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TMI Blog2019 (7) TMI 1624X X X X Extracts X X X X X X X X Extracts X X X X ..... er ORDER RAJESWARA RAO VITTANALA, JUDICIAL MEMBER 1. C.P. (IB) No. 02/BB/2017 is filed by M/s. Rossmary Anthony Arakkal, Shareholder and Director of M/s. Nysa Enterprises Private Limited ('Petitioner/Corporate Applicant') under Section 10 of the IBC, 2016 read with Rule 7 of the I B (Application to Adjudicating Authority) Rules, 2016 to initiate the Corporate Insolvency Resolution Process (CIRP) in respect of M/s. Nysa Enterprises Private Limited on the ground that it has committed default for a total outstanding amount of ₹ 56,55,587.21/- (Rupees Fifty Six Lakhs Fifty Five Thousand Five Hundred and Eighty Seven and Paise Twenty One Only) while the total debt raised is ₹ 60,00,000/- (Rupees Sixty Lakhs Only). 2. Brief facts of the case, as mentioned in the Company Petition, are as follows: (1) M/s. Nysa Enterprises Private Limited ('Petitioner/Corporate Applicant') is a Private Limited Company incorporated on 05.09.2005 under the Companies Act, 1956 having CIN: U51311KA2005PTC037147 and having its registered office at No. 126, Wrangler Showroom, 1st Floor, The Forum Mall, No. 21, Hosur Road, Koramangala, Bangalore-560029. The Au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Applicant. (6) Owing to the closure of the Corporate Applicant's store and inability to continue its business, the Corporate Applicant has tiled the present application under Section 10 of the IBC, 2016 on 28.02.2017, seeking to have the Company declared insolvent and to pay off their debts with, the existing liabilities of the Company. (7) It is stated, that.One of the Financial Creditors i.e. Zen.Lefin Pvt. Ltd. has raised objections stating that the Financial Creditor has the financial capability to repay its debt and hence the insolvency petition is not maintainable. However, it is disputed. The requirements under Section 10 of the Code have clearly been stated in the decision' of Hon'ble NCLAT in Unigreen Global (P) Ltd. v. Punjab National Bank, New Delhi [2018] 89 taxmann.com 17/145 SCL 272 as follows: 20... The moment the adjudicating authority is satisfied that a default has occurred, the application must be admitted unless it is incomplete, in which case it may give notice to the applicant to rectify the defect within 7 days of' receipt of a notice from the adjudicating authority. The view taken in the decision above has been reiterated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or also availed Overdraft .Facility to an extent of ₹ 35,00,000/- under Credit Arrangement letter dated 02.11.2010. from ICICI Bank Ltd., and a sum of ₹ 10,00,000/- from HDFC Bank Ltd. vide Loan letter dated 08.07.2014. (4) It is stated that according to the Corporate Debtor, it is unable to service its debts as also been suffering from huge losses. Because of the illegal termination of the Company Franchise for Wrangler' at Forum Mall, the Corporate Debtor had suffered sudden financial crunch. Therefore, Corporate Debtor has decided to close out all its financial obligations at the earliest with the available resources at the Company's disposal. (5) It is further stated that according to the Corporate Applicant, Corporate Debtor has issued a'letter dated 27.10.2016 to all the Respondents in which it is categorically stated the only asset that we own is a land measuring about 10,000 Sq. Ft. bearing Property No. 22, Site No. 11, Khatha No. 287, situated at Doddagubbi Village, Bidarahalli Hobli, Bangalore East Taluk, which was brought into the Company from the personal assets of our shareholder. The Company does not have any other assets. The market val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. (3) When such being a fact, instead of discharging the liability due to the answering Respondent, the Petitioner has knocked the doors of this Hon'ble Tribunal stating that it has commercial insolvent to paying the debt due to the financial crisis and infusing of funds etc. As already stated above, the Petitioner is commercially solvent and in order to thwart the recovery measures as a last resort approached this Hon'ble Tribunal. 5. Heard Shri Vignesh Raj, learned Counsel for the Petitioner/Corporate Applicant and Shri Francis Xavier, learned Counsel representing HDFC Bank Ltd. (Financial Creditor). We have carefully considered the pleadings of the parties and the extant provisions of the Code. 6. Learned Counsel for the Corporate Applicant while pointing out various contentions raised in the Company Petition and also in the material documents filed along with the Company Petition has further submitted that the Application is filed in accordance with law and they have also filed a written gist of arguments dated 08.07.2019, by inter alia stating that the Corporate Applicant has availed a Loan from ICICI Bank Ltd., Zen Lefin Pvt. Ltd., and HDFC Bank Ltd., amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ets of our shareholder. The market value of the property is estimated to be not less than ₹ 3,00,00,000/- and it is free from encumbrances of any kind. Therefore, the basic contention that the Applicant/Petitioner is not commercial solvent to pay its debts is not substantiated to initiate CIRP. A property put on sale during CIRP would normally fetch much below market value. As per the estimation of Petitioner herself, the property in question is worth not less than Rs. Three Crores and the default stated to be of ₹ 56,55,587.21. The proceedings under Code cannot be misused to avoid other judicial proceedings. It is also not in dispute that the Award in question is not questioned by the Petitioner so far. 9. Therefore, we are of the considered opinion that the Petitioner is not commercially insolvent so as to initiate CIRP under Section 10 R/w Section 2 of the Code. We concur with the contentions of the Financial Creditors, as stated supra, that the Petitioner is not commercially insolvent. Therefore, the Company Petition is liable to be dismissed. 10. Hence, C.P. (IB) No. 02/BB/2017 is hereby dismissed, and this order will not come in the way of the Petitioner to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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