TMI Blog2018 (10) TMI 1580X X X X Extracts X X X X X X X X Extracts X X X X ..... ejected. The objection of the learned counsel for the corporate debtor is, therefore, not accepted. As regards the date on which the default occurred, even though the same is not specified in para-2 of Part IV of Form1, we have already noted above that the detail of date of default is available in the Notice under Section 13(2) of the SARFAESI Act, 2002 dated 21.07.2016 enclosed as Annexure A- 25 of the petition. In the reply/objections filed vide Diary No. 645 dated 05.03.2018, it is inter alia submitted that the financial creditor has failed to provide the record of the default with the information utility as required under Section 7 of the Code. Para-3 of Part V of Form 1 requires furnishing of details of record of default with the information utility, if any. It is stated by the financial creditor in Form 1 that the para is not applicable. Further, Section 7(4) requires the Adjudicating Authority to ascertain the existence of a default from the records of an information utility or on the basis of other evidence furnished by the financial creditor under Section 7(3) of the Code. Therefore, no record being available with the information utility, cannot result in making the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Shri Himanshu Kansal is at Annexure A-1 of the petition. 2. The CIN of the corporate debtor is U24117CH1996PLC018656, date of incorporation is 21.08.1996 and registered address is at SCO 85, Sector 35-C, Chandigarh-160036 as per master data at Annexure A-29 of Diary No. 1116 dated 13.04.2018. The matter, therefore, lies within the territorial jurisdiction of this bench of the Tribunal. 3. It is stated that the corporate debtor had availed loan/credit facilities/financial assistance from the financial creditor and that as per account reviewed lastly on 29.03.2014 vide letter reference No. HO/ADV/852/2013- 14/4202 dated 29.03.2014 (placed at Annexure A-7 of the petition), the total amount of debt granted was as follows:- 1. Term Loan WCTL (Woking Capital Term Loan) of ₹23,61,00,000/-. 2. Term Loan of ₹ 19,03,00,000/-. 3. Term Loan-FITL (Funded Interest Term Loan) of ₹ 10,60,00,000/-. 4. Cash Credit Working Capital Limit of ₹ 7,63,00,000/- Letter of credit of ₹4,61,00,000/-. ₹ 60,87,00,000/- funded plus ₹ 4,61,00,000/- Non-funded total ₹ 65,48,00,000/- (Sixty five crore forty eight lakh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erms of Section 2A(b) of the Bankers Books Evidence Act. The joint summary of the accounts showing balance outstanding excluding cost and other expenses incurred of ₹ 83,10,72,467.80 is at page 130 of Diary No. 1116 dated 13.04.2018. 6. The particulars of security held are given in para-1 of Part V of Form 1. In para-2 of Part V, it is stated that original application has been registered by DRT-II, Chandigarh under No. 4494 of 2017 and date of hearing is 24.11.2017. The copy of the demand notice issued under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), dated 21.07.2016, copy of objections received from the corporate debtor under Section 13(3-A) of the SARFAESI Act dated 24.09.2016; copy of reply to the objections dated 24.09.2016 vide letter dated 14.10.2016; copy of demand notice dated 12.09.2017 are stated to be enclosed as Annexures A-24 to A-28 of the petition. The copy of the petition is stated to be sent to the corporate debtor by speed post on 08.12.2017. 7. In the order dated 10.01.2018, it was observed that the learned counsel for the petitioner has handed over the trac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the estimated value at the time of creation of the charge or at the current value was left open. 10. Vide Diary No. 1116 dated 13.04.2018, in compliance to the order dated 09.04.2018, the financial creditor placed on record certified copy of master data; certified copy of certificates of registration of charge issued by the Registrar of Companies, Punjab and Chandigarh along with certified copy of Form 8 (particulars for creation or modification of charge) as Annexure A- 29 to A-33; and also the copy of working for computation of amount and days of default in tabular form as annexures A-34 to A-37 along with bankers certificates. 11. The replication /rejoinder of the financial creditor was filed by Diary No. 1349 dated 01.05.2018 denying the contentions raised in the reply by the corporate debtor and stating that as regards para-8 of the reply of the corporate debtor, no claim has been submitted by the corporate debtor, and it is an admitted fact that there is amount due as well as default towards the financial creditor. 12. It is inter alia observed in the order dated 16.05.2018 that the respondent sought adjournment to file counter for the documents filed by the peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d resolution professional, it may, by order, admit such application; or (b) default has not occurred or the application under subsection (2) is in complete or any disciplinary proceeding is pending against the proposed resolution professional, it may, by order, reject such application: Provided that the Adjudicating Authority shall, before rejecting the application under clause (b) of sub-section (5), give a notice to the applicant to rectify the defect in his application within seven days of receipt of such notice from the Adjudicating Authority. Therefore, three issues arise for consideration are :- (i) Whether a default has occurred. (ii) Whether the application under Section 7(2) is complete and (iii) Whether any disciplinary proceedings are pending against Resolution Professional. 16. As regards the first issue i.e. the occurrence of default, we have already discussed above that consequent to review/restructuring under CDR, financial facilities in the form of loan/cash credit/letter of credit totalling to ₹ 65,48,00,000 (₹60,87,00,000 funded plus ₹ 4,61,00,000 non- funded) were granted to the corporate debtor and that the amount outstan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inancial creditor had drawn attention to the notice of demand dated 12.09.2017 issued to the corporate debtor stating that as against sanctioned amount of ₹ 65,48,00,000, the outstanding as on 12.09.2017 (inclusive of interest up to 11.09.2017) was ₹81,97,40,974 and stating that the loan is already due for repayment but the corporate debtor has failed and/or neglected to repay the outstanding dues or regularise the above account. By the notice, the corporate debtor was called upon to discharge the entire liability of ₹81,97,40,974 as on date of 12.09.2017 and also future interest thereon along with cost charge and expense within 15 days from the notice failing which the financial creditor, in addition to initiating recovery process under prevailing laws, shall be constrained to exercise all or any of the rights conferred under the Code. The notice of demand is not required to be statutorily issued in respect of initiation of CIRP in the case of financial creditors. However, the contents of the notice clearly bring out the occurrence of default. The occurrence of default is also supported by the issue of notice under Section 13(2) read with Section 13(13) of SARFAE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im Resolution Professional is appointed, he has to seek fresh valuation for determining the fair value and liquidation value of the properties of the corporate debtor. We find that the valuation of the securities does not have much relevance for determination of the question whether the application is to be admitted or rejected. The objection of the learned counsel for the corporate debtor is, therefore, not accepted. 20 . As regards the date on which the default occurred, even though the same is not specified in para-2 of Part IV of Form1, we have already noted above that the detail of date of default is available in the Notice under Section 13(2) of the SARFAESI Act, 2002 dated 21.07.2016 enclosed as Annexure A- 25 of the petition. 21. In the reply/objections filed vide Diary No. 645 dated 05.03.2018, it is inter alia submitted that the financial creditor has failed to provide the record of the default with the information utility as required under Section 7 of the Code. Para-3 of Part V of Form 1 requires furnishing of details of record of default with the information utility, if any. It is stated by the financial creditor in Form 1 that the para is not applicable. Further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppointment of Shri Hemanshu Jetley, Regn. No. IBBI/IPA-001/IP-P00219/2017-18/10457 as Interim Resolution Professional. The copy of the registration certificate has been annexed as Annexure A-3 of the petition. Form II has been filed at pages 14 to 15 of the petition in which Shri Hemanshu Jetley has agreed to accept appointment as Interim Resolution Professional and has affirmed that he is eligible to be appointed as Resolution Professional in respect of the corporate debtor in accordance with the provisions of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons ) Regulations, 2016. In Form No. 2, Shri Hemanshu Jetley has also certified that there are no disciplinary proceedings pending against him with the Board or Indian Institute of Insolvency Professional of ICAI. 26. In view of the above discussion, the requirements of Section 7(5)(a) are satisfied in the present case and, therefore, the petition is admitted and the moratorium is declared in terms of sub-section (1) of Section 14 of the Code, which is as under:- (a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Section 18 and other relevant provisions of the Code , including taking control and custody of the assets over which the Corporate Debtor has ownership rights recorded in the balance sheet of the Corporate Debtor etc. as provided in Section 18 (1) (f) of the Code . The Interim Resolution Professional is directed to prepare a complete list of inventory of assets of the Corporate Debtor ; (iii) The Interim Resolution Professional shall strictly act in accordance with the Code , all the rules framed thereunder by the Board or the Central Government and in accordance with the Code of Conduct governing his profession and as an Insolvency Professional with high standards of ethics and moral; (iv) The Interim Resolution Professional shall endeavour to constitute the Committee of Creditors after collation of all the claims received against the corporate debtor and the determination of the financial position of the corporate debtor, constitute a committee of creditors and shall file a report, certifying constitution of the committee to this Tribunal on or before the expiry of thirty days from the date of his appointment, and shall hold first meeting of the committee within ..... X X X X Extracts X X X X X X X X Extracts X X X X
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