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TMI Blog2018 (9) TMI 2034X X X X Extracts X X X X X X X X Extracts X X X X ..... per Section 238, the provisions of the Code are to be given effect to notwithstanding anything contrary contained in any other later laws or any instrument having effect under such law. Thus, the objection in this regard will not sustain as initiation and pendency of proceedings in different forums is no bar for initiation of Corporate Insolvency Resolution Process under Section 7 of the Code in view of the overriding effect given to the provisions of Section 238 of the Code. It is pertinent to note that in financial transactions, adjustments and compromise are to be left to the parties to settle the matter in their best interest or exigencies of the business. However, in the absence of any binding compromise agreement/ debt restructuring approval, it is beyond the powers of the adjudicating authority to extend time indefinitely or to defer the prayer of applicant financial creditor for admission of the petition filed under Section 7 of the Code - 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 appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shells (India) Private Limited (CIN No. U 25209 DL 2007 PTC 162691) against whom initiation of Corporate Insolvency Resolution Process has been prayed for, was incorporated on 27.04.2007 having its registered office at R - 122, Greater Kailash - I, New Delhi - 110048. Since the registered office of the respondent corporate debtor is in New Delhi, this Tribunal having territorial jurisdiction over the 3. NCT of Delhi is the Adjudicating Authority in relation to the prayer for initiation of Corporate Insolvency Resolution Process in respect of respondent corporate debtor under sub-section (1) of Section 60 of the Code. 4. It is appropriate to mention that the applicant Punjab National Bank is a body corporate constituted under the Banking Companies (Acquisition Transfer of Undertakings) Act, 1970 having its registered office at PNB, Plot No. 4, Sector 10, Dwaraka, New Delhi - 110075. Mr. Anoop Kumar Saxena, authorized representative of the applicant and working as Chief Manager has preferred the present application on behalf of the applicant Punjab National Bank for initiation of corporate insolvency resolution process in terms of the provisions of the Code. 5. The applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Fixed/ Block Assets and also gave Undertaking in favour of the applicant bank. In addition, the Corporate Debtor also executed General Counter Indemnity Agreement in order to secure the Enhance/ sanctioned guarantee limit for ₹ 175.50 lakh. Besides Balance and security confirmation letters were signed and delivered on behalf of the corporate debtor. 10. In order to secure the loan separate guarantee agreements were also executed by Rockside Impex Private Limited, corporate guarantor and by Mr. Shyam Sunder Bhatter, Ms. Nirmala Bhatter, Mr. Shambu Prasad Singh and Mr. Jai Prakash Narayan Singh as personal guarantors. Subsequently on 21.01.2011 Agreement of Guarantee was additionally executed by Ms. Jaspreet Kaur in favour of applicant Bank. 11. That apart Letter of Continuity was given by Corporate Debtor on 19.01.2011 in respect of property plot no. 350, Sector 3, Phase-Il, Industrial Growth Centre, Bawal, Haryana. Another letter of Continuity was given by Corporate Debtor on 19.01.2011 in respect of residential house no. C- 3/275, Vipul Khand, Gomti Nagar, Lucknow. Further, Letter of Continuity was also given by Corporate Debtor in respect of factory land and buildi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,74,392/-. As such the total outstanding amount in respect of various loan facilities claimed to be in default was for ₹ 30,00,98,972.50. The details of outstanding debts in respect of various facilities as annexed with the application are as follows. S. No. Facility Outstanding 1. cc 18,09,32,270.50 2. TL-I 7,31,39,312.00 3. TL - II 53,21,940.00 4. TL - III 3,17,52,714.00 5. Car Loan - 1 25,86,023.00 6. Car Loan - 1 7,50,521.00 7. Car Loan - 1 33,41,799.00 8. BG - 1 1,50,054.00 9. BG - 2 20,24,338.0 Total 30,00,98,970.05 22. It is submitted that the Corporate Debtor has defaulted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere has been commission of default. 26. Insolvency and Bankruptcy Code, 2016 being a complete Code and subsequent Union Law, will prevail over other later laws like the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, Money Laundering Act and SARFESI Act, 2002. As per Section 238, the provisions of the Code are to be given effect to notwithstanding anything contrary contained in any other later laws or any instrument having effect under such law. 27. Section 238 of the Code envisages as follows. 238. Provisions of this Code to override other taws. The Provisions of this Code shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law. 28. Hon 'ble NCLAT in the matter of M/ s. Ksheeraabd Constructions Pvt. Ltd. V. M/S. Vijay Nirman Company Pvt. Ltd. in Company Appeal (AT) (Insolvency) No. 167 of 2017 has observed that: The I B Code being a complete code will prevail over other Acts. person can take advantage of pendency of a case to stall Corporate Insolvency Resolution Process under the I B Code . 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dicating Authority. In the present proceeding under Section 7 of the Code the Tribunal is not supposed to ascertain the quantum of amount of default or to pass a decree as to how much is actually due to the applicant financial creditor. 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. 34. Similarly, the objection on the ground of discrepancies in the amount of claim cannot sustain. The variance in the amount of default is mainly on account of difference of dates and subsequent restructuring of the loan. Be that as it may the corporate debtor would be entitled to raise objection of mismatching of dues before the resolution professional/ committee of creditors. Adjudicating Authority is only to ascertain the existence of a default and not to adjudicate on the exact amount due and payable. Mere mismatch of the figures will ipso facto not estop the admission of corporate insolvency resolution process under section 7 of the Code. 35. It is also the case of the respondent that application bank has mislead the court by not revealing the existence of One-t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 7 (1) of the Code an application could be maintained by a Financial Creditor either by itself or jointly with other Financial Creditors. 40. 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. 41. In the present case applicant bank had sanctioned and disbursed various loan amounts recoverable with applicable interest by entering in to loan agreements with the corporate debtor. The corporate debtor had borrowed the credit facilities against payment of interest as agreed between the parties. The loan was disbursed against the consideration of time value of money with a clear commercial effect of borrowing. Moreover the debt claimed in the present application includes both the component of outstanding principal and interest. In that view of the matter not only the present claim will come within the purview of 'Financial Debt' but also the applicant bank can clearly be termed as 'Financial Creditor' so as to prefer the present application under Section 7 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also placed on record the balance and security confirmation letters executed by the respondent company confirming balance outstanding in respect of various loan facilities. 46. In addition the 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. 47. 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. 48. 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. 49. In the case on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... possession of the corporate debtor. 54. 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. 55. 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 its connected with the Corporate Debtor, promoters or any other person associated with the Management of the Corporate Debtor are under legal obligation under Section 19 of the Code to extend every assistance and cooper ..... X X X X Extracts X X X X X X X X Extracts X X X X
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