Amit Mehta vs Franchise India Brands Limited

The Ld. Counsel for the Operational Creditor is present. No representation on behalf of the Corporate Debtor. As seen from order dated 11.02.2020, the Corpora Debtor was proceeded Ex-Parte.

Under consideration is an Application IB-3029/ND/2019, filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred as "IBC, 2016") for initiating Corporate Insolvency Resolution Process against the Corporate Debtor viz., Franchise India Brands Limited, declaring moratorium and appointing Interim Resolution Professional (hereinafter referred as "IRP").

The Ld. Counsel for the Operational Creditor submitted that the Applicant/Operational Creditor was appointed as AVP-Operations (3M)by the Corporate Debtor with effect from 12.02.2018 by fixing annual package of Rs. 14,40,000/- and worked till 28.03.2019. The Ld. Counsel further submitted that the Applicant/Operational Creditor was given promotion with effect from January, 2019 by fixing a revised salary of Rs. 1,32,000/- per month. However, the salary for the month of February, 2019 and March, 2019 has not been paid by the Operational Creditor. The Operational Creditor remained hospitalized due to an accident with effect from 3rd March, 2019 to 14th March, 2019 but for rest of the days of March, he has performed his duties as usual. Besides this, the Operational Creditors has claimed Leave Encashment with effect from February, 2018 to March, 2019.

In short, the total amount claimed is Rs. 3,49,688/- as on 28th March, 2019 plus interest @18% per annum. The Operational Creditor has sent notice under Section 8 on 22.07.2019 demanding the same amount. The notice has been delivered on 25.07.2019, to which no reply has been given by the Corporate Debtor.

The documentary evidence placed on record establishes that the Corporate Debtor has failed to make the payment of the salary and the Leave Encashment including reimbursement of expenses to the Applicant/Operational Creditor.

The Operational Creditor has complied with the requirement of Section 9(3) (b) and (c) by placing on record an affidavit, stating therein the Corporate Debtor has not raised any dispute with reared to the unpaid operational debt. The Bank Statement is also placed on record, which indicates that the amount claimed was not paid. Therefore, Application is admitted in terms of Section 9(5) of the IBC, 2016 and the commencement of the Corporate Insolvency Resolution Process is ordered which ordinarily shall be completed within 180 days, reckoning from the day this Order is passed.

The moratorium is declared which shall have effect from the date of this Order until the completion of CIRP, for the purposes referred to in Section 14 of the IBC, 2016. It is ordered to prohibit 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 judgment, 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.

The supply of essential goods or services of the Corporate Debtor shall not be terminated, suspended, or interrupted during moratorium period. The provisions of Sub-section (1) of Section 14 shall not apply to such transactions, as notified by the Central Government.

The Operational Creditor has not proposed the name of any Resolution Professional for appointment as IRP. Therefore, this Bench based on the list provided by the IBBI hereby appoints Mr. Dewart Rana as an IRP subject to the condition that no disciplinary proceedings are pending against the IRP. The IRP is directed to take charge of the Respondent Corporate Debtor's management immediately. He is directed to cause public announcement as prescribed under Section 15 of the IBC, 2016 within three days from the date the copy of this order is received, and call for submissions of claim in the manner as prescribed. The details of IRP are as under:

Name: Mr. Dewart Rana

Registration number: IBBI/IPA-002/IP-N00680/2018-2019/12025

E-mail: devvartrana@gmail.com

Mobile No. : 9891813021

The IRP shall comply with the provisions of Sections 13(2), 15, 17 & 18 of IBC, 2016. The Directors of the Corporate Debtor, its Promoters or any person associated with the Management of the Corporate Debtor are/is directed to extend all assistance and cooperation to the IRP as stipulated under Section 19, so that he could discharge his functions under Section 20 of the IBC, 2016.

The Operational Creditor and the Registry are directed to send the copy of this Order to IRP, so that he could take charge of the Corporate Debtor's assets etc., and make compliance with this Order as per the provisions of IBC, 2016.

The Registry is directed to communicate this Order to the Operational Creditor and the Corporate Debtor with immediate effect.

The Order is dictated and pronounced in the open court in the presence of the Ld. Counsel for the Operational Creditor.