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TMI Blog2020 (1) TMI 470X X X X Extracts X X X X X X X X Extracts X X X X ..... loan along with the agreed interest. The loan/financial facility was clearly disbursed against the consideration for time value of money with a clear commercial effect of borrowing. Moreover, the debt claimed in the present application based on the arbitral awards includes both the component of outstanding principal and interest - not only the present claim comes within the purview of 'Financial Debt' but also the applicant can clearly be termed as 'Financial Creditor' of the respondent corporate debtor so as to prefer the present application under Section 7 of the Code. The corporate debtor is entitled to point out to the Adjudicating Authority that a default has not occurred; in the sense that a debt, which may also include a disputed claim is not due i.e. it is not payable in law or in fact. Respondent Corporate Debtor has miserably failed to raise any good defence against the petition and also has failed to place its updated financial statement to show that no financial debt is due. There is no proof to show the re-payment of the entire awarded amount to the financial creditor - The material placed on record confirms that the respondent corporate debtor comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Code. 4. It is submitted in the application that the applicant financial creditor had sanctioned 134 loans on various dates in the year 2014 for the purpose of purchasing of vehicles, Mahindra Truxo to the Corporate Debtor, with a total amount of debt for ₹ 45, 58, 37, 4901/-. A table evidencing the total amount of debts in respect of 134 loan agreements granted along with disbursement dates has been placed on record. 5. It is alleged that the corporate debtor made continuous defaults in repayment of the aforesaid loans, and consequently applicant issued recall notices dated 25.07.2017 in respect of all 134 cases whereby the entire loan amount was recalled. When the amount was not repaid despite recall notices, the dispute was referred to the Sole Arbitrator for adjudication. The Learned Arbitrator passed awards in favour of the applicant Financial Creditor dated 27.06.2018 in all the 134 matters totalling to an amount of ₹ 24,50,00,000/-, with an additional interest of 1.5% per month until the date of payment along with a sum of ₹ 10,000/- towards the cost of the reference. 6. As per part IV of the application it is claimed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken the liability to repay the loan along with the agreed interest. The loan/financial facility was clearly disbursed against the consideration for time value of money with a clear commercial effect of borrowing. Moreover, the debt claimed in the present application based on the arbitral awards includes both the component of outstanding principal and interest. 15. In that view of the matter not only the present claim comes within the purview of 'Financial Debt' but also the applicant can clearly be termed as 'Financial Creditor' of the respondent corporate debtor so as to prefer the present application under Section 7 of the Code. 16. The application filed by the applicant financial creditor has to be admitted under sub-section 5 (a) of Section 7 of the code, on satisfaction that: I. Default has occurred. II. Application is complete, and III. No disciplinary proceeding is pending against the proposed IRP. 17. An application under Section 7 of the Code is acceptable so long as the debt is proved to be due and there has been occurrence of existence of default. What is material is that the default is at least ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... requirement of Section 7 (3) (b) of the Code has also been satisfied. 21. It is thus seen that the requirement of sub-section 5 (a) of Section 7 of the code stands satisfied as default has occurred; the present application filed under Section 7 is complete and as no disciplinary proceeding against the proposed IRP is pending. 22. Respondent has raised another objection that all the 134 awards being ex parte is not enforceable. Respondent has also questioned the correctness of inclusion of additional 1.5 % of monthly interest on awarded amount is incorrect and bad in law. 23. In this regard it is seen that respondent had challenged the said arbitral awards before the Hon'ble High Court of Bombay under Section 34 of the Arbitration and Conciliation Act, 1996. Hon'ble High Court however declined to interfere with the impugned awards and rejected the application filed under Section 34 of the Arbitration and Conciliation Act, 1996 on 05.12.2018. 24. It is thus seen that not only awards in all the 134 loan agreements have been passed in favour of the applicant, but also appeal against the same has been rejected. There is, therefore, no dispute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .e. it is not payable in law or in fact. Respondent Corporate Debtor has miserably failed to raise any good defence against the petition and also has failed to place its updated financial statement to show that no financial debt is due. There is no proof to show the re-payment of the entire awarded amount to the financial creditor. Needless to say, that the claim is based on enforceable awards, which have since attained finality. 31. In the aforesaid background it is seen that the applicant clearly comes within the definition of Financial Creditor. Respondent has neither denied the availment of various loans granted by the financial creditor, nor denied the execution of Loan Agreements. Besides there are enforceable awards passed in favour of the applicant, which has since attained finality and are clearly enforceable in law. The material placed on record confirms that the respondent corporate debtor committed default in repayment of the financial debt. On a bare perusal of Form - I filed under Section 7 of the Code read with Rule 4 of the Rules shows that the form is complete and there is no infirmity in the same. It is also seen that there is no disciplinary proceeding p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operty by an owner or lessor where such property is occupied by or in the possession of the corporate debtor. 37. It is made clear that the provisions of moratorium shall not apply to transactions which might be notified by the Central Government or the supply of the essential goods or services to the Corporate Debtor as may be specified, are not to be terminated or suspended or interrupted during the moratorium period. In addition, as per the Insolvency and Bankruptcy Code (Amendment) Act, 2018 which has come into force w.e.f. 06.06.2018, the provisions of moratorium shall not apply to the surety in a contract of guarantee to the corporate debtor in terms of Section 14(3)(b) of the Code. 38. The Interim Resolution Professional shall perform all his functions contemplated, inter alia, by Sections 15, 17, 18, 19, 20 21 of the Code and transact proceedings with utmost dedication, honesty and strictly in accordance with the provisions of the Code, Rules and Regulations. It is further made clear that all the personnel connected with the Corporate Debtor, its promoters or any other person associated with the Management of the Corporate Debtor are under legal obligat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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