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TMI Blog2019 (6) TMI 1154X X X X Extracts X X X X X X X X Extracts X X X X ..... y, which is registered in India and the jurisdiction solely lies with this court. In this case, the Indian Government has no such reciprocal arrangement with the Government of Netherland. Therefore, none of the courts has any jurisdiction to pass an order under IBC, where the assets and properties of the Corporate Debtor are situated in a country outside their country. This petition filed under Section 7 of I B Code, 2016, filed by State Bank of India , Financial Creditor / Petitioner, under section 7 of I B Code against Jet Airways (India) Limited , Corporate Debtor for initiating corporate insolvency resolution process at this moment admitted - Moratorium declared. List this matter on 5th July 2019. - CP 2205 (IB)/MB/2019, CP 1968(IB)/MB/2019 And CP 1938(IB)/MB/2019 - - - Dated:- 20-6-2019 - Mr V. P. Singh, Member (Judicial) And Mr Ravikumar Duraisamy Member (Technical) For The Petitioner : Adv. Avinesh Bisht, Adv. Dhananjay Kumar, Adv. Saloni Kapadia, Adv. Kaustub Rai, Adv. Ashish Matkar andAdv. Amie jain, Kiran Sharma, PCS for R. Mulder (Administrator in Bankruptcy), Adv. Jane Cox For National Aviators Guild ( Pilot), Adv. Rahul Kametk ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cr, including both fund based and non-fund based facilities. The Financial Creditor revised and reduced the existing working capital limit from ₹1445 Cr to ₹1355 Cr vide First Supplemental Working Capital consortium agreement dated 23.09.2016. The Financial Creditor further revised and reduced the existing fund based working capital limit by ₹101 Cr vide Second Supplemental Working Capital consortium agreement dated 22.02.2018. 6. The Financial Creditor and the other lenders of the Corporate Debtor extended another loan facilities agreement dated 12.02.2019 to the Corporate Debtor to meet its operational expenses, bridging any cash shortfall requirements, the prepayment of existing aircraft loans and regularising the overdraft limits utilised by the Corporate Debtor. Under this agreement, the Financial Creditor granted a term of ₹ 216.21 Cr to the Corporate Debtor. 7. The Petitioner has submitted that the aggregate amount of default as on 15.06.2019 is ₹462,39,38,604.55. This figure represents the total overdrawn amount over the sanctioned limit of the cash credit facilities granted by the Financial Creditor to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Corporate Debtor s dues to its various Operational Creditor has exceeded USD 340 million and that it has received various default notices. In the letter dated 27.12.2018, the Corporate Debtor requested the Financial Creditor to defer the loan repayment and interest payment obligations due on 31.12.2018 to 17.01.2019. 13. The Financial Creditor vide its letter dated 11.01.2019 pointed out that the cash flow position of the Corporate Debtor had reached a critical point and that it had defaulted in the payment to its lenders on 12.12.2018. The Corporate Debtor in its letter dated 16.1.2019 sought further deferral on payment of the loan and interest instalments. 14. We have heard the parties and perused the records. 15. The Petition is filed by Mr Rajesh Kumar, Assistant General Manager, authorised vide Authority Letter dated 17.06.2019 read with the Gazette of India Notification No. ORG/17405 dated 27.03.1987 published in Gazette Notification No. 18 dated02.05.1987. 16. In our Order dated 19.06.2019 we have ordered for serving the Court notice upon the Corporate Debtor for intimating the next date of hearing on 20.06.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Corporate Debtor. 19. The total amount of debt granted to the Corporate Debtor by the Petitioner alone stands at ₹1795.21 Cr. There are several other Financial Creditors who have also granted a loan to the Corporate Debtor. Thus, the Corporate Debtor has a huge outstanding Debt. 20. The default amount is stated to be ₹462,39,38,604.55/-, being the overdrawn amount over sanctioned limits of the cash credit facilities by the Petitioner alone. The default in loan facilities given by the other financial creditors is not included in the default amount in the present application. Over and above this, the Corporate Debtor has also defaulted in the payment to several of its Operational Creditors as has been stated in the letter of the Senior Vice-President-Finance of the Corporate Debtor dated 14.12.2018. Two of the applications filed by the Operational Creditor have also reached the stage of admission. Further, during the hearing on 20.06.2019 the counsel appearing for the Pilots of the Corporate Debtor has submitted that the Corporate Debtor owes more than ₹550 Cr. to its pilots towards the pending salary. The Counsel for engineers of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ptcy proceedings has been widely reported by the Indian media. 24. It is further contended by the Intervener that the Counsels of the Administrator apprised this Tribunal regarding the existing order of Insolvency and appointment of Administrator. The contention of the Administrator is as under: a. Admission of application(s) and passing order of commencement of insolvency against the Corporate Debtor when the insolvency process has already been commenced against the Corporate Debtor one month ago in another jurisdiction will create a peculiar situation of two insolvency proceedings running in parallel against the same Corporate Debtor leading to complications and delays in resolution Of insolvency. b. The Administrator appointed by a competent court in the Netherlands and Interim Resolution Professional appointed by the Adjudicating Authority will compete to take control and possession of assets, in India and other jurisdictions, which is neither in the interest of smooth functioning of the insolvency process nor in the interest of the stakeholders including the creditors. c. The above situation will create uncertaint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of a corporate debtor, as the case may be, situated at any place in a country outside India with which reciprocal arrangements have been made, shall be subject to such conditions as may be specified. 235. Letter of request to a country outside India in certain cases. ( 1) Notwithstanding anything contained in this Code or any law for the time being in force if, in the course of insolvency resolution process, or liquidation or bankruptcy proceedings, as the case may be, under this Code, the resolution professional, liquidator or bankruptcy trustee, as the case may be, is of the opinion that assets of the corporate debtor or debtor, including a personal guarantor of a corporate debtor, are situated in a country outside India with which reciprocal arrangements have been made under section 234, he may make an application to the Adjudicating Authority that evidence or action relating to such assets is required in connection with such process or proceeding. ( 2) The Adjudicating Authority on receipt of an application under sub-section (1) and, on being satisfied that evidence or action relating to assets under sub-se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... National Importance . The Corporate Debtor company has more than 20,000 employees, and its revival at the earliest by a viable Resolution Plan is essential. Therefore, the proceeding of this court cannot be stayed or withhold even for a single day based on the order passed by any foreign court, which is a nullity in the eye of law. 34. The Statement of Objects and Reasons of the Code states that the objective of the I B Code is to resolve insolvency in a time-bound manner. The relevant part of the Statement of Objects and Reasons reads as under: The objective of the Insolvency and Bankruptcy Code, 2015 is to consolidate and amend the laws relating to reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximization of value of assets of such persons, to promote entrepreneurship, availability of credit and balance the interests of all the stakeholders including alteration in the priority of payment of government dues and to establish an Insolvency and Bankruptcy Fund, and matters connected therewith or incidental thereto. An effective legal framework for the timely reso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) in very wide terms as meaning non-payment of a debt once it becomes due and payable, which includes non-payment of even part thereof or an instalment amount. For the meaning of debt , we have to go to Section 3(11), which in turn tells us that a debt means a liability of obligation in respect of a claim and for the meaning of claim , we have to go back toSection3(6) which defines claim to mean a right to payment even if it is disputed. The code gets triggered the moment defaults of rupees one lakh or more (Section 4). The corporate insolvency resolution process may be triggered by the corporate debtor itself or a financial creditor or operational creditor. A distinction is made by the Code between debts owed to financial creditors and operational creditors. A financial creditor has been defined Under Section 5(7) as a person to whom a financial debt is owed, and financial debt is defined in Section5(8) to mean a debt which is disbursed against the consideration for the time value of money. As opposed to this, an operational creditor means a person to whom an operational debt is owed and an operational debt Under Section 5 (21) means a claim in respect of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de and the stakes involved in the Corporate Debtor, the prompt disposal of this application is essential, and any further delay or deferment, in this case, would be against the objective of the I B Code. 38. The Petitioner has proposed the name of Mr Ashish Chhawchharia, a registered insolvency resolution professional having Registration Number [IBBI/IPA-001/IP-P00294/2017-18/10538] as Interim Resolution Professional, to carry out the functions as mentioned under I B Code, and given his declaration; no disciplinary proceedings are pending against him. 39. The CP 2205/2019 filed under sub-section (2) of Section 7 of I B Code, 2016 is complete. The existing financial debt of more than rupees one lakh against the corporate debtor and its default is also proved. Accordingly, the petition filed under section 7 of the Insolvency and Bankruptcy Code for initiation of corporate insolvency resolution process against the corporate debtor deserves to be admitted. ORDER This petition filed under Section 7 of I B Code, 2016, filed by State Bank of India , Financial Creditor / Petitioner, under section 7 of I B Code against Jet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate debtor under section 33 of I B Code, as the case may be. V. That the public announcement of the corporate insolvency resolution process shall be made immediately as specified under section 13 of I B Code. VI. That this Bench at this moment appoints Mr Ashish Chhawchharia, a registered insolvency resolution professional having Registration Number [IBBI/IPA-001/IP-P00294/2017-18/10538] as Interim Resolution Professional to carry out the functions as mentioned under I B Code, the fee payable to IRP/RP shall comply with the IBBI Regulations/Circulars/Directions issued in this regard 40. The IRP/RP is further directed to submit his fortnightly Progress report to expedite the CIRP of the Corporate Debtor without delay of even a single day. Considering the matter being of National Importance and the Corporate Debtor has been one of the largest private sector airlines, the huge number of work force of more than 20,000 employees, large number of flights, having international operations and the important sector in which the Corporate Debtor is operating, serving both Domestic and International markets,thus we direct the IRP/RP to make every ..... X X X X Extracts X X X X X X X X Extracts X X X X
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