9911796707
TMI Blog2020 (9) TMI 599X X X X Extracts X X X X X X X X Extracts X X X X ..... with 765/400 kV AIS at Mainpuri and associated schemes in Uttar Pradesh with an estimated project cost of INR 4951 crores. Pursuant to the said application, PFC in-principle agreed to grant the Corporate Debtor a Rupee Term Loan Assistance to the extent of INR 2475.05 Crores. 3. Subsequently, the Financial Creditor -PFC along with Rural Electrification Corporation Limited ('REC') and the Bank of India ('BOI'), collectively referred to as 'the Lenders' agreed to part finance the Corporate Debtor's project and out of the Rupee Term Loan Facility sanctioned by the Lenders, the Financial Creditor sanctioned an amount of INR 2475.50 Crores (Rupees Two Thousand Four-Hundred Seventy - Five Crores) to the Corporate Debtor. 4. In terms of the Facility Agreement, the Corporate Debtor was under obligation to pay/repay the interest and principal amount in terms in 48 equal quarterly instalments and interest at the prescribed rate on a quarterly basis from the date of disbursement of the PFC Facility. 5. PFC was appointed as the Lenders' Agent under the Lenders' Agent Agreement dated February 28, 2014 and as the Security Agent under the Security Agent Agre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unds necessary to complete the execution of the Project. However, the Investment Agreement was subject to the approval of UPPTCL on certain conditions necessary to facilitate the investment. But on 28.11.2017, UPPTCL arbitrarily rejected the proposal of the Respondent to bring into the Project, a private investor as per the terms of the Investment Agreement that had already been signed by the Respondent and Adani. And, alternatively, UPPTCL and the Government of U.P. promised that UPPTCL would take over the Project at the fair price to be determined by two independent valuers to be proposed by the lead lender of the Project i.e. the Applicant Financial Creditor and chosen by UPPTCL itself. 12. Further independent valuer appointed by UPPTCL, have concluded the valuation and submitted the report to which parties were bound by the valuation but UPPTCL remained silent about it. Further the applicant financial creditor apprised the respondent that UPPTCL arbitrarily rejected the fair market valuation arrived at by the independent valuers and requested the respondent to conclude discussion with Adani for investment and confer to Financial creditor or else they will file for bankruptcy. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the financial creditor has admitted that they has been receiving payments from UPPCL, therefore it is clear that the financial creditor has entered into some new arrangements with UPPCL for receiving direct payments in lieu of services provided by the Corporate debtor and financial creditor has kept the corporate debtor in dark failing to inform the corporate debtor about the factum of receipt of such payment and whether after receipt of such payment, whether the payments are being adjusted in the accounts of the Corporate debtor or not. Hence corporate debtor has no information regarding the amount outstanding, if any, to the financial creditor. 17. Further, when the matter was again taken up for hearing, Mr. Anurag Khanna, learned Counsel appearing for the Respondent has raised the issue that the petition is not maintainable on two grounds. Firstly, he has referred to the circular of the RBI dated 7th June, 2019 which has been filed as Annexure-7 to CA No. 216/2010 by the Respondent and stated that the said circular is fully applicable upon the petitioner and they have violated the conditions thereof. Secondly, that the petition has also been filed before the Uttar Prades ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the State Bank of India. Therefore, the said Circular is not applicable in the present case. 15. The directions of the Reserve Bank of India also suggest that he Reserve Bank of India never intended to interfere with the statutory remedy for resolution process under the 'I&B'. Those Circulars also cannot override the provisions of the 'I&B Code'. 16. The right of the Creditors under the 'I&B Code' for initiation for 'Corporate Insolvency Resolution Process' is a statutory right. The 'I&B Code' is a special enactment passed by the legislature and is a complete Code in itself. The Adjudicating Authority needs only to be satisfied of the existence of a debt and default if any. Once the Adjudicating Authority is satisfied, and the application is complete, then the application is required to be admitted...." It is therefore argued on behalf of the petitioner that the circular will not apply in the present case and there was no Resolution Plan which was under consideration at the point when the petition was filed. 21. It is further submitted on behalf of the petitioner that the objection with regard to the filing of the petition before Ut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aced reliance upon para 27, 28 and 30 of the said judgment wherein it has been held that the Adjudicating Authority is to ascertain the existence of default from the record of the information utility or on the basis of other evidence furnished by the Financial Creditor. It is therefore emphasized on behalf of the petitioner that the information which is already on record with regard to the default is a valid evidence and the petition cannot be thrown out on this ground alone. The relevant para as referred are quoted below: "27. The scheme of the Code is to ensure that when a default takes place, in the sense that a debt becomes due and is not paid, the insolvency resolution process begins. Default is defined in Section 3(12) in very wide terms as meaning non-payment of a debt once it becomes due and payable, which includes non-payment of even part thereof or an instalment amount For the meaning of "debt", we have to go to Section 3(11), which in turn tells us that a debt means a liability of obligation in respect of a "claim" and for the meaning of "claim", we have to go back to Section 3(6) which defines "claim" to mean a right to payment even if it is disputed. The Code gets tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the "debt", which may also include a disputed claim, is not due. A debt may not be due if it is not payable in law or in fact 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. Under sub-section (7), the adjudicating authority shall then communicate the order passed to the financial creditor and corporate debtor within 7 days of admission or rejection of such application, as the case may be. 30. On the other hand, as we have seen, in the case of a corporate debtor who commits a default of a financial debt, the adjudicating authority has merely to see the records of the information utility or other evidence produced by the financial creditor to satisfy itself that a default has occurred. It is of no matter that the debt is disputed so long as the debt is "due" i.e. payable unless interdicted by some law or has not yet become due in the sense that it is payable at some future date. It is only when this is proved to the satisfaction of the adjudicating autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the claim is put forward by the petitioner satisfy Sec. 7(5)(a) of IBC, this Adjudicating Authority is bound to admit the application. 27. With regard to the proving of debt, this Adjudicating Authority finds that the corporate debtor has not denied the fact that the debt has been taken from the applicant financial creditor thus it is an admitted debt taken by the corporate debtor as Rupee Term Loan through Facility Agreement from the applicant financial creditor. 28. Further, this Adjudicating Authority finds that as the corporate debtor was under obligation to pay the interest and principal amount in terms of Facility Agreement in 48 equal quarterly instalments and interest at the prescribed rate on a quarterly basis from the date of disbursement under the Facility Agreement and the corporate debtor has failed of fulfil its payment obligation thus default has occurred on part of corporate debtor and the applicant has also attached several documents to prove the existence of debt and default. Thus, this Adjudicating Authority is of the view that there is a default as the corporate debtor has failed repay the amount due to the financial creditor. 29. Referring to the decision o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 14 of the Insolvency & Bankruptcy Code, 2016 shall come into effect forthwith stating: (1) Subject to provisions of sub-sections (2) and (3), on the insolvency commencement date, the Adjudicating Authority shall by order declare moratorium for prohibiting 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 judgement, decree or order in any court of law, tribunal, arbitration panel or other authority; (b) transferring, encumbering, alienating or disposing off 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 of 2002); (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. Explanation.-For the purposes of this sub-section, it is hereby clarified that notwithstanding anything con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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