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Judgment
Per Dr. V. K. Subburaj (Member Technical)
This is an application filed by Taipack Limited as a corporate applicant under Section 10 of the Insolvency and Bankruptcy Code, 2016 (“the Code”) seeking to initiate corporate insolvency resolution process (“CIRP”) of itself for the alleged default on the part of the Respondent in clearing the total debt of over Rs. 75,00,000/- owed to various creditors.
The Applicant company dealt in all types of adhesive, PVC films, synthetic rubber, packaging materials etc. and equipments required to manufacture these products.
The Applicant claims it has committed defaults on debts owed to J. Kirti & Brothers, Ram Kishore Nager Mal, Rishab Packages Ltd., Savioury Laboratories, Supreme Oriented Films Ltd., Suvidha Tubes Ltd. and the Central Excise Department.
A perusal of the documents filed by the Applicant shows that the defaults with regard to all the creditors listed above occurred between 1995 to 2001. It further appears that the Applicant had filed a reference before the Board for Industrial and Financial Reconstruction (“BIFR”) on 27.01.1997 under Section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 (“SICA”). Ultimately, the BIFR passed an order dated 14.03.2011 wherein it was directed that the Applicant be deregistered from SICA. This order was appealed against by the Applicant before the Appellate Authority for Industrial and Financial Reconstruction (“AAIFR”). The AAIFR, vide order dated 16.11.2015, recommended that the Applicant be wound up and the recommendation was sent to the concerned High Court for further action under Section 20(2) of SICA.
The Applicant has failed to mention if the winding up proceedings were initiated in the concerned High Court, however, a document has been annexed by the Applicant showing that the website of the High Court of Delhi does not reflect record of any cases filed bearing the Applicant’s name. Notwithstanding the order of the AAIFR, the Applicant has shown that it has defaulted on debts owed to the creditors listed above. Further, since the Applicant has acknowledged the existence of such debts in its financial statements for the financial years 2017-2018 and 2018-2019, the present application is not barred by limitation even though defaults occurred between 1995 to 2001. Thus, the present application is admitted and the CIRP of the Applicant is initiated.
A moratorium in terms of Section 14 of the Code is imposed forthwith in following terms:
“(a)the institution of suits or continuation of pending suits or proceedings against the Respondent 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 Respondent 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 Respondent in respect of its property including any action under the Securitization 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 Respondent.
(2)The supply of essential goods or services to the Respondent as may be specified shall not be terminated or suspended or interrupted during moratorium period.
(3)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.
(4)The order of moratorium shall have effect from the date of such order till the completion of the corporate insolvency resolution process."
The interim resolution professional ("IRP") proposed by the Applicant is Mr. B. N. Kalra (Email – bnkalra1954@gmail.com) and is being confirmed by this Bench. He shall take such other and further steps as are required under the statute, more specifically in terms of Section 15, 17 and 18 of the Code and file his report within 30 days before this Bench.