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TMI Blog2019 (3) TMI 1925X X X X Extracts X X X X X X X X Extracts X X X X ..... as the debt is proved to be due and there has been occurrence of existence of default. What is material is that the default is at least 1 lakh. In view of Section 4 of the Code, the moment default is of Rupees one lakh or more, the application to trigger Corporate Insolvency Resolution Process under the Code is maintainable. 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 various 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 - the present application is complete in all respect and the applicant financial creditor is entitled to claim its outstanding financial debt from the corporate debtor and that there has been default in payment of the financial debt. Application admitted - moratorium declared. - Company Petition No. (IB)-1291 (PB)/2018 - - - Date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver, as the reply was not filed, one last opportunity was granted to the respondent on 11.12.2018 for filing reply. On the next date of hearing i.e. on 10.01.2019, at the request of the respondent one-week further time was allowed to file reply subject to payment of cost of ₹ 20,000/-. Despite several opportunities as reply was not filed by the respondent company, the defense of respondent was struck off and the respondents were proceeded exparte vide order dated 11.02.2019. 6. 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 under the Code. 7. The applicant has proposed the name of Mr. Vivek Raheja, for appointment as Interim Resolution Professional having registration number IBBI / IPA 002 / IP-N00055/ 20 17-18 / 10133 resident of JD 2C, 2nd Floor, Pitampura, New Delhi - 110034 with email - id vivek(vpgs.in. Mr. Vivek Raheja has agreed to accept the appointment as the interim resolution professional and has signed a communication dated 03.09.20 18 in Form 2 in terms of Rule 9(1) of the Insolvency and Bankruptcy (Applicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Bank. F. Letter of undertaking by company not to create any further charge over the property and assets including uncalled capital dated 06.02.2003. G. Omnibus counter guarantee dated 06.02.2003 executed by Corporate Debtor in favour of the Petitioner Bank. H. Equitable mortgage was also created on 08.07.2003 in respect of the property at ND-27 Pitampura, New Delhi to cover the facilities availed by the Corporate Debtor. I. Corporate Debtor further created a second charge in favour of State Bank of India over the fixed asset of the company including second charge over factory land and building with HSIDC. 8. The respondent Corporate Debtor agreed to pay interest on the various credit facilities availed by it as per the terms and conditions of the sanction letter. 9. Subsequently, at the request of Corporate Debtor the petitioner bank enhanced/ renewed/ additionally sanctioned credit facilities in favour of the respondent Corporate Debtor time to time as stated at Part IV of the application as follows: a) 2004 - Addi. ₹ 4.80 Cr. i.e., ₹ 14 Cr. b) June 2005 - Addi. ₹ 10.60 Cr. i.e., ₹ 24.60 Cr. c) Dec. 2005 - Addi. ₹ 2. 70 C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ressions 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. 17 In the present case applicant bank had sanctioned and disbursed the term loan amount recoverable with applicable interest by entering in to loan agreements with the corporate debtor. The corporate debtor had borrowed the credit facility against payment of interest as agreed between the parties. The loan was disbursed against the consideration for 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 comes 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 the Code. 18. The application filed by the applicant financial creditor under sub-section 5 (a) of Section 7 of the code, has to be admitted on satisfaction that: I. Default ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corporate debtor, which inter alia reveals that huge debts are outstanding to the applicant bank and that default has occurred in repayment of the outstanding financial debts. 23. 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. 24. 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. 25. 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. 26. In the facts it is seen tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nancial 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. 31. 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. 32. 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 pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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