2019 (5) TMI 1786 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor has defaulted in repayment of loan provided by Petitioner/ Financial Creditor - existence of debt and dispute or not - HELD THAT - The case of the Petitioner/ Financial Creditor is that it has provided various term loan facilities to the Corporate Debtor and the Corporate Debtor has defaulted in repayment of the same for an amount in default as on 31.08.2018 is Rs. Several notices were sent to the Corporate Debtor by the Financial Creditor for appearance and for making submissions. Even notice was carried out by way of paper publication against the Corporate Debtor for appearance and for making submissions in relation to the claim made by Petitioner, but there was no representation by the Corporate Debtor or any of its Directors. Inspite of ample opportunities to the Corporate Debtor, it failed to appear and make submissions before this Adjudicating Authority. Notices to the Corporate Debtor held sufficient. The Petitioner has proved its case by placing documentary evidence viz., Sanction Letter issued to the Corporate Debtor, loan Documents, Guarantee Agreement and copies of entries in Bankers Book in accordance with the Bankers Books Evidence Act; 1891 (18 of 1891) reflecting that the default has occurred for which the present Corporate Debtor was liable to pay. The submissions put forth by the Petitioner/Financial Creditor is satisfying - Further, the Financial Creditor has fulfilled all the requirements as contemplated under IB Code, in the present Company Petition and has also proposed the name of IRP after obtaining the written consent in Form-2. In these circumstances, this Adjudicating Authority is inclined to admit the Instant Petition. Application admitted - moratorium declared.

Issues Involved:
1. Default in repayment of loan by the Corporate Debtor.
2. Admissibility of the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016.
3. Appointment of Interim Resolution Professional (IRP).
4. Declaration of moratorium.

Detailed Analysis:

1. Default in Repayment of Loan by the Corporate Debtor:
The Corporate Debtor, M/s. Athena Chhattisgarh Power Limited, availed various loan facilities from the Financial Creditor, State Bank of India (SBI), amounting to INR 2150 Crore under a Common Term Loan Agreement dated 30.01.2011, which was later amended. The loans were disbursed in multiple tranches, with the last tranche disbursed on 29.01.2016. The Corporate Debtor defaulted in repayment, with the total amount in default as on 31.08.2018 being INR 2944,57,70,156.22. Several notices were sent to the Corporate Debtor by the Financial Creditor for appearance and submissions, but there was no representation by the Corporate Debtor or its Directors.

2. Admissibility of the Petition Under Section 7 of the Insolvency and Bankruptcy Code, 2016:
The petition was filed by SBI under Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. The Financial Creditor provided documentary evidence, including sanction letters, loan documents, guarantee agreements, and copies of entries in Bankers' Books as per the Bankers' Books Evidence Act, 1891, to prove the default. The Adjudicating Authority was satisfied with the submissions and evidence provided by the Financial Creditor, fulfilling all requirements under the Insolvency and Bankruptcy Code.

3. Appointment of Interim Resolution Professional (IRP):
The Financial Creditor proposed Mr. C. Bala Mouli as the Interim Resolution Professional (IRP), and his name was reflected on the IBBI website with no disciplinary proceedings pending against him. The Adjudicating Authority appointed Mr. C. Bala Mouli as the IRP and directed him to take charge of the Corporate Debtor's management immediately. The IRP was also directed to cause a public announcement within three days from receiving the order and call for submissions of claims as prescribed.

4. Declaration of Moratorium:
A moratorium was declared effective from the date of the order until the completion of the Corporate Insolvency Resolution Process (CIRP). The moratorium prohibits:
a) The institution or continuation of suits or proceedings against the Corporate Debtor.
b) Transferring, encumbering, alienating, or disposing of any assets of the Corporate Debtor.
c) Any action to foreclose, recover, or enforce any security interest created by the Corporate Debtor.
d) The recovery of any property by an owner or lessor where such property is occupied by the Corporate Debtor.

The supply of essential goods or services to the Corporate Debtor shall not be terminated or suspended during the moratorium period. The IRP must comply with Sections 13(2), 15, 17, and 18 of the Code, and the directors, promoters, or any person associated with the management of the Corporate Debtor are expected to extend all assistance and cooperation to the IRP.

Conclusion:
The petition was admitted, and the commencement of the Corporate Insolvency Resolution Process against M/s. Athena Chhattisgarh Power Limited was ordered, to be completed within 180 days from the date of the order. The Registry was directed to communicate the order to the Financial Creditor and the Corporate Debtor.

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