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TMI Blog2019 (12) TMI 1368X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany incorporated under the Jammu & Kashmir Companies Act, 1977 and governed by the provisions of Banking Regulation Act, 1949 and having its Registered Office at Maulana Azad Road, Srinagar, Jammu & Kashmir - 190001. 3. Mr. Mohammad Maqsood Wani, working as an Execution Manager and duly authorized on behalf of applicant bank has preferred the present application on behalf of the applicant for initiation of insolvency resolution process against the respondent under the Code. A copy of the General Power of Attorney executed on 15.07.2011 authorizing Mr. Mohammad Maqsood Warn to act as lawful attorney on behalf of the applicant bank has been placed on record. 4. The Respondent Company M/s. Integrated Livestock Village Farm Private Limited (CIN No. U 74999 DL 2005 PTC 132499) against whom initiation of Corporate Insolvency Resolution Process has been prayed for, was incorporated on 28.01.2005 having its registered office situated at B-3, Friends Colony (West), Main Mathura Road, South Delhi - 110065. Since the registered office of the respondent corporate debtor is in New Delhi, this Tribunal having territorial jurisdiction over the NCT of Delhi is the Adjudicating Authority in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paisa Twenty-Four Only) is due from the respondent company with further interest from 01.05.2019. 10. The respondent corporate debtor has filed its reply on 28.08.2019. Both the parties were heard on 10.12.2019 and the order was reserved. 11. It is pertinent to mention here that the scheme of the Code provides for triggering the insolvency resolution process by three categories of persons namely, a) Financial creditor b) Operational creditor, and c) Corporate debtor itself. 12. The procedure in relation to the Initiation of Corporate Insolvency Resolution Process by the "Financial Creditor" is delineated under Section 7 of the Code, wherein only "Financial Creditor"/"Financial Creditors" can file an application. As per Section 7(1) of the Code, an application could be maintained by a Financial Creditor either by itself or jointly with other Financial Creditors. 13. The expressions "Financial Creditor" and "Financial debt" have been defined in Section 5(7) and 5(8) of the Code and precisely "Financial debt" is a debt along with interest, if any, which is disbursed against the consideration for time value of money. 14. In the present case applicant bank had sanctioned and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ities availed by the respondent. 19. In addition, applicant bank has filed the statement of accounts duly certified in accordance with Bankers' Books Evidence Act, 1891 as per requirement of Form 1-part V column 7 of the application. Certified copy of statement of account pertaining to various loan facilities, kept during the course of banking business basing on which the claim has been raised can be termed as sufficient evidence of the financial debt. 20. It is thus seen that the applicant 'financial creditor' has placed on record voluminous and overwhelming evidence in support of the claim as well as to prove the default. 21. In fulfilment of other conditions required for admission of the application, it is seen that the applicant bank has filed the present application under Section 7 of the Code in the requisite FORM-1 to initiate Corporate Insolvency Resolution Process against the respondent Corporate Debtor. Form-1 filed under Section 7 of the Code read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 shows that the required information and other facts as prescribed have been furnished. The applicant bank has annex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 10.07.2019, where in corporate debtor has made a request to the applicant bank for time till 30.09.2019 for payment of OTS balance amount of Rs. 2.50 Crores. There is also a request made in the letter to keep pending the present case till that time. This shows acknowledgement of clear default which exceeds much above the statutory limit of 1 Lakh. 26. Besides it has been shown from the relevant loan account that the corporate debtor has made last deposit/repayment of Rs. 25 Lakh on 02.04.2019. The period of limitation runs from the close of the year in which the last payment was admitted or proved. There are deposits in the loan account in the year 2018-19 and even on 02.04.2019. Moreover, various correspondences pertaining to One Time Settlement are on record. Respondent in its reply has admitted that as per the One Time Settlement accepted by the parties most of the payments have been made by the Respondent and only a part of it is left to be paid. There is thus admission of payment as shown in the relevant loan account. Accordingly, the objection that the claim of applicant bank is barred by limitation cannot sustain. 27. Respondent corporate debtor has also raised objecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of the Code. 31. Respondent corporate debtor has further alleged that the account of the corporate debtor has been wrongly declared as NPA. 32. In this regard it is pertinent to note that while dealing with application under Section 7 of the Code, it is immaterial to see as to when the account was declared as NPA. In Section 7 application, it is only to be considered as to whether there is a debt due in law and facts and whether there has been a default in paying the financial debt. 33. Hon'ble National Company Law Appellate Tribunal in the Case of Ranjit Kapoor Versus Asset Reconstruction Company (India) Limited, in company appeal (AT) (Insolvency) No. 410 of 2018 has held that "the provision of NPA relates to SARFAESI Act, 2002 and has nothing to do with Code." Therefore, the objection of the respondent that applicant has not acted in terms of circular and guidelines of RBI and determined the account as NPA illegally; cannot be a ground to reject the application preferred by the financial creditor under Section 7 of the Code, there being default in payment of financial debt. 34. Respondent corporate debtor has further contended that respondent had approached th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payable in law or in fact. However, it is not the case of respondent that the entire loan or the entire OTS amount has been paid. Bank loan having not paid in its entirety, the default of debt is apparent. 39. It is pertinent to mention here that the Code requires the adjudicating authority to only ascertain and record satisfaction in a summary adjudication as to the occurrence of default before admitting the application. The material on record clearly goes to show that respondent had availed the loan facilities and has committed default in repayment of the outstanding loan amount. 40. In the facts it is seen that the applicant bank clearly comes within the definition of Financial Creditor. The material placed on record further confirms that applicant financial creditor had disbursed loan facilities to the respondent corporate debtor and the respondent has availed the loan and committed default in repayment of the outstanding financial debt. On a bare perusal of Form - I filed under Section 7 of the Code read with Rule 4 of the Rules shows that the form is complete and there is no infirmity in the same. It is also seen that there is no disciplinary proceeding pending against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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." 47. It is made clear that the provisions of moratorium shall not apply to transactions which might be notified by the Central Government or the supply of the essential goods or services to the Corporate Debtor as may be specified, are not to be terminated or suspended or interrupted during the moratorium period. In addition, as per the Insolvency and Bankruptcy Code (Amendment) Act, 2018 which has come into force w.e.f. 06.06.2018, the provisions of moratorium shall not apply to the surety in a contract of guarantee to the corporate debtor in terms of Section 14(3)(b) of the Code. 48. The Interim Resolution Professional shall perform all his functions contemplated, inter-alia, by-Sections 15, 17, 18, 19, 20 & 21 of the Code and transact proceedings with utmost dedication, honesty and strictly in accordance with the provisions of the Code, Rules and Regulations. It is further made clear that all the personnel connected with the Corporate Debtor, its promoters or any other person ..... X X X X Extracts X X X X X X X X Extracts X X X X
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