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TMI Blog2020 (3) TMI 1209X X X X Extracts X X X X X X X X Extracts X X X X ..... ant-financial creditor is required to be admitted under section 7(5) of the I and B Code, 2016 - Petition admitted - moratorium declared. - C. P. No. 1264/IB/2018. - - - Dated:- 4-11-2019 - R. Varadharajan Judicial Member And Anil Kumar (B.) Technical Member For the Financial Creditor : N. Sivabalan For the Corporate Debtor : K. Manoj Menon , for the corporate debtor. ORDER R. VARADHARAJAN (JUDICIAL MEMBER). - 1. Under adjudication is C. P. No. 1264/IB/2018 that has been filed on October 10, 2018 by Corporation Bank (hereinafter referred to as financial creditor ) under section 7 of the Insolvency and Bankruptcy Code, 2016 (in short, I and B Code, 2016 ) read with rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 against M/s. SLO Industries Ltd. (hereinafter referred to as corporate debtor ). The prayer made is to admit the application, to initiate the corporate insolvency resolution process against the corporate debtor, declare moratorium and appoint interim resolution professional (IRP). 2. Heard counsels for the financial creditor and corporate debtor and perused the pleadings including the documents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing all the above facilities, did not adhere to the terms of sanction and the operation of account was not regular. Hence, the accounts have been classified as non-performing assets (NPA) on May 30, 2016 by the financial creditor. Thereafter, the financial creditor has initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and on July 14, 2016 issued a demand notice under section 13(2) of the SARFAESI Act demanding the balance outstanding amount from the corporate debtor and followed by the possession notice under section 13(4) of the SARFAESI Act on March 20/21, 2017 by taking physical possession of the property. Simultaneously, the financial creditor filed original application under section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, before Debts Recovery Tribunal-III, Chennai. Thereafter, the corporate debtor filed three SAs before Debts Recovery Tribunal-I, Chennai and except S. A. No. 30 of 2017, other two SAs were dismissed by the Debts Recovery Tribunal. 8. Besides above, counsel for the financial creditor has referred to the annual report of the corporate debt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntainable and for the said reason also the application is liable to be rejected. (iii) The applicant-bank has initiated the petition mala fide as against the corporate debtor and in this connection it is pointed out that in addi tion to the present proceedings initiated under the IBC, 2016, earlier the applicant-bank has initiated proceedings before the Debts Recovery Tri bunal arising out of recovery of debts and bankruptcy as well as initiated action under the SARFAESI Act, 2002 and filed complaint with SFIO as alleged against SLO Industries Ltd., and in the circumstances this petition is only a continuation of the abuse of process of law. (iv) It is also contended that in relation to the proceedings before the Debts Recovery Tribunal based on the claim as filed by the applicant-bank, a counter claim had been made as against the applicant-bank by the cor porate debtor for an amount ₹ 308.04 crores, which is in excess of the claim amount as made before this Tribunal by the applicant-bank against the corporate debtor in a sum of ₹ 236,35,93,324.86. In the circumstances, taking into consideration the claim being in excess of the amount claimed, this petition is lia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of one Mr. S. T. Nadarajan, assistant general manager of the applicant-bank is reflected who has also signed at the end of the application, affixing his signature along with seal disclosing his designation. Further an authorization letter in his favour has also been enclosed dated October 6, 2018 and has also been again furnished along with additional typed set and in the circumstances we do not find much credence factually or legally in relation to the said objection and hence overruled. 13. In relation to the contention the claim as being barred by limitation, it is pointed out on the part of the corporate debtor that the balance-sheet of the company has been filed only for the year ended 2015, which is beyond the period of 3 years from the date on which the default is said to have arisen as disclosed in the application filed by the bank. Further, in any case, it is also contended by the corporate debtor that mentioning of any amount in the balance-sheet cannot be considered as an admission on the part of the corporate debtor in relation to the amount claimed by the applicant-bank. 14. In addition, it is also contended that the statement of account filed along with the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... From the pleadings as filed by the applicant-bank on facts as well as documents the following position emerges : (i) At the request of the corporate debtor inland letter of credit for ₹ 15.75 crores over and above the sanctioned limits in March, 2016 and the bills drawn under the letters of credits were not paid on due dates and the liabilities have devolved and debited to the protest bill account. (ii) Additional set of documents dated August 10, 2019 enclosing the stand alone financial statements of corporate debtor for the year ended March 31, 2018 as filed with the Registrar of Companies being a public authority shows the indebtness in the nature of secured loan to the extent of ₹ 2,07,10,04,479.23 correlating with the details of security offered to the financial creditor by the corporate debtor. (iii) Statement of accounts furnished by the financial creditor in relation to the corporate debtor along with the additional typed set filed on January 30, 2019 disclosing a credit of ₹ 14,85,00,000 to the account of the corporate debtor on March 28, 2018 prior to the filing of the instant application in the month of October, 2018 and which fact had also be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in initiating proceedings before this Tribunal, it is stated that the applicant-bank has initiated proceedings before the Debts Recovery Tribunal-III, Chennai in O. A. No. 105 of 2017 for recovery of the alleged debt owed by the corporate debtor to the applicant-bank. Subsequently, notice under section 13(2) of the SARFAESI Act, 2016 followed up with another notice dated December 17, 2016 and thereafter a possession notice under section 13(4) of the said Act dated March 18, 2017 have been invoked and that the same is challenged by the corporate debtor in S. A. No. 30 of 2017 before the Debts Recovery Tribunal-1, Chennai. Thereafter, the order of the Debts Recovery Tribunal-1 was challenged before the Debts Recovery Appellate Tribunal, Chennai wherein the Debts Recovery Appellate Tribunal directed to pre-deposit ₹ 70 crores to entertain the appeal, to which the corporate debtor has filed a Writ Petition No. 718 of 2018 and the said amount has been reduced to ₹ 57 crores to be deposited in two instalments. 20. In relation to the above contention put forth by the corporate debtor about multiplicity of proceedings, it is by now trite that despite proceedings pending bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the application as filed by the applicant-financial creditor is required to be admitted under section 7(5) of the I and B Code, 2016. 23. The financial creditor has proposed the name of Mr. Chandramouli Ramasubramaniam, having registration number IBBI/IPA-002/IP-N00052/ 2016-2017/10096, as interim resolution professional (IRP) and a written communication in the format prescribed under Form 2 of the Insolvency and Bankruptcy Board of India (Application to Adjudicating Authority) Rules, 2016 has been filed by the proposed IRP who is appointed as the IRP to take forward the process of corporate insolvency resolution of the corporate debtor. The IRP appointed shall take in this regard such other and further steps as are required under the statute, more specifically in terms of sections 15, 17 and 18 of the Code and file his report within 20 days before this Bench. The powers of the board of directors of the corporate debtor shall stand superseded as a consequence of the initiation of the CIR process in relation to the corporate debtor in terms of the provisions of the I and B Code, 2016. 24. As a consequence of the application being admitted in terms of section 7 of the Code, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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