In the matter of Manan Apparels Limited

National Company Law Tribunal30 January 2024

CitationC.P. No. 787-IBC-MB-2023

Ratio decidendi

The rule this decision rests on

The Adjudicating Authority admits a corporate debtor's voluntary application under Section 10 of the Insolvency and Bankruptcy Code, 2016 where it is satisfied that the corporate applicant has committed a default and that the petition contains the particulars required under Section 10; on that footing, the admission of the petition and the initiation of the corporate insolvency resolution process follow.

Written by Miss Lucy from the judgment below, not taken from a headnote.

Judgment

As delivered

IN THE NATIONAL COMPANY LAW TRIBUNAL, MUMBAI BENCHCOURT-IC.P. No. 787/IBC/MB/2023Under Section 10 of the Insolvency andBankruptcy Code, 2016.In the matter ofManan Apparels Limited(CIN- U18100MH2005PLC155531)124, Shree Ram Laxmi CommercialComplex, 1st Floor, Kalher, Bhiwandi NA,Mumbai, Thane, Maharashtra-421302...........Corporate ApplicantOrder Dated: 30.01.2024Coram:Hon'ble Member (Judicial) : Justice V.G. Bisht, (Retd.)Hon'ble Member (Technical) : Sh. Prabhat KumarFor the Applicant : Mr.Aniruth Purusothaman, AdvocateFor Intervenor : Ms.Vidhi Suthar, Advocate.Per: Justice V.G. BishtORDER1. This Company petition is filed by Manan Apparels Limited(hereinafter called “Corporate Applicant”) on 07.08.2023,seeking to initiate Corporate Insolvency Resolution Process.C.P. No. 545/IBC/MB/20222. The present petition is filed before this AdjudicatingAuthority on the ground that the total debt raised by theCorporate Applicant is for a sum of Rs. 34,67,46,380/-(Rupees Thirty-Four Crore, Sixty-Seven Lakh, Forty-SixThousand, Three Hundred Eighty Only). while the totalamount in default is Rs.2,68,54,626/-(Rupees Two CroreSixty-Four Lakhs Fifty-Four Thousand as on 31.07.2023.Six Hundred Twenty-Six Only). Date of Default as perCIBIL Report is on 03.04.2023.3. The Corporate Applicant is in the Business ofManufacture of Jeans.4. The Authorized Share Capital of Corporate Applicant isRs. 6,00,00,000/- and paid up Equity share capital is ofRs.3,23,85,730/-5. The Corporate Applicant has 6 Financial Creditors and206 Operational Creditor as on 28.07.2023.6. The brief facts of the case are as follows: -a. The Corporate Applicant was incorporated on22.08.2005.b. The Corporate Applicant had approached the StateBank of India with repeated request to staggerFITL/GECL due to slowdown in its business.c. The Total Debt is of Rs. 34,67,46,380/- while the totalamount in default is Rs.2,68,54,626/-d. The Date of NPA is on 03.04.2023.C.P. No. 545/IBC/MB/2022e. Subsequently State Bank of India on 24.07.2023issued a demand notice to Corporate Applicant.f. The Board of Directors for Manan Apparels Limitedpassed an Explanatory Statement pursuant to Section102(1) of the companies act ,2013.g. Rekha Kantilal Shah having IBBI Reg No.IBBI/IPA-001/IP-P00776/2017-2018/11349 has been proposedinterim Resolution Professional and has given herwritten consent in Form 2.h. The financial condition of the Corporate Applicantdistinctly reflects the financial challenges it is currentlyfacing as well as the cash flow shortage. Despite itsgenuine intentions and earnest efforts to settleoutstanding debts, the Applicant continues to grapplewith its obligation to meet financial liabilities.i. In the light of the above stated facts and circumstances,the Corporate Applicant being left with no other optionand compelled to file the present application. Thepresent application is being filed after the due approvalof its Board of Directors by way of resolution passed atthe Meeting of Board of Directors on 24.07.2023 forinitiation of Corporate Insolvency Resolution Processunder Section 10 of the Code. The Corporate Applicanthas enclosed a copy of Resolution passed by thecompany in the Meeting of Board of Directors. TheBoard of Directors of the Corporate Applicant hadauthorized Mr. Sanjeev Kumar Gogia, who is one of theDirector of the Company as to Person to file necessaryapplication under the Code before this Tribunal..7. The Corporate Applicant has also enclosed the auditedC.P. No. 545/IBC/MB/2022Financial statement for the years 2018-19, 2019-20,2020-2021, 2021-22, 2022-23 and copy of provisional Balancesheet of Corporate Applicant as on 03.07.2023.8. The Corporate Applicant has also enclosed the list offinancial creditors (secured/unsecured), list of propertiesgiven as security for the loans availed and extract ofcharges registered with the Registrar of Companies takenfrom MCA portal. The Corporate Applicant has alsodisclosed the names and addresses of the members of theCompany with details of their shareholding, details ofdebt owed by or to the Corporate Applicant to or bypersons connected with it and details of personalguarantors of the Corporate Applicant.

9. The Corporate Applicant duly recorded the default with the information utility namely National e-governance Service Limited, date of which the information is submitted:

• Submitter’s Name - State Bank of India as on 22.06.2023. • Submitter’s Name - State Bank of India as on 16.05.2023. • Submitter’s Name - State Bank of India as on 06.07.2023.

10. After hearing the submissions and upon perusing the supporting documents annexed with the Petition, this Bench is of the view that the Corporate Applicant has committed default and the Petition contains the particulars as required u/s 10 of the Code.

C.P. No. 545/IBC/MB/2022 11. The Corporate Applicant also suggested the name of Rekha Kantilal Shah as Interim Resolution Profession along with his consent letter in Form II. Thus, the present Company Petition satisfies all the necessary legal requirements for admission. Accordingly, the above Company Petition is admitted by passing the following order:

ORDER a. The above Company Petition No. (IB) -787/(MB)/2023 is hereby allowed and initiation of Corporate Insolvency Resolution Process (CIRP) is ordered against Manan Apparels Limited. b. This bench has forfeited the right to file the reply of State Bank of India who is an Intervenor/Objector in vide order dated 03.01.2024. Imperatively this bench on two occasions has granted liberty to the Intervenor to file the reply but till date no objection has been filed.

c. This bench hereby appoints Rekha Kantilal Shah(iprekhashah@gmail.com) ,insolvency Professional, Registration No.IBBI/IPA-001/IP-P00776/2017-2018/11349 as the interim resolution professional to carry out the functions as mentioned under the Insolvency & Bankruptcy Code, 2016. d. The Corporate Applicant shall deposit an amount of Rs. 2,00,000/- towards the initial CIRP cost by way of a Demand Draft drawn in favour of the Interim Resolution Professional appointed herein, immediately upon communication of this Order for meeting the CIRP cost and IRP’s fees till the first meeting of CoC and such expenses shall be subject to C.P. No. 545/IBC/MB/2022 ratification. The IRP shall be paid a considerate remuneration of Rs. 1,50,000/- for his services rendered till conclusion of first CoC meeting. e. That this Bench hereby prohibits the institution of suits or continuation of pending suits or proceedings against the corporate applicant including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; transferring, encumbering, alienating or disposing of by the corporate applicant any of its assets or any legal right or beneficial interest therein; any action to foreclose, recover or enforce any security interest created by the corporate applicant in respect of its property including any action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the Corporate applicant. f. That the supply of essential goods or services to the Corporate applicant, if continuing, shall not be terminated or suspended or interrupted during moratorium period. g. That the provisions of sub-section (1) of Section 14 shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator. h. That the order of moratorium shall have effect from the date of pronouncement of this order till the completion of the corporate insolvency resolution process or until this Bench approves the resolution plan under sub-section (1) of section 31 or passes an order for liquidation of corporate applicant under section 33, as the case may be i. That the public announcement of the corporate insolvency

C.P. No. 545/IBC/MB/2022 resolution process shall be made immediately as specified under section 13 of the Code. j. During the CIRP period, the management of the corporate applicant will vest in the IRP/RP. The suspended directors and employees of the corporate applicant shall provide all documents in their possession and furnish every information in their knowledge to the IRP/RP. k. Registry shall send a copy of this order to the Registrar of Companies, Mumbai, for updating the Master Data of the Corporate Applicant. Accordingly, this Petition is admitted. The Registry is hereby directed to communicate this order to Corporate Applicant and IRP immediately.

12. Ordered Accordingly.

sd/- sd/-

SH. PRABHAT KUMAR Justice V.G BISHT MEMBER (TECHNICAL MEMBER (JUDICIAL)

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