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TMI Blog2018 (9) TMI 1225X X X X Extracts X X X X X X X X Extracts X X X X ..... is of Rupees one lakh or more, the application to trigger Corporate Insolvency Resolution Process under the Code is maintainable. The applicant 'financial creditor' has placed on record voluminous and overwhelming evidence in support of the claim as well as to prove the default. Moreover, the application of the financial creditor is complete and there is no disciplinary proceeding pending against the proposed IRP. We are satisfied that the present application is complete and the applicant financial creditor is entitled to claim its outstanding financial debt from the corporate debtor and that there has been a default in payment of the financial debt. In terms of Section 7(5)(a) of the Code, the present application is admitted. - Company Petition No. (IB)-563(PB)/2018 - - - Dated:- 14-8-2018 - DR. DEEPTI MUKESH, MEMBER (JUDICIAL) AND S.K. MOHAPATRA, MEMBER (TECHNICAL) For The Applicant : N.P. Gaur, Advocate ORDER S.K. Mohapatra, Member Andhra Bank, claiming as the financial creditor, has filed the instant application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (for brevity 'the Code'), read with rule 4 of the Inso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 01.05.2018 in Form 2 in terms of Rule 9(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. There is a declaration made by him that no disciplinary proceedings are pending against him in Insolvency and Bankruptcy Board of India or elsewhere. In addition, further necessary disclosures have been made by Shri Prabhakar Nandiraju as per the requirement of the IBBI Regulations. Accordingly, he satisfies the requirement of Section 7(3)(b) of the Code. 6. The applicant bank has filed an affidavit on 04.06.2018 inter alia affirming that on 31.05.2018 at about 2:30 PM one Mr. Vikrant Kapoor, Manager (Law) of SARM Branch of Andhra Bank along with Mr. Vijay Kumar, clerk of the counsel visited the registered office of the corporate debtor at 121, First Floor, Vardhrnan Market, Outer Ring Road, Vikas Puri, New Delhi 110018 to serve the notice of the present petition and found that the corporate debtor is not having any office at the said address. In a subsequent affidavit dated 25.07.2018 it has been affirmed that in compliance of order dated 12.06.2018 notice has been served by the applicant/financial creditor to the respondent company through email on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and ILC/FLC (renewal) Limit of ₹ 2.50 crores for procurement of raw material. At the request of the Respondent company, the Applicant Bank sanctioned the said limits totalling ₹ 22.00 crores subject to the terms and conditions mentioned in the sanction letter dated 03.02.2010. 13. The Respondent accepted the said conditions and in token thereof acknowledged the sanction letter. Besides the Resolution dated 18.02.2010 of the Board of Directors of the Respondent company has been placed on record to show that the corporate debtor had resolved to borrow Fund Based and Non-Fund based limit of ₹ 22.00 crores from the Applicant Bank and also to create mortgage to secure the loan. In addition applicant has submitted that in the Extraordinary General Meeting of the shareholders held on 08.02.2010 under Section 293(1)(a) and 293 (1)(d) of the Companies Act, it was resolved to borrow in excess of the paid-up capital and free serves of the company and to mortgage on the assets of the Respondent. 14. The respondent corporate debtor has further executed the following loan documents on 06.03.2010. (i) Composite agreement executed by the Respondent for ₹ 22.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the OCC limit from 7.50 crores to ₹ 25.00 crores and renewal of ILC/FLC limit of ₹ 5.00 crores. At the request of Respondent, the Applicant Bank sanctioned the OCC limit of ₹ 20.00 crores and ILC/IFC limit of ₹ 5.00 crores subject to the terms and conditions mentioned in the sanction letter dt. 25.02.2011. 19. It is submitted that the following loan documents were again executed on 11.03.2011:- 1. Composite agreement executed by the Respondent for ₹ 25.00 crores promising to repay the working capital limits within one year. The Respondent also agreed to pay overdue interest @ 2% in case of default in repayment of the amounts on the due date. 2. Demand Promissory Note for ₹ 20.00 crores (for OCC limit) promising to repay the same with interest with 14.25% per annum being 4.75 % over and above banks Base rate compounded with monthly rests. 3. Demand Promissory Note for ₹ 25.00 crores (OCC limit ILC limits) promising to repay the same with interest compounded with monthly rests. 4. Demand promissory note for ₹ 5.00 crores (for ILC Limit). 5. Consent letter executed by Respondent to disclose to CIBIL. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the current assets of the Respondent which are hypothecated to the Applicant Bank are lying with the respondent company. 28. It is submitted that as per the clause in the composite agreement, the Respondent was required to remit the sale proceeds of the hypothecated assets and route the transaction through the Applicant Bank. It is alleged that the Respondent has been selling the hypothecated assets since April, 2013 but not remitting the sale proceeds into the account. There are no operations in the loan account since April, 2013. As per the terms of composite agreement, Applicant Bank is empowered to seize, to sell the hypothecated assets and appropriate the sale proceeds to the loan accounts and is also empowered to sell the hypothecated assets even without intervention of the court. It is alleged that the Respondent represented by its Directors with mala fide intention to obtain unlawful gain have been adopting unfair trade practices and misappropriating the sale proceeds of the hypothecated assets. It is submitted that the Respondent failed to pay the loan amounts in accordance with the agreed terms and as such the Applicant bank was constrained to classify the account of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recovery as per the statement of accounts filed. It is further contended that in view of the introduction of Section 21A in Banking Regulation Act, the Applicant Bank is entitled to claim interest at contractual rate till the date of realization. 32. As per Part IV of the application it has been claimed that the Respondent corporate debtor is liable to pay a sum of ₹ 86,07,72,488.43/- under Term Loan, FITL, OCC limit (Including the ILC liability) as on 30.04.2018 as detailed hereunder: TERM LOAN LIMIT; As per statement of account as on 30.04.2018 - ₹ 25,63,38,260.60 (Rupees Twenty five crores sixty three lakhs thirty eight thousand two hundred sixty and paise sixty only). FITL LIMIT: As per statement of account as on 30.04.2018-Rs. 3,86,17,800.00 (Rupees Three crores eighty six lakhs seventeen thousand eight hundred only) QCC LIMIT. As per statement of account as on 30.04.2108-Rs. 51,99,70,580.83 (Rupees Fifty one crores ninety nine lakhs seventy thousand five hundred eighty and paise eighty three only) QCC Sub-Limit (Account with Banaswadi Branch) As per statement of account as on 30.04.2018-Rs. 4,58,45,847.00 (Rupees Four ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... financial creditor has to be admitted on satisfaction that: 1. Default has occurred. 2. Application is complete, and 3. No disciplinary proceeding against the proposed IRP is pending 38. Hon'ble Supreme Court in the case of Mobilox Innovations Private Limited V. Kirusa Software Private Limited reported in AIR 2017 4532 at Para 19 has observed that: Once the adjudicating authority / Tribunal is satisfied as to the existence of the default and has ensured that the application is complete and no disciplinary proceedings are pending against the proposed resolution professional, it shall admit the application. The adjudicating authority/Tribunal is not required to look into any other criteria for admission of the application . (Emphasis given) 39. In the case in hand applicant has produced Board resolution and also special resolution of the respondent company in order to establish availment of various loan facilities by the respondent company. It has been shown that the respondent company through its several letters accepted the terms and conditions of respective sanction letters. In addition, respondent has executed various loan agreements and created mortga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titled to claim its outstanding financial debt from the corporate debtor and that there has been a default in payment of the financial debt. 43. As a sequel to the above discussion and in terms of Section 7(5)(a) of the Code, the present application is admitted. 44. Shri Prabhakar Nandiraju, having registration number IBBI/IPA-002/ IP-N00361/2017-18/11030 resident of D. No. 11-12-7, Road No. 1, Income Tax Colony, SRK Puram, Hyderabad - 500102, email [email protected] is appointed as an Interim Resolution Professional. 45. In pursuance of Section 13(2) of the Code, we direct that public announcement shall be made by the Interim Resolution Professional immediately (3 days as prescribed by Regulations) with regard to admission of this application under Section 7 of the Code. 46. We also declare moratorium in terms of Section 14 of the Code. The necessary consequences of imposing the moratorium flows from the provisions of Section 14 (1) (a), (b), (c) (d). Thus, the following prohibitions are imposed: (a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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