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TMI Blog2019 (6) TMI 1394X X X X Extracts X X X X X X X X Extracts X X X X ..... al of the Corporate Debtor. This establishes the debt and default very well over ₹1,00,000/-. Concerning the argument of the Corporate Debtor that the debt is time-barred, the Petitioner has sought exclusion of time under section 15 of the Limitation Act, 1963. We are of the view that the contention of the Petitioner is correct as there was stay over the execution of recovery certificates and due to the stay orders, the recovery certificates could not be executed, therefore the period during which the execution proceedings were stayed needs to be excluded for counting period of limitation. The period from 07.05.2008 till 21.01.2019 is to be excluded as the order dated 07.05.2008 whereby SRO directed the Corporate Debtor to deposit 50% of the decretal amount was stayed by the DJR vide order dated 28.05.2009 in Revision Application No. 231 of 2008 and subsequently vide order dated 30.11.2018 the said Revision Application No. 231 of 2008 has been sent back to the DJR for re-adjudication. As per submissions of the Petitioner, vide order dated 21.01.2019 the DJR has confirmed the action taken under notice dated 07.05.2008. In the present petition, the debt and default are es ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01at an interest of 16% p.a. The loan was secured by hypothecation of stock of goods-in-trade, book debt and mortgage of immovable property. A copy of this agreement is annexed with the Petition. 5. The Corporate Debtor has also executed a Promissory Note dated 27.4.2001, a form of declaration as to the constitution of the Firm dated 27.4.2001, continuing security letter dated 27.4.2001 and letter of lien and setoff dated 27.4.2001 in favour of the Petitioner to secure repayment of ₹44,22,000/-. A copy of the said documents annexed with the Petition. 6. The Petitioner had filed two recovery application in which the Assistant Registrar, Co-operative Societies, Government of Maharashtra, Mumbai has issued two recovery certificates dated 07.12.2004 for an amount of ₹48,08,145/- and ₹2,40,66,865.37/- plus interest on principal amount against the Corporate Debtor, Mr. Nirmal Phophalia (Director) and Mr. Hemang Phophalia (Director) and Ms. Reena Phophalia. It is submitted by the Petitioner in its affidavit in the rejoinder that in the execution of the said Recovery Certificates, the Special Recovery and Sales Officer executed and recovere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2041 of 2008, the Hon ble Bombay Court granted part reliefs in terms of stay of action by the Bank in terms of the notice before Judgement dated 17.3.2008 and directed Ms Jyoti to deposit ₹50,00,000/- (Rupees Fifty lakhs only) within 8 weeks and liberty given to Bank to withdraw the same. Ms Jyoti Phophalia failed to deposit the same as per the directions of Hon ble Bombay High Court. The Bank was also given liberty to sell the Flat No.B-12. In the Revision Application No. 231 of 2008, the DJR vide Order dated 28.5.2009, set aside the order dated 7.5.2008 passed by the SRO directing the Respondent and its directors to deposit 50% of the amounts as per the said Recovery Certificates. Being aggrieved by the said order, the Bank preferred a Writ Petition No. 2344 of 2009 before the Hon ble High Court and the Court vide order dated 13.1.2010 granted ad-interim stay on order dated 28.5.2009 passed by the Division Joint Registrar. 10. It is stated that aggrieved by the action of the Bank, Ms Jyoti moved the Hon ble Bombay High Court in the pending Writ Petition 2344 of 2009 (filed by the Bank) and as per Order dated 17.2.2010, Ms Jyoti was directed not to sell, alie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,000/- on 3.4.2000 and a Term Loan facility for ₹44,22,000/- on 23.3.2001. The account of the Corporate Debtor was classified as NPA on 1.1.2002. This as per the Corporate Debtor is the date of cause of action. 15. The Corporate Debtor submits that the Petitioner initiated the recovery proceedings and was granted Recovery Certificates dated 7.12.2004 for ₹47,96,420/- and ₹2,40,55,055.37 under section 101 of the Maharashtra Co-operative Societies Act, 1960. Under the Recovery Certificates, it is stated, that the Petitioner sold 5(Five) properties that were attached as collateral securities in the year 2004. The amount recovered from the said sale is stated to be not adjusted in the principal amount. It is contended that it would be the jurisdiction of the Civil Court to determine in what manner and in what circumstances have the amounts been appropriated. 16. The Corporate Debtor placed reliance on the judgement of Hon ble Supreme Court in B.K. Educational Services Pvt. Ltd. v/s. Parag Gupta Associates to state that Limitation Act would be applicable on the proceedings before this Tribunal. It is stated that the cause of action aro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... porate Debtor has sanctioned Cash Credit facility for ₹2,10,00,000/- on 3.4.2000 and a Term Loan facility for ₹44,22,000/- on 23.3.2001. The loan is admitted by the Corporate Debtor, and there is no dispute as to the existence of the debt. The two recovery certificates issued by Assistant Registrar of Co-operative Societies are also annexed to the petition that is also not disputed by the Corporate Debtor. 23. It is settled the position of law that this Tribunal as Adjudicating Authority does not have to determine the quantum of debt at the stage of admission of the petition but only determine that the amount of debt and default is more than the stipulated threshold of ₹1,00,000/-. The Corporate Debtor has sent a letter dated 07.02.2017 offering the Petitioner an amount of ₹5,00,00,000/- as a full and final settlement of its entire due. However, the Petitioner-Bank has refused to the settlement proposal of the Corporate Debtor. This establishes the debt and default very well over ₹1,00,000/-. 24. Concerning the argument of the Corporate Debtor that the debt is time-barred, the Petitioner has sought exclusion of time unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve it enforced before the appropriate authority and cannot file an application before this Tribunal for execution of the decree and venture into forum shopping. 28. In the present petition, the debt and default are established. The Corporate Debtor could not show that either no debt of more than ₹1,00,000/- is due, payable and in default. 29. The petition is well within limitation. 30. The Petitioner has proposed the name of Mr.Vijay Pitamber Lulla, a registered insolvency resolution professional having Registration Number [IBBI/IPA-001/IP-P00323/2017-18/10593] 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. 31. The Application 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 b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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