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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 ..... s been filed by the duly authorised officer, Shri Dineshchandra Maganlal Patel, Bank of India, University Road Branch, Rajkot. 2. The Respondent Corporate Debtor (CD) Company, namely Jyoti Power Corporation Private Limited was incorporated on 30-3-2006 with CIN: U45204GJ2006PTC048048. 3. The nominal share capital of the Respondent (CD) Company is Rs. 40,50,00,000/- divided into Rs. 4,05,00,000/- Equity Shares of Rs. 10/- each and the paid-up capital of the company is Rs. 39,04,45,150/-divided into Rs. 3,90,44,515/- Equity Shares of Rs. 10/-each. The Registered Office of the Corporate Debtor Company is situated at: Matru Jyot, 1st Floor, Opp. Agro Petrol Pump, Gondal - 360311, District - Rajkot, Gujarat. As per the copy of Memorandum of Association and Articles of Association of Corporate Debtor reveals that the erstwhile company, Jyoti Engineers and Contractors Private Limited changed its name to Jyoti Power Corporation Private Limited and are carrying on the business of engineering and contract work on job-work basis or otherwise of all kinds of electricity works including erection of towers and electricity lines for government, semi government or private parties. 4. It is gath ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any continued to approach the said BOI consortium Banks to sanction/restructure/revise/renew/enhance various credit facilities periodically and such requests were favourably considered by the aforesaid BOI consortium Banks to meet the credit needs of the Corporate Debtor Company. It is further submitted that upon request of the borrower company, the aforesaid BOI consortium banks, lastly sanctioned/restructured/revised/renewed/enhanced the credit facilities vide their respective sanction letters, wherein the Applicant Bank, as per the sanction letter dtd: 27-3-2014, granted Fund Based Term Loans/FITL limits of Rs. 103.00 Crores, Fund Based Working Capital of Rs. 70.00 Crores and Non-Fund Based Limits of Rs. 106.00 Crores (total Rs. 279.00 crores) 7. In consideration thereof and in order to avail the above sanctioned/restructured/revised/renewed/enhanced Credit Facilities, 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., signed and executed Bank's standard loan documents on 7-8-2014 in favour of the BOI Consortium in their respective capacities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Corporate Debtor stopped its accounting operation in its various restructured debts/credit facilities with the Financial Creditor, Bank of India. 11. It is further submitted that as the Corporate Debtor failed to adhere to the terms and 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 pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Proprietorship concern through its Proprie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 into effect of the Code and cannot form the basis for filing proceedings under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Rs. 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 different dates and put forth their submissions before the Bench on all the above aspects. 23. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Rs. 250.00 Crores of Fund Based and Non-Fund Based facilities to the Corporate debtor and thereafter also restructured the limit to Rs. 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, Rs. 76,81,73,985.81Ps in Term Loan A/c. No. 313065410000018, Rs. 43,38,09,181.08Ps in Term Loan A/c. No.313065410000019 and Rs. 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 Rs. 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 the I.B. Code annexing copies of loan documents confirming the existence of debt due and defaulted and proposed a name of Resolution Professional to act a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 sections 13 and 14 of the I&B. Code on the date of commencement of insolvency, this Adjudicating Authority declares moratorium with effect from today for prohibiting all of the follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 in accordance with the provisions of the Code, Rules and Regulations. 39. It is also observed that the CD has paid Rs. 16.54 crores after the account became NPA and the Petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplication 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 Rs. 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 in the matter of Arvinder Singh v. NT Capital Ltd. Read with judgment of Hon'ble Supreme Court's decision of Swiss Ribbon (supra) that, a Mediation process can be conducted and the Insolvency application can be set aside. Further, this Adjudicating Authority is vested with necessary jurisdiction to refer the matter for mediation for which, no express consent from the other side is required. 5. We duly considered the above stated contention in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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