Corporate debtor may file application for initiating insolvency resolution process

By | May 6, 2017
(Last Updated On: May 6, 2017)

Bench National Company Law Tribunal (NCLT), Principal Bench, New Delhi

Operational Creditor M/s. Incredible Unique Buildcon Pvt. Ltd.

Corporate Debtor M/s. Clutch Auto Ltd.

Amount of Default 12.88 Cr.

Date of Order 10-04-2017

Relevant Section Section 10 of the Insolvency and Bankruptcy Code, 2016 read with Rule 7 of the

Insolvency and Bankruptcy (Application to Adjudication Authority) Rules, 2016 – Initiation of corporate Insolvency resolution process by Corporate applicant

Facts of the Case The ‘corporate debtor’ company is in default for the last more than 3 years. The list of ‘operational creditors’ which contains as many as 293 names and a total sum owed to them is declared to be Rs.12,88,32266. The petitioner has disclosed the details of property against which the loan of the corporate debtor is fully or partially secured along with details of the date of its creation, its estimated value etc. A copy of the audited financial statements of the ‘corporate debtors’ along with other relevant documents have been placed before the Tribunal. A reference was filed before the BIFR and the order of admission of reference passed in 2014 has also been placed before the Tribunal.

Decision of the Tribunal A perusal of Section 10 would show that a corporate debtor may file such application for initiating the insolvency resolution process where it has committed a default. A perusal of the paper book would show that books of accounts and other attendant documents have been filed. The petitioner itself has admitted default.

Accordingly, the Tribunal admitted the Petition and appointed the Insolvency Resolution Professional. The Tribunal dismissed the application filed by the operational creditor under section 9 of the Code with the observation that ‘operational creditor’ may file its claim before the Insolvency Resolution Professional.

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