2017 (10) TMI 758 - Tri - Insolvency and Bankruptcy

Insolvency resolution process - Held that - As heard learned Counsel for the Financial Creditor who has taken us through the various paras of the application as already recorded in the preceding paras from the perusal of the record. We are satisfied that the Financial Creditor has proved by overwhelming evidence that default has occurred. Accordingly, the application for initiation of Corporate Insolvency Resolution Process under section 7 is admitted and Mr. Sanjay Gupta, Registration No. IBBI/IPA-001/IP- P00117/2017-18/10252 is appointed as Interim Resolution Professional. In pursuance of Section 13(2) of Code, we direct that public announcement shall be immediately made by the Interim Resolution Professional with regard to admission of this application under Section 7 of the Code. We also declare moratorium in terms of Section 14 of the Code.

Issues Involved:
1. Application under Section 7 of the Insolvency and Bankruptcy Code, 2016.
2. Financial Debt and Default by Corporate Debtor.
3. Security and Charges over Assets.
4. Actions under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
5. Declaration of Moratorium and Appointment of Interim Resolution Professional.

Detailed Analysis:

1. Application under Section 7 of the Insolvency and Bankruptcy Code, 2016:
The Punjab National Bank (PNB-Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the insolvency resolution process against Samtel Colour Ltd. (Corporate Debtor). The application was filed on 24.05.2017 and initially included sixteen respondents, but later, respondents 2 to 16 were deleted, leaving only Samtel Colour Ltd. as the respondent.

2. Financial Debt and Default by Corporate Debtor:
The Financial Creditor detailed various financial debts, including working capital facilities and term loans, extended to the Corporate Debtor. The total amount of debt granted was substantial, with specific amounts and dates of disbursement provided. The Corporate Debtor defaulted on 14.01.2016, with the amount claimed being ?236,20,17,559.29. The application included a comprehensive list of financial facilities and the dates of their sanction and disbursement.

3. Security and Charges over Assets:
The Working Capital Facility was secured by a first pari passu charge over the Corporate Debtor’s current assets and a second pari passu charge over its fixed assets. The Restructured Credit Facilities were secured by creating an equitable mortgage over several immovable properties and a first pari passu charge over all present and future fixed assets. Detailed descriptions of the secured properties and the amounts involved were provided.

4. Actions under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002:
The Financial Creditor issued a demand notice under Section 13(2) of the Securitisation Act on 20.08.2013, demanding ?158,59,74,423.98. The borrower failed to comply, leading to symbolic possession of the mortgaged properties under Section 13(4) on various dates in April 2014. A recall notice was also sent on 14.01.2016, demanding the outstanding amount with interest.

5. Declaration of Moratorium and Appointment of Interim Resolution Professional:
The Tribunal admitted the application for initiating the Corporate Insolvency Resolution Process under Section 7. Mr. Sanjay Gupta was appointed as the Interim Resolution Professional. A public announcement was directed to be made, and a moratorium was declared under Section 14 of the Code. The moratorium included prohibitions on instituting or continuing suits, transferring assets, foreclosing security interests, and recovering property.

Conclusion:
The Tribunal concluded that the Financial Creditor had provided overwhelming evidence of default by the Corporate Debtor. Consequently, the application was admitted, and the necessary steps for the insolvency resolution process were initiated, including the appointment of an Interim Resolution Professional and the declaration of a moratorium. The petition was disposed of in these terms.

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