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TMI Blog2020 (4) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... Petitioner. Kunal Kher and Ms. Diksha, Advocates for the Respondent. JUDGMENT M.M. Kumar, 1. The 'Financial Creditor'-Oriental Bank of Commerce has filed the instant petition under section 7 of the Insolvency Bankruptcy Code, 2016 (for brevity 'the Code') with a prayer to trigger the Corporate Insolvency Resolution Process in the matter of M/s. Piyush Colonisers Limited. 2. The Corporate Debtor-M/s. Piyush Colonisers Limited is a company registered under the provisions of the Companies Act, 1956 and was incorporated on 14-7-2004. The identification number of the Corporate Debtor is U40105DL2004PLC0127584 and its registered office is situated at A-16/B-1, Mohan Co-operative Industrial Estate, Main Mathura Road, New Delhi-110044. 3. The Financial Creditor has proposed the name of Resolution Professional, Mr. Umesh Garg, with the address D-15, Second Floor, Okhla Industrial Area, Phase-1, New Delhi and e-mail id [email protected]. His registration number is IBBI/IPA-001/IP-P00135/2017-18/10277. He has filed his written communication which satisfies the requirement of Rule 9(1) of the Insolvency Bankruptcy (Application to Adjudicating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abular chart depicting working of the amount in default is annexed (Annexure-2). 10. Learned counsel for the Corporate Debtor has opposed the admission of the petition by asserting that:- (i) The account has never been declared as NPA as per the guidelines issued by the Reserve Bank of India from time-to-time. The petitioner has failed to demonstrate whether, how and when the account of Respondent became overdue or out of order as per the Master Circular - Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances dated 1-7-2013 issued by the Reserve Bank of India. It is inconceivable as to how an account was admittedly standard can be declared as an NPA. The petitioner has admittedly not communicated the factum of declaration of the account of Respondent as irregular or overdue or out of order or NPA, which is a mandatory requirement. (ii) The Respondent was serving the interest component on time but high interest rate being charged by the petitioner and adverse market conditions could not reap the expected results which led to the delay in making the principal amount as well as serving the high interest cost. (ii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng creation of mortgage over the properties in order to secure the loan. 15. In addition, the Financial Creditor has filed the relevant statement of accounts duly certified in accordance with Banker's Book Evidence Act, 1891 as per the requirement of Form 1 Part V Column 7 of the application. True copy of statement of accounts submitted by the Financial Creditor pertaining to loan facility, kept during the course of banking business, based on which the claim has been raised, can be termed as sufficient evidence of the financial debt. 16. Section 4 of the Bankers' Books Evidence Act, 1891 provide for mode of proof of entries in bankers' books and the same read as under:- Section 4. Mode of proof of entries in bankers' books.- Subject to the provisions of this Act, a certified copy of any entry in a banker's books shall in all legal proceedings be received as prima facie evidence of the existence of such entry, and shall be admitted as evidence of the matters, transactions and accounts therein recorded in every case where, and to the same extent as, the original entry itself is now by law admissible, but not further or otherwise. 17. A perusal of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o till date and first time is being raised in the present proceeding. Under these circumstances, the defence that aforesaid documents were blank does not hold good. It is wholly irresponsible behaviour of the Corporate Debtor. 20. It is also the case of the respondent that the account of the Corporate Debtor has been wrongly declared as NPA. While dealing with application under section 7 of the Code, it is immaterial for us to examine as to when the account was declared as NPA. In section 7 application, the Adjudicating Authority has to consider whether there is a debt due in law and facts and whether there has been a default in paying the financial debt. Hon'ble National Company Law Appellate Tribunal in the case of Ranjit Kapoor v. Asset Reconstruction Co. (India) Ltd. [Company Appeal (AT) (Insolvency) No. 410 of 2018] has held that the provision of NPA relates to SARFAESI Act, 2002 and has nothing to do with Code . Therefore, the objection of the Respondent that the Financial Creditor has wrongly declared the account as NPA, cannot be a ground to reject the application preferred by Financial Creditor under section 7 of the Code, there being default in payment of financia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As per requirement of section 4 of the Code if default amount is one lac or more then the CIR Process would be issued. The application under sub-section 2 of section 7 is complete; and no disciplinary proceedings are pending against the proposed Interim Resolution Professional. 25. As a sequel to the above discussion, this petition is admitted and Mr. Umesh Garg is appointed as an Interim Resolution Professional. 26. In pursuance of section 13 (2) of the Code, we direct that Interim Insolvency Resolution Professional to make public announcement immediately with regard to admission of this application under section 7 of the Code. The expression 'immediately' means within three days as clarified by Explanation to Regulation 6 (1) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. 27. We also declare moratorium in terms of section 14 of the Code. A necessary consequence of the moratorium flows from the provisions of section 14 (1) (a), (b), (c) (d) and thus the following prohibitions are imposed which must be followed by all and sundry: (a) the institution of suits or continuation of pending suits or proceedings against the cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to this Tribunal with a prayer for passing an appropriate order. The Interim Resolution Professional/Resolution Professional shall be under a duty to protect and preserve the value of the property of the 'Corporate Debtor' as a part of its obligation imposed by section 20 of the Code and perform all his functions strictly in accordance with the provisions of the Code. 30. Directions are also issued to the Ex-Management/Auditors etc. to provide all the documents in their possession and furnish every information in their knowledge as required under section 19 of the Code to the Interim Resolution Professional within a period of one week from today otherwise coercive steps to follow. 31. We direct the Financial Creditor to deposit a sum of ₹ 2 lakhs with the Interim Resolution Professional to meet out the expenses to perform the functions assigned to him in accordance with Regulation 6 of Insolvency Bankruptcy Board of India (Insolvency Resolution Process for Corporate Person) Regulations, 2016. The needful shall be done within three days from the date of receipt of this order by the Financial Creditor. The amount however be subject to adjustment by the Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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