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TMI Blog2022 (11) TMI 804X X X X Extracts X X X X X X X X Extracts X X X X ..... applicant to file the Petition on its behalf, we have in the contrary found a clear power of attorney executed by the financial creditor in favour of the Applicant in paragraph 2 of the Power of Attorney as annexed to the Petition - the claim of the Corporate Debtor that it is not the Corporate Debtor in the present petition is nothing but an attempt to shy away from its liability, considering that all the clauses were agreed between the Assignor Bank and the Corporate Debtor . The Corporate Debtor has potrayed the facts in a deranged manner and has tried to misguide this Bench. The application made by the Financial Creditor is complete in all respects as required by law. It clearly shows that the Corporate Debtor is in default of a debt due and payable, and the default is in excess of minimum amount stipulated under section 4(1) of the IBC. Therefore, the debt and default stands established and there is no reason to deny the admission of the Petition. Petition admitted - moratorium declared. - CP (IB) 306/MB/C-I/2020 - - - Dated:- 11-11-2022 - Hon ble Member (Judicial) : Justice P.N. Deshmukh (Retd.) Hon ble Member (Technical) : Mr. Shyam Babu Gautam For th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng amount under the SBLC Facility and the Applicant issued a Recall Letter dated 10.10.2018 to the Corporate Debtor seeking repayment of Rs. 187,00,21,252 (Rupees One Hundred Eighty-Seven Crores Twenty- One Thousand Two Hundred and Fifty-Two Only). 9. The Applicant submits that in February 2019, they had filed Company Petition No. 912/(MB)/2018 before the National Company Law Tribunal, Mumbai to initiate the CIRP against the Corporate Debtor. 10. However, during the pendency of the said Company Petition, the Corporate Debtor approached the Applicant to amicably settle its outstanding dues. Pursuant to the discussions, the Applicant and the Corporate Debtor executed Consent Terms dated 26.09.2019. As per the terms agreed between the parties, Consent Terms were placed on record before this Tribunal in the Company Petition. By an order dated 26.09.2019, this Tribunal was pleased to dismiss the said Company Petition as withdrawn in terms of the Consent Terms. 11. The Corporate Debtor failed and neglected to abide by the terms of the Consent Terms and failed to make payment of instalments as agreed therein. 12. The Applicant vide a letter dated 17.12.2019 intimated the Corpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning is given for one year and renewable every year. Accordingly, the State Government has been issuing the Notification, renewing the previous notification every year. Hereto annexed and marked as Annexure III (page 39) are the various notifications issued by the State Government of Maharashtra from time to time. 18. Therefore, the effect of the above provision therefore is that any obligation or liabilities which might accrue in respect of the relief undertaking shall be stayed for the period of one year. 19. It is settled principal of law that in order to initiate the Insolvency proceedings, the petitioner has to prove the default as defined under the provisions the section 3(12) of the IBC, it being sine qua non. It is only when the default as envisaged under Section 3(12) arose, then and then only, the rights of the petitioner under Section 6 gets triggered. The terms default is defined under Section 3(12) as default means non-payment of debt when whole or any part or instalment of the amount of debt has become due and payable and is not paid by the debtor or the corporate debtor, as the case may be . The debt to be considered under default it must be due and payable. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal ('NCLAT) in Palogix Infrastructure Private Limited Vs. ICICI Bank Limited dated 20.09.2017 (2017 SCC OnLine NCLAT 266) whereby the Hon'ble NCLAT made the following observation: 36. As per Section 7 of the 'I B Code' an application for initiation of Corporate Insolvency Resolution Process' requires to be filed by Financial Creditor' itself. The form and manner in which an application under section 7 of the 'I B Code' is to be filed by a Financial Creditor is provided in 'Form-1 of the Adjudicating Authority Rules. Upon perusal of the Adjudicating Authority Rules and Form-1, it may be duly noted that the I B Code' and the Adjudicating Authority Rules recognize that a 'Financial Creditor being a juristic person can only act through an Authorized Representative Entry 5 6 (Part I) of Form No.1 mandates that 'Financial Creditor to submit name and address of the person authorised to submit application on its behalf . The authorization letter is to be enclosed. The signature block of the aforementioned Form 1 also provides for the authorised person's detail is to be inserted and also include inter alia the position of the au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent that Bilcare Packaging Ltd is the actual Beneficiary of the SBLC. It is submitted that in the present case, the Respondent has merely acted as an entity that is providing security to the Applicant in respect of the actual Beneficiary of the Transaction i.e. Bilcare Packaging Ltd arising out of the SBLC. 28. The Corporate Debtor has placed reliance on the judgment of the Hon'ble Supreme Court in Anuj Jain, Interim Resolution Professional for Jaypee Infratech Limited Vs. Axis Bank Limited dated 26.02.2020 wherein the Hon'ble Supreme Court made the following observation: The requirement of the existence of a debt, which is disbursed against the consideration for the time value of money, in our view, remains an essential part even in respect of any of the transactions/dealings stated in sub-clauses (a) to (i) of Section 5(8), even if it is not necessarily stated therein. In any case, the definition, by its very frame, cannot be read so expansive, rather infinitely wide, that the root requirements of 'disbursement against the consideration for the time value of money' could be forsaken in the manner that any transaction could stand alone to become a financia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oached the South Indian Bank to provide the SBLC Facility to Bilcare Packaging Limited. c. Bilcare Packaging Limited discounted the said SBLC with Export- Import Bank of India, London, who lent amount of USD 21,700,000 to the Bilcare Packaging Limited against USD 100 million Term Loan Facility. d. Bilcare Packaging Limited defaults in repayment of loan amount to Export-Import Bank of India, London. e. SBLC is in the nature of the guarantee issued by the South Indian Bank to the Export-Import Bank of India, London in respect of repayment of amount received by the Bilcare Packaging Limited. f. Therefore, Export-Import Bank of India, London demanded amount of SBLC Discounted from the South Indian Bank. South Indian Bank paid the same amount to Export-Import Bank of India, London. Due to such payment, South Indian Bank subrogates Export-Import Bank of India, London. g. Therefore, in this transaction, Bilcare Packaging Limited is a principal debtor. The South Indian Bank was a Surety to the debt of Bilcare Packaging Limited. h. Bilcare Limited simply guaranteed the guarantee issued by the South Indian Bank. 31. Simply, subrogating EXIM Bank, does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eedings by and against the Bank. If general authorisation is made by any Financial Creditor or Operational Creditor or Corporate Applicant in favour of its officers to do needful in legal proceedings by and against the Financial Creditor / Operational Creditor / Corporate Applicant in favour of its officer, mere use of word Power of Attorney while delegating such power will not take away the authority of such officer and for all purposes it is to be treated as an authorization by the Financial Creditor / 'Operational Creditor' / Corporate Applicant in favour of its officer, which can be delegated even by designation. In such case, officer delegated with power can claim to be the Authorized Representative for the purpose of filing any application under section 7 or Section 9 or Section 10 of I B Code . The NCLAT was of the opinion that general authorisation given to an officer of the financial creditor by means of a power of attorney, would not disentitle such officer to act as the authorised representative of the financial creditor while filing an application under Section 7 of the Code, merely because the authorisation was granted through a power o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition. 39. The Financial Creditor has proposed the name of Mr. Ashutosh Agarwala, Registration No. IBBI/IPA-001/IP-P01123/2018-19/11901, as the Interim Resolution Professional of the Corporate Debtor. He has filed his written communication in Form 2 as required under rule 9(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 along with a copy of his Certificate of Registration. 40. The application made by the Financial Creditor is complete in all respects as required by law. It clearly shows that the Corporate Debtor is in default of a debt due and payable, and the default is in excess of minimum amount stipulated under section 4(1) of the IBC. Therefore, the debt and default stands established and there is no reason to deny the admission of the Petition. In view of this, this Adjudicating Authority admits this Petition and orders initiation of CIRP against the Corporate Debtor. 41. It is, accordingly, hereby ordered as follows: - a) The petition bearing CP(IB)306/MB/C-I/2020 filed by Assets Reconstruction Company (India) Limited (Assignee of South India Bank Limited), the Financial Creditor, under section 7 of the IBC read with rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P) of the Corporate Debtor to carry out the functions as per the IBC. The fee payable to IRP or, as the case may be, the RP shall be compliant with such Regulations, Circulars and Directions issued/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 IBC. g) During the CIRP Period, the management of the Corporate Debtor shall vest in the IRP or, as the case may be, the RP in terms of section 17 of the IBC. The officers and managers of the Corporate Debtor shall provide all documents in their possession and furnish every information in their knowledge to the IRP within a period of one week from the date of receipt of this order, in default of which coercive steps will follow. h) The Financial Creditor shall deposit a sum of Rs.3,00,000/- with the IRP to meet the expenses arising out of issuing public notice and inviting claims. These expenses are subject to approval by the Committee of Creditors (CoC). i) Registry is directed to communicate this Order to the Financial Creditor, the Corporate Debtor and the IRP by Speed Post and email immediately, and in any ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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