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TMI Blog2019 (2) TMI 1686X X X X Extracts X X X X X X X X Extracts X X X X ..... 79,028/- and the amount claimed to be in default is stated to be Rs.28,05,66,577/- as on 31.03.2018. The Corporate Debtor defaulted in repayment of the Financial Facilities on various dates as reflected in the Statement of Accounts , therefore, the loan account of the Corporate Debtor was declared NPA on 31.12.2014. A) Brief History of the case: 3. The Corporate Debtor herein, approached a Consortium of Banks consisting of UCO Bank (Assignor Bank) as the Lead Bank, Union Bank of India, Bank Of India and Canara Bank, requesting for certain financial facilities. The request was acceded to by the Consortium of Banks. Accordingly, UCO Bank Consortium and the Corporate Debtor executed Term Loan Agreement dated 17.11.2007 pursuant to which a Term Loan I (Spinning) of Rs.17,00,00,000/- (Term Loan I) was advanced to the Respondent. The Term Loan I was renewed vide Sanction Letters dated 15.12.2009, 17.11.2011 and 11.03.2014. The total amount which was disbursed is Rs.17,35,79,028/- on different dates in the year 2007 and 2008. Out of the said disbursed amount, the 'Term Loan I' was partly repaid in several instalments between 2007 to 2014. However, an amount of Rs.11,71,28,848/-was out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Petition/Application may be Admitted for the initiation of the CIRP. C) Submissions by the Corporate Debtor : 11. The Corporate Debtor has challenged the maintainability of this petition on various grounds. The foremost contention of the Corporate Debtor is that the Financial Creditor is acting in its capacity as Trustee of the Phoenix Trust. However, no documents have been produced on record nor any resolution has been passed to assert or prove the aforesaid fact. Hence, the Financial Creditor is not authorised to file this petition. 12. Various technical objections have been raised by the Corporate Debtor. One of them is that the petition U/s 7 is not supported with an affidavit in Form No. NCLT 6 as per Rule 34 of National Company Law Tribunal Rules, 2016. Also, the Resolution passed at the meeting dated 30.01.2016 is defective, although it mentions the name of the persons who are authorised to represent the Company or trust in any court of law. However, the said resolution does not mention the name of the trust and the signatures of various officials have not been attested in the said resolution. Further, the incorporation documents of the Financial Creditor have not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said contention of the Corporate Debtor ought to be rejected. 19. The Financial Creditor contends that the affidavit verifying the petition has been duly annexed with the petition. As regards the contention of the Corporate Debtor that the Board Resolution dated 30.01.2018 is defective, the Financial Creditor argues that it is not required to pass separate Board Resolutions in respect of each trust and is not invalid on the ground that it does not mention the name of the Phoenix Trust - FY 16-4 or otherwise. It is further contended that the petition is complete in all respects and it is not required to produce incorporation documents or the Trust Deed of the Financial Creditor. 20. It is further argued that the debt is not barred by limitation as the liability to the tune of Rs.16,42,09,675/- has been acknowledged by the Corporate Debtor in the Balance Sheet for the year ending on 31.03.2017. Reliance has been placed on Edelweiss Asset Reconstruction Company Limited V. M/s Birla Cotsyn (India) Limited in CP 579/I&BP/NCLT/MAH/2018, order dated 20.11.2018, wherein it was held that: "The balance sheets of 2016-17 reflect the debts due. Therefore, it is logical to assume that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been duly served upon the Corporate Debtor. 23. Furthermore, it is contended that the Financial Creditor is not guilty of Forum Shopping because of the fact that the pendency of the proceedings before the Debt Recovery Tribunal, Nagpur does not preclude the Financial Creditor from filing the Company Petition in hand. The grievance of the Corporate Debtor that the Financial Creditor failed to disburse the amounts as agreed was never raised earlier at any point of time and is thus unsustainable. E) Findings: 24. On going through the submissions made by the Learned counsels of both the sides and on perusal of documents placed on record, it is necessary to deal with all the contentions as hereunder. The Corporate Debtor's foremost contention, that the documents to prove that the Financial Creditor is acting in its capacity as a trustee of the Phoenix Trust have not been placed on record, is rejected as the Assignment Agreement itself is evident of this fact and the same has not been challenged by the Corporate Debtor. Hence, no further proof is required to be submitted in this regard. Also, as per section 5(7) of IBC, Financial Creditor means any person to whom a financial debt i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Limitation Act, 1963, the limitation period is twelve years from the date when the money sued for becomes due. Even if the limitation is to be taken three years from the date when the cause of action arose, then also the Corporate Debtor's Balance Sheet as on 31.03.2017 acknowledge the amount payable to the Financial Creditor. Hence, in view of Section 18 of the Limitation act, 1963, the limitation stands extended. 28. The argument of the Corporate Debtor, that the amount claimed by the Financial Creditor is higher than the amount for which the loan accounts were assigned to it, is clearly vague and inadmissible, as the same is a matter of understanding between the Assignor and Assignee. The Financial Creditor's act of taking over the loan at a reduced rate cannot be questioned as there is an element of risk involved in recovering the debt assigned. The Corporate Debtor is not a privy to the Assignment Agreement and therefore has to restrict its contentions to the debt owed by itself to the Financial Creditor. 29. The Financial Creditor is not guilty of Forum Shopping as the pendency of DRT proceedings is no bar to the present proceedings in view of Section 238 of the IBC which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed the name of Insolvency Professional. The IRP proposed by the Financial Creditor, Mr. Hasti Mal Kachhara, A-602, Nirman Apartments, Pump House, Vikas Nagar, Andheri East, Mumbai-400093, having registration No. IBBI/IPA-002/IP-N00342/2017-18/10992 is hereby appointed as Interim Resolution Professional to conduct the Insolvency Resolution Process. 38. Having admitted the Petition/Application, the provisions of Moratorium as prescribed under Section 14 of the Code shall be operative henceforth with effect from the date of order shall be applicable by prohibiting institution of any Suit before a Court of Law, transferring/encumbering any of the assets of the Debtor etc. However, the supply of essential goods or services to the "Corporate Debtor" shall not be terminated during Moratorium period. It shall be effective till completion of the Insolvency Resolution Process or until the approval of the Resolution Plan prescribed under Section 31 of the Code. 39. That as prescribed under Section 13 of the Code on declaration of Moratorium the next step of Public Announcement of the Initiation of Corporate Insolvency Resolution Process shall be carried out by the IRP immediately on appo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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