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Judgment
O R D E R
Per Coram
The instant application has been filed by M/s Pipe Field India Private Limited (hereinafter ‘Corporate Debtor’) under Section 10 of the Insolvency & Bankruptcy Code, 2016 (hereinafter ‘the Code’) read with Rule 7 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 for initiation of Corporate Insolvency Resolution Process in respect of the Corporate Debtor, Pipe Field India Private Limited. The prayer made is to admit the Application, to initiate the Corporate Insolvency Resolution Process against the Corporate Debtor, declare moratorium, and appoint an Interim Resolution Professional.
As per Part I of the petition, Corporate Debtor is a Private Limited Company with Corporate Identification Number: U28110KL2013PTC033705 and having its registered office at 35/762, Pipe Field, North Janatha Road, Palarivattom PO, Ernakulam, Kerala, India – 682 025. The Corporate Debtor has a Managing Director, Mr. Ajith Bhaskaran, and a director, Mrs. Anupama Ajith, and a paid-up share capital of Rs. 9,95,00,000.00/-.
As per Part II of the petition, the Corporate Debtor has proposed the name of one Mr. K.P. Dileep, IBBI Registration Number: IBBI/IPA-001/IP-P01310/2018-2019/12220, as the Interim Resolution Professional.
Part III of the petition shows that the total amount of default towards financial creditors is Rs. 18,47,35,694/- and the total amount in default towards operational creditors is Rs. 2,00,25,246/-. The particulars of financial/ operational debt, documents, records, and evidence of default as described below:
Details of financial debts and operational debts availed and default thereof.
The letter of arrangement dated 24.11.2021.
Original Application under SARFAESI Act and notices annexed with this Petition as Annexure I (b).
Copy of audited financial statements of the Corporate Debtor for financial years ending 2020-2021 and 2021-2022.
Provisional statements for 2022-2023, 2023-2024, and 2024-2025 and as on 20.05.2025.
The copy of the relevant books of accounts of the Corporate Debtor evidencing the default to the financial creditors and operational creditors is annexed with this petition as Annexure IV.
The default committed by the Corporate Debtor and the loan Accounts of the Corporate Debtor became NPA on 02.04.2019. The Financial Creditor has issued a demand notice under Section 13(2) of the SARFAESI Act on 13.11.2024 to the Corporate Debtor and filed an original application, being OA No. 277 of 2024, before the DRT on 10.05.2024. The amount of default committed by the applicant is Rs. 20,47,60,940/-, which is more than the minimum threshold limit of One Crore for initiating the corporate insolvency resolution process of the Corporate Debtor.
On 03.07.2025, this Adjudicating Authority directed the financial creditor to file its reply within one week. On 18.07.2025, State Bank of India filed its reply statement and stated that the State Bank of India, through its SME Branch, Ernakulam, since 2010, has granted various financial assistance to the Corporate Debtor, Pipe Field India Private Limited, which is engaged in the business of roofing sheets, steel tubes, and pipes. The sanction was renewed from time to time, and the last sanction was made vide letter of arrangement dated 24.11.2021, by which the Respondent has granted/renewed a total credit facility of Rs. 25.50 Crores to the Corporate Debtor Respondent has granted the following credit facilities.
The above facilities were secured by first charge on the current assets of the company by way of hypothecation of stocks of raw materials, stock in process, finished goods, including present and future, and charges over the entire current assets of the company. The Corporate Debtor has created a mortgage of the properties by deposit of title deeds, more fully described in the sanction letter. The Loan was also secured by the personal guarantee of Mr. Ajith Bhaskaran, Mrs. Vanaja Bhaskaran, Mr. Bhaskaran Padinjarayil, and Mrs. Anupama Ajith, and the corporate guarantee of Roofco Trading Company Private Limited.
The Corporate Debtor defaulted in the repayment, and the debt was classified as Non-Performing Asset, in accordance with the directive/guidelines issued by the Reserve Bank of India on 02.04.2019. The Financial Creditor issued a demand notice on 07.02.2024 for repayment of the debt. However, no repayment was made by the Corporate Debtor.
The Corporate Debtor has also given a Corporate Guarantee to M/s. Roofco Trading Company Private Limited, Pipe Distributors and Pipe Field, partnership firms, and sister concerns of the Corporate Debtor, and all such accounts also became NPA on 02.03.2021, 26.08.2023, and 08.08.2023, respectively.
The State Bank of India initiated the SARFAESI Proceeding and issued a notice under Section 13(2) of the SARFAESI Act on 13.1 1 .2024 demanding to pay the total outstanding liability of Rs. 55,60,85,4881 as on 06.11.2024 within 60 days. However, no payment has been made by the Corporate Debtor.
The Financial Creditor has also filed OA No.277 of 2024 before the Debt Recovery Tribunal on 20.02.2024.
The total liability of the Corporate Debtor as on 15.07.2025 is Rs. 60,38,19,914.00, including the liability arising out of the Corporate Guarantee executed in favour of the Company M/s. Roofco Trading Company Private Limited, and the partnership firms Pipe Field and Pipe Distributors.
Since the Corporate Debtor has made default and is unable to pay its debt, the State Bank of India has no objection to admitting the application filed by the Corporate Debtor for initiating Corporate Insolvency Resolution Process under Section 10 of the Insolvency and Bankruptcy Code, 2016, subject to condition that the Applicant shall bear the CIRP Cost and the Respondent shall have the liberty to file the claim as on the insolvency commencement date.
We have heard the submissions made by Learned PCS for the Corporate Debtor Mr. N.R. Krishnan Unni, Learned Counsel Mr. Vinod P.V., representing the financial creditor State Bank of India. We have also perused the documents placed on record.
Since the Corporate Debtor itself comes before us with the prayer to admit it in Corporate Insolvency Resolution Process holding that it is Insolvent Company, we have only to see whether the Applicant has submitted along with the application (i) the information relating to the books of accounts and such other documents, (ii) information relating to Resolution Professional to be appointed and (iii) special resolution passed by the shareholders of the Corporate Debtor at least by ¾ of the total numbers.
Such an application can be rejected only on the ground that the application is incomplete or any disciplinary proceeding is pending against the proposed Interim Resolution Professional. In this case, no disciplinary proceeding is pending against the proposed Interim Resolution Professional.
It is observed that in the instant case, there was a debt due, and there was a default of the same. It is also observed from the reply of the financial creditor that no payment has been made by the Corporate Debtor. The Corporate Debtor, vide its Board resolution dated 18.05.2025, had resolved to file an application under Section 10 of the Code. The shareholders on 19.05.2025 in the Extraordinary General Meeting passed the resolution to initiate the Corporate Insolvency Resolution Process of the Corporate Debtor.
The Corporate Debtor has served a copy of this application to the Insolvency and Bankruptcy Board of India in Form 1A on 27.05.2025. The name of the Interim Resolution Professional has been proposed as per Section 10(3)(b) of the Code. The default amount meets the threshold limit as prescribed under Section 4 of the Code. The default claimed in the application is well within the limitation period to initiate the Corporate Insolvency Resolution Process proceeding. Hence, the application is complete and defect-free.
At this juncture, it will be advantageous to consider what the requirements are for admitting an application under section 10 of the Code, 2016. For this purpose, it is useful to refer the judgment of the Hon’ble NCLAT in Unigreen Global Pvt. Ltd. VS. Punjab National Bank & Ors. CA (AT) (INS. 81/2017) wherein it was held that:
"20.Under both Section 7 and Section 10, the two factors are common i.e. the debt is due and there is a default. Subsection (4) of Section 7 is similar to that of sub-section (4) of Section 10. Therefore, we hold that the law laid down by the Hon'ble Supreme Court in "Innoventive Industries Ltd. (Supra) is applicable for Section 10 also, wherein the Hon'ble Supreme Court observed as "The moment the adjudicating authority is satisfied that a default has occurred, the application must be admitted unless it is incomplete, in which case it may give notice to the applicant to rectify the defect within 7 days of receipt of a notice from the adjudicating authority". 22. Section 10 does not empower the Adjudicating Authority to go beyond the records as prescribed under Section 10 and the information as required to be submitted in Form 6 of the Insolvency and Bankruptcy (Application to the Adjudicating Authority) Rules, 2016 subject to ineligibility prescribed under Section 11. If all information is provided by an applicant as required under Section 10 and Form 6 and if the Corporate Debtor is otherwise not ineligible under Section 11, the Adjudicating Authority is bound to admit the application and cannot reject the application on any other ground. 23. Any fact unrelated or beyond the requirement under I & B Code or Forms prescribed under Adjudicating Authority Rules (Form 6 in the present case) are not required to be stated or pleaded. Non-disclosure of any fact, unrelated to Section 10 and Form 6 cannot be termed to be suppression of facts or to hold that the Corporate Debtor has not come with clean hand except the application where the 'Corporate Debtor' has not disclosed disqualification, if any, under Section 11. Nondisclosure of facts, such as that the 'Corporate Debtor' is undergoing a corporate insolvency resolution process; or that the 'Corporate Debtor' has completed corporate insolvency resolution process twelve months preceding the date of making of the application; or that the Corporate Debtor has violated any of the terms of resolution plan which was approved twelve months before the date of making of an application under the said Chapter; or that the Corporate Debtor is one in respect of whom a liquidation order has already been made can be a ground to reject the application under Section 10 on the ground of suppression of fact/not come with clean hand. *******************************************************
25.Similarly, if any action has been taken by a 'Financial Creditor' under Section 13(4) of SARFAESI Act, 2002 against the Corporate Debtor or a suit is pending against Corporate Debtor under Section 19 of DRT Act, 1993 before a Debt Recovery Tribunal or appeal pending before the Debt Recovery Appellate Tribunal cannot be a ground to reject an application under Section 10, if the application is complete."
We are of the view that the existence of debt and default is established, and no winding up proceedings are pending against the Corporate Debtor, and the Corporate Debtor is not covered by the ineligibilities provided under Section 11 of the Code, 2016. We are satisfied that the Corporate Debtor is entitled to move an application under Section 10 of the Code in view of the admitted outstanding financial debt as well as operational debt, and default of the same by the Corporate Debtor.
In view of the aforesaid observations, we hereby admit the petition and pass the following Orders.
A. The petition bearing CP (IBC)/12/KOB/2025, by Pipe Field India Private Limited, (CIN: U28110KL2013PTC033705), the Corporate Debtor under Section 10 of Code read with Rule 7 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 for initiation of Corporate Insolvency Process in respect of the Corporate Debtor is ADMITTED.
B. The moratorium under section 14 of the IBC, 2016 is declared for prohibiting all of the following in terms of section 14(1) of the IBC, 2016.
a. 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;
b. transferring, encumbering, alienating or disposing of by the Corporate Debtor any of its assets or any legal right or beneficial interest therein;
c. 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; d. the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the Corporate Debtor.
C. The moratorium under section 14 of the Code shall come to effect from the date of this order till the completion of the Corporate Insolvency Resolution Process or until this Adjudicating Authority approves the Resolution Plan under sub-section (1) of section 31 or passes an order for liquidation of the Corporate Debtor under Section 33 of the IBC 2016, as the case may be.
D. However, in terms of Section 14(2) to 14(3) of the Code, the supply of essential goods or services to the Corporate Debtor as may be specified, if continuing, shall not be terminated or suspended, or interrupted during the moratorium period.
E. Public announcement of the Corporate Insolvency Resolution Process shall be made immediately as specified under section 13 of the Code read with Regulation 6 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Person) Regulations 2016.
F. The Corporate Debtor has proposed the name of one Mr.K.P. Dileep, IBBI Registration Number: IBBI/IPA-001/IP-P01310/2018-19/12220 email: [email protected]., as Interim Resolution Professional (IRP) and a written communication in the format prescribed under Form 2 of the Insolvency and Bankruptcy Board of India (Application to Adjudicating Authority) Rules, 2016 has been filed by the proposed IRP who is appointed as the IRP to take forward the process of Corporate Insolvency Resolution of the Corporate Debtor. The designated IRP must take any additional actions in this regard that are mandated by the law, more specifically Sections 15, 17, and 18 of the Code. The powers of the Board of Directors of the Corporate Debtor shall stand superseded as a consequence of the initiation of the Corporate Insolvency Resolution Process in relation to the Corporate Debtor in terms of the provisions of the Code. The fee is payable to IRP or as the case may be the Resolution Professional shall comply with such Regulations, Circulars, and Directions as may be issued by the Insolvency and Bankruptcy Board of India (IBBI). The IRP shall carry out his functions as contemplated by Sections 15 to 21 of the Code.
G. During the Corporate Insolvency Resolution Process period the management of the Corporate Debtor shall vest with the IRP or, as the case may be, the Resolution Professional in terms of section 17 of the Code. The officers and managers of the Corporate Debtor 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.
H. The IRP/Resolution Professional shall submit to this Adjudicating Authority periodical reports concerning the progress of the Corporate Insolvency Resolution Process in respect of the Corporate Debtor.
I. The Corporate Debtor shall deposit a sum of Rs. 2,00,000/-(Two Lakhs Only) with the IRP to meet the expenses arising out of issuing publication and inviting claims. These expenses would be subject to approval by the Committee of Creditors (COC). The Applicant would be liable to bear the entire expense of the CIRP process in accordance with the law and the proceeding.
J. In terms of Section 7 (7)(a) of the Code, the Registry is hereby directed to communicate a copy of this Order to the Corporate Debtor, financial creditors, and IRP by Speed Post & e-mail immediately, and in any case, not later than two working days from the date of this order.
K. Additionally, the Corporate Debtor shall serve a copy of this Order on the IRP and the Registrar of Companies, Kerala, by all available means for updating the Master Data of the Corporate Debtor. The Registrar of Companies shall send a compliance report in this regard to the Registry of this Tribunal within seven days from the date of receipt of a copy of this order.
The Registry is directed to send e-mail copies of the order forthwith to all the parties and their Ld. Counsel for information and for taking necessary steps.
Certified Copy of this order may be issued, if applied for, upon compliance with all requisite formalities