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TMI Blog2020 (10) TMI 538X X X X Extracts X X X X X X X X Extracts X X X X ..... ce by this Tribunal. The plea of the Corporate Debtor that financial fraud took place in the company and as a result of which, this Application should be dismissed, does not appear to be plausible and it cannot be considered as a ground for not initiating the CIRP against the Corporate Debtor. All these, the Tribunal has to see that whether there is a 'financial debt' which is due and whether there is any 'default' on the part of the Corporate Debtor and whether the Application filed by the Financial Creditor is within the period of limitation. For the said reasons, the objections, as raised by the Corporate Debtor are rejected. The Financial Creditor has satisfied this Tribunal that there is a 'financial debt' which is due and payable by the Corporate Debtor and the Corporate Debtor has committed a default in repayment of the loan to the Financial Creditor and the Application filed by the Financial Creditor is also within the period of limitation and the Application filed by the Financial Creditor is complete in all respects. Hence, this Tribunal is perforce required to admit the Application as filed by the Financial Creditor - Application admitted - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) ii. Letter of continuity (AD-09M) iii. Packaging Credit Agreement (SD-04) iv. Letter of Hypothecation of Bills (SD-17) v. Interest Agreement (SD-24) vi. Letter of confirmation (SD-23-A) vii. Renewal of Limits viii. Letter of Extension of Mortgage ix. Slippage of Corporate Debtor account in NPA category 5. The Learned Counsel for the Financial Creditor submitted that the Corporate Debtor has approached the Financial Creditor with the request to sanction initially a Packaging Credit facility to the tune of ₹ 16 Crores in order to meet the export needs and based on the said request, the Financial Creditor has sanctioned a sum of ₹ 16 Crores to the Corporate Debtor vide Packaging Credit Agreement dated 06.08.2016, the copy of the said Agreement is placed at pages 9 to 18 of the typed set filed, with the Application. 6. Apart from the above, the Learned Counsel for the Financial Creditor submitted that the facility Duty Draw back, Cash Credit, Term Loan was granted to the Corporate Debtor and the Financial Creditor, in order to secure the loan, has executed (i)Three Demand Promissory Note for a total sum of 27 Crores on 06.08. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned Counsel for the Corporate Debtor has filed their objections and submitted that the application filed by the Financial Creditor is not maintainable as the same has been filed fraudulently and with a malicious intent, other than the purpose of resolution and hence it attracts Section 65 of the IBC, 2016. Further it was submitted that the Financial Creditor has filed lot of forged documents and suppressed the financial frauds and also the Application is incomplete for nondisclosure of all the information. 11. The Learned Counsel for the Corporate Debtor has submitted that the application filed by the Financial Creditor contains the following suppressed and forged documents; a. In page No. 3 in Part IV of the Application, the Financial Creditor says the calculation of amount on account wise and statement is attached herewith is suppressed and not enclosed in the documents filed. b. In page No. 3, in Part V, the copy of Certificate of Registration of charge issued by the Registrar of Companies is suppressed and not enclosed in the documents filed. c. In page No. 4, copy of entries in banker's book in accordance with the Bankers Book Evidence Act, 1891, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istrict Court and also a Writ Petition was filed by the Directors of the Corporate Debtor before the Hon'ble High Court of Madras. Apart from the above, the counter filed by the Corporate Debtor, alleges various Financial Fraud done by the Financial Creditor in connivance with the Axis Bank and KPS Selvaraj and his wife Mrs. S. Indira Vijayalakshmi. However, for the sake of prolixity and the same being only an allegation, they are not being extracted in the present order. Finally, the Corporate Debtor has prayed for the dismissal of the Application filed by the Financial Creditor. 14. The Learned Counsel for the Financial Creditor has filed rejoinder and vehemently denied all the allegations and the averments stated in the Counter and has put the Respondent to strict proof of the same. It was further submitted that the Financial Creditor has produced several admitted documents that have been signed by the Corporate Debtor, such as loan agreements, demand promissory notes, to prove the existence of financial debt and the Corporate Debtor cannot now claim contra to what is borne on records. 15. The Learned Counsel for the Financial Creditor further submitted that all the al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 SCC 353, wherein the Hon'ble Apex Court after going through the Scheme of I B Code, 2016 in depth in relation to an Application under Section 7 filed by a Financial Creditor where there is an existence of a 'financial debt' and its 'default' in excess of ₹ 1,00,000/-, this Tribunal is bound to admit the Application and as a consequence trigger the CIRP. The plea of the Corporate Debtor that financial fraud took place in the company and as a result of which, this Application should be dismissed, does not appear to be plausible and it cannot be considered as a ground for not initiating the CIRP against the Corporate Debtor. All these, the Tribunal has to see that whether there is a 'financial debt' which is due and whether there is any 'default' on the part of the Corporate Debtor and whether the Application filed by the Financial Creditor is within the period of limitation. For the said reasons, the objections, as raised by the Corporate Debtor are rejected. 18. The Financial Creditor has satisfied this Tribunal that there is a 'financial debt' which is due and payable by the Corporate Debtor and the Corporate Debtor has commit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uritization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 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. 22. However during the pendency of moratorium period in terms of Section 14(2) and 14(3) as extracted hereunder; (2) The supply of essential goods or services to the Corporate Debtor as may be specified shall not be terminated or suspended or interrupted during moratorium period. (2A) Where the interim resolution professional or resolution professional, as the case may be, considers the supply of goods or services critical to protect and preserve the value of the corporate debtor and manage the operations of such corporate debtor as a going concern, then the supply of such goods or services shall not be terminated, suspended or interrupted during the period of moratorium, except where such corporate debtor has not paid dues arising from such supply during the moratorium period or in such circumstances as may be specified. (3) The provisions of sub - section (1) shall not apply to such transactions, agreements or other arrangeme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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