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TMI Blog2021 (3) TMI 473X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Debtor is a private limited company incorporated on 28.05.2007, having CIN No. U50100KL200PTC020847. The registered office of the Corporate Debtor is at No,II 6B, N. H. 47 Bye Pass Road, Maradu P. O., Kochi- 682 304. The Paid-up Share Capital of the Corporate Debtor Company is Rs. 114400000 and the Authorised Capital is Rs. 114400000. Submissions by the Financial Creditor: 4. The Financial Creditor/ Bank submitted that on 30.06.2019 the Corporate Debtor had availed inter alia a Term Loan of Rs. 10,00,00,000/- from the Financial Creditor, agreeing to repay the same in 120 monthly instalments together with interest and charges set forth in the loan documents. Towards collateral Security the Corporate Debtor created equitable Mortgage in favour of the Applicant. Due to non-payment of monthly instalments the Account of the credit facility turned to the status of a Non-Performing Asset with effect from 29.10, 2019. The Financial Creditor caused a Demand Notice dated 16.12.2019 to the Corporate Debtor requiring them to repay the entire outstanding in the Loan Account. Though the said notice was served on the borrowers including the Corporate Debtor, they did not pay the amounts dem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the approval of members at the extra ordinary general meeting complying with Section 180(1)(c) of Companies Act. In the absence of approval of members at the |extra ordinary general meeting as required by Section 180(1)(c), there can be no financial debt that could be legally enforceable against the Corporate Debtor, Company. The Financial Creditor themselves being aware of the restrictions on the power of the Board as envisaged in the Companies Act and as stated in clear terms in the Board Resolution, the debt is not recoverable as against the Corporate Debtor. The amount advanced by the applicant being in excess of the paid-up share capital and free reserves of the company, the amount advanced by the Financial Creditor is not valid and effectual so as to bind the Corporate Debtor, company. Hence the Corporate Debtor submits that there is no debt that is legally recoverable as against the company. 8. The Corporate Debtor further stated that the Document No. 2 is a document which purports to create right, title and interest is immoveable property of the value of more than Rs. 100/- and is compulsory registerable. In the absence of registration and payment of registration fee and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is repayable with or without interest. 10. It is also stated that no consideration has passed from the Financial Creditor to the Corporate Debtor for the promissory note. No evidence to show that the amount of Rs. 10 Crores has been disbursed to the respondent under the promissory note. In the absence of any evidence to the effect that the amount covered under the promissory note has been disbursed merely because of the promissory note, it cannot be taken as a debt. No demand has been made by the applicant for the amount covered under the promissory note, which itself shows that no separate amount has been disbursed. 11. The Corporate Debtor also stated that there is no Debtor Creditor relationship between the Financial Creditor and Corporate Debtor. There is no undertaking to repay the amount with interest within the specified period and hence there is no default. On the basis of documents which are not enforceable in law, the Financial Creditor cannot claim to owe 'Financial Debt' from the 'Corporate Debtor' and thereby cannot be claimed to be a 'Financial Creditor' as defined under Section 5(7) and (8) of the Insolvency and Bankruptcy Code, 2016. Though the Financial Creditor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orporate Debtor though challenged the order of this Tribunal before the National Company Law Appellate Tribunal, New Delhi in Company Appeal (AT) (insolvency) No.952/2020, the same was dismissed by the Appellate Tribunal confirming the order of this Tribunal. Now, the Respondent cannot agitate the very same issue before this Tribunal at a subsequent stage of the proceedings as the same is hit by the principles of Constructive res judicata. 15. It is also stated that the contentions taken by the Corporate Debtor under the head 'No Debt is Due and Payable' are all incorrect and unsustainable. The contention that the debt as claimed by the Financial Creditor is not due as it is not payable in law is incorrect and baseless. The very contention presupposes admission of a debt. The further contention that there is no default of any financial debt is also incorrect and unsustainable. The averment that the Financial Creditor has not disbursed any money to the Corporate Debtor as debt as the documents produced by the applicant are unenforceable against the Corporate Debtor Company is incorrect and unsustainable. The contention that the Financial Creditor has not produced any docume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would categorically prove that the Corporate Debtor owe a financial debt to the Financial Creditor. Findings: 19. I have heard counsel for the parties and perused the whole case records including documents and photocopies appended with the case records. On perusal of the arguments of both the sides and the documents and evidences placed on record, this Bench finds it necessary to deal with each issue separately. i. Whether the application is filed by the competent person? ii. Whether the documents filed by the Financial Creditor is having the common seal? iii. Whether there is a Creditor-Debtor relationship between the Financial Creditor and Corporate Debtor herein? Point No (i) On perusal of the record, I found out that Smt. Maya C. is the Assistant Vice President/ Branch Head of the Financial Creditor has the proper authority to file the present application, and the objection raised by the counsel for the Corporate Debtor is merely incongruous, and therefore, holds no water. Moreover, this issue was decided by this Tribunal vide order dated 24.09.2020 in IA/105/KOB/2020, which was affirmed by the NCLAT. Hence, that contention will not stand now, and it is only to be reje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 7 of I&B Code, 2016 is complete in all respects. Accordingly, the application filed under Section 7 of the Insolvency and Bankruptcy Code for initiation of corporate insolvency resolution process against the corporate debtor deserves to be admitted. Hence, the Application No. IBA/25/KOB/2019 is admitted and the following order has been passed: - ORDER 24. Having admitted the Petition/Application, the provisions of Moratorium as prescribed under Section 14 of the Code shall be operative henceforth with effect from the date of order shall be applicable by prohibiting institution of any suit before a Court of Law, transferring/encumbering any of the assets of the Debtor etc. i. The Financial Creditor has suggested the name of Mr. Sathiq Buhari, Sagreen Law Chamber, Vanchiyoor, Thiruvananthapuram- 695 035, e-mail id: [email protected], IBBI Registration Number: IBBI/IPA-001/IP-P00758/2017-2018/11307 for appointment as Interim Resolution Professional (IRP). The Insolvency Resolution Professional is directed to submit the copy of AFA (Authorization for Assignment) issued by the Insolvency Professional Agency within 2 days from the date of receipt of this order. ii. Accord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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