- (1.) This Company Petition has been filed by Corporate Debtor Burn Standard Company Limited in Form 6 under Rule 7 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 and supported by an affidavit to initiate Corporate Insolvency Resolution Process. The application has been submitted in Form 6 under Rule 7 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 and supported by an affidavit to initiate Corporate Insolvency Resolution Process as provided under the Insolvency and Bankruptcy Code 2016.
(2.) It has been stated in the application that reference made to the BIFR in view of the proviso to section 4 of SICA Repeal Act stands abated and he is at liberty to submit application within 180 days, from the commencement of Insolvency and Bankruptcy Code 2016 to NCLT. The Applicant therefore has made the present Petition within the 180 days time frame before the NCLT. The applicant has also submitted a chart representing the correspondence of the Financial creditors and/or operational creditors and the amount outstanding to them which is Annexure 5(a) and 5(b) at pages 17 and 18 to 41 respectively of the application. It has been stated in the application that the company is in default of about Rs.81,902,987.43 with respect to financial creditors which is at Annexure-5 (b) at page 41 of the application. The particulars of the financial creditors and operational creditors is given in the table below including secured and unsecured creditors, which is at Annexure 5(a) and 5(b) (pages 18 to 41) with the application. Company has also been making loss as could be seen from the balance-sheet 2016-17 on account of its operation.
(3.) Accumulated losses at the end of the financial year 2016-17 also shows accumulated loss of Rs.284.26 Crores. The applicant has also given a list of creditors regarding the default committed with respect to amount due to the creditors (both financial as well as operational creditors) , as required under section 10 of the IBC, 2016. The figures reveal that there is little possibility of the company paying back the principal amount of borrowings in its entirety as well as the interest accrued thereupon from operations of the company. In the circumstances mentioned above, we admit the petition for initiating the Corporate Resolution Process and declare a moratorium and public announcement as stated in section 13 of IBC 2016. The relevant sections 13 and 14 are reproduced below for the purpose of convenience. 13. Declaration of moratorium and public announcement (1) The Adjudicating Authority, after admission of the application under section 7 or section 9 or section 10, shall, by an order-fa) declare a moratorium for the purposes referred to in section 14; (b) cause a public announcement of the initiation of corporate insolvency resolution process and call for the submission of claims under section 15; and (c) appoint an interim resolution professional in the manner as laid down in section 16. (2) The public announcement referred to in clause (b) of sub-section (1) shall be made immediately after the appointment of the interim resolution professional. 14. Moratorium (1) Subject to provisions of sub-sections (2) and (3) , on the insolvency commencement date, the Adjudicating Authority shall by order declare moratorium for prohibiting all of the following, namely:- (a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgement, decree or order in any court of law, tribunal, arbitration panel or other authority; (b) transferring, encumbering, alienating or disposing of by the corporate debtor 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 corporate debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002); (d) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor. (2) The supply of essential goods or services to the corporate debtor 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 the1-corporate insolvency resolution process. Provided that where at any time during the corporate insolvency resolution process period, if the Adjudicating Authority approves the resolution plan under subsection (1) of section 31 or passes an order for liquidation of corporate debtor under section 33, the moratorium shall cease to have effect from the date of such approval or liquidation order, as the case may be.";