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TMI Blog2018 (11) TMI 609X X X X Extracts X X X X X X X X Extracts X X X X ..... rusal of Form -I filed under Section 7 of the Code read with Rule 4 of the Rules shows that the form is complete and there is no infirmity in the same. It is also seen that there is no disciplinary proceeding pending against the proposed IRP. We are satisfied that the present application is complete in all respect and the applicant financial creditor is entitled to claim its outstanding financial debt from the corporate debtor and that there has been default in payment of the financial debt. Thus in terms of Section 7(5)(a) of the Code, the present application is admitted. - COMPANY PETITION (IB) -419 (PB)/2018 - - - Dated:- 12-10-2018 - MR M.M. KUMAR, PRESIDENT AND MR S.K. MOHAPATRA , MEMBER (T) For The Applicant : Kaaran Khanna, Advocate For The Respondent : Joby P. Varghase, Aby P. Varghese and Shahid Akhtar, Advocates ORDER S. K. Mohapatra, Member Indian Oversea 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 Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (for brevity the R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Code. 6. It is the case of the applicant that in the year 2005 the applicant bank sanctioned a term loan to the extent of ₹ 22.00 Crore, which was subsequently bought under the Consortium - I on 20-07-2007 and the same debts were revived and duly acknowledged by the Corporate Debtor on 14.06.2010. 7. Thereafter another term loan to an extent of ₹ 35 Crore, was sanctioned on 29.05.2006 which was availed by corporate debtor after necessary documentation on 12.06.2006. This term loan was also subsequently bought under the Consortium - II on 20.07.2007 and the same debts were revived and also acknowledged by the Corporate Debtor on 14.06.2010. 8. Subsequently, working capital and LG facilities were sanctioned on 02.05.2007 to the respondent corporate debtor to an extent of ₹ 17.50 Crore. In order to secure aforesaid facility necessary documentation were executed on 14.05.2007. This facility was also pulled in a Consortium on 02.11.2007. Thereafter on the request of the Corporate Debtor, the credit facility was enhanced to ₹ 21.50 Crore from ₹ 17.50 Crore vide sanction dated 18.12.2008 and necessary documentation was executed on 19.01.2009. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reement dated 12.06.2006 viii. Copy of Letter of Hypothecation dated 12.06.2006 ix. Copy Guarantee for Cash Credit dated 12.06.2006 x. Copy Letter of Creation/Conf rmation of Equitable Mortgage. xi. Copy of Sanction Letter dated 02.05.2007. xii. Copy of Letter of Hypothecation dated 14.05.2007. xiii. Copy of Demand Promissory Note for ₹ 10 Crores dated 14.05.2007. xiv. Copy of Demand Promissory Note for ₹ 7.5 Crores dated 14.05.2007. xv. Copy of Letter of Continuity date 14.05.2007 xvi. Copy of Letter of Hypothecation (in case of open advance only) dated 14.05.2007. xvii. Copy of Hypothecation of Book Debts dated 14.05.2007 xviii. Copy of Letter of Hypothecation for securing (machines/goods/book debts) dated 14.05.2007 xix. Copy General Counter Guarantee dated 14.05.2007 xx. Copy Guarantee Agreement dated 14.05.2007. xxi. Copy of Inter-Se Agreement dated 20.07.2007 (Consortium-1). xxii. Copy Credit Facilities Agreements Dated 20-07-2007 (Consortium-1). xxiii. Copy of Joint Deed of Hypothecation dated 20.07.2007 (Consortium-1). xxiv. Copy of Guarantee Agreement Dated 20. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f open advances only) dated 04.07.2011. lvii. Copy of Hypothecation of Book Debts dated 04.07.2011. lviii. Letter of Hypothecation for securing machinery/vehicles/goods/book debts dated 04.07.2011. lix. guarantee far Cash Credit etc. dated 04.07.2011. lx. Letter of Conf rmation for creation of Supplemental Mortgage dated 05.07.2011 in respect of Property hearing Plot Nos.201, 149-150, Land Mark Building, Bandra West, Mumbai. lxi. Letter of Conf rmation for creation of Supplemental Mortgage dated 05.07.2011 in respect of the property hearing plot No. 13, Film City, Noida U.P. lxii. Letter of Undertaking dated 04.07.2011. lxiii. Balance and Security Confirmation dated 29.06.2011. lxiv. Copy of notice dated 13.08.2012 under section 13(4) of the Securitization Act, 2002. lxv. Copy of Legal notice dated 22.04.2013. lxvi. Certified copy of Statement of Accounts along with total outstanding chart. 13. The applicant has submitted that the Respondent corporate debtor failed to clear the outstanding dues and did not adhere to the terms and conditions of the loan agreement. Consequently, applicant bank has initiated action again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plication alone under Section 7 of the Code. 16. Hon ble NCLAT in the matter of Asian Natural Resources (India) v. IDBI Bank Limited. in its order dated 11.08.2017 passed in Company Appeal (AT) (Insolvency) No. 60 of 2017 has observed that: The Inter-se Agreement between different banks is not binding in nature, the Corporate Debtors not being signatories cannot derive advantage of such Inter-se Agreement. This apart, the financial creditors having right to file application under Section 7 of the I B Code, individually or jointly on behalf of other financial creditors as quoted below, the Inter-se Agreement between the financial creditors cannot overr de the said provision, nor can take away the right of any Financial Institution to file application under Section 7 of the I B Code. 17. Respondent has raised another objection that the present application is not maintainable as applicant bank can only act through its authorized representative. It is alleged that there is no Board resolution authorizing Mr. M. Ravindran Menon Asstt. General Manager to file the present petition on behalf of the applicant bank. 18. In this regard applicant bank in its rejoinder f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pointment as the interim resolution professional and has signed the communication dated 27.08.2018 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. He has confirmed that he is not related to the corporate debtor. In addition, other necessary disclosures have been made by Mr. Anil Kumar as per the requirement of the IBBI Regulations. Accordingly, the defect as pointed out in this regard, stands rectified. 22. Respondent has further alleged that as the company was in dire need of money, the applicant bank being in a dominant position got certain sets of unfilled papers, undated printed proformas, blank stamp papers and forms etc.; signed from the signatory of the respondent company. In this regard applicant bank has submitted in its rejoinder dated 06.06.2018 that it has never forced the corporate debtor to sign and stamp any unfilled documents. It is the case of the applicant that respondent suo motu had executed security and other loan documents. It is submitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... top the admission of corporate insolvency resolution process under section 7 of the Code. 27. In connection with the objection regarding simultaneous pendency of proceedings, it is well settled that the pendency of DRT proceedings and initiation of action under SARFAESI Act cannot be an impediment or bar to initiate the Corporate Insolvency Resolution Process under Section 7 of the Code. 28. Respondent corporate debtor further asserted that time and again it had requested the consortium of banks for more financial facility/restructure/compromise, but due to arbitrary, illegal and non-helping approach of the consortium, despite assurances, the same was not done. In reply applicant has stated in the rejoinder that as soon as the recovery proceedings were initiated by the applicant, the respondent started giving proposals for amicable settlement. In addition several settlement applications were also filed before Debt Recovery Tribunal. 29. In this regard it is pertinent to note that in financial transactions, adjustments and compromise are to be left to the parties to settle the matter in their best interest or exigencies of the business. However, in the absence of any bindin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under sub-section 5(a) of Section 7 of the code, has to be admitted on satisfaction that: I. Default has occurred. II . Application is complete, and III. No disciplinary proceeding against the proposed IRP is pending. 36. Hon ble Supreme Court in the case of Mobilox Innovations (P.) Ltd. v. Kirusa Private Limited reported in AIR 2017 SC 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) 37. An application under Section 7 of the Code is acceptable so long as the debt is proved to be due and there has been occurrence of existence of default. What is material is that the default is at least 1 lakh. In view of Section 4 of the Code, the moment default is of Rupees one lakh or more, the application to trigger Corporate Insolvency Resolution Process under the Code is maintainable. 38 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e are satisfied that the present application is complete in all respect and the applicant financial creditor is entitled to claim its outstanding financial debt from the corporate debtor and that there has been 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. Mr. Anil Kumar having registration No. IBBI/IPA-001/IP-P00144/2017-18/10308, resident of 303, Chandra GHS Limited, Golf Course Road, Plot No. 64, Sector 55, Gurgaon, Haryana-122011, email id; [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 the IBBI Regulations) with regard to admission of this application under Section 7 of the Insolvency Bankruptcy Code, 2016. 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), (e) (d) of the Code. Thus, the following prohibitions are imposed: ..... X X X X Extracts X X X X X X X X Extracts X X X X
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