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TMI Blog2022 (4) TMI 1411X X X X Extracts X X X X X X X X Extracts X X X X ..... dvocate, Ms. Shilpa, Advocate For the Corporate Debtor : Mr.Sai Krishnan, Advocate ORDER PER: JUSTICE (RETD.) RAMALINGAM SUDHAKAR, PRESIDENT Under Adjudication is an Application that has been filed by Indian Overseas Bank (hereinafter referred to as Financial Creditor ) under Section 7 of the Insolvency Bankruptcy Code 2016 (in short, IBC, 2016 ) r/w Rule 4 of the Insolvency Bankruptcy (Application to Adjudicating Authority) Rules, 2016 against INMA International Limited (hereinafter referred to as Corporate Debtor ). The prayer made is to admit the Application, initiate the Corporate Insolvency Resolution Process against the Corporate Debtor, declare a moratorium and appoint Interim Resolution Professional. 2. Part-I of the Application sets out about the Financial Creditor from which, it is evident that the Financial Creditor is a Bank Registered under the Banking Companies (Acquisition Transfer of Undertakings) Act, 1970 having its branch office at Chennai. Part- II of the Application gives all the particulars of the Corporate Debtor from which it is evident that the Corporate Debtor is a Limited Company with CIN:U31300TN1999PLC043708 which was in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken any action, which shows the Corporate Debtor has no grievance against the action of the Financial Creditor. 7. Thereafter, the Corporate Debtor had requested the Financial Creditor to stop the e-auction process vide letter dated 31.12.2015 and to consider the One-time settlement proposed in the letter dated 27.1.2015. Pursuant to that Financial Creditor permitted the Corporate Debtor to operate the account within the existing limit of Rs.11.25 crore (Rupee Eleven Crore Twenty-Five Lakh only) subject to the payment of Rs.5.57 crore (Rupees Five Crore Fifty- Seven Lakh only) along with the approximate interest of Rs.25 lakh (Rupees Twenty-Five Lakh only) on or before 10.01.2016. 8. It was further submitted that the Financia! Creditor has not accepted the OTS proposal of the Corporate Debtor and advised the Corporate Debtor to pay the amount immediately. In turn, the Corporate Debtor has filed S.A.No.20 of 2016 before the DRT-III, Chennai and obtained an order (13.01.2016) against the Financial Creditor to stay all proceedings pursuant to the sale notice dated 19.12.2015, subject to the condition that the CD has to remit Rs.1 crore to the credit of the loan account on or bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the date of sanction of the financial facilities till the date of the order and if there was any balance in the principal amount, the Financial Creditor is entitled to recover that with the interest at the rate of 6% per annum. The key issue is on the rate of interest. 15. It was further submitted that as per the order passed by the DRT-II Chennai vide order dated 30.05.2019, in C.C.No.6 of 2018 and OA No.633 of 2016 there are no dues or outstanding payable by the Corporate Debtor to the Financial Creditor and hence sought dismissal of this application. 16. It was further submitted by the Learned Counsel for the Corporate Debtor in the written submission that in the appeal preferred by the Financial Creditor against the above said DRT order, the DRAT, Chennai vide its order dated 14.11.2019, held that the Financial Creditor herein is entitled for 9% rate of interest on due amount from the sanction till realisation of the credit facility and rejected the counterclaim of the Corporate Debtor. Aggrieved by the order of DRAT the Corporate Debtor had filed WP.No.33396, 33398 33399 of 2019 before Hon ble High Court of Madras wherein interim injunction has been granted in favou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that there is a dispute about the quantum of payment. However, merely because the Appellant has disputed the claim it will not affect the right of the Financial Creditor to file application under Section 7. 18. From reading Section 7 of the Insolvency and Bankruptcy Code, 2016 Section 7: Initiation of corporate insolvency resolution process by financial creditor: (5) Where the Adjudicating Authority is satisfied that- (a) a default has occurred and the application under subsection (2) is complete, and there jis no disciplinary proceedings pending against the proposed resolution professional, it may, by order, admit such application; or (b) default has not occurred or the application under subsection (2) is incomplete or any disciplinary proceeding is pending against the proposed resolution professional, it may, by order, reject such application: makes clear that if the Adjudicating authority is satisfied with the default as stated in Section 7(5)(a), it can trigger CIRP against the Corporate Debtor. We may also refer to a decision of the Hon ble Apex Court in Innoventive Industries Ltd Vs. ICICI Bank Anr, wherein it was held as follows 30. On the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Board of Directors of the Corporate Debtor shall stand superseded as a consequence of the initiation of the CIR Process in relation to the Corporate Debtor in terms of the provisions of IBC, 2016. 22. As a consequence of the Application being admitted in terms of Section 7 of the IBC, 2016, moratorium as envisaged under provisions of Section 14(1) and as extracted hereunder shall follow in relation to the Corporate Debtor; a. The institution of suits or continuation of pending suits or proceedings against the Corporate Debtor including the execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; b. Transferring, encumbering, alienating or disposing of by the Corporate Debtor any of its assets or any legal right or beneficial interest therein; c. Any action to foreclose, recover or enforce any security interest created by the Corporate Debtor in respect of its property including any action under the Securitization and Reconstruction of Financial 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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