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TMI Blog2018 (3) TMI 1966X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to run the business due to pressing demand of recovery by the Creditors. It is to be made clear at this moment itself that Section 10 be not used or considered as a scapegoat for the defaulters, or that an exist route be made possible under the guise of Bankruptcy. The procedure of Section 10 is to be applied to facilitate the restructuring of the Stressed Assets as well as to reorganize the finances of a defaulted Company. Considering the voluminous evidences annexed along with the Application and in the light of the provisions of Section 10 of the Code, it is held that the conditions as prescribed under section 10 of The Code have duly been fulfilled. Since this is a Petition of Corporate Debtor , therefore, the Insolvency Process shall commence as prescribed under Section 10 of IBC 2016. On one hand the existence of Financial Debt as well as Operational Debt is proved, on the other hand the occurrence of default is also established. The Corporate Debtor had failed to pay the amounts due and also failed to adhere to or comply with the other terms of Facility agreements. The Financial Debts have been classified as Non-Performing Asset in the books of the Financial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Insolvency and Bankruptcy Code, 2016 (IBC), t has been decided to substitute the existing guidelines with a harmonised and simpilfied generic framework for resolution of stressed assets. The details of the revised framework are elaborated n the following paragraphs. As per the revised framework it s advised for early identification and reporting of stressed assets. As soon as a default is detected by a Lender, singly or jointly, directed to take steps to cure the default. Revised prudential norms for restructuring under IBC framework or outside the IBC have been issued for exposure to Borrowed entities against whom Insolvency Applications are filed under the IBC. Apart from several other clauses of the said Notification, an important decision has also been communicated i.e. withdrawal of extant instructions reproduced below: The extant instructions on resolution of stressed assets such as Framework for Revitalising Distressed Assets, Corporate Debt Restructuring Scheme, Flexible Structuring of Existing Long Term Project Loans, Strategic Debt Restructuring Scheme (SDR), Change in Ownership outside SOR, and Scheme for Sustainable Structuring of Stressed Assets (S4A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whom a Liquidation Order has been made or iii) a Corporate Debtor having completed Corporate Insolvency Resolution Process 12 months preceding the date of making of the Application. Since none of the above conditions are applicable on the Applicant, hence, it is prayed that the Application under consideration be Admitted . 1.3 Learned Senior Advocate has also informed that as happening n the case of Aircel Limited [CP (IB)/298/MB/2018], in this case as well, a Law and Order problem is happening because of the reason that the Bank Account of the Corporate Debtor is freezed. There is a TRA Account which is not allowed to be operated by Dishnet Wireless Limited. The Company is not making the payment to its staff and employees due to the action of the Bank authorities, not allowing to operate the said Account. All revenue generation and income since agreed upon to be deposited in TRA account; but now it is freezed. A substantial amount has been freezed. He has vehemently pleaded that if this Petition is Admitted then the Insolvency Resolution Professional shall take charge of the affairs of the Company and the Company thereupon can run the business. Otherwise, owing to several pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .6 it is prescribed to furnish Particulars of Financial/Operational Debt (Creditor-wise) n Part-Ill. Accordingly, an Annexure is attached describing the Financial Creditors as under :- Image 1 2.2 The Corporate Debtor had also availed several other Loan Facilities and one of such Loan Facility is Non-Fund Based Facility granted by State Bank of India and the outstanding Loan figures as on 20.02.2018 is described as under: NON Fund Based Facility Dishnet Wireless Limited as on 20 th Feb 2018 Image 2 2.3 The impugned Application submitted under section 10 of the I B Code also contains a long list of Operational Creditors , running n to several pages displaying total outstanding Operational Credit stated to be Rs. 15123,34,62,544/-. 2.4 The summary of liability on the Corporate Debtor is listed in one of the Column as below :- FINANCIAL CREDITORS 1. Long Term Facility Total amount Outstanding (as on 20 th February 2018 (: Rs.8161,9655,135/-. Default amount (Interest on borrowings) (as on 20 February 2018) : Rs.304,2359,437/-. 2. Non Fund Based Facillty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lishment of a stressed Company for the years to come. In this regard, Eradi Committee report, Joint Committee Report of Lok Sabha, Parliamentary Debate etc. have also been perused. My decision underneath is based upon the thorough study of the said Reports and on due consideration of the stressed finances of this Corporate Debtor. 3.2 Before considering other aspects, at first it is worth to address the objection raised by an Intended Intervener. It is objected that the right to file this Application under section 10 of The Code has already been forfeited by the Hon ble Delhi High Court. In this regard, I have perused the relevant paragraph and specially the said line of the Order pointed out for consideration. The Petition before the Hon ble High Court is not moved under any of the provisions of the Insolvency Code but it was moved under section 9 of the Arbitration and Conciliation Act. On perusal I have noticed that the Petitioner GTL had filed a Petition to secure the unpaid dues payable by a Group Company (Aircel) of about f800 crores. The said Petition therefore revolves around a Settlement Agreement 24.05.2014 and Business Transfer Agreement dated 14.01.2010. The said Int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NCLT. By this method as well, the ultimate motive is to restructure the stressed assets and to revive the revenue generation by inviting Resolution Plans. The procedure or the law may be different but the ultimate aim is the same. The aim s to protect the interest of all the stakeholders by reviving the finance of a Debtor Company. Because of this reason as well, I am of the opinion that the action taken by the Corporate Debtor is meaningful and to be supervised strictly. Appointment of Insolvency Resolution Professional and his conduct is also to be scrutinized with judicial acumen. Instead of putting all stakeholders n a lurch, it is best that a consolidated litigation inviting all claimants, be dealt under one umbrella of NCLT. 3.4 A pressing urgency has also been stated for Admission of this Petition that the Banks have freezed TRA Account. It is a common practice and a general mechanism to ask the Debtor to have a Trust and Retention Account which is opened and controlled by the Lenders to protect Credit Risk .e. the risk of Debt Service Default. In this account substantial deposit is lying, however, the Debtor Company is not allowed to use the same for running day to da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Corporate Debtor , therefore, the Insolvency Process shall commence as prescribed under Section 10 of IBC 2016. On one hand the existence of Financial Debt as well as Operational Debt is proved, on the other hand the occurrence of default is also established. The Corporate Debtor had failed to pay the amounts due and also failed to adhere to or comply with the other terms of Facility agreements. The Financial Debts have been classified as Non-Performing Asset in the books of the Financial Creditor. The Petition under consideration therefore deserves Admission . 7 The Corporate Debtor has intimated the name of the IRP Mr. Vijaykumar V. Iyer, Address: Deloitte Touche Tohmatsu India LLP, Indiabulls Finance Centre, Tower 2, 27U Floor, Senapati Bapat Marg, Elphinstone Road (West), Mumbai 400 013, email: [email protected], Registration No. IBBI/IPA-001/IP- P00261/2017-18/10490 in Part-II of Form No.6 and the said IRP has given his consent in Form No.2, placed on record. 8 The Petition is hereby Admitted . As a consequence, the Moratorium shall commence as prescribed under section 14 of the I B Code which prohibits as under :- (a) the institution of suits or continu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. The Applicant is admittedly a Corporate Debtor and in that capacity moved the impugned Application dated 28.02.2018 by invoking the provisions of Section 10 of Insolvency Bankruptcy Code, 2016. Stated therein that huge Loan Facilities were availed, however admittedly defaulted. In support, a list of the Financial Creditors comprising State Bank of India, J K Bank, etc. as well as Loan Agreements are annexed. Seeking Admission of the Application and consequent thereupon, commencement of Insolvency Proceedings against the Applicant itself. 2. One of the Operational Creditors viz. GTL Infrastructure Limited represented by Learned Counsel pleaded to join as an Intervener before admission of section 10 Application. Referred a decision of Hon ble Delhi High Court dated 29.01.2018 titled as GTL Infrastructure Limited Vs. M/s. AIRCEL Limited (O.M .P.(I) (COMM. )40/2018 IA.1214/2018. 3. On hearing Learned Senior Counsel Mr. Janak Dwarkadas for the Petitioner and Learned Counsel Mr. Ashish Kamat for the impugned Intervener, it is appropriate to formulate a question of law that whether an Operational Creditor be allowed as an Intervener while adjudicating the Admission of an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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