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TMI Blog2018 (3) TMI 1778X X X X Extracts X X X X X X X X Extracts X X X X ..... ncy Resolution Process under the provisions of the Code. Insolvency and Bankruptcy Code, 2016 is a special law having an overriding effect on any other law as mandated under Section 238 of the Code. The statutory rights of the applicant bank satisfying the requirements of Section 7 of the Code to trigger Corporate Insolvency Resolution Process cannot be defeated on the ground of pendency of adjudication pertaining to misappropriation of funds. Once there is a debt and default, the Adjudicating Authority has no option but to admit the application filed under Section 7 of the Code, when it is complete. It is also settled law that facts which are not required to be disclosed as per the prescribed format, cannot be treated as suppression of facts. Application is admitted - moratorium in terms of Section 14 of the Code declared. X X X X Extracts X X X X X X X X Extracts X X X X ..... he copy of Certificate of Registration dated 15th September, 2017 issued by IBBI. In addition, further necessary disclosures have been made by Mr. Ashok Kumar Dewan as per the requirement of the IBBI Regulations. Accordingly, he satisfies the requirement of Section 7(3)(b) of the Code. 6. It is the case of the applicant that in the year 2016, the Corporate Debtor approached the Financial Creditor to avail certain credit facilities and entered into several agreements, deeds of hypothecation, deeds of guarantee and supplemental deeds for availing the credit facilities. 7. It is stated that the Corporate Debtor also availed the facilities with respect to Invoice Discounting, which allowed the Corporate Debtor to obtain credit from the Bank on its outstanding invoices, issued by it to its customers, and upon payment of such invoices by its customer the amount would be routed through the Corporate Debtor's bank account maintained with the applicant bank and would be repaid to the bank. 8. It is alleged that the applicant bank discounted several invoices and credited the amounts to the bank account of the Corporate Debtor. However, since the month of February, 2018 the Corporate D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18 till 25.02.2018 along with copy of invoices. * Copies of four (4) letters dated 09.03.2018 issued by the corporate debtor seeking discounting of sale invoices from 26.03.2018 till 04.03.2018 along with copy of invoices. * Copies of two (2) letters dated 12.03.2018 issued by the corporate debtor seeking discounting of sale invoices from 08.03.2018 till 10.03.2018 along with copy of invoices. * Copies of two (2) letters dated 21.03.2018 issued by the corporate debtor seeking discounting of sale invoices from 13.03.2018 till 14.03.2018 along with copy of invoices. * Letter dated 03.05.2018 bearing Ref No. YBL/0016/030518/001 issued to Mr. Neeraj Kumar Jain and Mr. Naresh Kumar Jain demanding payment of the outstanding amount of ₹ 215,640,515.50 along with postal receipts. * Letter dated 28.05.2018 bearing Ref No. YBL/0016/250518/002 issued to the corporate debtor, its directors demanding payment of outstanding payment of outstanding amounts along with postal receipts. * Show cause notice dated 12.06.2018 issued by the applicant bank to the corporate debtor for wilful defaulter classification. * Letter dated 18.06.2018 issued by the applicant bank to the corporat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cant company. In this regard applicant has relied upon the power of attorney dated 21.06.2018, wherein Mr. Gaurav Sarkar, Vice President of applicant banking company inter alia was nominated and appointed to act on behalf of the bank and in the name of the bank for filing application under the Code. 21. Hon'ble NCLAT in the case of Palogix Infrastructure (P.) Ltd. v. ICICI Bank Ltd. 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" 22. In the present case Applicant bank has filed the petition through Mr. Gaurav Sarkar, Vice President of applicant banking company. Admittedly Mr. Gaurav Sarkar is working in a senior post as Vice President of applicant banking company and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of bank, if any, has to be dealt with separately. Pendency of investigation and civil suit, in the absence of specific stay order, cannot be construed as a valid defense against triggering of Corporate Insolvency Resolution Process under the provisions of the Code. Insolvency and Bankruptcy Code, 2016 is a special law having an overriding effect on any other law as mandated under Section 238 of the Code. The statutory rights of the applicant bank satisfying the requirements of Section 7 of the Code to trigger Corporate Insolvency Resolution Process cannot be defeated on the ground of pendency of adjudication pertaining to misappropriation of funds. 28. Hon'ble NCLAT in the matter of Ksheeraabd Constructions (P.) Ltd. v. Vijay Nirman Co. Pvt. Ltd. in Company Appeal (AT) (Insolvency) No. 167 of 2017 has observed that: "The "I & B Code" being a complete code will prevail over other Acts.... No person can take advantage of pendency of a case to stall "Corporate Insolvency Resolution Process" under the I & B Code". 29. Similarly, in the case of Innoventive Industries Ltd. v. ICICI Bank and Ors. reported in AIR 2017 SC 4084, Hon'ble Supreme Court has also held at para 56 tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reditor' has placed on record voluminous and overwhelming evidence in support of the financial debt as well as to prove the default. 36. The material on record clearly goes to show that respondent has availed the loan facilities and has committed default in repayment of the loan amount. An application under Section 7 of the Code is acceptable so long as the debt is due and there has been occurrence of existence of default. 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. 37. 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. 38. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Applicant has placed on record adequate and convincing evidence in support of the disbursement of debt as well as to prove the default. 44. As a sequel to the above discussion and in terms of Section 7(5)(a) of the Code, the present application is admitted. 45. Mr. Ashok Kumar Dewan having registration number IBBI/IPA-001/IP-P00063/2017-18/11054 resident of B1/D2, II Floor, Mohan Co-operative Industrial Estate, New Delhi-110044 with email-id [email protected] is appointed as the interim resolution professional. 46. 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 Explanation to Regulation 6(1) of the IBBI Regulations, 2016) with regard to admission of this application under Section 7 of the Insolvency & Bankruptcy Code, 2016. 47. We also declare moratorium in terms of Section 14 of the Code. The necessary consequences of imposing the moratorium flows from the provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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