21 November 2022



Central Bank of India Vs. NCML Industries Limited




In case of default, Financial creditor either by itself or jointly with other financial creditor could file application for initiating CIRP against Corporate Debtor

The 'Financial Creditor'-Central Bank of India has filed the instant application under Section 7 of the Insolvency and Bankruptcy Code, 2016 ('the Code') with a prayer to trigger the Corporate Insolvency Resolution Process in the matter of NCML Industries Limited. The 'financial creditor' is a body corporate constituted by and under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 ('Banking Companies Act'). The Corporate Debtor-NCML Industries Limited was incorporated on 26.09.1996. In the application, the Financial Creditor has given the details of financial debt granted to the 'Corporate Debtor' with the dates of disbursement.

The 'financial creditor' has placed on record an overwhelming evidence to prove the amount advanced and secured by Corporate guarantees. The 'corporate debtor' has opposed the admission of the application by arguing that, the petition is incomplete as no statutory details required in part IV of the prescribed form have been given. It is appropriate to mention that, the proforma has been prescribed by Rule 4 of the Rules known as Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. In part IV two columns are mentioned namely (1) total amount of debt granted with date(s) of disbursement (2) amount claimed to be in default and the date on which the default occurred. The Petitioner has given the particulars of financial debt in part IV satisfying all the aforesaid requirements.

Another objection raised by the Corporate Debtor is that the petition was not maintainable without joining the lead Bank. This objection would not detain present Tribunal as Section 7 of the Code itself shows that a financial creditor either by itself or jointly with other financial creditor may file an application for initiating Corporate Insolvency Resolution Process against a Corporate Debtor when a default has occurred. Therefore, there is no obligation to join the lead Bank.

Present petition is admitted. Shri Gian Chand Narang who is duly registered with Insolvency and Bankruptcy Board of India is hereby appointed as an Interim Resolution Professional.

In pursuance of Section 13(2) of the Code, it is directed that public announcement shall be made by the Interim Resolution Professional immediately (3 days as prescribed by Regulations) with regard to admission of this application under Section 7 of the Code. 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.

The Interim Resolution Professional shall perform all his functions contemplated 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. The Petition is disposed of.

Tags : Financial debt CIRP Appointment

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