9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (8) TMI 217 - Tri - Insolvency and BankruptcyAdmissibility of petition - Initiation of Corporate Insolvency resolution process - Corporate Debtor - default in repayment of the debt - HELD THAT - On looking at the submissions of either side, it has been proved that the Financial Creditors have not accepted the OTS proposal offered by the Corporate Debtor - The Orders of the Hon'ble Apex Court will specifically apply only to those companies against whom insolvency proceedings have been initiated based on RBI Circular. This Bench is of the view that the Corporate Debtor has defaulted in repaying outstanding debt of ₹ 125,89,60,431.52. The defense of Corporate Debtor that they had given a proposal for OTS is not tenable since the Financial Creditor has rejected the OTS proposal. This Bench hereby holds that it is a fit case for admission and orders commencement of Corporate Insolvency Resolution Process which shall ordinarily get completed within 180 days, reckoning from the day this order is passed. Petition admitted - moratorium declared.
Issues Involved:
1. Default in repayment by the Corporate Debtor. 2. Validity of the One-Time Settlement (OTS) proposal by the Corporate Debtor. 3. Applicability of the Supreme Court judgment in Dharani Sugars and Chemicals Ltd. vs. RBI. 4. Jurisdiction of the High Court in insolvency proceedings. 5. Appointment of Interim Resolution Professional (IRP) and declaration of moratorium. Issue-wise Detailed Analysis: 1. Default in repayment by the Corporate Debtor: The Applicant, State Bank of India (Financial Creditor), invoked the provisions of Section 7 of the Insolvency and Bankruptcy Code (IBC) against M/s. Bhatia Coke & Energy Limited (Corporate Debtor) for defaulting on a repayment of ?125,89,60,431.52 as of 31.12.2018. The date of default was noted as 11.08.2017. The Corporate Debtor had availed various credit facilities from the Financial Creditor and erstwhile State Bank of Mysore since September 2009. The loans were secured by land, building, plant, machinery, and personal guarantees. 2. Validity of the One-Time Settlement (OTS) proposal by the Corporate Debtor: The Corporate Debtor proposed an OTS offering an upfront payment of 10% of the principal outstanding and the balance in five equal quarterly installments. However, the Financial Creditor did not accept the OTS proposal. The Tribunal noted that the Financial Creditor's rejection of the OTS proposal invalidated the Corporate Debtor's defense. 3. Applicability of the Supreme Court judgment in Dharani Sugars and Chemicals Ltd. vs. RBI: The Corporate Debtor argued that the proceedings initiated under the RBI Circular dated 12.02.2018 should be quashed as per the Supreme Court judgment in Dharani Sugars and Chemicals Ltd. vs. RBI. However, the Tribunal clarified that the Supreme Court's order specifically applied to companies against whom insolvency proceedings were initiated based on the RBI Circular, which was not the case here. 4. Jurisdiction of the High Court in insolvency proceedings: The Corporate Debtor filed a Writ Petition and a Miscellaneous Petition in the High Court of Madras, arguing that the restructuring package was still in effect and the Financial Creditor filed the application with undue haste. The Financial Creditor contended that the High Court did not have jurisdiction over applications filed under Section 7 of the IBC. The Tribunal noted that there was no stay order from the High Court, and the Financial Creditor was within its rights to demand repayment as per the loan agreement. 5. Appointment of Interim Resolution Professional (IRP) and declaration of moratorium: The Tribunal admitted the petition and ordered the commencement of the Corporate Insolvency Resolution Process (CIRP). Mr. Motappa Thimmaraya Swamy was appointed as the IRP. A moratorium was declared, prohibiting the institution or continuation of suits, transferring of assets, foreclosure actions, and recovery of property by owners or lessors. The supply of essential goods or services to the Corporate Debtor was not to be terminated during the moratorium period. The moratorium would be in effect until the completion of the CIRP or until a resolution plan was approved or liquidation ordered. Conclusion: The Tribunal found that the Corporate Debtor defaulted on the repayment of the outstanding debt. The defense of the OTS proposal was not tenable as it was rejected by the Financial Creditor. The Tribunal ordered the commencement of the CIRP, appointed an IRP, and declared a moratorium. The Registry was directed to communicate the order to all relevant parties immediately.
|
