2020 (12) TMI 1252 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditor - existence of debt and dispute or not - time limitation - HELD THAT - It is noted that the last date of the transaction in the Bank account is on 27.01.2016 and an Affidavit is filed with a copy of the Acknowledgment of debt dated 20.11.2018 signed by the two directors of the Respondent/Corporate Debtor. In view of this and in line with the decision of Hon ble NCLAT in Yogesh Kumar Jaswantlal Thakkar Vs. Indian Overseas Bank, 2020 (9) TMI 582 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI the application filed under section 7 of IB Code filed on 06.06.2019 is within time. In an affidavit filed on 08.10.2020 the respondent -Corporate Debtor has submitted that the additional affidavit filed by the petitioner should not be taken on record at such belated stage and stated the acknowledgment letter signed by Mr Kamlesh G. Pansuriya is forged and it was never signed by Mr. Kamlesh G. Pansuriya. The petitioner also enclosed a copy of the complaint sent to the police sub-Inspector by Post along with the Affidavit - it is noticed that the acknowledgment of the debt is signed by two directors and not one and on the face of it, the signature matches with that of the two directors who have signed the loan documents. Hence, the objections of the respondent is not sustainable. This Adjudicating Authority is satisfied that default has been committed by the Corporate Debtor in repayment of loan amount to the Bank. The petition is complete - Petition admitted - moratorium declared.

Summary

Issues:
1. Initiation of corporate insolvency resolution process under Section 7 of the Insolvency and Bankruptcy Code, 2016 against the Corporate Debtor.
2. Dispute regarding the date of default and authority of the Applicant Bank to file the insolvency application.
3. Claim of the Respondent Company that the insolvency application is barred by limitation.
4. Consideration of additional affidavits and acknowledgment of debt in relation to the limitation period.
5. Appointment of Interim Insolvency Resolution Professional and declaration of moratorium under Section 14(1) of the IB Code.

Issue 1: Initiation of CIRP under Section 7 of the IB Code
The Chief Manager of Bank of India filed a petition under Section 7 of the IB Code against the Corporate Debtor, M/s. Raghukul Cottex & Processing Pvt. Ltd., citing a debt amounting to ?23,07,58,224.09 as of 04.06.2019. The Respondent Company was engaged in cotton ginning and textile substances business, with authorized share capital of ?90,00,00,000/- and paid-up share capital of ?47,50,000/-.

Issue 2: Dispute over Date of Default and Authority of Applicant Bank
The Respondent disputed the date of default claimed by the Applicant Bank, arguing that the default started on 28.01.2016, not 07.06.2016, as stated. Additionally, the Respondent challenged the authority of the bank officer who filed the insolvency application, alleging lack of authorization.

Issue 3: Claim of Barred Limitation
The Respondent contended that the insolvency application was barred by limitation. However, the Applicant argued that the application, filed on 06.06.2019, was within the limitation period, supported by an acknowledgment of debt dated 20.11.2018.

Issue 4: Consideration of Additional Affidavits and Acknowledgment of Debt
The Respondent objected to the consideration of an additional affidavit and claimed that the acknowledgment of debt was forged. The Adjudicating Authority found the objections unsubstantiated, noting that the acknowledgment was signed by two directors and matched the loan documents' signatures.

Issue 5: Appointment of Interim Insolvency Resolution Professional and Moratorium
The Adjudicating Authority admitted the petition under Section 7 of the IB Code, appointing Mr. Shalabh Kumar Daga as the Interim Insolvency Resolution Professional. A moratorium was declared under Section 14(1) of the IB Code, prohibiting suits against the Corporate Debtor and asset transfers. The order of moratorium was to remain in effect until the completion of the Corporate Insolvency Resolution Process.

This judgment addressed the initiation of CIRP, disputes over the date of default and authority of the Applicant Bank, claims of limitation, consideration of additional affidavits, and the appointment of an Interim Insolvency Resolution Professional with a declaration of moratorium. The Adjudicating Authority found in favor of the Applicant Bank, admitted the petition, and appointed an IRP, imposing a moratorium to facilitate the resolution process.