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TMI Blog2018 (11) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... passed by Hon'ble Bombay High Court (Annexure-A/7) duly sanctioning a scheme of arrangement between Reliance Capital Ltd. and Reliance Commercial Finance Limited under the provisions of Section 391-394 of the Companies Act, 1956. As a result of the approval of the scheme by Hon'ble Bombay High Court the loan amount stands transferred to and vested in the petitioner-'Financial Creditor', together with the securities and/or benefits, rights and obligations. Accordingly, the petitioner has acquired the status of 'Financial Creditor' in terms of Section 5 (7) of the Code. It has made adequate disclosure being the transferee of the financial contract by placing on record a copy of the order dated 09.12.2016 passed by Hon'ble Bombay High Court. Thus, we are satisfied that the petitioner is a transferor of a financial contract and that it has adequately fulfilled the requirement of Rule 4 (2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (for brevity Adjudicating Authority Rules'). 2. The 'Financial Creditor' as a company was incorporated on 17.08.2000 as is evident from a copy of the Company Master Data obta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the default occurred' substitution of certain paras were allowed. Thereafter vide diary No. 1434 dated 15.03.2018 an amended application was filed by the Corporate Debtor. 7. It is the pleaded case of the Financial Creditor that the Corporate Debtor through its Directors namely Mr. Yogesh Choudhary and Ms. Maya Kumari Choudhary approached the Financial Creditor for Short and Medium Enterprise loan for the purpose of meeting general corporate purpose of the company. It duly considered the request of the Corporate Debtor for financial assistance and accordingly, a facility agreement dated 29.09.2015 under Loan Agreement No. RLCSDEL000310220 was executed between the Financial Creditor and the Corporate Debtor. Subsequently a loan for a sum of Rs. 1,06,35,000/- was disbursed on 30.09.2015 for purchase of three machines namely (1) IDEA MACHINE TOOLS/CGU 130 X 600 US; (2) SMARTURN CNC LATEHE WITH FANUC SYSTEMS; and (3) CYLINDER MACHINE MODEL 175 X 600 U/S CNC. The loan was to be repaid along with interest @ 12.50% per annum in 48 EMIS of Rs. 2,82,678/- each. Further, on default in repayment of the loan, a further interest of 3% per annum on defaulted amount was also agreed be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shmi Machine Work Ltd. The total value of the said machines was Rs. 1,06,35,000/- in which total amount to be contributed by the Financial Creditor was Rs. 79,92,533.75/- and the Corporate Debtor was to make the part payment of Rs. 26,95,031/-. The Corporate Debtor has already fulfilled their part by paying the said part payment to both the respective parties. (ii) The Financial Creditor has concealed the fact that at the time of paying Idea Machine Tools and LMW Ltd. the Financial Creditor made a fault and made a payment of Rs. 72,50,000/- instead of paying Rs. 54,53,690/- to Idea Machine Tools. The Financial Creditor has also attempted to hide the fact that the payment of Rs. 7,42,533.75 instead of Rs. 25,38,843.75 was wrongfully made to the LMW Ltd. The Financial Creditor had mistakenly over paid Idea Machine Tools an amount of Rs. 17,96,310/- and underpaid the said amount to LMW Ltd. Due to faults of the Financial Creditor the order of the Corporate Debtor was not completed and the machine that was to be delivered by LMW Ltd. to the Corporate Debtor was never delivered and it further suffered the business opportunity and losses. (iii) The Financial Creditor has failed to br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der:- "Initiation of corporate insolvency resolution process by financial creditor. 7(1).................... 7. (2) The financial creditor shall make an application under sub-section (1) in such form and manner and accompanied with such fee as may be prescribed. 7(3).................. 7(4).................. 7. (5) Where the Adjudicating Authority is satisfied that- (a) a default has occurred and the application under sub-section (2) is complete, and there is no disciplinary proceedings pending against the proposed resolution professional, it may, by order, admit such application; or (b)............." 14. A conjoint reading of the aforesaid provision would show that form and manner of the application has to be the one as prescribed. It is evident from the record that the application has been filed on the proforma prescribed under Rule 4 (2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, read with Section 7 of the Code. We are satisfied that a default amounting to lacs of rupees has occurred within the meaning of Section 4 of the Code and the application under sub-section 2 of Section 7 is complete; and no disciplinary proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods or services as provided by Regulation 32 of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. 19. The Interim Resolution Professional shall perform all his functions religiously and strictly which are contemplated, inter alia, by Sections 15, 17, 18, 19, 20 & 21 of the Code. He must follow best practices and principles of fairness which are to apply at various stages of Corporate Insolvency Resolution Process. His conduct should be above board & independent; and he should work with utmost integrity and honesty. It is further made clear that all the personnel connected with the Corporate Debtor, erstwhile directors, promoters or any other person associated with the Management of the Corporate Debtor are under legal obligation under Section 19 of the Code to extend every assistance and cooperation to the Interim Resolution Professional as maybe required by him in managing the affairs of the Corporate Debtor. In case there is any violation committed by the ex-management or any tainted/illegal transaction by ex-directors or anyone else the Interim Resolution Professional/Resolution Professional would be at liberty to make appropriate application to this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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