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TMI Blog2020 (3) TMI 777X X X X Extracts X X X X X X X X Extracts X X X X ..... the Insolvency Resolution Professional to act as Interim Resolution Professional and there being no disciplinary proceedings pending against the proposed resolution professional, therefore the Application under sub-section (2) of section 7 is taken as complete, accordingly this Bench hereby admits this Petition. Application admitted - moratorium declared. - CP (IB) NO. 2803/MB/2019 - - - Dated:- 25-11-2019 - Suchitra Kanuparthi, Judicial Member And V. Nallasenapathy, Technical Member Vijay Hinge, Ravi Chandran and Deepti B. Mistry, Advs. for the Petitioner. D.J. Kakalia, Sarosh Bharucha and Raghavi Sharma, Advs. for the Respondent. ORDER V. Nallasenapathy, 1. Bank of India (hereinafter called 'Petitioner') has sought the Corporate Insolvency Resolution Process of TD Toll Road Private Limited (hereinafter called the 'Corporate Debtor') on the ground, that the Corporate Debtor committed default on 16.07.2019 to the extent of ₹ 21,68,44,477/-as provided under section 7 of Insolvency and Bankruptcy Code, 2016 (hereafter called the 'Code') read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s: (a) The Corporate Debtor faced many difficulties in implementing the project due to which there is serious cash flow mismatch against the ballooning repayments towards the debt advanced by the Lenders under the Consortium Loan Agreement (CLA). (b) The Corporate Debtor as provided under the RBI Circulars dated 12.02.2018 and modification dated 07.06.2019 is entitled to restructure the loan and accordingly on 13.08.2018 proposed a resolution plan to the Lenders, the Lenders appointed Ernst and Young merchant banking services to study the techno-economic viability of the project. The picture emerging from the meetings held by the Corporate Debtor with the lenders was that the party would jointly discuss and arrive at a resolution plan but all on a sudden, the Petitioner belying hopes of the Corporate Debtor filed this Petition. (c) The Consortium members have entered into an Inter-Creditor Agreement recognising the fact that one consortium member, can by its unguided action, cause irreparable damage to the interest of entire consortium. The transaction document permits the member of the consortium to take any action pursuant to any alleged default collectively and not indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsaction document specifically prohibits any action for the winding up, liquidation, official management, receivership, bankruptcy, insolvency or dissolution of the borrower or any analogous process by a single member of the consortium. (g) The Petitioner herein is a signatory to the transaction document and acted contrary to the express provisions therein. (h) The Petitioner has initiated the present proceedings without the consent of other members of the consortium and in the midst of formulating the resolution plan by the members of the consortium to recover their dues. (i) Even though, the Petitioner has statutory right to file petition under section 7, that right is sub-servient to the contractual clauses contained in the Inter-Creditor Agreement despite the fact that the Corporate Debtor is not a party to the Inter-Creditor Agreement. (j) The Petitioner refused to cooperate with the other members of the consortium and the Corporate Debtor and has taken this extreme step of putting the company under CIRP, whereas the other members of the consortium acknowledged the difficulties of the Corporate Debtor and tried to work out the solution to resolve the problem in acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is subservient to the Inter-Creditor Agreement, comply with the conditions in the Inter-Creditor Agreement and ignore the Code at least for the time being. 11. The above contentions of the Corporate Debtor cannot be taken into account while considering the Petition for admission under section 7 of the code, in view of the decision of the Hon'ble Supreme Court of India in the case Innoventive Industries Ltd. v. ICICI Bank Ltd. [2017] 84 taxmann.com 320/143 SCL 625 wherein it was observed as below: 28. When it comes to a financial creditor triggering the process, section 7 becomes relevant. Under the Explanation to section 7(1), a default is in respect of a financial debt owed to any financial creditor of the corporate debtor - it need not be a debt owed to the applicant financial creditor. Under section 7(2), an application is to be made under sub-section (1) in such form and manner as is prescribed, which takes us to the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. Under Rule 4, the application is made by a financial creditor in Form 1 accompanied by documents and records required therein. Form 1 is a detailed form in 5 parts, which re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h of imagination, will come in the way of admission of the petition under section 7 of the Code when debt and default is proved beyond doubt. The petitioner having consented and executed the Inter Creditor Agreement has not waived its statutory rights by a contractual agreement, but have only envisaged a mechanism/procedure to jointly enforce the loan as a consortium. 14. This Adjudicating Authority, on perusal of the documents filed by the Petitioner, is of the view that the Corporate Debtor defaulted in repaying the loan availed and also placed the name of the Insolvency Resolution Professional to act as Interim Resolution Professional and there being no disciplinary proceedings pending against the proposed resolution professional, therefore the Application under sub-section (2) of section 7 is taken as complete, accordingly this Bench hereby admits this Petition, prohibiting all of the following of item-I, namely: (I) (a) 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; (b) transferring, encumberi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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