IN RE Vs. BURN STANDARD CO LTD

JUDGEMENT

(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.