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TMI Blog2018 (11) TMI 690X X X X Extracts X X X X X X X X Extracts X X X X ..... ry 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. As a sequel to the above discussion and in terms of Section 7(5)(a) of the Code, the present application is admitted. - COMPANY PETITION NO. (IB)-263(PB)/2018 - - - Dated:- 4-10-2018 - MR M. M. KUMAR, PRESIDENT AND MR S.K. MOHAPATRA, MEMBER (TECHNICAL) For The Applicant : Vipin Jain, Advocate For The Respondent : Joby P. Varghese And Aby P. Varghese, Advocates ORDER S. K. Mohapatra, Technical Member State Bank of India, 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 Rules') with a prayer to trigger Corporate Insolvency Resolution Process in respect of respondent company M/s. Century Communication Ltd. referred to as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant bank in part - IV of the application are enumerated below. PART - IV 4. PARTICULARS OF THE FINANCIAL DEBT 1. Total amount of debt granted date of disbursement. Working Capital ( a) 2003 - ₹ 4.92 Cr. (b) 2004 - ₹ 6.38 Cr (c) 2005 - ₹ 5.40 Cr (d) 2006 - ₹ 9.28 Cr (e) 2007 - ₹ 8.45 Cr (f) 2008 - ₹ 44.20 Cr (g) 2009 - ₹ 44.20 Cr and ₹ 53.45 Cr Multiple Banking TL-I-Rs. 7 Cr. - 01.03.2004 TL-II- ₹ 10 Cr. - 04.04.2005 TL-III-Rs. 45 Cr (Rs. 30 Cr -12.02.2007 and ₹ 15 Cr.- 01.02.2007) TL-IV ₹ 75 Cr. (Rs. 30 Cr. - 12.10.2009 and ₹ 45 Cr.-20.11.2009) 2. Amount claimed to be in default and the date on which the default occurred. ₹ 287,30,27,27,863.47 (Rupees Two hundred eighty seven crores thirty lakh twenty seven thousand eight hundred sixty three and paise forty seven only) as on 17.02.2018 along with pendent lite interest till the payment. 7. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilized the same. However, it is alleged that the respondent company failed to maintain financial discipline and defaulted in making periodical repayment of the credit facilities advanced by the petitioner. 10. As the respondent company defaulted and failed to repay its contractual outstanding dues, the accounts of the respondent were classified as Non-Performing Asset by the Petitioner in terms of the guidelines of the RBI, as follows: State Bank of India - 30.11.2011 State Bank of Hyderabad (New State Bank of India) - 28.11.2011 11. It is submitted that as the respondent company failed to clear the outstanding dues, Indian Overseas Bank (Lead Bank) on behalf of all the other banks including the Petitioner, issued a notice under Section 13(2) of the SARFAESI Act, 2002 on 13.08.2012 to the respondent corporate debtor to pay an amount of ₹ 693,46,65,059.10 (Rupees Six Hundred Ninety Three Crores Forty Six Lacs Sixty Five Thousand Fifty Nine and Paise Ten Only) with further interest from 01.07.2012 within 60 days from the date of receipt of the notice. However, it is alleged that even after the service of the said notice, the respondent corporate debto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,34,248/- (Rupees Seven Hundred Fifty Four Crores Seventy Two Lacs Thirty Four Thousand Two Hundred Forty Eight Only) as on 28.02.2013 plus interest within two weeks. The Respondent company failed to pay the amount as sought in the said legal notice dated 16.04.2013. 16. Consequently, Indian Overseas bank, on behalf of Petitioner and other consortium banks, filed Original Application No. 160/2013 before the Debts Recovery Tribunal-I, New Delhi on 23.07.2013. The original application filed before the Debts Recovery tribunal, New Delhi is still pending for adjudication of the claims of consortium banks. 17. The petitioner has placed on record the relevant statement of accounts duly certified as per Bankers' Book Evidence Act and has claimed that as on 17.2.2018 a sum of ₹ 287,30,27,863,47/-paisa is due in the account of Respondent Corporate Debtor. 18. On the ground that huge amounts are outstanding, it is claimed that the respondent has become commercially insolvent and accordingly it is prayed for initiation of corporate insolvency resolution process against the respondent company by admitting the present application. 19. Respondent has filed its reply on 01. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nable as applicant bank can only act through its authorized representative. It is alleged that there is no Board resolution authorizing Mr. N. K. Sharma AGM to file the present petition on behalf of the applicant bank. 22. In this regard applicant bank in its rejoinder has affirmed that Mr. N.K. Sharma is duly authorised to sign, verify and instate the present application. 23. Hon'ble NCLAT in the case of Palogix Infrastructure (P.) Ltd. v. ICICI Bank Ltd. Limited in Company Appeal (AT) (Insolvency) Nos. 30, 37 54 of 2017 at para 38 has held that, If an officer, such as senior Manager of a Bank has been authorised to grant loan, for recovery of loan or to initiate a proceeding for 'Corporate Insolvency Resolution Process' against the person who have taken loan, in such case the 'Corporate Debtor' cannot plead that officer has power to sanction loan, but such officer has no power to recover the loan amount or to initiate 'Corporate Insolvency Resolution Process', in spite of default of debt. 24. In the present case Applicant bank has filed copy of Gazette notification pertaining to exercise of signing power in respect of different officers of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n agreements. There is nothing on record to show as to why the express terms of commercial loan agreements, suo motu executed, are not binding on the parties. 27. Respondent corporate debtor has also denied and disputed the claim of the applicant bank. It is alleged that necessary information including the statement of account, rates of interest debited from time to time, rates of penal interest charged etc. were never furnished. Respondent has additionally disputed the claim of interest and the declaration of the account as NPA. 28. In this regard the applicant bank in its rejoinder has submitted that monthly statements of accounts were provided to the corporate debtor and also agreed rate of interest was charged by the applicant bank. Applicant has further submitted that the outstanding dues as claimed are duly supported by the statement of accounts of the corporate debtor which has been duly certified under Section 2A of the Banker's Books of Evidence Act, 1891. 29. It is pertinent to mention here that dispute over the quantum of default, cannot be a ground for rejection of an application under Section 7 of the Code as the determination of quantum of financial debt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Adjudicating Authority at every stage of the proceedings. When despite demand there is default in repayment of the loan amount, the applicant gets right to move under the Code. The application under Section 7 is maintainable once the default is more than one lakh, in view of Section 4 of the Code. 35. It is pertinent to mention here that the scheme of the Code provides for triggering the insolvency resolution process by three categories of persons namely, (a) Financial creditor (b) Operational creditor, and (c) Corporate debtor itself. 36. The procedure in relation to the Initiation of Corporate Insolvency Resolution Process by the Financial Creditor is delineated under Section 7 of the Code, wherein only Financial Creditor / Financial Creditors can file an application. As per Section 7(1) of the Code an application could be maintained by a Financial Creditor either by itself or jointly with other Financial Creditors. 37. The expressions Financial Creditor and Financial debt have been defined in Section 5(7) and 5(8) of the Code and precisely Financial debt is a debt along with interest, if any, which is disbursed against the consideration for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and enjoyed the loan facility. The applicant bank has filed Form 8 pertaining to creation of charge over the assets of the respondent company in respect of various loans taken from consortium banks. Additionally, the applicant has also placed on record certificate of registration of charge issued by the Registrar of Companies. The applicant bank has also field the CIBIL report in support of its contention of default in repayment of the loan. 43. In addition the applicant bank has filed the statement of accounts duly certified in accordance with Bankers' Books Evidence Act, 1891 as per requirement of Form 1 part V column 7 of the application. Certified copy of statement of account pertaining to various loan facilities, kept during the course of banking business basing on which the claim has been raised can be termed as sufficient evidence of the financial debt. 44. It is thus seen that the applicant 'financial creditor' has placed on record voluminous and overwhelming evidence in support of the claim as well as to prove the default. 45. It is pertinent to mention here that the Code requires the adjudicating authority to only ascertain and record satisfaction in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of its property including any action under the Securitization 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. 51. 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. In addition, as per the Insolvency and Bankruptcy Code (Amendment) Act, 2018 which has come into force w.e.f. 06.06.2018, the provisions of moratorium shall not apply to the surety in a contract of guarantee to the corporate debtor in terms of Section 14(3)(b) of the Code. 52. 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 furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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