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TMI Blog2020 (2) TMI 1585X X X X Extracts X X X X X X X X Extracts X X X X ..... e of objecting and hence stands rejected. The Corporate Debtor committed default in repayment of the loan amount to the Financial Creditor, and hence its Loan account was declared as NPA. SARFAESI proceedings were also initiated by the Financial Creditor in respect to the same debt, and they are pending till date. In the light of above facts and circumstances, the existence of debt and default is reasonably established by the Financial Creditor as a major constituent for admission of a petition under Section 7(4) of the I B Code - the present application filed by the Financial Creditor is satisfying all the definitions of Financial Creditor , Default and Financial Debt and qualifies for filing an application under Insolvency and Bankruptcy Code. 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. Application admitted - moratorium declared. - IBA/51/KOB/19 - - - Dated:- 7-2-2020 - Veera Brahma Rao Arekapudi Member And Ashok Kumar Borah Member For Financial Creditor : M/s Vinod PV Reetha D For Corporate Debtor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated. 5. The counsel for the Financial Creditor stated that the Corporate Debtor had also issued Demand Promissory Note for ₹ 1 Crore and ₹15 Crore in favour of the Financial Creditor on 31-03-2015. Further submitted that the Trivandrum Medical Speciality Services Ltd has executed Corporate Guarantee and Dr K. N. Pai Heart Foundation, a trust, has executed a guarantee in favour of the Financial Creditor guaranteeing the re- payment of the loan granted to the Corporate Debtor in the event of default. Additionally, three Directors of the Corporate Debtor have also executed personal guarantee in favour of Financial Creditor. 6. The counsel for the Financial Creditor further submitted that the Corporate Debtor has also created equitable mortgage in favour of the properties of the Financial Creditor, and created first parri passu charge along with State Bank of Travancore and Kerala Financial Corporation. The Corporate Debtor has also created equitable mortgage in favour of the Financial Creditor with exclusive charge on the property. 7. The Counsel for the Financial Creditor further stated that the Corporate Debtor had committed default in repayment of credit facil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Debtor under Section 7 of Insolvency and Bankruptcy Code, 2016. Submissions by the Corporate Debtor 12. The Learned Counsel for the Corporate Debtor submitted that the Financial Creditor was not properly authorized to file this application. No board resolution in this regard was filed before this Bench, though the loan was sanctioned by the Board of Directors. As per the norms of the RBI, the corporate loan granted to the Corporate Debtor was sanctioned by the Board of Directors and therefore Regional Manager has no authority to file the present application before this Bench. 13. The counsel for the Corporate Debtor stated that as per the website of Insolvency and Bankruptcy Board of India the registration of the proposed interim resolution professional is not valid after 01-07-2019.The copy of the printout from the website of Insolvency and Bankruptcy Board of India is annexed with the reply statement. The loan sanction was on 30-03-2015 and the bank released only ₹ 2,76,17,962/- on 31-07-2015. The Term Loan sanction was for an amount of ₹15 Crores, the Bank released only an amount of ₹ 7,76,12,971/- that too in instalments. Balance amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of Cancer Block and HCG Group offered upfront payment of ₹ 12 Crores and also proposed to invest ₹ 20 Crores in the Cancer Block. The Kerala Financial Corporation has issued No Objection Certificate for the said proposal. The Financial Creditor did not co-operate with the Corporate Debtor for the revival proposal submitted by the Health Care Global Enterprises Limited. The HCG group has given time upto 30-03-2019 to get the NOC from the Financial Creditor, and which was denied by the Financial Creditor due to unknown reasons. 17. The counsel for the Corporate Debtor claimed that the introduction of the act is not applicable to a pending loan. The Code and National Company Law Tribunal Rules are not having retrospective effect in the pending loan as it is hit by Article 20(2) of Constitution of India. 18. The counsel for the Corporate Debtor further submitted that the Financial Creditor resorted to unconscionable practice of capitalization of penal interest which is against the dictum of the Constitution Bench decision of the Hon ble Supreme Court of India, in the case of Central Bank of India Vs Ravindra and others reported in 2002(1) SCC 367. The present a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Code. The registered office of the Corporate Debtor is located in Thiruvananthapuram which is within the limits of ROC, Kochi and therefore this Bench has jurisdiction to try the present application. 24. The Counsel further stated that the Financial Creditor has co-operated with the Corporate Debtor for the revival of the company and the proposals which does not address the debt of the Financial Creditor, were not considered and accepted by them. However, it is a fact that the Financial Creditor has accepted the O.T.S. proposal submitted by the Corporate Debtor in principle vide letter dated 22-01-2019. However, Corporate Debtor failed to adhere to the terms therein and not paid the initial payment as required under the O.T.S. Scheme. Since the Corporate Debtor has committed default, the present application has been filed for initiating Corporate Insolvency Resolution Process against the Corporate Debtor. 25. The Counsel for the Financial Creditor stated that the provisions of the Code shall apply to any company incorporated under the Companies Act, 2013, or under any previous company law. It is further submitted that the Hon ble Supreme Court has upheld the constitutional v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht Only), recoverable from the Corporate Debtor viz Trivandrum International Health Services Ltd. The documents produced on record prove the disbursement of various loan facilities granted by the Financial Creditor to the Corporate Debtor. 31. On perusal of the record we found that 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, the Senior Manager of the Financial Creditor had signed the application as an authorised person of the Financial Creditor and a specific authorization letter to file Insolvency Application before this Bench. Hence, the technical objection raised on the ground of maintainability is raised only for the sake of objecting and hence stands rejected. 32. The Corporate Debtor committed default in repayment of the loan amount to the Financial Creditor, and hence its Loan account was declared as NPA. SARFAESI proceedings were also initiated by the Financial Creditor in respect to the same debt, and they are pending till date. In the light of above facts and circumstances, the existence of debt and def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proposed by the Financial Creditor, Mr. Raju Palanilkunnathil Kesavan, IBBI/IPA-001/IPP00801/2017-2018/11356, is hereby appointed as Interim Resolution Professional to conduct the Insolvency Resolution Process. 38. However, the supply of essential services to the Corporate Debtor shall not be terminated during Moratorium period. It shall be effective till completion of the Insolvency Resolution Process or until the approval of the Resolution Plan prescribed under Section 31 of the Code. 39. That as prescribed under Section 13 of the Code on declaration of Moratorium the next step of Public Announcement of the Initiation of Corporate Insolvency Resolution Process shall be carried out by the IRP immediately on appointment, as per the provisions of the Code. 40. That the Interim Resolution Professional shall perform the duties as assigned under Section 15 and Section 18 of the Code and inform the progress of the Resolution Plan and the compliance of the directions of this Order within 30 days to this Bench. A liberty is granted to intimate even at an early date, if need be. 41. The commencement of the Corporate Insolvency Resolution Process shall be effective from the da ..... X X X X Extracts X X X X X X X X Extracts X X X X
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