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TMI Blog2019 (4) TMI 1999X X X X Extracts X X X X X X X X Extracts X X X X ..... Adjudicating Authority . The Corporate Debtor admits default. The petition is complete and therefore deserves to be admitted. Petition admitted - moratorium declared. - CP (IB) No. 43/7/HDB/2018 - - - Dated:- 9-4-2019 - Shri Ratakonda Murali, J. For the Petitioner: Mr.Sethu Madhava Rao, Advocate. For the Respondent: Mr. Mallela Leela Prasad, Advocate. ORDER Shri Ratakonda Murali, J. 1. This petition is filed by Andhra Bank, which is the Financial Creditor stating that M/S Leo Meridian Infrastructure Projects and Hotels Limited, Corporate Debtor herein had defaulted in repaying a sum of ₹ 339,05,12,985.44 (Rupees Three Hundred Thirty Nine Crores Twelve Lakhs Nine Hundred Eighty Five and Paisa Forty Four Only). This petition is filed under Section 7 of Insolvency and Bankruptcy Code, 2016, R/ w Rule 4 of Insolvency Bankruptcy (Application to the Adjudicating Authority) Rules, 2016, seeking admission of the Petition, initiation of Corporate Insolvency Resolution Process, granting moratorium and appointment of Interim Resolution Professional as prescribed under the Code and Rules thereon. 2. The brief averments made in the petition are a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... um for a Term loan of ₹ 91.00 Crores for the purpose of setting up Multi facility Convention Center in an extent of Ac. 11.00 in survey No. 420/2 situated Shamirpet (Bommaraspet) Shamirpet Mandal, R.R. District which is fully described in 'C' schedule (hereinafter called Project No. I ) . The Guarantors agreed to stand as continuing guarantors for due repayment of the said Term loans. On the request of Corporate Debtor Consortium A sanctioned the Term Loan-I as detailed hereunder subject to the Terms and conditions men tioned in the their respective sanction letters and opening of Escrow account with Bank of India for Project No. I . S.No. Name of the Bank Sanction letter dated Term loan - I (Rupees in Crores) 1 BOI 30-01-2008 40.00 2 AB / Financial Creditor 25.06.2007 16.00 3 UCO Bank 11-03-2008 35.00 Total 91.00 g) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erm loan - III as detailed hereunder subject to the Terms and conditions mentioned in their respective sanction letters. S.No. Name of the Bank Sanction letter dated Term loan - III (Rupees in Crores) 1 AB / Financial Creditor 30-06-2009 30.00 2 Union Bank 01-11-2010 13-12-2010 30.00 3 BOB 20-10-2009 11-12-2010 20.77 4 Allahabad Bank 08-05-2010 08-12-2010 5.00 Total 85.77 i) It is averred that the Corporate Debtor and Guarantors again approached in June, 2011 , the consortium Banks consisting of Bank of Baroda, Union Bank of India, Financial Creditor , Allahabad Bank, Indian Overseas Bank and State Bank of Mysore ( hereinafter called Consortium 'D') in which Bank of Baroda is recognized and appointed as Leader of the Consortium for Term Loan - IV of & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o Union Bank of India under Term Loan I, II, III, IV, V and Cash Credit and ₹ 89,71,99,151.44 due to Financial Creditor under Term Loan V and ₹ 38,04,41,125.00 due to Indian Overseas Bank under Term Loan V and ₹ 15,38,19,401.00 due to Allahabad Bank under Term Loan V and ₹ 12,60,40,631.00 due to State Bank of Mysore under Term Loan V and ₹ 3,49,77,871.00 due to Corporation Bank under Term Loan I II and the said O.A is pending. m) It is averred that Financial Creditor issued demand notice 03.10.2012 under section 13(2) of the SARFAESI Act demanding the Corporate debtor to pay ₹ 151,56,28,981/- together with interest from 01-10-2012 It is submitted Bank of India as leader of the Consortium of Term Loan I and Il issued Demand Notice 21.05.2014 under Section 13(2) of the SARFAESI Act on behalf of Financial Creditor and UCO Bank. The Corporate Debtor received the said notice, but failed to pay the amount demanded in the default notice. n) It is averred that Corporate Debtor failed to pay the amount and the Financial Creditor , Bank of India and UCO Bank issued possession notice dt. 23-07-2014. Challenging the said possession notice, the Corpor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd economic downturn. h) It is averred that the Company has coordinated will all bankers for revival of the Company Accounts. It is further averred that the Company is not receiving any type of funding from banks either in the form of Project funding or working capital needs. The Company has made best efforts to keep the Company as a going concern. i) It is averred that as per the RBI guidelines the units which could not commence commercial operations as per the initial projection and loan accounts are already once re-structured in regard to re - payment schedule are eligible for re-structuring. j) It is averred that the banks having knowledge about the cost escalation and having understood about intricacies involved for escalation of the project and regular monitoring of the project and also understanding the social and economical conditions during the execution of the project period should have extended helping hand which is obligatory in the light of the RBI guidelines, causing massive financial damage and crippled the company with the erroneous decisions contrary to RBI guidelines. k) It is averred that during the last 2 years, Promoters have sold their personal ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 30.03.2017 shown at page No. 271 of the paper book of ₹ 7,05,469/-. Therefore, the debt is not barred by limitation as part payment is an acknowledgement within the meaning of Section 19 of Limitation Act. Counsel contended Corporate Debtor admitted in the interim reply about part payment. Therefore, it is not open to the Corporate Debtor to say that debt is barred by limitation. 5. Counsel contended the Corporate Debtor also created mortgage by way of deposit of title deeds under Section 58 (O of the Transfer of the Property Act and the same was confirmed under Registered Memorandum of Deposit of Title Deeds No.2254 of 2005 dated 15.04.2005. Further Corporate Debtor also extended the mortgage under Registered MOD No. 2237 of 2005 dated 15.04.2005 and Registered MOD No. 469 of 2009 dated 13.03.2009 which is duly registered in SRO Shameerpet. The mortgage was also registered with Registrar of Companies and Form No.8 and Charge Certificates are filed. The contention of the Learned Counsel, mortgage was confirmed under Registered MOD dated 13.03.2009. Counsel contended, to enforce mortgage, the Period of limitation under Section 62 of Limitation Act is 12 years. Therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alance sheet regarding liability of the Company in respect of debt borrowed shown in the balance sheet amounts to acknowledgement. 9. It is a specific case of Financial Creditor that Corporate Debtor is showing its liability for the debt due to the Financial Creditor in the balance sheet filed for every Financial Year. It is true, if liability to discharge the debt is shown in the Financial Statements of the Company, then it amounts to acknowledgement of debt. So the plea taken by the Corporate Debtor that the claim is barred by limitation has no legs to stand. Hon'ble NCLT Mumbai Bench in CP.(IB)-3622(I BC)/MB/2018 has held in the decision between TJSB Sahakari Bank Ltd Vs. M/S Unimetal Castings Ltd dated 25.01.2019 that when the loans due to the Corporate Debtor is shown in the balance sheet then, this amounts to acknowledgement of liability and debt is not barred by limitation. When liability is shown in the balance sheet, then it is a clear case of acknowledgement of debt by the Corporate Debtor. 10. The next contention of the Counsel for Corporate Debtor that Financial Creditor and other Banks already initiated proceedings before DRT Hyderabad and therefore the prese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Debtor including execution of any judgment, decree or order in any court of law, Tribunal, arbitration panel or other authority; Transferring, encumbering, alienating or disposing of by the Corporate Debtor any of its assets or any legal right or beneficial interest therein; any action to foreclose, recover or enforce any security interest created by the Corporate Debtor in respect of its property including any action under Securitization and Reconstruction of Financial Assets and Enforcement of Security interest Act, 2002 (54 of 2002); the recovery of any property by an owner or lessor where such property is occupied by or in possession of the corporate Debtor. b) That the supply of essential goods or services to the Corporate Debtor, if continuing, shall not be terminated or suspended or interrupted during moratorium period. c) That the provisions of sub-section (1) of Section 14 shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator. d) That the order of moratorium shall have effect from 09.04.2019 till the completion of the Corporate Insolvency Resolution Process or until this Bench appro ..... 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