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TMI Blog2022 (9) TMI 630X X X X Extracts X X X X X X X X Extracts X X X X ..... d by law. The petition establishes that the Corporate Debtor is in default of a debt due and payable and that the default is more than the minimum amount stipulated under section 4(1) of the Code, i.e., Rupees one crore. Petition admitted - moratorium declared. - CP (IB) No. 1144/KB/2020 - - - Dated:- 12-9-2022 - Shri Rohit Kapoor : Member ( Judicial ) And Shri Balraj Joshi : Member ( Technical ) For the Financial Creditor : Mr. Rishav Banerjee , Advocate Mr. Rahul Auddy , Advocate For the Corporate Debtor : Mr. Shaunak Mitra , Advocate Ms. Sristi Burman Roy , Advocate Mr. Sidhartha Sharma , Advocate Mr. Arjun Asthana , Advocate Ms. Shalini Basu , Advocate ORDER Rohit Kapoor , Member ( Judicial ) 1. This Court convened through hybrid mode. 2. This Company Petition under section 7(1) of the Insolvency and Bankruptcy Code, 2016 (IBC) read with rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, has been filed by Mr. Prasenjit Roy on behalf of and authorised by UCO Bank(hereinafter referred to as the Financial Creditor), seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Mayur Ply Indu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and in order to include Allahabad Bank in the consortium arrangement, certain documents were executed between UCO Bank (Financial Creditor), State Bank of India and Allahabad Bank. In 2013, the Financial Creditor had not enhanced any limits sanctioned by it in 2008, and the same stood unchanged. 5.7 After the execution of the supplemental working capital agreement, the Corporate Debtor started failing to pay the agreed interest amounts and as such started defaulting in the terms and conditions of the sanction and the consortium documents executed by the Corporate Debtor. 5.8 The Corporate Debtor on 18th April 2016 has confirmed the balance due to the Financial Creditor as on 31st March 2016 in the balance confirmation certificate of the Bank. 5.9 Thereafter several letters of Credits which were issued by the Financial Creditor at the instance of the Corporate Debtor were dishonoured due to the non-payment of the LC facility amounts and the said facilities devolved upon the fund-based cash credit accounts on different dates of involvement. 5.10 The corporate debtor started defaulting in liquidating the dues under the credit facilities on account of interest as well as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;ble Appellate Tribunal in Palogix Infrastructure Private Limited Vs. ICICI Bank Limited [Company Appeal (AT) No 17 of 2017] expressly mandates a valid board resolution for juristic entities for institution of an application under Section 7 of the Code. Further, the Hon'ble Appellate Tribunal in Palogix Infrastructure Private Limited (supra) refused to accept power of attorney as a valid instrument conferring valid authorisation on an official of a juristic entity to institute an application under the Code. As such, the present petition deserves to be dismissed in liminie by this Tribunal. 6.3 It is further submitted in this regard that flowing from the observations made in Palogix (supra) , which bars any person to present an application under section 7 on the basis of a power of attorney, the Hon'ble NCLAT even held that while only a Board Resolution is permissible, the authorization in such Board Resolution should also be specific. 6.4 On perusal of the contents of the Power of Attorney in the instant petition, it is revealed that the said Mr. Prasenjit Roy has not been authorised by virtue of the said Power of Attorney to institute the present application under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sheet of the Corporate Debtor as on 31st March 2019, which are unsigned and unverified; b. Copy of the balance confirmation certificate dated 18th April 2016 which has been issued even prior to the commission of default by the Corporate Debtor as per the case of the applicant Bank; c. Copy of letter dated 9th October 2018 issued by State Bank of India with copy marked to UCO Bank which does not amount to acknowledgement of liability of debts and is merely a resolution proposal. 6.11 It is submitted that none of the aforesaid documents establish a valid acknowledgment of liability within the period of limitation, i.e., within 3 years from the alleged date of default, as submitted by the Applicant in its application under Section 7 of the Code. 6.12 With reference to Copy of the balance confirmation certificate dated 18th April 2016, it is submitted it is the own case of the applicant that the Corporate Debtor first defaulted on 31st March 2017 and thereafter accounts of the Corporate Debtor were classified as Non-Performing Asset on 31st May 2017. Therefore, a balance confirmation acknowledgment dated 18th April 2016, i.e., an alleged acknowledgement issued prior to ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so far as the petitioner does not contain correct facts and date of default. 5. Rejoinder on behalf of the Financial Creditor: 7.1 It is submitted that has the Corporate Debtor not denied the dues or its obligation of payment. It has tried to raise frivolous technical issues but has not dealt with anything on the merits of the matter. As such, the entire outstanding dues stand admitted. 7.2 It is further submitted that there is no issue with the authority of the deponent of the section 7 petition and the power of attorney is validly executed in accordance with law. 7.3 The signatory of the section 7 petition was the Assistant General Manager, Flagship Corporate Branch of the Financial Creditor and a principal officer thereof and thus, was competent to sign said petition. Further, in case of a Board Resolution of the Financial Creditor, all its Managers of the Branches are duly authorized to sign, verify, execute, affirm, present and file plaints, written statements, petitions, applications etc. and generally all other documents and papers expedient or necessary in connection with any suit or legal proceeding in any court or Tribunal or any other judicial or quasi-judic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its directors and responsible officers. Then this will amount to a sheer act of fraud and misleading the public. 7.9 It is submitted that the default in the service of interest has started prior to the declaration of the NPA and the same is stated in the petition itself. As detailed in the petition, there are admissions in the balance sheets of 2017 and 2019, balance confirmations in 2016 and letters written to bankers in 2018 wherein debts have been admitted and promised to pay. Thus, the petition has been filed well within the period of limitation. Further, the limitation protection under the suo moto orders on limitation by the Hon'ble Supreme Court covers the limitation aspect in this matter. 7.10 So far as the issue of the balance sheet and balance confirmation is concerned, it is submitted that the same has been dealt with in details. So far as the letter dated 9th October 2018 issued to State Bank of India is concerned, it is submitted that in the said letter, there is categorical admission of the dues of the Financial Creditor and promise to pay the Financial Creditor and such letter was also copied to the Financial Creditor. Since State Bank of India is leader of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dre of Scale-IV are duly authorised and empowered by the Board of Directors to sign applications on behalf of the Financial Creditor to initiate CIRP proceedings. 8.4 The instant petition filed by the Financial Creditor under section 7 of the Code was signed and affirmed by Mr. Prasenjit Roy who was the then Assistant General Manager of the Bank and as such was a Scale - V Officer. 8.5 Pursuant to the provisions of the MCA Notification of 27th February 2019 and the Resolution passed by the Board of Directors of the Bank on 21.06.2019, Mr. Prasenjit Roy is duly authorized and competent to sign the Application on behalf of the Financial Creditor and the acts done by him is perfectly valid. 8.6 The Financial Creditor has also issued a Circular bearing No. CHO/RCR/08/2019-20 dated 09.07.2019 recording the approval of the Board of Directors authorizing officers of the Bank in the cadre of Scale- IV and above to file an application for initiating CIRP under the Code. 7. Analysis and Findings: 9.1 We had heard the Ld. Counsel on behalf of the Financial Creditor and the Ld. Counsel on behalf of the Corporate Debtor and perused the records. 9.2 The contention of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the date of default and the financial creditor furnishes the required information relating to the acknowledgement of debt, in writing by the corporate debtor, before the Adjudicating Authority, with such acknowledgement having taken place within the initial period of three years from the date of default, a fresh period of limitation commences and the application can be entertained, if filed within this extended period. 9.6 In the instant petition, the date of default as mentioned by the Financial Creditor is 31.03.2017, which means originally, the period of limitation would end on 31.03.2020. Beside the fact that Hon'ble Supreme Court of India in Suo Moto Writ Petition (Civil) No. 3/2020, regarding cognizance for extension of limitation on account of Covid-19 has excluded the period from 15.03.2020 to 14.3.2021, the limitation has got extended due to a written acceptance by the Corporate Debtor which has been placed by the Financial Creditor in the shape of a letter dated 09.10.2018 (Annexed on pages 264 to 269) as issued by the Corporate Debtor to State Bank of India with a copy marked to the Financial Creditor. In the said letter, the Corporate Debtor has clearly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authority approves the resolution plan under sub-section (1) of section 31 of the IBC or passes an order for liquidation of Corporate Debtor under section 33 of the IBC, as the case may be. d) Public announcement of the CIRP shall be made immediately as specified under section 13 of the Code read with regulation 6 of the Insolvency Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. e) Mr. Rajesh Kumar Agarwal, registration number IBBI/IPA-001/IPP01023/ 2017-18/11722 email: [email protected] hereby appointed as Interim Resolution Professional (IRP) of the Corporate Debtor to carry out the functions as per the Code subject to submission of a valid Authorisation of Assignment in terms of regulation 7A of the Insolvency and Bankruptcy Board of India (Insolvency Professional) Regulations, 2016. The fee payable to IRP or, as the case may be, the RP shall be compliant with such Regulations, Circulars and Directions as may be issued by the Insolvency Bankruptcy Board of India (IBBI). The IRP shall carry out his functions as contemplated by sections 15, 17, 18, 19, 20 and 21 of the Code. f) During the CIRP period, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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