Allowed

In the matter of Sail- Scl Kerala Limited CP(IBC)-48-KOB-2022

NCLT23 Mar 2023

Case brief

AI extract

What is this about?

The NCLT admitted an application filed by Canara Bank to initiate Corporate Insolvency Resolution Process (CIRP) against SAIL-SCL Kerala Limited, a joint venture government company. The court resolved disputes regarding limitation and the applicability of IBC to government entities, appointing an Interim Resolution Professional and imposing a moratorium.

What did the court decide?

The application was admitted, a moratorium under Section 14 was imposed, and Mr. Anish Agarwal was appointed as Interim Resolution Professional.

In the matter of Sail- Scl Kerala Limited… — Insolvency and Bankruptcy | NCLT (2023)

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IN THE NATIONAL COMPANY LAW TRIBUNAL KOCHI BENCH

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KOCHI

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CP(IBC)/48/KOB/2022

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(Under Section 7 of IBC, 2016 read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016)

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In the matter of:

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Canara Bank, ARM Branch Vs. M/s. SAIL- SCL Kerala Limited;

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MEMO OF PARTIES:

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CANARA BANK, Registered Head Office/Corporate Office at 112, J C Road Bengaluru, Karnataka, India;

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… Petitioner/Financial Creditor

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-Versus-

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SAIL – SCL KERALA LIMITED, Registered office at Steel Nagar, P.B No. 42, Kolathara P.O., Calicut, Kerala – 673 655.

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… Respondent/ Corporate Debtor

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Coram:

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Shri P. Mohan Raj : Member (Judicial

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Shri Satya Ranjan Prasad : Member (Technical)

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Appearances (through video conferencing)

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For Petitioner : Ms. Umarani M N, Adv.

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For Respondent : Mr. Arun Chandy, Government Pleader

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Order reserved on: 03.02.2023 Order pronounced on:.23.03.2023

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O R D E R

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The petitioner has filed this application under Section 7 of the Insolvency & Bankruptcy Code, 2016 (hereinafter referred to as “IB Code” ) read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (for brevity Adjudicating Authority Rules, 2016) for initiation of Corporate Insolvency Process against the Corporate Debtor, SAIL- SCL

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IN THE NATIONAL COMPANY LAW TRIBUNAL KOCHI BENCH

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CP (IBC)/48/KOB/2022 In re : Canara Bank, ARM Branch Vs. SAIL- SCL Kerala Limited

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KERALA LIMITED, a joint venture with SAIL and Government of Kerala. The prayer made is to admit the Application, to initiate the Corporate Insolvency Resolution Process against the Corporate Debtor, declare moratorium and appoint Interim Resolution Professional (IRP).

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Part I of the application, sets out the details of the Financial Creditor from which, it is evident that the Financial Creditor has PAN - AAACC6106G. As per Part II of the application, the Corporate Debtor is a Limited Company with Corporate Identification Number U27104KL1969SGC002253 having registered office at Steel Nagar, P.B. No.42, Kolathara P.O, Calicut, Kerala673655. As per Part III of the application, the Financial Creditor has proposed the name of one Mr. Anish Agarwal, Registration Number: IBBI/IPA-001/IPP-01497/2018-2019/12256 as the Interim Resolution Professional.

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Part IV of the application signifies the amount of debt to the tune of Rs. 1,07,18,00,214.22/- as on 30.06.2022. Part V of the application describes the particulars of Financial Debt, documents, records and evidence of default as described below:

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I . It is stated in the Petition that the Financial Creditor sanctioned Open Cash Credit loan facility of Rs. 4.28 Cr and a Term Loan facility of Rs. 45.33 Cr on 25-06-2013 and the terms of sanction were duly communicated to the Corporate Debtor. The said credit facility was secured by execution of the following security documents jointly by the Corporate Debtor and its Directors/Guarantors.

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i. Pro Note for Rs. 4,28,00,000.00 (Rupees Four Crore and TwentyEight Lakh only) executed on 18-07-2013 by the Corporate Debtor in favour of financial creditor wherein they had agreed to repay the loan amount advanced with interest with a minimum at 11.45% per annum on monthly rests.

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IN THE NATIONAL COMPANY LAW TRIBUNAL KOCHI BENCH

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CP (IBC)/48/KOB/2022 In re : Canara Bank, ARM Branch Vs. SAIL- SCL Kerala Limited

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ii. Deed of Hypothecation dated 18-07-2013 for Rs. 37,77,500.00 executed by the Corporate Debtor thereby hypothecated the assets to secure the said Term loan facility.

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iii. Common Hypothecation Agreement dated 18-07-2013 executed by the Corporate Debtor by which it was agreed to repay the total sum of Rs. 4961.00 lakh with interest. It was also agreed that in case of any default committed in making the regular repayments, bank can charge additional interest also. The Corporate debtor had agreed to the other terms and conditions specified in the agreement.

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iv. Title Docs PATTA 622 and PATTA 640 were deposited with the Financial Creditor in order to secure the aforesaid facilities on 07-07-2013.

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v. Letter Evidencing deposit of title deed dated 18-07-2013 thereby confirmed creation of EM of the said property in order to secure the aforesaid credit facility.

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II. The Financial Creditor enhanced the Open Cash Credit loan facility of Rs. 4.28 Cr to Rs. 10.00 Cr and the terms of sanction were duly communicated to the Corporate Debtor. Towards securing the limit the Corporate Debtor executed following additional loan documents.

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i. Pro Note for Rs. 5,72,00,000.0 (Rupees Five Crore Seventy-Two Lakh only) executed on 03-12-2013 by the Corporate Debtor in favour of financial creditor wherein they had agreed to repay the loan amount advanced with interest with a minimum at 1 l .45% per annum on monthly rests.

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ii. Supp. Common Hypothecation Agreement dated 03-12-2013 confirming that the terms of the Common Hypothecation Agreement dated 1807-2013 would continue to remain in force and effective in respect of the enhanced limits as well and also the corporate debtor agreed to the other stipulations contained thereon.

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IN THE NATIONAL COMPANY LAW TRIBUNAL KOCHI BENCH

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CP (IBC)/48/KOB/2022 In re : Canara Bank, ARM Branch Vs. SAIL- SCL Kerala Limited

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III. The Financial Creditor renewed the Open Cash Credit loan facility of Rs. 10.00 Cr. on 15-12-2014. Upon such renewal the defendant executed the following documents:

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i. Supp. Common Hypothecation Agreement dated 15-12-2014 confirming that the terms of the Common Hypothecation Agreement dated 18.07.2013 would continue to remain in force and effective in respect of the enhanced limits and the corporate debtor agreed to the other stipulations contained thereon.

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IV. The Financial Creditor again renewed the Open Cash Credit loan facility of Rs.10.00 Cr on 29-03-2016. Upon such renewal the defendant executed the following documents:

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i. Supp. Common Hypothecation Agreement dated 29—03-2016 confirming that the terms of the Common Hypothecation Agreement dated 1807- 2013 would continue to remain in force and effective in respect of the enhanced limits and the corporate debtor agreed to the other stipulations contained thereon.

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ii. The Corporate Debtor acknowledged the liabilities under the Cash Credit and Term Loan facilities by execution of Acknowledgement of Liability dated 29-03-2016 and 12-02-2019.

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The Corporate Debtor in their counter stated that the applicant being a financial institution has acted merely as a money lender and sought for recovery of the dues on the false allegations of defaulting in repayment of the alleged dues. This application is bad for non-joinder of parties, the Government of Kerala and the Steel Authority of India Ltd., a Central PSU under Ministry of Steel being necessary parties. The Corporate Debtor SCL Kerala limited is a Government company jointly promoted by the Government of Kerala and Steel Authority of India Limited (for short SAIL). The Corporate Debtor became a government company in the year 1979. On account of unviable financial performance, the Company was referred to BIFR in 1992. In 2008 GoK entered into a Joint

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IN THE NATIONAL COMPANY LAW TRIBUNAL KOCHI BENCH

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CP (IBC)/48/KOB/2022 In re : Canara Bank, ARM Branch Vs. SAIL- SCL Kerala Limited

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Venture Agreement with SAIL to jointly develop the company and in pursuance thereof the company became a Joint Venture [JV] of Government of Kerala and SAIL on 28.12.2010. The JV Agreement conceived the establishment of a Rolling Mill for ensuing the viable performance of the company in accordance with the proposal in the modified BIFR Rehabilitation Scheme.

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The learned counsel for the Corporate Debtor submitted that the Corporate Debtor SAIL-SCL Kerala Ltd being a Government Company and moreover it is being a Public Sector Undertaking (PSUs) under Ministry of Steel, the PSUs cannot be dragged in to rigors of IBC 2016. Therefore, the initiation of CIRP cannot be initiated against the Corporate Debtor as it is a Government Company (PSUs).

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It is stated that there is no power of attorney or authorization to present an insolvency application under Sections 7 of the Insolvency and Bankruptcy Code, 2016 (“IBC”). It is not an authorized representative, it would have been duly authorized by board resolution, who are eligible to present the same. This is based on the simple rationale that a company being juristic person acts only through its board of directors, who can exercise all powers that the company is entitled to exercise, and it may through a resolution authorize any person to present an application. There should be specific authorization to the power of attorney holder to initiate the CIRP, since the financial creditor had not filed such specific authorization. Hence, the person who filed the application under Section 7 of the Code is not the authorized representative of the Financial Creditor and therefore, the application was liable to be dismissed.

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It is further stated that the application under Section 7 was barred by limitation. The account of the Corporate Debtor was declared as non- performing asset (NPA) on 22.08.2016 and the Financial Creditor filed an application under Section 7 of the Code before this bench as on 16.08.2022. In so far as limitation is concerned, that the application under Section 7 of the Code was not filed

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IN THE NATIONAL COMPANY LAW TRIBUNAL KOCHI BENCH

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CP (IBC)/48/KOB/2022 In re : Canara Bank, ARM Branch Vs. SAIL- SCL Kerala Limited

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within the prescribed time. That the acknowledgement of debt is shown as 12.02.2019, hence the application was barred by limitation as it was not filed within three years from the date of default and the acknowledgement date. The bank approached the Debt Recovery Tribunal, Kochi with an original application OA No.419 of 2020 against the corporate debtor for recovery of debts and the parallel application in CF (IE) 48 of 2022 before this bench under section 7 of, IBC 2016 amounts to forum shopping. The Right to choose for redressal of Grievance does not permit choice of two forums for same reliefs.

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The learned counsel for CD submitted that the Steel Melting Plant of the Company which was envisaged as the feeder unit of the Rolling Mill had to call off production activities due to various reasons. A sudden deterioration in market conditions coupled with this underutilization adversely affected the operational sustainability of the Rolling Mill and the Mill also came to a standstill in December, 2016. Since, both the plants were idle, there was no revenue input and the Company could not fulfil its commitments regarding loan repayment to the Applicant Bank. Since 2016 the company has been trying hard to resume its operations. The Union Ministry of Steel, the Government of Kerala and SAIL interacted and considered various proposals to revive the company. The Applicant Canara Bank was also included in the above revival process at appropriate forums. Discussions are continuing to work out a concrete revival scheme for the Corporate Debtor Company at the earliest.

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The learned counsel further submitted that the Hon’ble Minister for Industries, Government of Kerala, convened a meeting of the senior officials of the Applicant Bank on 25.05.2017 and discussed the matter of normalizing the account of the Corporate Debtor. As suggested by the Bank, the Corporate Debtor submitted a revival proposal dated 21.09.2017. When the revival proposal got delayed, the Hon’ble Minister for Industries, Government of Kerala, convened another meeting of the senior officials of Canara Bank on 25.06.2018 and the Corporate Debtor requested certain concessions from the

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IN THE NATIONAL COMPANY LAW TRIBUNAL KOCHI BENCH

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CP (IBC)/48/KOB/2022 In re : Canara Bank, ARM Branch Vs. SAIL- SCL Kerala Limited

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Bank. The officials of the Applicant Bank had participated in five meetings organized by the Government of Kerala in connection with the revival of the company on 1.3.2017, 25.5.2017, 25.6.2018, 17.3.2020 and on 26.6.2020.

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It is further submitted that the estimated value of the mortgaged property and other hypothecated assets substantially exceeds the outstanding liability payable to the Applicant Bank. The surplus is considerably on the higher side as per the market value of the securities. An asset valuation done by a Chartered Engineer dated 21.05.2022 in connection with Impairment of Assets shows the value of assets under consideration as Rs.205,53,63,674.06. Accordingly, there is no need for the Bank to hasten the recovery of debt. The Applicant has sufficient time left to allow the Company to finalize the ongoing revival process, resume operations and pay off the debt in a healthy way from business revenue instead of a forced recovery which is quite unwarranted at this point of time in View of the surplus value of the assets. The debt is wholly secured by Schedules Properties and that the estimated value of those properties/assets are sufficient to cover the total amount of debts claimed by the Applicant. Whereas the amount of debts claimed is Rs.1,07,18,00,214.22, the estimated value of assets is sufficient to cover the total debt.

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The learned counsel concluded the argument stating that the matter of restructuring the loans was discussed at length with the Bank during several meetings convened by Government of Kerala and proposals to that effect also were submitted to the Bank. The Bank also had expressed their readiness to do so. The fact is that the proposal could not be accomplished until now because of the delay involved in finalizing the revival scheme. Thus, the Applicant is fully aware of the various steps taken by the Corporate Debtor and the Government of Kerala and the Ministry of Steel to settle the dues of the Applicant Bank in respect of the accounts of the Corporate Debtor. The minutes of the various meetings and the correspondences resting with the bank are undeniable proof of the same.

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IN THE NATIONAL COMPANY LAW TRIBUNAL KOCHI BENCH

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CP (IBC)/48/KOB/2022 In re : Canara Bank, ARM Branch Vs. SAIL- SCL Kerala Limited

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The applicant herein filed a rejoinder and replied to the above stated counter. The allegation raised by the Corporate Debtor that CIRP cannot be initiated against a Government Company or PSU is denied. It is submitted that section 3(7) of the IBC defines a “Corporate Person” to include any company as defined in section 2(20) of the Companies Act, 2013. An interpretation of the above definitions itself leads to the inference that government companies are not expressly exempted from the applicability of the IBC. In this regard Apex Court held in

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Hindustan Construction Company Limited & amp; Anr. Vs. Union of India & amp; Ors. [Writ Petition (Civil) No. 1074 OF 2019, judgement dated 27.11.2019] held that that the CIRP process can be initiated against a government company by virtue of it being covered under the first part of ‘corporate person’ as provided in section 3(7) of the Code, and hence insolvency proceedings against Government company can be initiated by virtue of it being covered under the ambit of Section 3(7) of the Code. In the above cited HCC Case (Supra), the Hon’ble Supreme Court while agreeing with argument put forth by the Solicitor General of India observed that: - As correctly argued by the learned Solicitor General, Shri Tushar Mehta, the first part of ‘corporate person’, as defined in Section3(7) of the Insolvency Code, means a company as defined in Clause 20 of Section 2of the Companies Act 2013. Sections 2(20) and 2(45) of the Companies Act, 2013, which define ‘company’ and ‘Government company’ respectively, are set out herein below: “2 (20) & quot; company & quot; means a company incorporated under this Act or under any previous company law;” “2(45). & quot; Government

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IN THE NATIONAL COMPANY LAW TRIBUNAL KOCHI BENCH

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CP (IBC)/48/KOB/2022

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In re : Canara Bank, ARM Branch Vs. SAIL- SCL Kerala Limited

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company & quot; means any company in which not less than fifty-one per cent of the paid-up share capital is held by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments, and includes a company which is a subsidiary company of such a government company.” From a reading of the aforesaid definition, Shri Tushar Mehta is clearly right in stating that the three entities who owe monies under arbitral awards to.

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For the second allegation raised, it is stated that the General Power of Attorney produced as Annexure 1(a) along with the main application itself shows that the person who signed the application is very well authorised to present the application on behalf of Financial Creditor. Since, it is a General Power of Attorney authorising the agent to do all acts on behalf of the principal, there is no need of another specific authorisation to move an IBC application for and on behalf of the Financial Creditor.

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As regards the allegation of limitation, the learned counsel for the applicant submitted that the said limitation aspect is detailed in part iv clause (2). It is reiterated that the contractual liability was duly acknowledged by the Corporate Debtor by execution of Acknowledgement of Liability document lastly on 12.02.2019. Also, as per the order dated 10.01.2022 passed by Hon’ble Supreme Court of India in M. A. No. 21/2021 in M. A. No. 665/2021, Suo Moto W.P.(C) No. 3/2020, the period w.e.f. 15.03.2020 till 28.02.2022 has been directed to be excluded for purpose of limitation. Thus, the claim is not barred by limitation and the application filed by the Financial Creditor is well within the time prescribed by the Code.

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It is further submitted that the internal matters of the corporate debtor and that the meetings conducted and the discussions happened from 2016 onwards are matters of fact. The corporate debtor requested for some concessions during the

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CP (IBC)/48/KOB/2022 In re : Canara Bank, ARM Branch Vs. SAIL- SCL Kerala Limited

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meeting held on 25.06.2018 and submitted a revival plan on 10.07.2018 etc are correct. But nothing moved on a positive note and even the discussions happened thereafter also didn’t fructify. The valuation of the assets of the Corporate Debtor amounting to Rs. 205,53,63,674.06 as on 21.05.2022 is on a higher side. As per the valuation of the secured assets conducted by the financial creditor is only Rs. 66,27,75,000.00 as on 16.03.2020.

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It is stated that the corporate debtor itself has submitted in their counter affidavit that both the plants are idle and there is no revenue input to repay the loan availed from the financial creditor and the company has been trying hard to resume its operations and to revive the company. The Corporate Debtor themselves that the finances of the Company deteriorated for reasons beyond its control and the Steel Melting Shop of the Company discontinued its operations since 2014. The Rolling Mill though commissioned in June 2015 also failed to generate the anticipated reasons and eventually led to suspension of the operations of the Company in December 2016. The Company came to a total standstill and not functional since Dec. 2016. Presently no activities are carrying out in the premises of the company. Moreover, the hypothecated assets and imported machineries are lying idle and no service maintenance are being carried out.

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The learned counsel for the applicant concluded the argument stating that the main aim of the IBC proceedings itself is to find out a chance to revive the company and not to leave the company and its assets to deteriorate and take its course to die off.

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Heard Ld. Counsel for the Financial Creditor and Ld. Counsel for the Corporate Debtor at length. We have gone through the evidence and the materials on record.

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At the outset, we note that there is no dispute over the fact that the Corporate Debtor defaulted in paying the financial debts of more than Rs.1 crore (as per Section 4 of the IBC). From evidence and material on record, we also hold that

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IN THE NATIONAL COMPANY LAW TRIBUNAL KOCHI BENCH

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CP (IBC)/48/KOB/2022 In re : Canara Bank, ARM Branch Vs. SAIL- SCL Kerala Limited

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the application is filed by properly authorized officer of the Bank. As regards the issue of limitation, we have found that the Acknowledgement of Debt and Security has been signed by the Asst. Manager (Finance) of SAIL-SCL Kerala Limited on 12.02.2019 along with considering the order dated 10.01.2022 passed by Hon’ble Supreme Court of India in M. A. No. 21/2021 in M. A. No. 665/2021, Suo Motu W.P.(C) No. 3/2020, the petition filed on 20.09.2022 is well within the time period. Thus, the defence taken by the Corporate Debtor that the application is hit by limitation will not sustain in this scenario and this Tribunal has the jurisdiction to adjudicate this application on merits. The Hon’ble Supreme Court in the case of Innovative Industries Limited v ICICI Bank Limited (Civil Appeal Nos. 8337-8338 of 2017), where it was discussed extensively the scope of the Adjudicating Authority under Section 7 of the IBC is limited to assessing the records provided by the Financial Creditor to satisfy itself that the default has occurred.

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The Ld. Counsel appearing for the Corporate Debtor relying on the judgment of the Hon’ble Supreme Court in the case of Vidarbha Industries Power Limited Vs. Axis Bank Limited (2022) 8 Supreme Court Cases 352 and submitted that this Adjudicating Authority may reject this application as the judgement states that the tribunal might examine the expedience of initiation of CIRP, taking into account all relevant facts and circumstances, including the overall financial health and viability of the Corporate Debtor. He also added that the Tribunal has to consider the ground made out by the Corporate Debtor against admission, on its own merits. Ld. Counsel relied on paragraphs 82 and 84 of the said judgment, which is as follows: -

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“78. The Legislature has consciously differentiated between Financial Creditors and Operational Creditors, as there is an innate difference between Financial Creditors, in the business of investment and financing, and Operational Creditors in the business of supply of goods

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IN THE NATIONAL COMPANY LAW TRIBUNAL KOCHI BENCH

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CP (IBC)/48/KOB/2022

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In re : Canara Bank, ARM Branch Vs. SAIL- SCL Kerala Limited

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and services. Financial credit is usually secured and of much longer duration. Such credits, which are often longterm credits, on which the operation of the Corporate Debtor depends, cannot be equated to operational debts which are usually unsecured, of a shorter duration and of lesser amount. The financial strength and nature of business of a Financial Creditor cannot be compared with that of an Operational Creditor, engaged in supply of goods and services. The impact of the non-payment of admitted dues could be far more serious on an Operational Creditor than on a financial creditor.

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79. As observed above, the financial strength and nature of business of Financial Creditors and Operational Creditors being different, as also the tenor and terms of agreements/contracts with financial creditors and operational creditors, the provisions in the IBC relating to commencement of CIRP at the behest of an Operational Creditor, whose dues are undisputed, are rigid and inflexible. If dues are admitted as against the Operational Creditor, the Corporate Debtor must pay the same. If it does not, CIRP must be commenced. In the case of a financial debt, there is a little more flexibility. The Adjudicating Authority (NCLT) has been conferred the discretion to admit the application of the Financial Creditor. If facts and circumstances so warrant, the Adjudicating Authority can keep the admission in abeyance or even reject the application. Of course, in case of rejection of an application, the Financial Creditor is not denuded of the right to apply afresh for initiation of CIRP, if its dues continue to remain unpaid.

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IN THE NATIONAL COMPANY LAW TRIBUNAL KOCHI BENCH

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CP (IBC)/48/KOB/2022

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In re : Canara Bank, ARM Branch Vs. SAIL- SCL Kerala Limited

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80. The IBC, as observed above, is intended to consolidate and amend the laws with a view to reorganize Corporate Debtors and resolve insolvency in a time bound manner for maximization of the value of the assets of the Corporate Debtor.

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81. The title “Insolvency and Bankruptcy Code” makes it amply clear that the statute deals with and/or tackles insolvency and bankruptcy. It is certainly not the object of the IBC to penalize solvent companies, temporarily defaulting in repayment of its financial debts, by initiation of CIRP. Section 7(5)(a) of the IBC, therefore, confers discretionary power on the Adjudicating Authority (NCLT) to admit an application of a Financial Creditor under Section 7 of the IBC for initiation of CIRP.”

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We examine the circumstances of this case to determine whether the ratio laid down by the Honourable Apex Court in the preceding judgment is applicable.

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In this case, admittedly, the Corporate Debtor has submitted that both the plants are idle and there is no revenue input to repay the loan availed from the Financial Creditor. The proceedings of the recovery of debts against the Corporate Debtor were initiated by the Bank, which is pending before DRT Kochi.

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For a past few years, the Corporate Debtor was unable to pay the full amount of the loan. We are left with no choice but to hold that the Corporate Debtor is now an insolvent firm and that its bankruptcy needs to be remedied in this situation.

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Coming back to the facts, the Corporate Debtor admitted its default. This application is defect free. The Financial Creditor has proposed the name of Insolvency Professional Mr. Anish Agarwal, having Registration No.

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CP (IBC)/48/KOB/2022

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In re : Canara Bank, ARM Branch Vs. SAIL- SCL Kerala Limited

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IBBI/IPA-001/IP-P-01497/2018-2019/12256 and e-mail Id: [email protected] for appointment as an Interim Resolution Professional (“IRP”). There is no disciplinary proceeding against the Insolvency Professional whose name is suggested for IRP. There is no reason to reject this application. Hence, we pass the following order: -

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a) The petition bearing CP (IB) No. 48/ KOB /2022, Canara Bank, the financial creditor, under section 7 of Insolvency and Bankruptcy Code 2016 read with rule 4 (1) of Insolvency and Bankruptcy (Petition to Adjudicating Authority) Rules 2016 for initiating CIRP against M/s SAIL-SCL KERALA LIMITED, (CIN: U27104KL1969SGC002253), the Corporate Debtor is admitted.

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b) There will be a moratorium under section 14 of the Code.

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c) The moratorium shall have effect from the date of this order till the completion of the CIRP or until the Adjudicating Authority approves the resolution plan under sub-section (1) of section 31 of IBC or passes an order for liquidation of Corporate Debtor under section 33 of the Code, as the case may be.

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d) Public announcement of the CIRP shall be made immediately as specified under section 13 of the code read with regulation 6 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Person) Regulations 2016.

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e) We appoint Mr. ANISH AGARWAL, Chartered Accountant, having Registration No. IBBI/IPA-001/IP-P-01497/2018-2019/12256 and e- mail Id: [email protected] and having an address at Space No. Vista D- 1101, Godrej United, Whitefield Main Road, Near Phoenix, Market City, Hoodi Village, Hobli, Mahadevapura, Bengaluru, Karnataka – 560 048 as Interim Resolution Professional (IRP) and a written communication in the format prescribed under Form 2 of the Insolvency and Bankruptcy Board of India (Application to Adjudicating Authority) Rules, 2016 has been

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CP (IBC)/48/KOB/2022 In re : Canara Bank, ARM Branch Vs. SAIL- SCL Kerala Limited

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filed by the proposed IRP who is appointed as the IRP to take forward the process of Corporate Insolvency Resolution of the Corporate Debtor. The designated IRP must take any additional actions in this regard that are mandated by the law, more specifically Sections 15, 17, and 18 of the Code. The powers of the Board of Directors of the Corporate Debtor shall stand superseded as a consequence of the initiation of the CIRP in relation to the Corporate Debtor in terms of the provisions of IBC, 2016. The fee payable to IRP or as the case may be, the RP shall comply with such Regulation, Circulars and Directions as may be issued by the Insolvency and Bankruptcy Board of India (IBBI). The IRP shall carry out his functions as contemplated by section 15, and to 21 of the Code.

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f) During the CIRP period the management of the Corporate Debtor shall vest with the IRP or, as the case may be, the RP in terms of section 17 of the IBC. The officers and managers of the Corporate Debtor shall provide all documents in their possession and furnish every information in their knowledge to the IRP within one week from the date of receipt of this order, in default of which coercive steps will follow.

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g) The IRP/RP shall submit to this Adjudicating Authority periodical reports concerning the progress of the CIRP in respect of the Corporate Debtor.

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h) The financial creditor shall deposit a sum of Rs.2,00,000/- (Two Lakhs Only) with the IRP to meet the expenses arising out of issuing publication and inviting claims. These expenses are subject to approval by the Committee of Creditor (COC).

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i) In terms of section 7 (5) (a) of the Code, the Registry is hereby directed to communicate a copy of this Order to the Financial Creditor, the corporate debtor and IRP by Speed Post & e-mail immediately, and in any case, not later than two days from the date of this order.

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j) Additionally, the Financial Creditor shall serve a copy of this Order on the IRP and on the Registrar of Companies, Kerala, by all available means for

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CP (IBC)/48/KOB/2022 In re : Canara Bank, ARM Branch Vs. SAIL- SCL Kerala Limited

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updating the Master Data of the Corporate Debtor. The said Registrar of Companies shall send a compliance report in this regard to the Registry of this Tribunal within seven days from the date of receipt a copy of this order.

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k) The commencement of the Corporate Insolvency Resolution Process (CIRP) shall be effective from the date of this order.

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CP (IB) No. 48/ KOB /2022 to come up on 27.04.2023 for progress report.

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The Registry is directed to send e-mail copies of the order forthwith to all the parties and their Ld. Counsel for information and for taking necessary steps.

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Certified Copy of this order may be issued, if applied for, upon compliance of all requisite formalities.

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SATYARANJAN PRASAD Digitally signed by SATYARANJAN PRASAD Date: 2023.03.23 17:31:52 +05'30' PANDIAN MOHAN Digitally signed by PANDIAN MOHAN RAJ RAJ Date: 2023.03.23 14:36:56 +05'30'

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Satya Ranjan Prasad P. Mohan Raj Member (Technical) Member (Judicial)

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Signed on this 23^rd day of March, 2023.

¶141

Cimy

¶142

Page 16 of 16

In the matter of Sail- Scl Kerala Limited CP(IBC)-48-KOB-2022

Case brief

What is this about?

What did the court decide?

In the matter of Sail- Scl Kerala Limited CP(IBC)-48-KOB-2022

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases