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TMI Blog2020 (5) TMI 394X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 and the application has been filed on 13-7-2018 besides submission of OTS Proposal on 25-9-2018. It is a settled legal position that the pendency of SARFAESI proceeding or other dispute does not prevent a Financial Creditor to trigger the C.I.R.P. because the nature of remedy being sought for under the provisions of the I.B. Code is Remedy in Rem in respect of the CD. Also, application is filed by the Respondent under section 60(5) read with section 442 of Companies Act, 2013 against the Applicant Bank with a prayer to refer the matter for mediation and conciliation panel - At this stage, this Adjudicating Authority is only to decide whether the petition filed by the Financial Creditor under section 7 of IBC is to be admitted or rejected, considering the facts that whether the default has occurred or not and the application under section 7 filed under sub-section 2 of the IBC is complete or not in all respects. When the application is yet to be admitted, the question of referring the petition to the Mediation and Conciliation panel does not arise and moreover the Ld. Lawyer of the Financial Creditor strongly opposed to this prayer of the Corporate Debtor as the Applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... electricity lines for government, semi government or private parties. 4. It is gathered from the records that initially the Corporate Debtor had availed working capital credit facilities with limits of ₹ 140.00 crores with Bank of India (Applicant Bank herein) at its Rajkot Mid Corporate Branch and credit facilities aggregating to ₹ 71.75 Crores with IDBI Bank Ltd., at its Specialised Corporate Branch, Rajkot. Thereafter, at the request of the Corporate Debtor, the IDBI Bank Limited with Bank of India, Applicant Bank herein as the lead bank of 'BOI consortium' granted Working Capital credit facilities, both fund and non-fund based to an aggregate limit of ₹ 314.25 Crores as set out in the letters of sanction of the said Banks under the terms and conditions as contained in the sanction letters therein. To secure the aforesaid credit facilities, the Corporate Debtor hypothecated its movable assets, (detailed description of the same is mentioned at Third Schedule of annexed at Annexure I/8 at page no. 201 to 213 of the paper book of the petitioner) by execution of Joint Deed of Hypothecation. Further, the Corporate Debtor Company, as borrower through it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... signed and executed Bank's standard loan documents on 7-8-2014 in favour of the BOI Consortium in their respective capacities by passing necessary Board Resolution on 7-8-2014 for accepting all the stipulated terms and conditions. 8. Accordingly, to secure the aforesaid credit facilities, the Corporate Debtor company executed Second Supplemental Joint Deed of hypothecation dated 7-8-2014 in favour of the BOI consortium creating a charge over its movable assets. Further, the Corporate Debtor company through its Director, Mortgagors - Shri Niteshbhai M. Kataria Shri Mavjibhai M. Kataria and Corporate Guarantor, M/s. Jyoti Power Transmission Pvt. Ltd., executed Supplemental Indenture of Mortgage over their immovable property in favour of the BOI consortium. Descriptions of mortgaged properties are described in First Schedule Part -A, B, C, D, E, G, H, I, J and Second Schedule Part-A B in Annex: I/43 of the Application. The said mortgage has been registered with Sub-Registrar, Sanand vide serial no. 5287 on 8-8-2014. 9. Thus, the Corporate Debtor company availed the following credit facilities granted by the Applicant Bank - Sanction date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd conditions of the said restructuring of various credit facilities and as per RBI policies and directives and guidelines applicable to classification of accounts as NPA, in case of restructured facilities, the accounts of the Corporate Debtor came to be classified as NPA with effect from 28-10-2013 as per such applicable guidelines and directives of RBI. However, on 30-5-2015, various credit facilities of Corporate Debtor were classified as NPA with effect from 28-10-2013 (date of NPA as recorded in the system) in the books of the account of the Financial Creditor as per applicable directives and guidelines as applicable to restructured credit facilities of Corporate Debtor. 12. Subsequently, the Applicant recalled the loan and invoked the guarantees and initiated measures under RDDBFI Act and SARFAESI Act. It is submitted that the Financial Creditor has filed Original Application No. 717/2017 against the Corporate Debtor and others, which is pending before the DRT-I, Ahmedabad. Further, it is submitted that the Corporate Debtor and others have filed Securitisation Application No. 45/2016 against the Petitioner Financial Creditor before DRT-I, Ahmedabad, challenging the measur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Insolvency Bankruptcy Code, 2016 read with rule 4 of the Insolvency Bankruptcy before this Adjudicating Authority to initiate the Corporate Insolvency Resolution Process. 17. The Financial Creditor, to substantiate its claim, has enclosed following documents: - i. Copies of all sanction letters (Page Nos. 77 to 116 of paper book); ii. The statement of accounts of the Corporate Debtor maintained by Bank of India along with Certificate issued under Banker's Book Evidence Act (Page Nos. 130 to 146 of paper book); iii. Copy of Second Supplemental Joint Deed of Hypothecation dated 7-8-2014 executed by the Corporate Debtor in favour of BOI consortium consisting of Bank of India, IDBI Bank Limited and State Bank of India annexed at Annexure I/34(Page Nos. 482 to 500 of paper book); iv. Copy of Second Supplemental Working Capital Consortium Agreement dated 7-8-2014 executed by the Corporate Debtor in favour of BOI consortium consisting of Bank of India, IDBI Bank Limited and State Bank of India annexed at Annexure I/35(Page Nos. 501 to 529 of paper book); v. Copy of Deed of Guarantee dated 7-8-2014 executed between M/s. Raj kamal Power Engineering, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder dated 31-7-2018 had issued a formal notice to the Corporate Debtor for filing their objections and accordingly, the Petitioner filed the proof of service of notice before this Tribunal on 14-8-2018. Thereafter, the Respondent, Corporate Debtor appeared before this Tribunal on 05-9-2018 and sought time to file objections within two weeks. On 23-10-2018, the Learned Counsel appearing on behalf of the Respondent submitted that on 30-8-2018, the bank has issued a letter to the Respondent accepting their OTS proposal and the Respondent has written a letter to the bank on 25-9-2018, which is to be considered by the Bank. Hence, time was sought. Thereafter the matter was adjourned to 17-12-2018, 29-1-2019, 18-3-2019, 27-5-2019, 4-7-2019, 27-8-2019, 23-9-2019, 04-10-2019 25-11-2019. 19. In response to the present I.B. Petition filed by the Petitioner Bank, the Respondent has filed its affidavit in reply on 29-1-2019, raising preliminary objections with regard to the maintainability of the application - 19.1 It is submitted there is no specific power of attorney granted by the Applicant bank for initiation of the CIRP, since the power of attorney was executed prior to coming in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd.. and judgment of Hon'ble Supreme Court in the matter of Swiss Ribbons (P.) Ltd., v. Union of India [2019] 101 taxmann.com 389/152 SCL 365 and thus submitted that the mediation process can be conducted and the insolvency application can be set aside thereon. It is further submitted that as per the provisions of the Companies Act, 2013, this Adjudicating Authority can suo motu also refer the matter for mediation and conciliation and no consent of the other side is required for such reference. It is also submitted that the Corporate Debtor had proposed an amount of ₹ 77.00 crores towards full and final settlement against the finance provided by the consortium of Banks against which the banks had also replied vide letter dated 30-8-2018. It is submitted that inspite of sending continuous letters to the Applicant Bank, no substantive reply has been received from the Applicant bank. Hence, it is vital to mention here that the Corporate Debtor has made all the efforts to settle the dues with the banks, but banks have shown least interest in settling the matter. 22. The matter was finally heard. The counsels of the Petitioner and the Respondent were present on differ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 77.00 Crores to be paid on or before 31-3-2020; however, the Financial Creditor advised the Corporate Debtor to submit the assets and liabilities statement of the Corporate Debtor company, its Director, personal guarantors and corporate guarantors etc., however, such conditions were not complied by the Corporate debtor. 30. The Financial creditor had sanctioned a total limit of ₹ 250.00 Crores of Fund Based and Non-Fund Based facilities to the Corporate debtor and thereafter also restructured the limit to ₹ 279.00 Crores against which the FC has claimed an amount of Rs.l53,89,88,763.98Ps in Cash Credit Facility A/c. No.311930110000002, ₹ 76,81,73,985.81Ps in Term Loan A/c. No. 313065410000018, ₹ 43,38,09,181.08Ps in Term Loan A/c. No.313065410000019 and ₹ 36,11,99,567.51 Ps in Funded Interest Term Loan A/c. No. 313065510000004. 31. The Financial Creditor has submitted at page no. 11 of the Petition that the CD has paid an amount of ₹ 16,54,93,555.03Ps. after the classification of the account as NPA. 32. The present I.B. Petition is filed by the duly authorised official of the Applicant Bank in a prescribed format under section 7 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed on 13-7-2018; (f) Further, the Corporate Debtor is acknowledging the debts by offering OTS proposal of ₹ 77.00 crores on 25-9-2018 after the application is filed before the adjudicating authority on 13-7-2018. (g) Copy of the Application filed before the Tribunal has been sent to the Corporate Debtor and the application filed by the Petitioner Bank under section 7 of IBC is found to be complete for the purpose of initiation of Corporate Insolvency Resolution Process against the Corporate Debtor. Hence, the present IB Petition is admitted with the following Directions/observations. The date of admission of this petition is 5-2-2020. 35. IA 620 of 2019 is filed by the Respondent under section 60(5) read with section 442 of Companies Act, 2013 against the Applicant Bank with a prayer to refer the matter for mediation and conciliation panel. Having heard the arguments from both sides, we do not find any merit in the IA filed by the Corporate Debtor, while disposing the application filed under section 7 of IBC, 2016 by the Financial Creditor. Hence, the prayer made in the IA 620 of 2019 in CP(IB) 345/7/NCLT/AHM/2018 is rejected. 36. As per the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the duties as specified under section 17, 18, 20 and 21 of I B Code. The Interim Resolution Professional shall perform all his functions contemplated, inter alia, in 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 personnels connected with the Corporate Debtor, its promoters or any other persons associated with the Management of the Corporate Debtor are under legal obligation under section 19 of the Code to extend every assistance and co-operation to the Interim Resolution Professional as maybe required by him in managing the day-to-day affairs of the 'Corporate Debtor'. In case there is any violation, the Interim Resolution Professional would be at liberty to make appropriate application to this Tribunal with a prayer for passing an appropriate order. The Interim Resolution Professional shall be under 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the present I.B. Petition by admitting the same under section 7 of the I B. Code, I will express my opinion in respect of the disposal of the I.A. No. 620 of 2019 on its merits as the same was filed by the Corporate Debtor for referring it to the mediators. 2. It is a matter of record that in the present IA, oral submissions of the Ld. Counsels for both the parties were heard. However, the Counsel for the Financial Creditor has opposed such application for referring the matter for mediation. At such belated stage, while the main I.B. Petition came to be filed in the year 2018. Since then the efforts were being made by the Corporate Debtor for settling the matter, but the same has not so far been materialised. 3. As per the material available on record, the Corporate Debtor, at earlier point of time proposed for making settlement of its debt for an amount of ₹ 77.00 Crore, which was not acceptable to the Bank. Hence, it did not make any effective reply to the same and the Bank has shown its reluctance for proposal for settlement. 4. During the course of arguments, the Learned Senior Advocate Mr. Sandeep Singhi invited our attention to a decision of Hon'ble NCLAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inancial Creditor itself through its counsel has not given any expressed consent for referring the matter to mediation. 11. Notwithstanding the above, in our view, it is always open for both the parties to make amicable settlement even at the post admission stage before this Court under the provisions of rule 12(A) of the I.B. Code or rule 11 of the NCLT Rules and thereafter, this Court may pass an appropriate in accordance with the law. Therefore, at this stage, IA. No. 620 of 2019 is not having adequate force nor it can be a pre-requisite to refer the matter to mediation before making final disposal of the present IB. Petition filed under section 7 of the I B. Code. 12. Hence, for the aforesaid reasons, the present IA. No. 620 of 2019 is hereby rejected. Consequently, this Adjudicating Authority can proceed for disposal of main IB. Petition, CP (IB) No. 345/7/NCLT/AHM/2018, on its merit. Thus, I am with an agreement with my Learned Member (Technical) for admission of the petition under the I B. Code. Hence, the present I.B. Petition is admitted with the directions given and order contained in paras 36 to 41 of the present order. No order as to cost. - - TaxTMI - TMIT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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