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TMI Blog2019 (1) TMI 1315X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration is a Company petition filed M/s. PHOENIX ARC PRIVATE LIMITED (in short Applicant/Financial Creditor) against M/s. ST. JOHN FREIGHT SYSTEM LIMITED (in short Corporate Debtor) under section 7 of the Insolvency and Bankruptcy Code, 2016 (in short IB Code 2016) r/w rule 4 of Insolvency Bankruptcy (Application to Adjudicating Authority ) Rules, 2016 (for brevity, IB Rules 2016). 2. The Corporate Debtor is a public limited Company incorporated under the Companies Act, 1956 on 21.06.1991 having its registered office at C-98, SIPCOT Industrial Complex Harbour Express Road, Tuticorin- 628008. 2.1 Since 1999, the State Bank of Travancore sanctioned and disbursed various credit facilities to the CD herein and the same were renewed and/or enhanced from time to time. The said credit facilities were, inter-alia, duly secured by equitable mortgage on immovable properties and hypothecation of stock, book debts/receivables and other current assets and the said security cover was extended to secure the renewed and/or enhanced credit facilities. In the year 2015, the State Bank of Travancore renewed the following credit facilities in favour of the CD; (a) Cash Credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FC, by way of present petition, is seeking to recover an amount of ₹ 73,08,54,170. The FC has not given a break up of the calculation as to how a sum of ₹ 73 Crores is due. 5. The CD has stated that the FC or its predecessor has not filed any petition in the Debt Recovery Tribunal for recovery of amount from the CD. Thus the amount recoverable is not an ascertained amount and no adjudication has taken place till date to ascertain the amounts due. The CD had secured the loan taken by it from State Bank of Travancore, by pledging core immovable assets, which are estimated to be worth ₹ 140 crores. Thus, the debt to security ratio is very high. The CD with the consent of the FC has tried to liquidate part of its assets to pay certain amounts to the FC, however the same has not fructified till date. The CD has also identified a buyer to complete the transaction. In the event, the sale takes place, the CD shall be in a position to settle the agreed outstanding amount. 6. The CD has stated that most of the documents, which have been filed by the FC along with the Petition, are extremely old documents, which are beyond the period of three years, from the date of fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y advanced to the CD. 11. The CD has stated as the alleged statement of accounts, filed by the FC as document No.23 is specifically denied. The entries made in the purported statement of account are specifically denied and disputed individually and specifically as the State Bank of Travancore, had charged and debited interest and various other miscellaneous charges at the rates and amounts which were manifestly highly exorbitant and illegal. The CD denies such debits specifically and individually. It is further submitted that the State Bank of Travancore as well as Phoenix ARC Pvt. Ltd. had not maintained the ledgers in the ordinary course of banking business activity and as such the ledgers are specifically disputed and denied. The FC, therefore, must be directed to produce and prove in accordance with law each and every entry, purported vouchers, books, ledgers and other records pertaining to the alleged entries, relied upon in support of the alleged claims. 12. The CD has stated that with regard to the appointment of Mr.R. Venkatakrishnan as the insolvency professional the CD has stated that in accordance with the provisions of Insolvency and Bankruptcy Code (Amendment) Or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facilities were renewed/enhanced from time to time. The Balance confirmation dated 15.09.2004 is at Page 1115 of the Application. On 31.03.2015, at the request of the CD, the Assignor Lender enhanced/renewed/sanctioned and disbursed amongst others Cash Credit limit of ₹ 2600 lakhs, Export Packing Credit limit of ₹ 550 lakhs, Term Loan limit of ₹ 550 lakhs (since repaid) and Term Loan limit of ₹ 1325 and various documents were executed to secure the said facility, which were filed as document No.296 to 309, 312 to 324, 326 to 328 and 330 to 333. Further, the CD has issued a Revival letter of term loan dated 20.02.2016. The CD has issued a balance confirmation on 22.02.2016. Thus, the claim is within limitation. 16. Further, it is false to state that the major portion of the claim amount is the interest and other charges and that the principal amount availed by the CD is ₹ 59.35 Crores and the amount claimed is approximately ₹ 73 Crores. Further, it is false to state that the FC and the Assignor Bank has not maintained the ledgers in the ordinary course of banking business activity. It is absurd to state that no financial debt exists. The CD is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cant has established that the amount in default committed by the Corporate Debtor is a fact and it is supported by the documentary evidence placed before this Adjudicating Authority. 21. Therefore, the instant petition is admitted and we order the commencement of the Corporate Insolvency Resolution Process which shall ordinarily get completed within 180 days, reckoning from the day this order is passed. 22. We appoint Mr.R.Venkatakrishnan, as Interim Resolution Professional (IRP) as proposed by the Applicant. There is no disciplinary proceeding pending against the IRP and the IRP's name is reflected in IBBI website. The IRP is directed to take charge of the Corporate Debtor's management immediately. The IRP is also directed to make public announcement as prescribed under Section 15 of the I B Code, 2016 within three days from the date the copy of this order is received and call for submissions of claim in the manner as prescribed. 23.We declare the moratorium which shall have effect from the date of this order till the completion of Corporate insolvency resolution process for the purpose referred to in Section 14 of the I B Code, 2016. We order to prohibit all o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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