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TMI Blog2019 (1) TMI 2036X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, at present there is no need to direct the Corporate Applicant to furnish the details of Bank Guarantee so invoked by beneficiaries and it is always open to the Applicant to gather information since Corporate Applicant triggered CIRP against it - Application disposed off. Maintainability of application - fraudulent intention to stall the proceedings initiated before DRT - initiation of CIRP u/s 10 of the Insolvency and Bankruptcy Code, 2016 - default in repayment of loans borrowed from various financial creditors - HELD THAT:- The Corporate Applicant has to establish for admission of Petition filed under Section 10 of IBC, 2016 that existence of debt, occurrence of default and Corporate Applicant is not disqualified under Section 11 of the Code. If Adjudicating Authority is satisfied that there is debt payable by Corporate Applicant to Financial Creditors and that the Corporate Applicant committed default and that Corporate Applicant is not disqualified under Section 11, then Adjudicating Authority has no option but to admit the Petition, unless it is incomplete, in which case the Corporate Applicant is to be accorded time to rectify the defects - The Adjudicating Au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Debtor. 4. The case of Applicant, Corporate Applicant availed loans under various credit facilities to an extent of Rs. 105 crores, out of which Rs. 95 crores constitute various bank guarantees and Rs. 10 crores constitute CC limits and at present the total outstanding balance is Rs. 77,21,49,330/-. The case of Applicant/Financial Creditor that Corporate Applicant filed the main petition under Section 10 of IBC without disclosing the details of utilization of loan amount especially covered by bank guarantees. 5. The main petition is filed by Corporate Applicant under Section 10 of IBC, 2016 to initiate CIRP. The Applicant herein is one of the Financial Creditors of the Corporate Applicant. It is the case of Applicant that amount due by Corporate Applicant as on the date is Rs. 77,21,49,330/- which includes the amount covered by bank guarantees which were invoked by the beneficiaries. So the claim of the Financial Creditor which is due to it by the Corporate Debtor includes the amount covered by Bank Guarantee which were invoked. 6. The main petition filed by Corporate Applicant is admitted and IRP is appointed. The Applicant being a Financial Creditor will be included in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly to the Financial Creditors, but also to its Operational Creditors. It is averred the delay in realization of receivables led to default in meeting its commitments. As such, Corporate Debtor's accounts with Indian Overseas Bank and Andhra Bank were classified as 'Non-Performing Assets' during Jan '17. Subsequently both these banks and one NBFC have initiated recovery proceedings, although Corporate Debtor is a 'Going Concern' and is executing orders worth Rs. 1196.09 Cr. It is further case of Corporate Debtor/Petitioner that the Corporate Debtor has Orders worth Rs. 1250 Cr in pipeline and is confident in realizing its delayed receivables worth Rs. 322.24 Cr in about 6 months', by which time, the Corporate Debtor would be in a position to substantially reduce its debt. (4) It is averred according to its books of account as on October 15, 2018, it owes a sumof Rs. 227.18 Cr to its Financial Creditors, Operational Creditors and Statutory Liabilities as per details given below. S. No. Category Amount (Rs.) 1. Financial Creditors 194,96,56,434 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 18.09.2010, for which the Corporate Debtor executed various documents on 22.10.2010. (5) It is the case of Respondent No.1 that Board of Directors of Corporate Debtor vide resolution dated 04.05.2011 resolved to borrow / renew SOD (against real estate to contractors) limit of Rs. 6 crores (enhanced from Rs. 4 crores), BG limit of Rs. 66 crores (enhanced from Rs. 27.00 crores) subject to the terms and conditions mentioned in the sanction letter dated 03.05.2011, for which Corporate Debtor executed various documents on 04.05.2011. (6) It is averred that when Corporate Debtor failed to repay the liabilities, it approached Respondent No.1 in 2015 for re-scheduling the liabilities and for conversion of the overdue liability as Working Capital Term Loan limit of Rs. 17.00 crores and Funded Interest Term Loan of Rs. 1.71 crores; to reduce the BG limit from Rs. 108.00 crores to Rs. 88 crores and sanction of ILC limit of Rs. 5.00 crores. The same was sanctioned by Respondent No.1, subject to the terms and conditions mentioned in sanction letter dated 31.03.2015 and Corporate debtor vide letter dated 31.03.2015 accepted the terms and conditions of the sanction letter. The Corporate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and the said guarantor has not challenged the auction by Respondent No.1 under SARFAESI Act, 2002. 4. Counter is filed by Respondent No.2 / Indian Overseas Bank to the averments made in the Petition. Averments in brief are:- (1) It is averred Corporate Debtor availed Financial facility to the tune of Rs. 105 Crores under various credit facilities viz Bank guarantee and cash Credit facilities from the year 2013 onwards from Respondent No.2 and is liable to pay Rs. 77,71,49,330/- (as on 31.10.2018) plus interest and other incidental charges. (2) It is averred, when the Corporate Debtor failed to make payment of the dues, Respondent No.2 herein classified the loan account of the Corporate Debtor as non-performing asset (NPA) on 30.06.2016 and initiated proceedings under SARFAESI Act, 2002 and issued demand notice dated 17.01.2017 for Rs. 69,95,59,835/- and also issued possession notice dated 18.04.2018 for Rs. 74,72,73,108/- and took symbolic possession of all the secured assets. Aggrieved by the SARFAESI proceedings, the Corporate Debtor approached DRT and filed SA No. 340/2018 before Hon'ble DRT which is pending adjudication. (3) It is averred Corporate Debtor fail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditor u/s 13 (4) of SARFAESI Act, 2002 against a Corporate Debtor or a suit is pending against the Corporate Debtor U/s of the DRT Act, 1993 before a Debt Recovery Tribunal or appeal pending before the DRAT cannot be a ground to reject an application U/s 10 if the application is complete. (5) It is the case of Corporate Debtor that it fulfils the conditions /criteria for admission of its Petition filed u/s 10 of the Code. 6. I have heard the PCS for Petitioner/Corporate Debtor and Counsel for Financial Creditors / Respondents No. 1 2. The Corporate Applicant filed this Petition under Section 10 of IBC, 2016 to initiate CIRP against the Corporate Applicant. It is the case of Corporate Applicant that it has availed loans from the Respondents and that it has committed default. The Corporate Applicant is alleging that default occurred due to various reasons. The total debt in default is said to be Rs. 194,96,56,434/- as shown in Part-III of Form-6. Admittedly, the accounts of Corporate Applicant with Respondent Banks 1 2 were treated as Non-performing Assets. No doubt proceedings are initiated against the Corporate Applicant before DRT-II Hyderabad. 7. The case of Financia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsferring. encumbering, alienating or disposing of by the Corporate Debtor any of its assets or any legal right or beneficial interest therein; any action to foreclose, recover or enforce any security interest created by the Corporate Debtor in respect of its property including any action under Securitization and Reconstruction of Financial Assets and Enforcement of Security interest Act, 2002 (54 of 2002); the recovery of any property by an owner or lessor where such property is occupied by or in possession of the corporate Debtor. (2) That the supply of essential goods or services to the Corporate Debtor, if continuing, shall not be terminated or suspended or interrupted during moratorium period. (3) That the provisions of sub-section (1) of Section 14 shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator. (4) That the order of moratorium shall have effect from 03.01.2019 till the completion of the Corporate Insolvency Resolution Process or until this Bench approves the Resolution Plan under Sub-Section (1) of Section 31 or passes an order for liquidation of Corporate Debtor under Section 33, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal-ll, Hyderabad-II challenging the proceedings initiated by Respondents including the sale notice dated 24.09.2018 fixing the date of auction as 30.10.2018. It is averred, Hon'ble DRT vide orders dated 29.10.2018 has not inclined to stay the auction scheduled on 30.10.2018, but confirmation of sale was stayed subject to deposit of Rs. 12 crores, out of which Rs. 4 crores to be paid within a period of one week from the date of order and balance Rs. 8 crores within a period of 4 weeks thereafter. 5. It is contended that the Applicant failed to comply the interim orders passed by DRT-II and Respondent Banks conducted auction in respect of certain properties belonging to Guarantors and confirmed the same. 6. Further Respondent No.1/Financial Creditor states that it has not issued any sale notice in respect of the property belonging to the Corporate Debtor but issued notice only in respect of properties of Guarantor. 7. It is further contended that the relief asked in the IA is beyond the scope of the CP and there are no merits in the IA and Applicant has filed this IA only to drag on the proceedings. 8. Respondent No.2/1OB vide Adoption memo dated 15.11.2018 adopting ..... X X X X Extracts X X X X X X X X Extracts X X X X
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