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TMI Blog2019 (10) TMI 280X X X X Extracts X X X X X X X X Extracts X X X X ..... r by Section 7(5) (a) of the Code being satisfied in the present case, we direct that the application for initiation of CIRP against Corporate Debtor be admitted. The directions regarding moratorium and appointment of IRP issued. - CP (IB) No. 341/Chd/Pb/2018 - - - Dated:- 29-7-2019 - MR M.K. SHRAWAT, MEMBER (JUDICIAL) AND MR PRADEEP R. SETHI, MEMBER (TECHNICAL) For The Petitioner : Mr Manish Jain, Advocate And Ms. Divya Sharma, Advocate JUDGMENT Per : Pradeep R. Sethi, Member (Technical) The application in the prescribed Form No.1 is filed by Kotak Mahindra Bank Limited (hereinafter referred to as Bank) for initiation of Corporate Insolvency Resolution Process (CIRP) in the case of Sachdeva and Sons Rice Mills Limited (hereinafter referred to as Corporate Debtor). The application is filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, (Code), read with Rule 4, of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (Rules). The application is signed by Shri Ajay K. Raina, Vice-President of the Bank. His affidavit verifying the contents of the application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Post Shipment Loan 5 crore Bank Guarantee 1 crore The overall limit for above mentioned facilities was fixed at ₹ 35 crores. Thereafter, these limits were restructured from time to time. Upon the request of Corporate Debtor these limits were once again restructured by Bank of Punjab Limited as under:- Nature of Facility Amount (in Rs) Amount (in US $) Foreign Currency Loan 32 crores 16.4 Million Post-Shipment/Pay Order, DD Purchase (Export Bill) 3 crore Total 35 crore Authenticated workings for computation of amount of default in tabular form is at Annexure 13 hereto (Page 166). 4. It is stated that the Board of Direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assignee (Kotak Mahindra Bank Limited) is found to be stated as Financial Creditor as mentioned in Part-IV, Sr. No. 2 of Form 1 of the application. 8. In Part IV of Form No.1, it is stated that the outstanding of the corporate debtor towards the Kotak Mahindra Bank is ₹ 33,95,07,968 along with interest component of ₹ 94,70,32,360/- as on 31.07.2018. The Bank Account statements duly certified as per Banker s Books Evidence Act, 1891 are stated to be attached. 9. The charge on securities held is stated to be registered with the Registrar of Companies under the provisions of Companies Act, 1956, and the record of registration of charge available with the Registrar of Companies i.e. the original Form No. 8 along with Certificate of Registration for Modification of Mortgage in favour of Kotak Mahindra Bank are at Annexure-16 (Colly) of the petition. 10. It is also stated in Part-V of Form No. I that original application OA No. 4570 of 2017 was filed against Corporate Debtor by Centurion Bank of Punjab with the Debt Recovery Tribunal (DRT-I) Chandigarh. The substitution of Kotak Mahindra Bank in place of Centurion Bank of Punjab wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... placed on record as Annexure R-2 (Diary No. 638 dated 07.02.2019). It is further stated that during this course, Kotak Mahindra Bank approached the Corporate Debtor for providing financial advisory services for raising investments and structuring the finances. The Corporate Debtor was to pay fees in consideration as agreed. 17. Vide letter 14.09.2007, CBOP had cancelled the OTS agreement since the amount as agreed could not be deposited by the Kotak Mahindra Bank being a financial advisor of the Corporate Debtor. Further, CBOP initiated recovery proceedings against the Corporate Debtor before the DRT-I, Chandigarh vide an application bearing No. OA 04 of 2007. 18. It is also pointed out that on 27.09.2007, Kotak Mahindra Bank (Financial Creditor) and CBOP entered into a deed of assignment whereby CBOP had agreed to sell and the Kotak Mahindra Bank had agreed to purchase and acquire the existing debts of the Corporate Debtor. The Corporate Debtor has raised the contention that Kotak Mahindra Bank did not even share the details of the deed of assignment of debt and quantum of transaction between the assignor and the assignee bank. It was only on 28.09.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for a sum of ₹ 4.35 crore but the same was rejected by the Financial Creditor. Copy of the said letter dated 09.04.2015, is attached as Annexure A-34 (Diary No. 1045). 23. It is also submitted that a petition was filed by the Corporate Debtor before the Hon ble Punjab Haryana High Court challenging the assignment deed between the Financial Creditor and CBOP in CWP # 7187/2013 wherein the said petition was dismissed after considering that there is no illegality in the assignment of debt between the Financial Creditor and CBOP. It is contended that such judgment has been concealed by the Corporate Debtor and the Corporate Debtor is again trying to re-agitate the same issues which already stand decided. Copy of the order of Hon ble High Court is placed on record as Annexure A-35 (Diary No. 1045). 24. Learned counsel for the Financial Creditor submitted that there is an existing default in the repayment of loans by the Corporate Debtor and the Applicant Financial Creditor is within its rights to trigger CIRP proceedings against the defaulting Corporate Debtor. 25. It is observed in the Balance Sheet of the Corporate Debtor for the y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the submissions of the learned counsel for the financial creditor and the corporate debtor and have also examined the records. 28. The first contention of the learned counsel for the corporate debtor is that the present application is filed beyond limitation, since the date of loan was 24.09.2002. We find that Annexure-33 of the petition are the audited statement of accounts of the corporate debtor for the financial year ended 31.03.2004. In Schedule 3 thereof, secured loans of ₹ 329,314,589 from Bank of Punjab as on 31.03.2004, are shown. O.A. 4570/2017 was filed vide application dated 29.09.2006, by Centurion Bank of Punjab against the corporate debtor. The O.A. was filed before the DRT, Chandigarh for recovery of ₹ 33,95,07,968.36 along with pending pendentelite and future interest at 11.5% per annum with monthly rests from 30.09.2006. It is stated that vide DRT order 06.11.2008, the financial creditor was substituted in place of Centurion Bank of Punjab. Possession Notice dated 17.09.2012, and auction notice dated 20.06.2014, were issued by the financial creditor in respect of two properties in Mumbai. S.A. 8/2014 was filed by the corporate debtor for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itor will work with Sachdeva Group. It is submitted that the extent of reimbursement to the financial creditor would only be the cost of buying the debt along with agreed fees and expenses. The rejoinder of the learned counsel for the financial creditor is that the corporate debtor had earlier filed CWP 7187/2013 in the Hon ble Punjab and Haryana High Court and raised various issues therein including a challenge to the assignment deed. It is submitted that vide order 08.04.2013, the Hon ble Punjab and Haryana High Court had held that the challenge of assignment debt is wholly devoid of merit and the other argument that the financial creditor was an agent and thus could not be assigned the debt is again not tenable. The order also notes that in the communication dated 19.10.2007, the corporate debtor submitted settlement to the financial creditor and it is too late in the date almost after 6 years to say that the financial creditor is not competent to take possession from the corporate debtor in exercise of the powers conferred under Section 13 of the Act. In view of the above discussion the third contention raised by the by learned counsel for the corporate debtor is not accepted. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) Transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein; (c) Any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; (d) The recovery of any property by an owner or lesson where such property is occupied by or in the possession of the corporate debtor. 36. It is further directed that the supply of essential goods or services to the corporate debtor as maybe specified, shall not be terminated or suspended or interrupted during moratorium period. The provisions of Section 14(3) shall however, not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator and to a surety in a contract of guarantee to a corporate debtor. 37. The order of moratorium shall have effect from the date of this order till completion of the corporate insolvency resolution process or unti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate Debtor; vi) It is hereby directed that the Corporate Debtor, its Directors, personnel and the persons associated with the management shall extend all cooperation to the Interim Resolution Professional in managing the affairs of the Corporate Debtor as a going concern and extend all cooperation in accessing books and records as well as assets of the Corporate Debtor; vii) The Interim Resolution Professional shall after collation of all the claims received against the corporate debtor and the determination of the financial position of the corporate debtor constitute a committee of creditors and shall file a report, certifying constitution of the committee to this Tribunal on or before the expiry of thirty days from the date of his appointment, and shall convene first meeting of the committee within seven days of filing the report of constitution of the committee; and viii) The Interim Resolution Professional is directed to send regular progress report to this Tribunal every fortnight. 39. A copy of this order be communicated to both the parties. The learned counsel for the petitioner shall deliver copy of this or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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