Authum Investment & Infrastructure Limited Vs Mohanbir Hi-Tech Build Private Limited (NCLT Delhi)
Conclusion: Provisions of moratorium should not apply to transactions which might be notified by the Central Government and the supply of the essential goods or services to the Corporate Debtor as may be specified, were not to be terminated or suspended or interrupted during the moratorium period. In addition, the provisions of moratorium should not apply to the surety in a contract of guarantee to the corporate debtor in terms of Section 14 (3) (b) of the Code.
Held: In the instant case, Financial Creditor, Authum Investment & Infrastructure Ltd., filed an application u/s 7 of IBC seeking initiation of CIRP against the Corporate Debtor, Mohanbir Hi-Tech Build Pvt. Ltd. The application was filed before the Adjudicating Authority on the ground that the Corporate Debtor has defaulted to make a payment of a sum of Rs. 488,52,85,932/- (Rupees Four Hundred Eighty-Eight Crores Fifty-Two Lakhs Eighty-Five Thousand Nine Hundred and Thirty Two) which includes the principal amount of Rs. 181,05,00,000/-, Interest as per terms of loan agreement amounting to Rs. 145,51,57,274/- and Penal Interest as per terms of loan agreement amounting to Rs. 161,96,28,658/-. The Adjudicating Authority vide its Order directed the Applicant to issue notice to the Respondent. Applicant duly issued the notice to the Respondent and filed an Affidavit of Service in this regard. During the course of arguments, the Counsel appearing on behalf of Corporate Debtor sought time to file Vakalatnama and time was granted. Despite being granted several opportunities, the Counsel appearing on behalf of the Corporate Debtor failed to file its Vakalatnama and reply. Henceforth, the Corporate Debtor had been set as ex-parte vide Order. Since the registered office of the Corporate Debtor was in Delhi, this Tribunal which had territorial jurisdiction over the Union Territory of Delhi, was the Adjudicating Authority in relation to the prayer for initiation of Corporate Insolvency Resolution Process in respect of Respondent Corporate Debtor under Section 7 of the Code. It was held that it was a settled law that while adjudicating a Section 7 application, the Adjudicating Authority had to satisfy itself regarding the existence of ‘Debt’ and ‘Default’. In the instant case, the twin conditions of Section 7 i.e. ‘Debt ’and ‘Default’ were established. It was made clear that the provisions of moratorium should not apply to transactions which might be notified by the Central Government and the supply of the essential goods or services to the Corporate Debtor as may be specified, were not to be terminated or suspended or interrupted during the moratorium period. In addition, as per the Insolvency and Bankruptcy Code (Amendment) Act, 2018 which had come into force w.e.f. 06.06.2018, the provisions of moratorium should not apply to the surety in a contract of guarantee to the corporate debtor in terms of Section 14 (3) (b) of the Code. The Interim Resolution Professional should perform all his functions as contemplated, inter-alia, 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. It was further made clear that all the personnel connected with the Corporate Debtor, its promoters or any other person associated with the Management of the Corporate Debtor were under legal obligation under Section 19 of the Code to extend every assistance and cooperation to the Interim Resolution Professional as may be required by him in managing the day-to-day affairs of the ‘Corporate Debtor’. In case there was any violation committed by the ex- management or any tainted/illegal transaction by ex-directors or anyone else, the Interim Resolution Professional would be at liberty to make appropriate application to this Adjudicating Authority with a prayer for passing appropriate orders. The Interim Resolution Professional should be under duty to protect and preserve the value of the property of the ‘Corporate Debtor’ as a part of his obligation imposed by Section 20 of the Code and perform all his functions strictly in accordance with the provisions of the Code, Rules and Regulations.
