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TMI Blog2020 (1) TMI 1240X X X X Extracts X X X X X X X X Extracts X X X X ..... ptcy Code, 2016 [hereinafter referred to as the IB Code ] for the purpose of initiating corporate insolvency resolution process [hereinafter referred to as CIRP ) against Reliance Naval and Engineering Limited, the Respondent company, the Corporate Debtor. 2. Reliance Naval and Engineering Limited, the Corporate Debtor is a company incorporated under the provisions of the Companies Act, 1956 and is, inter alia, engaged in the business of manufacture of vessels and repairing of rigs. The Corporate Debtor, Reliance Naval and Engineering Limited was earlier known as Reliance Defence and Engineering Limited, which name was subsequently changed to Reliance Naval and Engineering Limited having its Registered Office at Port of Pipavav, Post Ucchaya, Via Rajula, Dist. Amreli, Gujarat - 365 560. The Respondent company, the Corporate Debtor was originally promoted by SKIL Infrastructure Ltd. (SKIL) as Pipavav Defence and Offshore Engineering Ltd. 3. The Authorised Share Capital of the Respondent company, the Corporate Debtor is ₹ 15000,00,00,000/-. (Rupees Fifteen Thousand Crores only). The Paid-Up Share Capital of the Respondent company, the Corporate Debtor is ₹ 779,83, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FITL for WCTL - II 0004673200001410 40.04 3.59 0.05 43.69 FITL for CC 0004673200001465 6.24 0.56 0.01 6.80 WCTL-I (DP shortfall) 0004673200001403 30.06 3.39 0.05 33.50 FITL DDI 0004673200002301 21.29 1.91 0.03 23.23 RTL-1, DD-I 0004673200002318 56.35 6.36 0.09 62.80 RTL-II, DD- I 0004673200002325 42.45 4.79 0.07 47.31 CC 0126655100001083 235.88 11.55 0.78 248.21 NCD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. with effect from September 06, 2017. 5.4 Post takeover, Reliance Naval and Engineering Ltd., the Respondent company, the Corporate Debtor prepared revised business plan, strategic tie ups with global defence and commercial shipbuilding majors and exit from CDR. The Respondent company, the Corporate Debtor also sought refinancing of its facilities under revised business plan. 5.5 The Petitioner, the Financial Creditor had approved refinancing package along with CDR exit to Reliance Naval and Engineering Ltd., the Corporate Debtor (subject to recovery of 75% of CDR recompense amount) in October 2016. The refinance package was, however, not documented/implemented, on account of delay in sanction of the package by most of the lenders, resulting in delay in CDR exit. 5.6 The Respondent company, the Corporate Debtor was pursuing with the lenders since October 2017 for sanction of refinancing package. However, due to the presence of large number of lenders in its banking arrangement, the sanction of revised refinancing package by various lenders has been delayed. 5.7 The Respondent company, the Corporate Debtor had been servicing lenders' dues on critical dues basis. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documents clearly establish existence of default to the Financial Creditor. The material on record clearly establishes that a default has occurred. The details of the documents submitted by the Petitioner Bank are given hereunder: 1. The particulars of various securities held by IDBI Bank with respect to facilities provided by it to the Corporate Debtor along with its estimated value as per Schedule - II hereto: a. Net Market value - ₹ 1880 Crores (Rupees One Thousand Eight Hundred and Eighty Crores only) as per valuation report dated 1st March, 2018 by GAA Advisory. b. Fair Market value - ₹ 1535 Crores (Rupees One Thousand Five Hundred and Thirty-Five Crores only) as per Valuation Report dated 21st May, 2018 by Yardi Prabhu Consultants and Valuers. Valuation Reports of GAA Advisory and Yardi Prabhu Consultants and Valuers are annexed with the Petition as Exhibit E-1 arid Exhibit E-2 respectively. c. The copy of Certificate of Registration of Charge issued by the Registrar of Companies along with ROC Search Report of Lalwani Thanvi Associates dated 30th May, 2017 with respect to the aforementioned securities, the owners of secured properties have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t H . 5. Other documents to prove the existence of financial debt: a. Acknowledgement of Debt Confirmation of Security from Reliance Naval and Engineering Ltd. to IDBI Bank dated 21st February, 2018 Exhibit I-1 . b. Recall Notice issued under the Master Restructuring Agreement dated 12th March, 2018. Exhibit I-2 . c. Recall Notice issued for the Debentures dated 18th April, 2018. Exhibit I-3 , d. Audited Annual Report of Reliance Naval and Engineering Ltd. Exhibit I-4 . e. Balance Confirmation dated 31st March, 2016. Exhibit I-5 . f. Balance Confirmation dated 31st March, 2017. Exhibit I-6 . g. Balance Confirmation dated 31st March, 2018. Exhibit I-7 . h. One Time Settlement Proposal by the Corporate Debtor dated 7th May, 2015. Exhibit I-8 . i. Reply to the OTS proposal by IDBI Bank dated 8th June, 2018. Exhibit I-9 . j. Letter addressed by IDBI Bank dated 25th June, 2018 to the Corporate Debtor. Exhibit I-10 . 7. The Applicant Bank, the Financial Creditor has proposed the name of Mr. Rajeev Bal Sawangikar, Registration No. IBBI/IPA-001/IP-P00783/2017-18/11323 for his appointment as the Interim Resolution Profe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis of impugned circular dated 12.02.2018. 8.5. Hence the present IA by the Applicant that present proceedings against the applicant which are initiated by the Financial Creditor on 05.09.2018 i.e. pursuant to the circular dated 12.02.2018 are declared as non-est by the Hon'ble Supreme Court and therefore, are liable to be dismissed. 9. The Respondent/the Original Applicant/the Financial Creditor further made submissions, before this Adjudicating Authority and the perusal of the records reveal that: A. The Respondent, the Original Applicant, the Financial Creditor has filed the Petition being CP(IB) No. 418 of 2018 under the provisions of Section 7 of the IB Code setting out the details of the Sanction Letter, Facilities granted by the Respondent, the Original Applicant, the Financial Creditor to the Corporate Debtor and the defaults committed by the Corporate Debtor, as a result of which the Corporate Debtor is liable to pay to the Respondent/the Original Applicant/the Financial Creditor, an amount of ₹ 1250.40 crores. The claim of the Financial Creditor is an independent claim in view of the defaults committed by the Corporate Debtor, pursuant to which t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Union of India and Ors. which is reproduced hereunder: Supreme Court Order dated 2nd April, 2019 in the matter of Dharani Sugars (supra) The Supreme Court Order, inter alia, directs as under: 45. ... Consequently, all actions taken under the circular, including actions by which the Insolvency Code has been triggered must fall along with the said circular. As a result, all cases in which debtors have been proceeded against by financial creditors under Section 7 of the Insolvency Code, only because of the operation of the impugned circular will be proceedings, which being faulted at the very inception, are declared to be non-est. (emphasis supplied). F. It is submitted by the Respondent/the Original Applicant/the Financial Creditor that from the above, it is abundantly clear that the aforesaid order of Hon'ble Supreme Court Order was 'generic' in nature and not case specific. It is further submitted by the Respondent/the Original Applicant/the Financial Creditor that facts and circumstances of each case will have to be examined and the original Respondent/Corporate Debtor has failed to establish that the present proceedings were filed only because o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reated 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. (i) The moratorium order in respect of (a), (b), (c) and (d) above shall not apply to the transactions notified by the Central Government. (ii) However, the order of moratorium shall not apply in respect of supply of essential goods or services to Corporate Debtor. (iii) The Petitioner shall also make public announcement about initiation of 'Corporate Insolvency Resolution Process', as required by Section 13(1)(b) of the Code. 11. This order of moratorium shall be in force from the date of order till the completion of Corporate Insolvency Resolution Process subject to the Proviso under sub-section (4) of Section 14. 12. This Petition is ordered accordingly. 13. Communicate a copy of this order to the Petitioner Financial Creditor, and to the Interim Insolvency Resolution Professional, and to the Respondent Corporate Deb ..... X X X X Extracts X X X X X X X X Extracts X X X X
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