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TMI Blog2019 (7) TMI 508X X X X Extracts X X X X X X X X Extracts X X X X ..... der Section 7 or 9 do not amount to recovery proceedings, the question of deciding the claim which may include the interest by the Adjudicating Authority does not arise for the purpose of triggering the Corporate Insolvency Resolution Process. It is clear that the application being complete and in absence of any other infirmity, and the corporate debtor having not denied the debt and default, the adjudicating authority cannot reject the application preferred by the appellant company - there is admitted debt and efforts are/were being made by the respondent to come out of the financial obligations. Existence of default - HELD THAT:- There is no dispute in the case that the petitioner is the financial creditor - On perusal of record, it is held that there is existence of default. The application under Section 7(2) of the Code is also complete in all respect. The petitioner/financial creditor having fulfilled all the requirements of Section 7 of the Code, the instant petition deserves to be admitted - Petition admitted - moratorium declared. X X X X Extracts X X X X X X X X Extracts X X X X ..... the following documents along with the application: - Sl. No. Annexure Particulars Page No. 01 A Certificate of incorporation 13 02 B POA dated 08.12.2017 14-17 03 C Form No. 2 18 04 D Assignment agreement dated 27.03.2014 19-63 05 E Board Resolutions dated 02.03.2005 64 06 F Common Loan Agreement dt.05.03.2005 65-196 07 F-l Inter-creditor agreement dated 05.03.2005 and letter of confirmation 197-237 08 G Indenture of mortgage dated 10.03.2005 238-281 09 H Security agent agreement dated 05.03.2005 282-314 10 I Resolution dated 26.12.2005 315-318 11 J Working capital consortium agreement dated 26.12.2005 319-354 12 K Joint deed of hypothecation dated 26.12.2005 355-374 13 L Indenture of mortgage dated 26.12.2005 375-413 14 M Inter se Agreement dated 26.12.2005 414-428 15 N Board Resolution dated 30.11.2006 429 16 O Letter regarding sanction of ad hoc EPC/PSC credit facilities dated 17.01.2007 430-433 17 P Resolution dated 29.01.2007 accepting terms and conditions of ad hoc EPC/PSC credit facilities 437-467 18 Q Agreement of loan for overall limit dated 29.01.2007 437-467 19 R Agreement for hypothec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question is signed by two Directors authorising the power of attorney holder to proceed insolvency proceedings against the respondent. 10. The second objection raised by the respondent do not hold ground to reject the application. At this juncture it is desirable to refer the decision taken by Hon'ble NCLAT in Naveen Luthra v. Bell Finvest (India) Ltd . wherein, it is held that an application under Section 7 of the IB Code cannot be rejected on the ground of "usurious and extortionate penal interest" which is governed by Usurious Loans Act, 1918. Hon'ble NCLAT further held that The presidency Towns Insolvency Act, 1909 having repealed, and there being a bar of jurisdiction under Section 231 of the I & B Code as no civil court have jurisdiction in respect of any matter in which the Adjudicating Authority is empowered to decide under the Code, we hold that the provisions of Sections 3 & 4 of the Usurious Loans Act, 1918 are not applicable to any of the proceedings under Section 7 or 9 of the I & B Code. Hon'ble NCLAT further held that as initiation of corporate insolvency resolution process under Section 7 or 9 of the Code does not amount to recovery proceedings, the question of de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esolution professional in part III, particulars of the financial debt in part IV and documents, records and evidence of default in part V. Under Rule 4(3), the applicant is to dispatch a copy of the application filed with the adjudicating authority by registered post or speed post to the registered office of the corporate debtor. The speed, within which the adjudicating authority is to ascertain the existence of a default from the records of the information utility or on the basis of evidence furnished by the financial creditor, is important. This it must do within 14 days of the receipt of the application. It is at the stage of Section 7(5), where the adjudicating authority is to be satisfied that a default has occurred, that the corporate debtor is entitled to point out that a default has not occurred in the sense that the "debt", which may also include a disputed claim, is not due. A debt may not be due if it is not payable in law or in fact. The moment the adjudicating authority is satisfied that a default has occurred, the application must be admitted unless it is incomplete, in which case it may give notice to the applicant to rectify the defect within seven days of receipt o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erim Resolution Professional has been annexed and placed at page No. 10A to the application where declaration is made that no disciplinary proceeding is pending against him with the Board or Indian Institute of Insolvency Professionals of ICAI. 16. On perusal of record and as also discussed above, it is held that there is existence of default. The application under Section 7(2) of the Code is also complete in all respect. 16.1 In view of the above, the petitioner/financial creditor having fulfilled all the requirements of Section 7 of the Code, the instant petition deserves to be admitted. 17. The petition is, therefore, admitted and the moratorium is declared for prohibiting all of the following in terms of sub-section (1) of Section 14 of the Code: - (i) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; (ii) transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein; (iii) any action to foreclose, recover or enforc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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