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TMI Blog2020 (12) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... ndency of actions under the SARFAESI Act by the Financial Creditor is not a bar for filling an Application under Section 7 of IBC, 2016, especially in view of Section 238 of IBC. Further, the proceedings under IBC, 2016 cannot be said to be a parallel proceedings since the Application under Section 7 of IBC, 2016 is filed to bring about a Resolution for the Corporate Debtor, on the other hand the proceedings under SARFAESI Act, 2002 is for recovery of the amount which is due and payable to the Financial Creditor. Thus, there is a debt and default on the part of the Corporate Debtor and the Corporate Debtor is unable to repay its dues to the Financial Creditor - this Application as filed by the Applicant - Financial Creditor is required to be admitted under Section 7 (5) of the I B Code, 2016. Application admitted - moratorium declared. - IBA/901/2019 - - - Dated:- 20-11-2020 - R. SUCHARITHA, MEMBER (JUDICIAL) AND ANIL KUMAR B, MEMBER (TECHNICAL) For Financial Creditor : S. Sathiyanarayanan, Advocate For Corporate Debtor : Ambili Menon, Advocate ORDER Under consideration is an Application filed under Section 7 of the Insolvency Bankruptcy Code, 2016 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same, the Financial Creditor has executed a Deed of Guarantee dated 28.05.2015 wherein the Corporate Debtor along with one M/s. Call Express Construction India (P) Limited stood as a Guarantor to the loan disbursed by the Financial Creditor. Further, the Corporate Debtor has also executed a Memorandum of Deposit of Title Deeds in favour of the Corporate Debtor which document has been registered in the Sub - Registrar office, Neelangarai, Chennai as Document No. 2108 of 2016. 7. The Ld. Counsel for the Financial Creditor submitted that the Corporate Debtor has failed to repay its dues and as such the account of the Corporate Debtor has been declared as NPA by the Financial Creditor on 31.10.2016 and pursuant thereto, the Financial Creditor has issued Demand Notice under Section 13(2) of the SARFAESI Act, 2016 to the Corporate Debtor on 01.02.2017, however, it is submitted that the Corporate Debtor has failed to make payment which is due to the Financial Creditor. Thus, it was submitted that the Corporate Debtor has committed 'default' in repayment of dues to the Financial Creditor and as such prayed for initiation of Corporate Insolvency Resolution Process (CIRP) aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Financial Creditor. Hence, it was prayed by the Corporate Debtor to dismiss the present Application. 12. Heard both sides and perused the files including the pleadings placed on record. 13. Prima facie it is the contention of the Ld. Counsel for the Corporate Debtor that since the Financial Creditor has initiated recovery proceedings under the SARFAESI Act, 2002 by taking possession of the property under Section 13(4) of the SARFAESI Act, 2002 and as such the Financial Creditor cannot initiate parallel proceedings under IBC, 2016 to recover the said sum from the Corporate Debtor. The identical issue fell for consideration before the Hon'ble NCLAT in the matter of Rakesh Kumar Gupta -Vs- Mahesh Bansal Anr. in Company Appeal (AT) (Insolvency) No. 1408 of 2019, dated 20.02.2020, wherein the Hon'ble NCLAT has held as follows; Insolvency Bankruptcy Code 2016 is subsequent Code to SARFAESI Act of 2002 Recovery of Debts Due to Banks Financial Institution Act, 1993 with provision of Moratorium under Section 14 and Section 238 giving the Provisions of the Code overriding effect on other laws. The Judgment relied on by learned Counsel for Appellant does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o disciplinary proceedings pending against the proposed resolution professional, it may, by order, admit such application. Contention of the Learned Counsel that applications are mechanically admitted, cannot be accepted. Contention that approach of the 2nd respondent to NCLT, amounts to forum shopping is not tenable, as the Code enables filing of an application, notwithstanding the pendency of any proceedings, under the SARFAESI Act, 2002. When the code has not been stayed, the process envisaged in the code, has to be continued, and cannot be restrained. 15. The Hon'ble NCLAT also in the matter of Harkirat S. Bedi -Vs-OrientaI Bank of Commerce [2019] 108 taxmann.com 110 (NCLAT) held as under; From the aforesaid finding, it is evident that even if a claim is disputed and if the amount payable is more than ₹ 1 lakh, the application u/s 7 of the I B Code is maintainable. Mere pendency of the case before the DRT for adjudicating of such disputed amount cannot be a ground to reject the application u/s 7 of the I B Code, if the Adjudicating Authority is satisfied that there is a 'debt' and 'default' and the application is complete. On the other hand, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ode, 2016 wherein the default in respect of the dues arising from the period 25.03.2020 till 25.09.2020, (now extended upto 25.12.2020) has been excluded and as such in the present case from Part-IV of the Application it is seen that the default has occurred much prior to 25.03.2020 and hence Section 10A of I B Code, 2016 also would not come to the aid of the Corporate Debtor. 20. Thus taking into consideration the facts and circumstances of the case as well as the position of Law, we are of the view that this Application as filed by the Applicant - Financial Creditor is required to be admitted under Section 7 (5) of the I B Code, 2016. 21. The Financial Creditor has proposed the name of A. Mohan Kumar having Registration Number IBBI/IPA-002/IP-N00377/2017-2018/11120 as Interim Resolution Professional (IRP) and a written communication in the format prescribed under Form 2 of the Insolvency and Bankruptcy Board of India (Application to Adjudicating Authority) Rules, 2016 has been filed by the proposed IRP who is appointed as the IRP to take forward the process of Corporate Insolvency Resolution of the Corporate Debtor. The IRP appointed shall take in this regard such other a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gulator. 24. The duration of the period of moratorium shall be as provided in Section 14(4) of the Code and for ready reference reproduced as follows: (4) The order of moratorium shall have effect from the date of such order till the completion of the Corporate Insolvency Resolution Process: Provided that where at any time during the Corporate Insolvency Resolution Process period, if the Adjudicating Authority approves the Resolution Plan under sub-Section (1) of Section 31 or passes an order for liquidation of Corporate Debtor under Section 33, the moratorium shall cease to have effect from the date of such approval or Liquidation Order, as the case may be. 25. Based on the above terms, the Application stands admitted in terms of Section 7(5) of IBC, 2016 and the moratorium shall come in to effect as of this date. A copy of the Order shall be communicated to the Financial Creditor as well as to the Corporate Debtor above named by the Registry. In addition, a copy of the Order shall also be forwarded to IBBI for its records. Further, the Interim Resolution Professional above named be also furnished with copy of this Order forthwith by the Registry, who will also comm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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