In re, P & S Jewellery Ltd.

INSOLVENCY AND BANRKRUPTCY CODE, 2016

--Insolvency process by applicant--Reference before BIFR abated due to SICA Repeal ActPetition filed before NCLT to initiate insolvency process under the Code----Where reference of sick company before BIFR stood abated due to SICA Repeal Act and petition filed before NCLT under the Code to commence insolvency process, it was admitted and moratorium declared abating other proceedings. --P Company was registered as a 'Sick Industrial Company' with erstwhile Board for Industrial and Financial Reconstruction. With the Sick Industrial Companies (Special Provisions) Repeal Act, 2003 coming into force, the reference of P stood abated barring the orders sanctioning a scheme. Section 4(b) of the Repeal Act allowed a company in respect of whom such reference stood abated, to make a reference to the National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016 (Hereinafter referred as the Code). P had thus moved petition before NCLT invoking the provisions of section 10 of the Code for adjudication on 'Admission'. P was admittedly a 'Corporate Debtor'. Total amount of debt had two components, 'Financial Debt' as well as 'Operational Debt'. Main financial creditors were several Banks as Secured creditors. P had proposed the name of the Interim Resolution Professional.Held: The petition was admitted. Once commencement of the Corporate Insolvency Resolution Process was declared, the process of 'Moratorium' under section 14 of the Code came into operation prohibiting any action to recover or to enforce any security interest created in respect of debtor's property. The appointment of proposed Interim Resolution Professional was confirmed.