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TMI Blog2019 (11) TMI 1405X X X X Extracts X X X X X X X X Extracts X X X X ..... it would be appropriate to make a note of background facts for the purpose of determination of this petition as stated under: I. That the Financial Creditor is a Government of India undertaking and a Financial Institution within a meaning of Section 2(72) of the Companies Act, 2013 (erstwhile Companies Act, 1956), inter alia engaged in the business of providing medium to long term financial assistance to manufacturing, services and infrastructure sectors. Il. That the total amount of Debt sanctioned to Corporate Debtor is Rs. 60,00,00,00/-whereas the total disbursed amount is Rs. 9,90,OO,OOO/- and the total amount claimed to be in default is Rs. 16,63,57,074/- and the date of default was 15.10.2013. III. List of documents placed on record in order to prove the existence of Financial Debt, the amount and date of default:- * Undertaking to execute sponsor support undertaking dated 26.02.2009 by IDEC. * Sponsor support agreement dated 27.02.2009 executed by the Corporate Debtor. * Lenders Agent Appointment Agreement dated 27.02.2009. * Deed of Hypothecation dated 27.02.2009 executed by the M/S. Indu Projects Ltd. * Guarantee Agreement dated 27.02.2009 executed by the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has filed certain documents i.e. confirmation of outstanding liability of Corporate Debtor to the Financial Creditor. However, the Corporate Debtor has not issued any balance confirmation certificate to the Financial Creditor on 28-03-2014. The said letter was not issued in the letter head of the company. Hence, the said balance confirmation certificate cannot be taken on record. It is further submitted that, any outstanding liabilities of the Corporate Debtor should be signed by only Director of the Company i.e. Mr.I.Shyam Prasad Reddy as per the Resolution of the Board of the Corporate Debtor, which is not the case here. v. That the Financial Creditor also filed Principal Account sheet evidencing the amount & date of disbursement of financial assistance to the Corporate Debtor. However, this also doesn't contain the letter head of the Financial Creditor nor signed by authorized person. vi. That, as per Form No. 1 - Part-IV - Column No.2, the date of default was shown as 15-10-2013. The Corporate Debtor has not acknowledged its Debt to the Financial Creditor. Under the Indian Limitation Act, the Financial Creditor should have filed the instant Petition on or before 14-10- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under section 50(3) of PMLA, 2002. After scrutinizing the documents available on record, certain properties were identified as proceeds of crime in terms of Section 2(1) (u) of PMLA, 2002 and the Joint Director, Enforcement Directorate, Hyderabad, issued Provisional Attachment Order vide PAO No.03/2015 dated 06.02.2015 under section (1) of section 5 of Prevention of Money Laundering Act, 2002 and provisionally attached immovable properties from different companies of Shri. I Syam Prasad Reddy including immovable properties held in the name of M/S. Indu Techzone Private Limited as the same fell within the meaning of 'Proceeds of Crime' as defined under section 2(1) (u) of PMLA, 2002. The particulars of the immovable property attached from M/S. Indu Techzone Private Limited are given hereunder: Sl. No. Property Description Name of the Party Value of the Property (in Rs.) 1 150 Acres of land in Sy. Nos. 99/ 1 , Mamidipalli Village, Saroor Nagar Mandal, Ranga Reddy District (registered vide sale deed dated 02.02.2009 M/S. Indu Techzone Private Limited 30,00,00,000/- III. Thereafter, an Original Complaint under sub-section 5 of section 5 of Prevention o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... memo regarding the status of the proceedings in relation to Prevention of Money Laundering Act (PMLA) proceedings. The matter adjourned to 24.01.2019 at request. 13. During the hearing held on 05.02.2019, it was brought to the notice that there are matters pending against the group companies wherein this Adjudicating Authority ordered notice to the authorities of ED for placing the information whether any proceedings are pending before them. Considering the above, Registry was directed to serve a notice to the concerned officials of the ED for filing a report regarding pendency of matters. 14. During the hearing held on 11.03.2019, Mr. K. Manmadha Rao, counsel representing the Office of ED filed vakalat and prayed time for filing counter. On 16.05.2019, counsel for the Respondent stated that an appeal preferred before the Hon 'ble NCLAT by Petitioner was dismissed and placed the copy of the order. 15. During the hearing held on 17.06.2019, no representation was made on behalf of ED but they filed counter in the registry. Therefore, registry was directed to issue notice to ED for making submissions. 16. On 27.08.2019, Mr. T.V.Subba Rao representing ED appeared and filed writ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard of Directors in favour of the person signing the appeal. c) That the Financial Creditor has not taken the consent of other lenders of the Consortium before filing the instant petition as per terms of inter-creditor agreement. d) That the petition is not maintainable due to parallel proceedings under SARFAESI/DRT. e) That the application is barred by limitation. 24. As regards (a) above, it is seen from the record that the Adjudicating Authority had given direction to the Financial Creditor to remove the defects on 03.08.2018 within a period of 7 days from the same and a memo was filed in compliance attaching a neat copy of the Form I on 10.08.2018. 25. As regards (b) above, it is seen from record that by way of their submissions dated 03.01.2018, the Financial Creditor has filed a letter of authorisation issued (pg no. 154) in favour of "all officers of IFCI, except Private Secretaries" to approve, sign execute and endorse all documents of behalf of IFCI as may be required for carrying out Insolvency Proceedings against the Corporate Debtor. The said letter clearly refers to decision of Board of Directors dated 29.06.2017 and delegation of power by MD & CEO on 27.09.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0. In fact the record also shows that all these letters have been signed by authorised signatory from time to time, the final letter for OTS dated 20.03.2018 having been signed by the current Director. 31. It may also be noted that even during the current proceedings, the Counsel of the Corporate Debtor has been making submissions that they are making all efforts to settle the matter with the Financial Creditor, which is a clear indication of the liability on the part of the Corporate Debtor. 32. Keeping in view the above facts, it is clear that the Corporate Debtor has acknowledged the debt in writing as late as on 20.03.2018 and therefore provisions of section 18 of the Limitation Act will apply. As such, the provisions of Limitation Act will not come to the assistance of the Corporate Debtor in the instant proceedings and the challenge to the instant CP on account of limitation also fails. 33. On the other hand, the Financial Creditor has been able to establish that there exists a 'financial debt' and there has been 'default' on the part of the Corporate Debtor. It has been held by the Hon'ble Supreme Court in INNOVENTIVE INDUSTRIES LTD. vs. ICICI BANK & A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y declares the moratorium which shall have effect from the date of this Order till the completion of corporate insolvency resolution process for the purposes referred to in Section 14 of the I&B Code, 2016. We order to prohibit all of the following, namely: 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, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein; c) Any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of2002), d) The recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor. 38. However, the supply of essential goods or services of the Corporate Debtor shall not be terminated or suspended or interrupted during moratorium ..... 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