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TMI Blog2019 (2) TMI 1865X X X X Extracts X X X X X X X X Extracts X X X X ..... uted inter alia between the Corporate Debtor, the Financial Creditor and IDBI Trusteeship Services Limited, whereby IDBI Trusteeship Services Limited was appointed as an Escrow Agent for custody of the documents, pursuant to the Put Option Deed dated 21.12.2007 - It is worthwhile to notice that the Financial Creditor has advanced loan to one of its group company namely AOCL. However, it is a party to the Escrow Agreement executed between the Corporate Debtor and the IDBI Trusteeship Services Ltd. Whether in terms of the mechanism laid down under the Debt Asset Swap Agreement dated 20.12.2014, Undertaking dated 14.04.2015 executed by the Corporate Debtor in favour of the Financial Creditor and the amendment carried in Articles of Association of the Corporate Debtor with an undertaking to sell the property owned by the Corporate Debtor situated at 3, Bhagwan Das Road, New Delhi, the objection concerning privity of contract losses its significance? - HELD THAT:- The reading the Facility Agreement, the provisions of DASA dated 20.12.2014, the Undertaking dated 14.04.2015 along with the amendment carried by the Corporate Debtor in its Articles of Association no doubt is left that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncial Creditor') has filed the instant application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (for brevity 'the Code') with a prayer for triggering the Insolvency Resolution Process in the matter of Aditya Estates Private Limited (for brevity 'the Corporate Debtor'). It is appropriate to mention that the 'Financial Creditor' is a wholly owned subsidiary of ICICI India. It was incorporated in England and Wales as a private company on 11.02.2003 with limited liability under the name ICICI Bank UK and was converted into a public limited company, assuming the name ICICI Bank UK PLC, on 30.10.2006. It was assigned identification No. 4663024 by the Registrar of Companies, United Kingdom. It has its Registered office at One Thomas MoreSquare, London-E IWIYN, United Kingdom. Copies of certificate of incorporation dated 11.02.2003 dated 30.10.2006 issued under the provisions of the United Kingdom's Companies Act, 1985 have been placed on record (Annexure- 1 ) . 2. Mr. Abhimanyu Pandey, Relationship Manager of the Financial Creditor has been empowered to sign and submit the petition on the strength of the resolution of the Board of Direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cneill Power India Limited; (3) ICICI Bank Limited (4) ICICI Bank Limited with regard to the immovable property of the Corporate Debtor situated at Plot No. 3, Bhagwan Das Road, New Delhi- 110001. It is pertinent to mention that in the DASA the abovesaid parties had been depicted by using different expressions namely the Corporate Debtor as 'Owner'; Duncan Macneil Power India Limited as 'Borrower'; ICICI Bank Limited as 'Lender' and ICICI Bank Limited as 'Attorney'. Clause '5' which is a relevant clause incorporated in the DASA is set out below verbatim. It deals with the sale of the aforesaid property of the Corporate Debtor in the event the Owner fails to deposit the total dues to the satisfaction of the Lender and reads thus:- 5. SALE PROCESS 5.1 Upon the occurrence of an Event of Default under the Facility, the Lender shall issue a notice to all the Obligors to make payment for discharge of their obligations within 7 days of the notice. 5.2 On non-payment of the dues in full to the satisfaction of the Lender within 7 days of the Demand Notice issued under clause 5.1, the Lender shall provide a notice to the Owner requesting t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case may be) shall credit the amount received as sale proceeds from the sale of the Immovable Property immediately into the account designated by the Lender for such purpose from time to time, out of which the Owner hereby authorizes the Lender to debit all amounts which are due to the (i) Lender from the Borrower and (ii) subject to receipt of all necessary regulatory approvals, ICICI Bank UK Plc from AOCL, and any charges/ expenses to be paid in connection with the sale including but not limited to overdue interest, penal charges, dues to be paid to L DO, stamp duty, tax deducted at source, other applicable statutory dues and other charges payable in relation to complete the transfer of the Immovable Property. 5.6 In case the Owner and/or the Attorney fail(s) to sell/ auction the Immovable Property and/or deposit the sale proceeds of the Immovable Property for any reason whatsoever within the timelines stipulated hereinabove, the Lender shall have a right (but not an obligation) to purchase the Immovable Property without any further notice for an amount equivalent to the Reserve Price. The Lender may pay the consideration for the purchase of the Immovable Property by adjus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated December 21, 2007 (as amended from time to time) 2.2 . 2.3 The Obligors further confirm that ICICI Bank is hereby authorized to hold the sale proceeds from the sale of Property 1 in an account in its own name and in trust for the benefit of ICICI Bank UK and remit the amounts to ICICI Bank UK when all the necessary regulatory approves (including the approval from the RBI, if required) have been obtained. Upon the satisfaction of the dues payable by Assam Oil Company Limited to ICICI Bank UK and Duncan Macneill Power India Limited to ICICI Bank, ICICI Bank shall remit the residual amount out of the sale proceeds received by it to Aditya Estate Private Limited. 2.4 This Undertaking is irrevocable and shall remain in full force and effect till the UK Facility is. paid off to the satisfaction of ICICI Bank UK, upon receipt of the necessary regulatory approvals and cannot be terminated by the Obligors. 8. It is highlighted that the Articles of Association were specifically amended in February 2015 (i.e. subsequent to and in continuation of the DASA and the Multi-party Undertaking)inter alia to include the Financial Creditor as 'Lenders' in relation to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he aforesaid property owned by it in any manner. The cause of action for filing the suit had arisen on account of the attempts of the Corporate Debtor to defeat the rights of the Financial Creditor by proposing to settle the dues of only ICICI India and redeeming the aforesaid property before the Learned Debts Recovery Tribunal-Il, New Delhi, which is seized of the proceedings arising out of claims of ICICI India against M/S. Duncan Macneill Power Limited, the Corporate Debtors and others, under the provisions of Recovery of Debts and Bankruptcy Act, 1993. 12. The Hon 'ble High Court vide its orders dated 17.07.2018 24.07.2018 issued interim directions whereby directed the Corporate Debtor to maintain status quo with respect to the aforesaid property till 16.08.2018. Meanwhile, upon payments of the dues with respect to ICICI India, the Learned Debts Recovery Tribunal-Il, New Delhi vide its order dated 23.07.2018 directed that the pendency of a case instituted by the Financial Creditor before the UK Court, is no ground to deny the right of redemption of the aforesaid property to the Corporate Debtor. Copies of the orders of the Hon'ble High Court of Delhi dated 17.07.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orate Debtor. 8) A copy of the default notice dated 13 December 2016 issued by the Financial Creditor inter alia upon Assam Oil Company Limited and the Corporate Debtor. 9) A copy of the default notice dated 16 January 2018 issued by the ICICI India to inter alia the Corporate Debtor under Clause 5.1 of the Debt Asset Swap Agreement. 10) A copy of the default notice dated 25 January 2018 issued by the ICICI India to the Corporate Debtor (with a copy to the Financial Creditor) under Clause 5.2 of the Debt Asset Swap Agreement inter alia for payment of the outstanding amounts towards the Financial Creditor, undertaken and guaranteed to be repaid under the terms of the Debt Asset Swap Agreement. 11) A copy of the letter dated 1 June 2018 issued by the Financial Creditor upon ICICI India (with a copy to inter alia the Corporate Debtor) seeking confirmation regarding adherence to the provisions of the Undertaking dated 14 April 2015 on account of the initiation of steps under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ( SARFAESI ACT ) with respect to the property of the Corporate situated at 3, Bhagwan Das Road, N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the laws of UK. (ii) For extending the UK facility, AOCL alongwith its group entities, entered into the following agreements: A Put Option Deed dated December 21, 2007 ( the First Put Option ) entered amongst AOCL, the Corporate Debtor and Quicknet Telecom Private Limited. Under this deed, the put option providers, i.e., the Corporate Debtor and Quicknet Telecom Private Limited, granted AOCL the option to sell all or any of the shares to that Put Option Provider on occurrence of events prescribed therein. Clause 1.3 of the said First Put Option records in unequivocal terms that a person who is not a party to the said Agreement has no right to enforce or enjoy the benefits of any term of the said Agreement. (b) Pursuant to the Put Option Deed, an Escrow Agreement dated December 21, 2007, was executed by the Corporate Debtor at Kolkata to place in escrow with IDBI Trusteeship Services Limited (Escrow Agent), the documents in relation to the aforesaid property. Admittedl the Res ondent had de osited the Pro ert documents not for creating any security, but only for the safe custody. The Escrow Agreement was governed by the laws of India and the High Court of Mumbai had th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, ICICI India disbursed only an amount of ₹ 24,95,30,000/- to Duncan. Admittedly, neither the Applicant nor the Corporate Debtor was party to the Indian Facility Agreement and as a security to the Loan given to Duncan, the Corporate Debtor mortgaged its aforesaid property in favour of the ICICI India. (viii) Pursuant to the Indian Facility Agreement, a DASA was entered between the ICICI India, the Corporate Debtor and Duncan on 20.12.2014. Admittedly, the Applicant is not a party to the DASA, on which reliance has been placed by the Applicant. The right of the Applicant under the DASA, if any, was subjected to an event of default in the Indian Facility and failure to repay the outstanding amount and consequent sale of the aforesaid property. (ix) AOCL, Duncan, the Corporate Debtor and Assam Company Ltd., allegedly gave an undertaking dated 14.04.2015, in favour of the Applicant and ICICI India for payment of the loan amount under UK Facility out of the sale proceeds of the aforesaid property. As per the terms of the Undertaking, the aforesaid undertakings were to kick of only in case of non-payment by Duncan and eventual sale of the property; and not otherwise. (x) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice of redemption of the mortgaged property to ICICI India. ICICI India despite receiving the notice of redemption, and in violation of Section 13(8) of the SARFAESI Act, published a notice of auction on July 17, 2018. (xv) Despite the abovesaid position, the Applicant filed a Suit being CS (COMM.) No. 1020/2018 before the Hon'ble High Court of Delhi to prevent the Ld. DRT from passing any order of redemption of the mortgage. (xvi) The Ld. DRT vide its order dated July 23, 2018 disposed of the O.A. and the S.A. While disposing the O.A. and the S.A., the Ld. DRT rejected the contention of the ICICI India that the Corporate Debtor is not entitled to redeem the property as the claim of the Applicant is pending. The operative part of the aforesaid order is extracted hereinbelow: 16. Further the contention of the OA bank that the security applicant is not entitled for redemption as the claim of the ICICI Bank UK Plc is pending. As per the provision of the Transfer of Property Act, the right to redeem mortgage under Section 60 of the TP Act which provided that at any time after the principal money has become due the mortgagor has a right, on payment or tender, at a Proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Code. (xix) The applicant has not disbursed any debt against the consideration for the time value of money. It is also not the case of the Applicant that the Corporate Debtor has borrowed money against the payment of interest from the Applicant. It is also not the case of the Applicant that the Corporate Debtor has raised any amount from the Applicant under any credit facility. (xx) The Respondent is not a 'Corporate Debtor' as defined under sub-section 8 of Section 3 of the Code and in that regard heavy reliance has been placed on the definition of Section 3 (8) of the Code. (xxi) The Respondent submits that no evidence of default as defined under Sub-section 12 of Section 3 of the Code has occurred in the present case. The applicant has failed to demonstrate due date of alleged money though under the Code, the onus to prove the same is on the Applicant's hand. (xxii) The Respondent does not owe any liability/ debt under the UK Facility. The applicant is, admittedly, not even a party to the UK Facility Agreement. No amount was disbursed by the Applicant to the Respondent against the UK Facility. (xxiii) The applicant cannot rely upon the Indian Facility ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 7 (5) (a) of the Code. It suffers from lack of proper authorization. The alleged board resolution relied upon by the applicant is defective as it does not specify time, date and place of meeting. The alleged resolution has not been signed by any of the board members of the applicant. (xxviii) The applicant has not registered the alleged claim against the Respondent with the Information utility. In that regard reliance has been placed at point no. 3 and 6 of Part V of Form 1 of the application which is blank and mentioned as 'not applicable'. (xxix) The alleged debt claimed by the Applicant from the Respondent is time barred. The applicant itself has stated that the alleged default in payment of principal by the borrower occurred on December 28, 2011. Date of alleged default in payment of interest as alleged by the applicant as December 24, 2013 and the present application has been filed on August 6, 2013 i.e. after a lapse of about five years from the date of first alleged default. 19. A rejoinder to the reply has been filed by the Financial Creditor reiterating the submissions made in the application and controverting the assertions in the reply. 20. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... explained in Annexure-6 including the date, arnount and the days of default. 23. The details of the proposed Interim Resolution Professional, Mr. Kailash Saksena duly filled in Form 2 as per the requirement of Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 has also been placed on record. According to the learned counsel the petition is complete in all respects and warrants admission. 24. Apart from the aforesaid requirements of Insolvency and Bankruptcy Code, a reference has been made to the suit filed by the Financial Creditor before Hon 'ble Delhi High Court and the one filed before the Hon 'ble High Court of Justice, Business and Property Courts of England and Wales, Commercial Court (QBD) against the AOCL etc. 25. However, Mr. S.N Mookherjee, learned Senior Counsel for the respondent has vehemently argued that the repayment of debt claimed by the petitioner from the Corporate debtor is time barred. In that regard, reliance has been placed on the view expressed by Hon 'ble the Supreme Court in para 27 of the judgment rendered in the case of B.K EducationaZ Limited v. Parag Gupta Associates, Civil Appeal No. 23988 of 2017, dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the petitioner on the undertaking and various clauses are also liable to be ignored. 28. Mr. Mookherjee also submitted that the petitioner never treated the respondent as a guarantor which become evident from the suit filed by petitioner in the U.K Courts and even various letters written on 20.05.2016 and 13.12.2016 to the respondent do not refer the respondent as a guarantor. Similar position emerges from a perusal of letters dated 01.06.2018 and 04.06.2018 written by the ICICI India which refers only to the undertaking for realising its dues and not the provisions of DASA. 29. Learned counsel further elaborated his submissions arguing that the right of ICICI India to sell the property under DASA has already extinguished and stand expired by submitting as under:- (i) The argument of the Applicant that once there is an event of default under the Indian Facility, the Respondent is bound to sell the property and repay the loans advanced under the UK facility, is untenable in view of the mandatory timeline provided for sale of the Property in case of event of default in the Indian Facility. (ii) Sale of Property as envisaged under DASA was to take place in case of defaul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itself as a Financial Creditor. In the rejoinder, the Applicant has changed its stance and states that the amendment only shows the acknowledgment of Respondent to treat the Applicant as 'Lender'. In this regard it is submitted that 'Lender' has the meaning given to it under Article 34(c). Article 34(c)(i) of the AOA, which reads as follows: Lender(s) shall mean ICICI Bank Ltd., India which has extended Rupee Term Loan facility of INR to Duncan Macneill Power India Limited vide facility agreement dated November 1 7, 2014 and Bank UK mc which has extended Forei n Currenc Term Loan aciZit of United States DoZZar 63,000,000/- to Assam Oil Company Limited vide faciZity agreement dated December 21, 2007. (ii) Clause 34(c) do not stipulate the Applicant as a 'Lender' of Respondent but 'Lender' of Assam Oil Company Limited. Without prejudice to the above, it is submitted that the Applicant cannot rely on the AOA of the Respondent as it is a settled law that the Articles of a Company are simply a contract between the shareholders inter se and cannot give a right of action to a person who is not a party to the articles although named therein. Moreove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the agreement but as long as they can prove that there was an underlying debt owed by the Corporate Debtor to the Financial Creditor and there was a default by the Corporate Debtor in repayment the debt then application under Section 7 of the Code is permissible to claim the arnount under the agreement. In that respect reference has been made to clause 5.2 of DASA read with Clause 5.3, the Corporate Debtor has inter alia undertaken to repay the facilities owed by AOCL to the Financial Creditor. Further, under Clause 5.3 of the DASA, ICICI India (in its capacity as the attorney of the Financial Creditor) has been granted the right to sell the Property, if the Corporate Debtor fails to repay all the arnounts due to ICICI India under the India Facility Agreement and to the Financial Creditor under the UK Facility Agreement. 33. Likewise, reliance has been placed on Clause 2 of the Undertaking to show that the Financial Creditor has been granted the right to repayment of monies owed to it by the AOCL out of the sale proceeds of the Property owned by the Corporate Debtor. In that regard reliance has been placed on the judgments of the Hon 'ble Appellate Tribunal namely Dr. B. V. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erms of Clauses 5.2, 5.3 5.4 of the DASA are kept in queue where the Respondent-Corporate Debtor has undertaken to repay the facilities owed by AOCL to the Financial Creditor and ICICI India as Attorney of the ICICI India, UK PLC has been granted right to sell the property, if the Corporate Debtor fails to repay all the amounts due to ICICI India under India Facility Agreement and to the Financial Creditor under the UK Facility Agreement. Similar arguments have been advanced with regard to the amendment in Articles of Association carried by the Corporate Debtor which are as under:- (a) The CD has claimed that the FC cannot place reliance on Article 34(c)(i) of the AoA to place on record that the CD has acknowledged the FC as one of its lenders, as (i) AoA has since been arnended to remove Article 34(c)(i) from the AoA; and (ii) Article 34(c)(i) was inserted by coercion exerted by ICICI India/ the FC and is hence void ab initio; and (iii) the FC is not a party to/ bound by the AoA of the CD as the AoA is a contract between the members of the CD and the CD. (b) In response to 6.4 (a) (i) above, it is submitted that the deletion of Article 34 is ultra vires of the procedure l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of actual payment. Further, as per the terms of the UK Facility Agreement default interest is chargeable on the overdue amounts and shall be compounded at the end of each Interest Period (being every six (6) months) and would remain immediately due and payable. It is well recognized that the principal at the beginning of each year would be the principal plus interest which accrued during the previous year, therefore, upon the occurrence of each instance for the compounding of the default interest (which was due and payable immediately), AOCL was liable for the entire amounts (including the principal due and payable as on that occurrence), thereby, being in the nature of a recurring cause of action. Respectfully, as evidenced from the bank account statements, the latest Interest Period for the unpaid debt by AOCL was in June/July 2018. (b) In fact, the CD has admitted the debt of AOCL towards the FC under the Undertaking and in furtherance of such admittance and part discharge of its obligations, AOCL has made a payment as recent as 20 April 2015 (as evidenced from the account statements of (AOCL)and, therefore, by way of the above the debt towards the FC is an admitted debt. Fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agent, the documents in relation to the property at 3, Bhagwan Das Road, New Delhi 110001. 3. 21.12.2007 Escrow Agreement inter alia executed between the Financial Creditor, the Corporate Debtor and IDBI Trusteeship Services Ltd., whereby IDBI Trusteeship Services Ltd. was appointed as an Escrow agent for custody of the documents, pursuant to the put option deed dated 21.12.2007. 4. 21.12.2007 Power of Attorney executed by Assam Oil Company Ltd. in favour of IDBI Trusteeship Services Ltd. for the purpose of disposing of shares as described in non-disposal and safety agreements dated 21.12.2007. 5. 21.12.2007 Non Disposal agreement executed between the Corporate Debtor, Assam Oil Company Ltd. and IDBI Trusteeship Services Ltd., pursuant to which non-disposal undertaking has been given by the Corporate Debtor that during the term of the agreement, it shall not without written consent of IDBI Trusteeship Services Ltd., create any encumbrance on the Property. 6. 21.12.2007 Non- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces Ltd. 11. 13.04.2011 Put Option Deed executed between Quicknet, Telecom Private Ltd., the Corporate Debtor and the Financial Creditor, pursuant to which the Corporate Debtor has granted the Financial Creditor the option to sell all of the present and future right and benefits of the Financial Creditor in respect of the Finance Documents (as defined therein) to inter alia the Corporate Debtor, upon the occurrence of an event of default under the facility agreement dated 21.12.2007. 10. 15.04.2011 Amendment and Restated Facility Agreement amending and restating the terms of the facility agreement dated 21.12.2007, was executed between Assam Oil Company Ltd. and the Financial Creditor. 11. 11.10.2011 Non-disposal agreement entered into between Cromwell Securities Ltd., Gujarat Hydrocarbons and Powers SEZ Ltd. and IDBI Trusteeship Services Ltd. 12. 18.01.2012 Amendment Agreement to the non-disposal agreement. 13. 20.12.2014 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anted the option to sell 103,600,000 of its ordinary shares in the capital of AOCL issued with a par value of INR 1 each to, Quicknet Telecom Private Limited and secondly the Corporate Debtor was required to place in Escrow with an Escrow Agent, the documents in relation to the property at 3, Bhagwan Das Road, New Delhi-110001. On the same date an Escrow Agreement was executed inter alia between the Corporate Debtor, the Financial Creditor and IDBI Trusteeship Services Limited, whereby IDBI Trusteeship Services Limited was appointed as an Escrow Agent for custody of the documents, pursuant to the Put Option Deed dated 21.12.2007. A Power of Attorney was also executed by AOCL in favour of IDBI Trusteeship Services Limited, for the purpose of disposing of shares as described in Non-Disposal and Safety Agreements dated 21.12.2007. It is pertinent to mention that Non-Disposal Agreement executed between the Corporate Debtor, AOCL and IDBI Trusteeship Services Limited, pursuant to which NonDisposal Undertaking has been given by the Corporate Debtor that during the terms of the agreement, it shall not create any encumbrance on the Property without written consent of IDBI Trusteeship Servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tuated at 3, Bhagwan Das Road, New Delhi, the objection concerning privity of contract losses its significance. We have already reproduced the material clause 5 from DASA dated 20.12.2014 executed between the Corporate Debtor (owner), Duncan Macneill Power India Limited (borrower), (3) ICICI Bank Limited (lender) (4) ICICI Bank Limited (attorney). It is true that ICICI Bank UK PLC is not a party to the DASA but its name as a beneficiary figures when we read the definition of 'Reserve Price' under clause 1.1 'definitions' and the provisions of clauses 2.1 (d) (g), 5 and its sub clauses. It is significant to note that on 14.04.2015 undertaking was executed at New Delhi inter alia between the Financial Creditor and the Corporate Debtor and thereafter the Corporate Debtor and AOCL undertook to the Financial Creditor, that upon sale of the property namely 3, Bhagwan Das Road, New Delhi, in accordance with the transaction documents upon occurrence of an event of default, any amount which is in excess of the arnount required for payment of statutory dues and satisfaction of outstanding amount under the transaction documents would be utilized to extinguish the outstandi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Undertaking dated 14.04.2015. Even the Articles of Association were amended in April, 2015. The Limitation for the purposes of enforcing payment of money secured by a mortgage or otherwise charged upon immovable property is twelve years. In that regard Article 62 of the Schedule appended to the Limitation Act may be relied upon. Therefore, going by the provisions of the Limitation Act as made applicable by Section 238 (A) of the Code the petition is within the period of limitation. 42. The default notices have been issued firstly under clause 5.1 of the DASA on 16.01.2018, secondly under clause 5.2 of the DASA on 25.01.2018 and thirdly under clause 5.4 of the DASA on 21.07.2018 for the repayment of the debts due. 43. There is no dispute that the default has occurred although the petition was opposed on various other grounds which shall be dealt with in the later part of this judgment. 44. Mr. Abhinav Vashisht, learned Senior counsel and Mr. Chandioke, learned Senior Counsel for the petitioner have then argued that all requirements of Section 7 of the Code for initiation of Corporate Insolvency Resolution Process by a Financial Creditor stand fulfilled. In that regard, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egard 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. 49. 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 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; (d) the recovery o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce with Regulation 6 of Insolvency and 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 Committee of Creditors. The amount must be accounted for by Interim Resolution Professional and shall be paid back to the Financial Creditor. 53. The office is directed to communicate a copy of the order to the Financial Creditor, the Corporate Debtor, the Interim Resolution Professional and the Registrar of Companies, NCR, New Delhi at the earliest but not later than seven days from today. The Registrar of Companies shall update his website by updating the status of 'Corporate Debtor' and specific mention regarding admission of this petition must be notified to the public at large. 54. Before parting we may deal with the arguments raised on behalf of the Corporate Debtor. The first and foremost argument is that the claim is time barred. The date of default stated to be 28.12.2011. The argument proceeds on a fallacious assumption that Article 137 of the Limitation Act is att ..... X X X X Extracts X X X X X X X X Extracts X X X X
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