9911796707
TMI Blog2018 (6) TMI 349X X X X Extracts X X X X X X X X Extracts X X X X ..... e Code. X X X X Extracts X X X X X X X X Extracts X X X X ..... uted hypothecation deeds, guarantee deeds in favour of Karnataka Bank to secure the loan facilities. 8. Respondent Corporate debtor had availed loan and financial facilities from Karnataka Bank but failed to maintain its loan account and the account of respondent corporate debtor was declared NPA on 03.10.2010. 9. The respondent then made a reference before Board for Industrial and Financial Reconstruction (BIFR) vide reference Case No. 64 of 2010. 10. Copy of acknowledgement of debt has been placed on record in support of the contention that the respondent corporate debtor had acknowledged the debt of Karnataka Bank vide letters dated 14.01.2011 and 12.10.2011. 11. Subsequently Karnataka Bank Limited assigned and transferred its financial debt outstanding from respondent, in favour of applicant vide assignment agreement dated 14.03.2013. Thereafter, in May 2017 the applicant initiated recovery proceedings against respondent corporate debtor before the Debts Recovery Tribunal. Since the financial debt has been legally assigned and transferred to the applicant by assignment agreement dated 14.03.2013, the applicant comes within the definition of financial creditor' under sub-sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted. That apart the interest rates as claimed are disputed as the same was never agreed. 17. In this regard it is seen that applicant has placed on record loan agreements, various documents whereby the loan has been secured, relevant ledger account including the acknowledgement of debt. Respondent company has clearly acknowledged the debt on 14.01.2011 and also on 12.10.2011. There is also no dispute that the accounts of corporate debtor became NPA on 03.10.2010 and in the same year corporate debtor had made a reference to BIFR vide case No. 64 of 2010. In the rejoinder filed by the applicant on 14.03.2018 it is stated that Corporate Debtor has admitted that even dues of the Financial Creditor were envisaged in the revival scheme under consideration before the BIFR, which in itself is sufficient evidence of existence of the liability and default on the part of the corporate debtor. 18. The material on record clearly goes to show that respondent had availed the loan facilities and has committed default in repayment of the loan amount. In an application under Section 7 of the Code it is no matter that the debt is disputed, so long as the debt is due and there has been occurrence of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.2013, which is quite evident from the receipt and certificate issued by the sub-divisional registrar, Bhiwadi and therefore both the dates are valid dates. It is submitted that mentioning of two dates does not raise any question on existence of the assignment, which has been duly executed and acted upon by the parties. The contention of the applicant is self-explanatory and since the financial debt has been legally assigned and transferred to the applicant through valid assignment agreement, the applicant comes within the definition of 'financial creditor' under sub-section (7) of Section 5 of the Code. 21. It is pertinent to note here that pendency of proceedings before DRT will not preclude the applicant to trigger corporate insolvency resolution process under Section 7 of the code. In view of the overriding effect given in the provisions of section 238 of the Code, the initiation of proceedings before DRT is no bar for triggering insolvency proceedings under the Code. 22. Under sub-section 5(a) of Section 7 of the code, the application filed by the applicant financial creditor has to be admitted on satisfaction that; 1. Default has occurred. 2. Application is complete, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egal 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; (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." 29. It is made clear that the provisions of moratorium shall not apply to transactions which might be notified by the Central Government or the supply of the essential goods or services to the Corporate Debtor as may be specified, are not to be terminated or suspended or interrupted during the moratorium period. 30. The Interim Resolution Professional shall perform all his functions contemplated, inter alia, by Sections 15, 17, 18, 19, 20 & 21 of the Code and transact proceedings with utmost dedication, honesty and strictly in accordance with the provisions of the Code, Rules and Regulations. It is further made clear that all the personnel connected with the Corporate Debtor, its promoters or any other person associated with the Management of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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