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TMI Blog2020 (10) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... ere availed by CD, M.P. Agro BRK Energy Foods Limited. The Charges have been filed by the CD with RoC and the Financial Creditor has filed valuation report and search report - The CD has defaulted in making repayment of loan/credit facilities to the Petitioner Bank and the date of default is 30.09.2017. The Statement of accounts and the CIBIL Reports submitted by the applicant Bank confirm the debt is due and default has been committed by the Corporate Debtor - The Petitioner Bank has filed the petition within the period of limitation, as the last credit has come to the account on 31.08.2018 when this application has been filed on 22.10.2018 which is within 3 years of last payment. 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 as an Interim Resolution Professional (IRP). This Adjudicating Authority is satisfied that, (a) The Corporate Debtor availed the loan /credit facilities from the Financial Creditor Bank. (b) Existence of debt is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lakhs Only) and the paid-up share capital of the company is INR.44,59,670/- (Rupees Forty Four Lakhs Fifty Nine Thousand Six Hundred Seventy Only). The Registered Office of the Corporate Debtor Company is situated at: Plot No. 71 (B C), Industrial Area, Dewas (M.P.) - 455001IN. 4. It is submitted that the Corporate Debtor has availed various credit facilities including CC and Term Loans to the extent of INR. 11.75 Crores from the Applicant since 2014, which facilities have been renewed / modified / enhanced and restructured from time to time. It is submitted that various securities and credit agreements / documents including but not limited to corporate guarantees, personal guarantees, third party mortgages, were executed / signed by the Corporate Debtor and other obligators on behalf of the Corporate Debtor, which have been extended from time to time in order to secure the credit facilities. It is submitted that in spite of all the support from the Applicant Financial Creditor at every step, the Corporate Debtor failed to comply with the applicable terms and conditions of the sanction letters and various agreements / documents thereto as executed from time to time, particularly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cash Credit - I 1,00,00,000.00 2 Working Capital Cash Credit - II 7,00,00,000.00 3 Term Loan 1,92,68,000.00 Total Amount Sanctioned 9,92,68,000.00 9. The Corporate Debtor has defaulted payment and the date of default is 30/09/2017 as stated by the Petitioner Bank (page No. 209 of paper book). CIBIL Report (page No. 268 to 289 of the paper book) has been filed by the Bank which confirms that the Account is in default. 10. The statements of accounts of the corporate debtor have been filed and the Petitioner Bank has submitted a Certificate to this effect under Banker Books of Evidence Act, 1891 (Page No. 290 to 474 of paper book). The Petitioner Bank has claimed their dues of ₹ 11,57,89,697.00 (Rupees Eleven Crores Fifty Seven Lakhs Eighty Nine Thousand Six Hundred Ninety Seven) as on 30.09.2017 as computed in the page No. 3 of the paper book which is given below: Particulars Amount P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 'default' as described Under Section 3(12) of the Code. It is submitted that as per dictum of law enunciated by the Hon'ble Supreme Court in the case of Innoventive Industries Limited Vs. ICICI Bank and another, reported at 2008 (2) SCC 134, existence do 'default', as per provisions of the Code is essential before petition under Section 7 of the Code can be admitted. The sole premise for instituting the present petition and considering default by the petitioner is on the premise that the Account of the corporate debtor is classified as NPA on 30/09/2017. The said classification is not only incorrect but also illegal and untenable on facts as well as in law, that is demonstrated hereinafter. In view of the fact that 'default' on the part of corporate debtor is not established within the meaning of Section 3(12) of the Code, the present petition deserves to be dismissed. 15.3 It is submitted that the corporate debtor was established as proprietor ship concern in the year 1991. Thereafter, Corporate debtor was converted into a partnership Firm in the year 2006, incorporate as a Private Limited Company in the year 2007. In the year 2009, the Corporate D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of Respondent as Operational . The further condition about Respondent being MSME unit is evident by the fact that on page 413, bank account is produced by petitioner where it is described that Respondent is a small scale industrial unit. Apart from this on page No. 504 to 516, registration certificate of Respondent being MSME are produced. In view of above the classification of credit facility as on 30.09.2017 is untenable and therefore there is no default under Section 3(12) of the Code . 16. The Learned Lawyer of the Applicant Bank(FC) clarified its positions and put forth its arguments relying on the documents submitted by them, which were executed by the Corporate Debtor and the Mortgagors/Guarantors. They have also referred the CIBIL report filed with the application which confirms the debt is in default. Valuation Reports and Search Report filed by them are referred to in support of the charge created in its favour by Corporate Debtor. 17. The Corporate Debtor offered OTS letter dated 06/08/2019, it is germane of ₹ 8,41,00,000.00 and one of the pre-conditions for OTS was that Respondent had to deposit ₹ 25,00,000.00 upfront. The further condition was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uted by the Corporate Debtor and guarantors along with a Certificate under the Banker's Book of Evidence Act, 1891, in support of its IB Petition for initiation of C.I.R.P. 23.1 The Cash Credit and Term Loan facilities were sanctioned by the Petitioner Bank and the same were availed by CD, M.P. Agro BRK Energy Foods Limited. The Charges have been filed by the CD with RoC and the Financial Creditor has filed valuation report and search report. 23.2 The CD has defaulted in making repayment of loan/credit facilities to the Petitioner Bank and the date of default is 30.09.2017. The Statement of accounts and the CIBIL Reports submitted by the applicant Bank confirm the debt is due and default has been committed by the Corporate Debtor. 23.3 The Petitioner Bank has filed the petition within the period of limitation, as the last credit has come to the account on 31.08.2018 when this application has been filed on 22.10.2018 which is within 3 years of last payment. 23.4 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 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ution 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 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. II. The supply of essential goods or services to the corporate debtor as may be specified shall not be terminated or suspended or interrupted during the moratorium period. III. The provisions of sub-seciion (1) shall not apply to (a) such transactions as may be notified by the Central Government in consultation with any financial sector regulator. IV. The order of moratorium shall have effect from the ..... 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