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TMI Blog2022 (1) TMI 1267X X X X Extracts X X X X X X X X Extracts X X X X ..... le High Court, it will not be a bar for a Financial Creditor to approach the NCLT under section 7 of the Code independent of that proceedings. Since the Corporate Debtor had already committed default in making the payment of the outstanding financial debt to the Banks, and the Financial Creditor has validly initiated the proceedings before this Adjudicating Authority against the Corporate Debtor which is presently in the hands of the Official Liquidator appointed by the Hon ble High Court of Calcutta, whatever decision in this matter is taken, the same would be binding on the Official Liquidator as well, who is in possession of all the properties, assets etc. of the Corporate Debtor. The petition of the Financial Creditor is very much maintainable and the Financial Creditor is entitled to the relief sought in the petition - On the basis of the submissions made by the Financial Creditor and the documents placed on record since the Corporate Debtor has failed to make any payment of the financial debt due to the Financial Creditor, it is opined that there is a default on the part of the Corporate Debtor by not repaying the debt owed to the Financial Creditor and in view of the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the Hon ble Calcutta High Court being C.P.No. 355 of 1997. Subsequently, on 26.11.1997, the Hon ble High Court was pleased to pass inter alia, winding up order and directed the Official Liquidator to forthwith to take possession of the company. Copy of the order dated 26th November,1997 is annexed as Annexure A-7. 5. It is submitted that one of the Secured Creditors M/s Allahabad Bank filed an application under section 446 of the Companies Act,1956 before the Hon ble Calcutta High Court, whereby, Allahabad Bank prayed for leave to execute the decree amounting of Rs.26,20,41,231.18 together with interest thereon at 19.75% P.A. from 05.03.1993 till the date of realization, in its favour in the pending certificate proceedings before the Ld. Debt Recovery Tribunal in Certificate Case No. 42 of 1996. A copy of the order dated 4th July, 1996 is annexed as Annexure A-8. 6. It is submitted that the said Company Application being C.A. no.352 of 1998 was taken up for hearing by Hon ble Calcutta High Court and after considering the submissions of the Financial Creditor on 27.10.1998, an order was passed, in terms of prayer(a) of the Judge s summons. It is submitted that the Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A copy of the letter dated 16th February, 2009 annexed as Annexure A-14. 12. It is submitted that the Financial Creditor also sought time for preparing inventory of the assets and properties, lying in the Jute Mill of the Company, in the presence of a representative of the Financial Creditor. 13. It is submitted that thereafter, several applications had been filed to either stay the winding up proceedings or to present scheme whereby the fortune of the Corporate Debtor might be revived and the Corporate Debtor comes out of Winding up. However, none of the applications succeeded and for long time, the Corporate Debtor remained in liquidation. At regular intervals various orders were passed by the Hon ble High Court at Calcutta to safeguard the assets of the Corporate Debtor and directions upon the Official Liquidator to adjudicate the claim filed before it. It is submitted that thereafter the Financial Creditor filed an application (being C.A.NO.107 of 2016) for revival of the Corporate Debtor by way of scheme and the said application was taken up for hearing and on 5th December,2016 the Hon ble High Court inter alia, pleased to pass the following order:- In my view, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to move the present application under section 7 for the reliefs mentioned therein. 17. It is submitted that a sum of Rs.2486,44,80,162.85 inclusive of interest, fell due on 19.12.2019. 18. It is submitted that the Financial Creditor has held as security, all the immovable properties belonging to the Corporate Debtor situated at Garifa, P.S. Naihati, in the state of West Bengal with all buildings, sheds, structures and all other fixed and moveable plant and machinery, and all other moveable properties of any kind present or future, wherever situated, having estimated valuation of around Rs.200 crores ( more or less). 19. Notice was issued to the Corporate Debtor, on 21st February,2020, there was, however, no representation on behalf of the Corporate Debtor on the next date i.e. 11th December, 2020 when the Registry was directed to issue Court notice to the Respondent and Respondent was given three weeks time to file reply to the said application. An application was however, filed by Dolphine Vintrade Pvt.Ltd. in I.A. No. 1069 of 2021, who sought leave of the Adjudicating Authority to file an application to intervene in the proceedings as an unsecured creditor. On 25th March ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to form an opinion that it is just and equitable to wind up the said company being the Corporate Debtor herein and forwarded its opinion to the Hon ble High Court for issuance of an order of Winding up as against the Corporate Debtor. On 9th October, 1991 an appeal was preferred before the AIFR by the Corporate Debtor and by an order dated March 25,1992, the said appeal was admitted. However, vide order dated August 5,1992 the said appeal was later dismissed and the AAIFR had granted a relief of Rs. 58.41 crores against the claim of 4 secured creditors namely Indian Bank, Allahabad Bank, United Bank of India and Industrial Bank of India (IIBI). A Writ Petition was however, moved by the Worker s Union of the Corporate Debtor against the order of Appellate Tribunal and subsequently in the year 1993, Indian Bank had filed a suit for Rs.16,92,08,930/- against the Corporate Debtor and had obtained a certificate from Debts Recovery Tribunal along with interest. On 4th July, 1996, Allahabad Bank, filed a suit for recovery of its dues and obtained a decree from Debts Recovery Tribunal interest. On 4th July, 1996, Allahabad Bank had filed a suit for recovery of its dues and obtained a decre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er unregistered document. It is needless to say that the first assignment itself being bad, the subsequent assignment continues to be bad. The said Ashray Vyaapar Private Limited is merely a special purpose vehicle without any background, a Private Limited Company having authorised share capital of Rs. 2.00 Lacs and paid up share capital of Rs. 1.00 lac which cannot have the permission of the Reserve Bank of India to take assignment of all such debts from the Banks or Financial Institutions. A Copy of the said deed of assignment dated February 13, 2008 from Teesta Multipurpose to Ashray Vyapaar is annexed as Annexure D. 28. It is submitted that by another Deed of Assignment dated February 21,2008, the Indian Bank which is also one of the 4 secured creditors as mentioned hereinbefore had assigned its claim against Gourepur Company Limited (in Liquidation ) to the said Ashray Vyaapar Private Limited for a sum of Rs. 2.50 Crores on as is where is, whatever there is basis upon unconditional release of all the personal and Corporate guarantees and securities. It is needless to say that the Corporate Debtor was by that time already (in liquidation) and by this assignment only the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me certificate in favour of Ashray Vyaapar Private Limited by registering it before the Additional Registrar of Assurance-IV, Kolkata whereas on the day of Registration it had already withdrawn its recovery proceeding stating that the company (in liquidation)stood discharged of its liabilities and the personal and Corporate guarantee have also been discharged. Thus, there was nothing as on September 14, 2015 which could have been assigned in favour of Ashray Vyaapar Private Limited and as such the said purported deed of assignment is bad in law. A Copy of the said registered Deed of Assignment dated September 14, 2015 is annexed as Annexure-G. 32. It is submitted that Ashray Vyaapar Private Limited falls within the definition of Financial Creditor as envisaged under section 5(7) of the Insolvency and Bankruptcy Code, 2016 nor the said Ashray Vyaapar Private Limited falls under the definition of financial institution or financial service provider. 33. It is submitted by the applicant that the Financial Creditor herein cannot step into shoes of the secured creditors. It is submitted that all the deeds of the Assignments are wrongful, illegal void and are not sustainable in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Counsel has also relied upon an order of the Hon ble Supreme Court in Civil Appeal No. 7641/2019 in the matter of Beacon Trusteeship Limited vs. Earthcon Infracon Private Limited Anr. 42. We have gone through the application and heard the applicant in I.A. (I B) No. 1069/KB/2021. 43. We have heard the Ld. Counsel for the applicant and also Ld. Counsel for the Financial Creditor, we do not find any substance in the contentions of the Ld. Counsel for the applicant so far as the present facts are concerned. The Financial Creditor has filed the petition under section 7 of the IBC,2016 having been duly assigned the debt by four banks. 44. The Financial Creditor, however, has relied upon judgement of Hon ble Supreme Court passed in A. NAVINCHANDRA STEELS PRIVATE LIMITED vs. SERI EQUIPMENT FINANCE LIMITED AND OTHERS (2021) 4 SCC 435. The relevant paragraph of the aforesaid judgement is reproduced as follows:- 29. Dr. Singhvi and Shri Ranjit Kumar have vehemently argued that SERI has suppressed the winding-up proceeding in its application under section 7 IBC before NCLT and has restored to Section 7 only as a subterfuge to avoid moving a transfer application before the H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the respondent Company and appointed the official liquidator attached to the High Court of Allahabad as the Liquidator and directed him to take over the assets and books of accounts of the Company. Thereafter, the Respondent company herein referred to as corporate debtor filed an application for recalling the order of winding up dated 10.03.2016 and in order to prove their bonafides paid the entire amount due to the creditor along with costs. Therefore, the creditor had no objection to recall the order of winding up but the official liquidator opposed the application for recall on the ground that the respondent company owed money to various creditors to the tune of Rs. 27 Crores and that unless the said amount is paid, the order of winding up cannot be recalled. The Official Liquidator also submitted that he had already taken over charge of the assets of the Company. 8. Further, the Company Court has passed an order on 22.08.2016 keeping the winding up order dated 10.03.2016 in abeyance however, the company court directed the official liquidator to continue to be in the custody of the asset of the company. Meanwhile the creditor herein referred to as an applicant filed a pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the winding-up proceeding would then take place to NCLT to be tried as a proceeding under the IBC. Short of an irresistible conclusion that corporate death is inevitable, every effort should be made to resuscitate the corporate debtor in the larger public interest, which includes not only the workmen of the corporate debtor, but also its creditors and the goods it produces in the larger interest of the economy of the country. It is, thus, not possible to accede to the argument on behalf of the appellant that given Section 446 of the Companies Act, 1956/Section 279 of the Companies Act, 2013, once a winding-up petition is admitted, the winding-up petition should trump any subsequent attempt at revival of the company through a Section 7 or Section 9 petition filed under the IBC. What is clear by this Section is that a compromise or arrangement can also be entered into in an IBC proceeding if liquidation is ordered. However, what is of importance is that under the Companies Act, it is only winding up that can be ordered, whereas under the IBC, the primary emphasis is on revival of the corporate debtor through infusion of a new management. 11. Referring to the above, this Adjudic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in I.A.(IB) 1069/KB/2021, that the debt of the Banks could not have been validly assigned to the present Financial Creditor does not stand to any reason. There cannot be any bar if a Lender/Bank assigns the debt to any other legal person. It will not make any difference or invalidate the assignment of debt transaction, even if the debt is assigned by a registered or an unregistered deed or if a deed is registered at a later date as has been done in the case of Allahabad Bank . 47. Even if the liquidation proceedings are not transferred to the NCLT by the Hon ble High Court, it will not be a bar for a Financial Creditor to approach the NCLT under section 7 of the Code independent of that proceedings. 48. If the loan has already been assigned and entrusted with all their rights and interest by the assignors in favour of the Financial Creditor herein, by way of assignment deeds, the Financial Creditor has validly and legally entered into the shoes of the assignor banks and is very much competent to pursue the proceedings already going on against the Corporate Debtor in all the Forums including the Hon ble High Court or the NCLT. 49. Since the Corporate Debtor had already c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the opinion that there is a default on the part of the Corporate Debtor by not repaying the debt owed to the Financial Creditor and in view of the fact that the application is otherwise complete and there is no other hindrance in the admission of the petition, we are of the considered view that this petition ought to be admitted and Corporate Insolvency Resolution Process ought to be initiated against the Corporate Debtor. Accordingly, we pass the following orders:- O R D E R S i) The application filed by the Financial Creditor under Section 7 of the Insolvency Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process against the Corporate Debtor is hereby admitted. ii) We hereby declare a moratorium and public announcement in accordance with Sections 13 and 15 of the I B Code, 2016. iii) Moratorium is declared for the purposes referred to in Section 14 of the Insolvency Bankruptcy Code, 2016. The I.R.P. shall cause a public announcement of the initiation of Corporate Insolvency Resolution Process and call for the submission of claims under Section 15. The public announcement referred to in clause (b) of sub-section (1) of Section 15 of Inso ..... X X X X Extracts X X X X X X X X Extracts X X X X
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