In re Vasoo Builders Private Limited (NCLT Bengaluru)
Conclusion: Application for voluntary initiation of Corporate Insolvency Resolution Process (CIRP) had been admitted under section 10 of IBC, 2016, read with Rule 7 of Insolvency and Bankruptcy (Application to Adjudicating Authority) as from the audited financials of assessee for the years 2020-2021 to 2022-2023, it was seen that the Corporate Applicant was suffering substantial Losses.
Held: The petition was filed u/s 10 of IBC by Vasoo Builders Pvt. Ltd. (Corporate Applicant) seeking initiation of CIRP read with Rule 7 of Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. The total default amount was stated to be 27,46,30,139/- (Rupees Twenty-Seven Crore Forty-Six Lakh Thirty Thousand One Hundred and Thirty-Nine Only) comprising Rs. 8,24,70,225/- against Financial Creditors and Rs. 19,21,59,914/- against the Operational Creditor, as per Part III of Form 6 filed by assessee. Financial Creditor (SBI) opposed admission, alleging incorrect default date, fabricated balance sheets, suppression of DRT recovery certificate, and bar of limitation as the date of default was 17.04.2016 and the recovery certificate was issued on 24.01.2019. However, the instant Petition had been filed on 07.04.2024, beyond the three-year limitation period.. Corporate Applicant contended that limitation did not apply to Section 10 petitions, and that necessary requirements under Form-6 and Section 10 were duly satisfied, including shareholders’ special resolution and Financial Creditor had failed to bring anything on record to establish that assessee could discharge liability towards the debt owed to the Financial Creditor. It was held that on careful examination of the facts of the case, it was found that there was a debt due against assessee above prescribed threshold which had become overdue and there had been a default in payment of the same. There was no delay in filing of the Application by the Corporate Applicant under section 10 of IBC, 2016 due to the non-application of The Limitation Act, 1963. It was also observed that assessee had not been earning profit to repay its debts. The recovery certificate further established debt. From the audited financials of assessee for the years 2020-2021 to 2022-2023, it was seen that the Corporate Applicant was suffering substantial Losses. The order of moratorium should have effect from the date of this order till completion of the Corporate Insolvency Resolution Process or until this Authority approved the Resolution Plan under sub-section (1) of Section 31 or passed an order for liquidation of Corporate Debtor under Section 33, as the case may be.
