Civil Appeal No. 2231/2021 has also clearly stated the fact that 'The definition of 'debt' is also expansive and the same includes inter alia financial debt. The definition of 'Financial Debt' in Section 5(8) of IBC does not expressly exclude an interest free loan. 'Financial Debt' would have to construed to include interest free loans advanced to finance the business operations of a corporate body.

In light of the above Judgement, after giving careful consideration to the entire matter, hearing the arguments of the parties and upon appreciation of the documents placed on record to substantiate the claim, this Tribunal admits this petition and initiates CIRP on the Corporate Debtor with immediate effect.

Sub-section (3) (b) of Section 7 mandates the financial creditor to furnish the name of an Interim Resolution Professional. In compliance thereof the applicant has proposed the name of Mr. Vimal Kumar, for appointment as Interim Resolution Professional having registration number IBBI/IPA-002/IP-N00995/2020-2021/13236 having address at V 1104, The Hyde Park, Sector-78, NOIDA-201301. Mr. Vimal Kumar has agreed to accept the appointment as the interim resolution professional and has signed a communication in Form 2 in terms of Rule 9(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. There is a declaration made by him that no disciplinary proceedings are pending against him in Insolvency and Bankruptcy Board of India or elsewhere. Accordingly, it is seen that the requirement of Section 7 (3) (b) of the Code has been satisfied.

It is thus seen that the requirement of sub-section 5 (a) of Section 7 of the code stands satisfied as default has occurred, the present application filed under Section 7 is complete, and as no disciplinary proceeding against the proposed IRP is pending.

It is pertinent to mention here that, the Code requires the Adjudicating Authority to only ascertain and record satisfaction in a summary adjudication, as to the occurrence of default before admitting the application. The material on record clearly goes to show that respondent had availed the credit facilities and has committed default in repayment of the outstanding loan amount.

We are satisfied that the present application is complete in all respect and the applicant financial creditor is entitled to claim its outstanding financial debt from the corporate debtor and that there has been default in payment of the financial debt.

As a sequel to the above discussion and in terms of Section 7 (5) (a) of the Code, the present application is admitted.

Mr. Vimal Kumar, having registration number IBBI / IPA-002 / IP-N00995/ 2020-21 / 13236, with address at V 1104, The Hyde Park, Sector-78, NOIDA-201301, is appointed as the Interim Resolution Professional.

In pursuance of Section 13 (2) of the Code, we direct that public announcement shall be made by the Interim Resolution Professional, immediately (3 days as prescribed by Explanation to Regulation 6(1) of the IBBI Regulations, 2016) with regard to admission of this application under Section 7 of the Insolvency & Bankruptcy Code, 2016.

We also declare moratorium in terms of Section 14 of the Code. The necessary consequences of imposing the moratorium flows from the provisions of Section 14 (1) (a), (b), (c) & (d) of the Code. Thus, the following prohibitions are imposed:

It is made clear that the provisions of moratorium shall not apply to transactions which might be notified by the Central Government or the supply of the essential goods or services to the Corporate Debtor, as may be specified, are not to be terminated or suspended or interrupted during the moratorium period. In addition, as per the Insolvency and Bankruptcy Code (Amendment) Act, 2018, which has come into force w.e.f. 06.06.2018, the provisions of moratorium shall not apply to the surety in a contract of guarantee to the corporate debtor in terms of Section 14 (3) (b) of the Code.

The Interim Resolution Professional shall perform all his functions contemplated, inter-alia, by Sections 15, 17, 18, 19, 20 & 21 of the Code and transact proceedings with utmost dedication, honesty and strictly in accordance with the provisions of the Code, Rules and Regulations. It is further made clear that all the personnel connected with the Corporate Debtor, its promoters or any other person associated with the Management of the Corporate Debtor, are under legal obligation under Section 19 of the Code to extend every assistance and cooperation to the Interim Resolution Professional, as may be required by him, in managing the day-to-day affairs of the 'Corporate Debtor'. In case there is any violation committed by the ex-management or any tainted/illegal transaction by ex-directors or anyone else, the Interim Resolution Professional would be at liberty to make appropriate application to this Tribunal with a prayer for passing an appropriate order. The Interim Resolution Professional shall be under duty to protect and preserve the value of the property of the 'Corporate Debtor' as a part of its obligation, imposed by Section 20 of the Code and perform all his functions strictly in accordance with the provisions of the Code, Rules and Regulations.

The office is directed to communicate a copy of the order to the Financial Creditor, the Corporate Debtor, the Interim Resolution Professional and the Registrar of Companies, NCT of Delhi & Haryana, at the earliest possible but not later than seven days from today. The Registrar of Companies shall update its website by updating the status of 'Corporate Debtor' and specific mention regarding admission of this petition must be notified to the public at large.