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Insolvency and Bankruptcy - Case Laws
Showing 81 to 100 of 147 Records
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2019 (12) TMI 1362 - NATIONAL COMPANY LAW TRIBUNAL , CHENNAI BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - time limitation - HELD THAT:- Corporate Debtor/Respondent Company has not produced any documentary proof with respect to the averments made in the One Time Settlement proposal or failure on the side of Financial Creditor to consider their proposal. While on this, existence of the debt is proved as mentioned in the order passed by the Debts Recovery Tribunal and other documents produced before this Adjudicating Authority, otherwise there is a mere allegation of dispute. The Respondent/Corporate Debtor could not produce any proof before this Tribunal so as to disprove its debt and default.
Time Limitation - it has been alleged that the present application is barred by limitation as the claim pertains to loan sanctioned in the year 2005 and the mortgage extended in favour of the Petitioner as security was given in the year 2005 - HELD THAT:- Even though the 'right to sue' accrues for the Financial Creditor on the date of NPA, i.e. 29.06.2013, the Hon'ble NCLAT in SESH NATH SINGH, AKHSAR KUMAR SINGH VERSUS BAIDYABATI SHEORAPHULI COOPERATIVE BANK LTD, ANIMESH MUKHOPADHYAY [2020 (2) TMI 286 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI], has held that in computing the period of limitation, the time during which the Financial Creditor has been prosecuting with due diligence another civil proceedings against the corporate debtor for the same relief shall be excluded as per Section 14(2) of the Limitation Act, 1963.
Even otherwise, the Financial Creditor has obtained a Debt Recovery Certificate against the Corporate Debtor and in view of the Judgment of the Hon'ble Supreme Court in the matter of VASHDEO R BHOJWANI VERSUS ABHYUDAYA CO-OPERATIVE BANK LTD AND ANR. [2019 (9) TMI 711 - SUPREME COURT], it is clear that the period of limitation would begin ticking from the date of issuance of the Recovery Certificate, as in this case, since the Recovery Certificate was issued by on 24.01.2019 and based on the recovery certificate issued the Financial Creditor has filed the present petition before this Authority on 15.04.2019. In view of the same, the present petition falls well within the period of limitation.
The Application as filed by the Applicant - Financial Creditor is required to be admitted under Section 7 (5) of the I&B Code, 2016 - Application admitted - moratorium declared.
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2019 (12) TMI 1361 - NATIONAL COMPANY LAW TRIBUNAL , BENGALURU BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- It is true that assets of Company are to be made available for payment or discharge of its liabilities and obligation even after the date of the order removing the name of the Company from the Registrar Companies. However, it is settled position of law that provisions of Code cannot be invoked for recovery of outstanding amounts. It is settled position of law that the provisions of Code cannot be invoked for recovery of outstanding alleged amount.
This is not a fit case for admission and it is liable to be rejected - petition rejected.
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2019 (12) TMI 1358 - NATIONAL COMPANY LAW TRIBUNAL , HYDERABAD BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - time limitation - HELD THAT:- In the instant case the invoices has been raised against corporate debtor on 13.03.2014 and there is no pursuance of the said liability by operational creditor against the corporate debtor till the issuance of demand notice dated 27.03.2019. Thus there is huge gap of more than five years in between the two dates which is unexplained - Since the Limitation Act is applicable to applications filed under Section 7 & 9 of I&B Code, Article 137 of the Limitation Act is invoked. The said Article provides the period of Limitation as in case of any other application for which no period of limitation is provided elsewhere, to be three years from the time when the right to apply accrues.
In the present case the legal action accrues from the date of invoice and the time limitation also accrues from the same date. In the instant case invoice has been raised on 13.03.2014 and the present proceedings have been initiated by way of the statutory demand notice only on 27.03.2019.
Petition dismissed.
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2019 (12) TMI 1357 - NATIONAL COMPANY LAW TRIBUNAL , KOLKATA BENCH
Condonation of delay in filing petition - Registration of transfer of shares - making entries in the Register of members and register of share transferred and thereafter return the share certificates to the Petitioners - HELD THAT:- Reliance placed in the case of AKAL SPRING LIMITED & ORS. VERSUS AMREX MARKETING PRIVATE LIMITED [2019 (11) TMI 1131 - NATIONAL COMPANY LAW] where it was held that It cannot be gain said that ‘Right to refuse’ registration of transfer of shares, ‘Sufficient Cause’ is question of law and the cause shown for refusal is sufficient or otherwise in a given case, can also be a ‘mixed question of law’ and fact. Besides this, a refusal may be on the basis of ‘Breach of Law’ or any other ‘Sufficient Cause’.
The application for condonation of delay permitting the parties to argue their respective versions on merits.
Let the matter be listed for hearing on the main petition C.P. No. 295/KB/2017 on 23.01.2020.
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2019 (12) TMI 1355 - NATIONAL COMPANY LAW TRIBUNAL , BENGALURU BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - whether debt and default in question, is established, without there being any dispute raised by the Respondent? - HELD THAT:- The Petitioner issued said statutory Demand Notice only on 08.10.2018, and the instant Company Petition was filed on 09.07.2019, even though the Demand Notice allowed only 10 days from the date of receipt of the copy of the Order either to settle the issue or bring to notice any notice of dispute. Therefore, the Petitioner failed to explain the delay in approaching the Adjudicating Authority, as the due date was only 30.08.2016. The only explanation given by the Petitioner is one Gmail stated to have sent from iPhone dated 17.08.2016 from Vikash Roy, wherein it is stated that they would definitely release the payments, once they receive the payments from their advertisers. However, there is no further corroboration about the alleged mail by the Petitioner and it did not refer as what is outstanding due and it is prior to impugned demand notice, and the subsequent correspondence and Police are serious pre-existing dispute between the parties for the services rendered.
It is a settled position of law that the provisions of the Code can be invoked where fundamental issues like debt, default, are not in dispute as it is summary proceedings in nature. Relevant issues to be examined in a Petition filed U/s 9 of the Code is whether there are debt and default in question and whether any pre-existing dispute is there or not - It is settled position of law that the provisions of Code cannot be invoked for recovery of outstanding alleged amount.
The Petitioner has failed to make out any case that the debt and default in question is not in dispute, so as to initiate CIRP against the Corporate Debtor as prayed for - Petition dismissed.
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2019 (12) TMI 1354 - NATIONAL COMPANY LAW TRIBUNAL , CHENNAI BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- In the instant Application it is seen that the Interim Resolution Professional has acted as an extra constitutional Authority beyond the scope of the I&B Code, 2106 as well as the Order passed by this Adjudicating Authority in terms of I&B Code, 2016 thereby seriously undermining the CIR Process initiated by this Authority against the Corporate Debtor and rather subverting it.
It is required to be noted that immediately after initiation of the CIR Process, it is the bounden duty on the part of the Interim Resolution Professional to issue paper publication calling for the claims from the Creditors in terms of Regulation 6 (1) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Debtor) Regulations, 2016, within 3 days from the date of receipt of the copy of the Order and he cannot hold his hands from issuing the said publication under any circumstance.
Since this Tribunal as Adjudicating Authority, does not have the power to take action against the Interim Resolution Professional/Resolution Professional/Liquidator, we are constrained to forward this Order along with MA/1327/2109 to the IBBI being the Regulator for a suitable action to be initiated against the Interim Resolution Professional as contemplated under the Scheme of the I&B Code, 2016 and the Regulations framed there under by IBBI, as may be warranted in the circumstances.
Registry is directed to communicate the IBBI for suitable and necessary action as against the Interim Resolution Professional.
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2019 (12) TMI 1352 - NATIONAL COMPANY LAW TRIBUNAL , AHMEDABAD BENCH
Dissolution of the Corporate Debtor - Section 54(2) of I&B Code - Release of closing balance in liquidation bank account and fixed Deposit Account to stakeholders/Liquidation expenses - HELD THAT:- The dues of the Government are not considered as a secured debt under Section 3(31) of the Code, do not get precedence over secured creditors under Section 53 and do not fall in Clause(b) of Section 53, but fall under Clause(e) of Section 53 - Hence, it is clear that amount dues to the Central Govt. and State Govt. shall be paid after the dues of the financial secured creditors are paid. In this case, the admitted dues of the secured creditor were ₹ 139.60 Crores, whereas the liquidation proceeds of ₹ 35.60 crores could only satisfy 25.5% of the secured financial creditor's admitted dues. Hence, there is no assets available for payment of dues of the Income Tax Deptt., Govt. of India and State Tax Deptt., Govt. of Gujarat.
Hence, the claims of the Income Tax Dept for the assessment for the year 2009-2010 and 2012-13 are not paid as there is no liquidation assets left over for payment to the Income Tax Deptt.
Matter disposed off.
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2019 (12) TMI 1351 - NATIONAL COMPANY LAW TRIBUNAL , AHMEDABAD BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- It is found that as per the original agreement dated 30th August, 2019 entered into between and operational creditor and the corporate debtor, the first instalment of ₹ 9.00 lacs were to be paid within seven days of signing the settlement agreement dated 30.08.2019 and the last instalment of ₹ 2,41,974/- on 29.02.2020. On perusal of the original agreement dated 30.08.2019 and the schedule given at page No. 21 of the reply shows different due dates of instalment and it is not the replica of agreement dated 30.08.2019 which is agreed between the parties - On perusal of the agreement dated 30.08.2019 it is clear that there is/are default in payment and as such the corporate debtor entered into agreement dated 30.08.2019 with covenant to pay as per the schedule mentioned in the agreement but that too corporate debtor has defaulted and has not paid a single instalment.
On perusal of the records it is also found that the respondent has not raised any dispute regarding the debt payable to the operational creditor.
Thus, the petition is complete in all respect.
Petition admitted - moratorium declared.
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2019 (12) TMI 1350 - NATIONAL COMPANY LAW TRIBUNAL , PRINCIPAL BENCH, NEW DELHI
Validity of Valuation report submitted to the liquidator - validity of sale notice - direction to liquidator to pay the cost of the valuers appointed till date - Section 60(5) of the Insolvency and Bankruptcy Code, 2016 - Whether the valuation and the consequential sale notice is in accordance with the provisions of Regulation 35(3) & (4) of the IBBI (Liquidation Process), Regulations, 2016?
HELD THAT:- As per the record the land continues to be the agricultural land as the whooping charges of change of land use amounting to ₹ 8.5 crores due in 2002 were not deposited which were presently ₹ 110 crores. Despite that we granted ten days time to the applicant to produce any evidence before the liquidator/valuers within ten days commencing from 24.04.2019. We also clarified that if no evidence concerning the nature of land was produced then the valuers were to proceed with valuation as per the evidence on record and the liquidator was to proceed with the auction in accordance with the liquidation process regulations. However, no evidence before liquidator/valuers was produced by the applicant. That order was challenged before Hon'ble NCLAT and it was dismissed as withdrawn on 17.05.2019. The order dated 24.04.2019 attained finality and was required to comply with in letter and spirit
There is sufficient evidence showing that the land in question is agricultural land irrespective of its use. The revenue record in the form of Jamabandis has been placed on record and presumption of truth attaches to the Jamabandis under the Punjab Land Revenue Act as applicable to Haryana. The Jamabandis are prepared every four years in order to ascertain the proprietorship of the land. The photocopies of the Jamabandis have been placed on record. A perusal of the revenue record shows that the nature of land is Shamlat and it is in possession of M/s. Forging Pvt. Ltd. (Company in Liquidation). These entries are consistent starting from the year 1980-81 to 2000-01. However for the purposes of the rent, cultivator is stating to be paying rent for the factory - The valuers could not have proceeded on the basis that the land in question is industrial land as it would result in misleading the prospective bidder. No potential bidder could have purchased this land as industrial or commercial because there was no conversion of land use and as per the statement of the applicant himself initially the charges for conversion of land amounting to ₹ 8.5 crores were not paid and presently the charges amounted to ₹ 110 crores. The valuers would have been guilty of misconduct had they proceeded on the basis that the land is industrial/commercial in nature.
A potential bidder cannot be sold the property as Industrial because it continues to be the agricultural land and in order to convert it into industrial or commercial then huge dues are payable to the state authorities. It must be remembered that when land is converted 'Industrial" huge sources provided by the State come under stress which need to be paid. Therefore, we are unable to persuade our self to accept the aforesaid information given under the RTI to the applicant as a proof that the land in question must be regarded as commercial.
Validity of sale notice - other submission made by the applicant is that the sale deed for the property in the same vicinity would show that the value of the land of the corporate debtor is more than 120 crores and the same has been ignored by the liquidator - HELD THAT:- The fact remains that if the nature of the land is agricultural in record and it has never change its land use then it could not be sold as a commercial/industrial property. In any case the liquidator has done well by issue sale notice describing the land 'AS IS WHERE IS, AS IS WHAT IS AND WHATEVER THERE IS BASIS'. Therefore, there is no substance in the present application.
We are further constraint to observe that the sequence of event inclined us to believe that the effort made by the applicant is only to delay the liquidation process without any basis and indulge in baseless litigation endlessly. For the conversion of agricultural land to commercial/industrial huge amount is payable and the valuers and the liquidator could not be expected to treat the land commercial in nature. The liquidation order has been passed on 26.10.2018 and sufficient time has already elapsed. The applicant has successfully delayed it but no further delay would be warranted at the instance of the applicant and the application warrants dismissal.
The application is dismissed with cost of ₹ 50,000/- payable to the Prime Minister's Relief Fund - the liquidator is directed to accept the highest bid as the amount stand already deposited and proceed with the liquidation process as per law.
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2019 (12) TMI 1340 - NATIONAL COMPANY LAW TRIBUNAL, KOLKATA
Request for adjournment of the case - Ld. Counsel for the Operational Creditor appears - Ld. Sr. Counsel for the Corporate Debtor appears - HELD THAT:- As requested adjourned to tomorrow, i.e., 17/12/2019 for hearing in the Priority List.
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2019 (12) TMI 1326 - NATIONAL COMPANY LAW TRIBUNAL, HYDERABAD
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational debt or not - existence of debt and dispute or not - HELD THAT:- A right to payment is a claim. 'Debt' means a liability or an obligation in respect of a claim which is due from any person which includes a financial debt an operational debt. Any liability or obligation in respect of a claim due from any person is a debt. May be that the petitioner is entitled for refund of TDS amount which is due from the corporate debtor. There is an obligation on the part of the corporate debtor to refund the amount deducted towards TDS. Now the question is whether the amount deducted towards TDS falls within the definition of 'operational debt'. When the amount paid towards TDS comes within the four corners of the definition of 'operational debt', then only the petitioner can maintain this petition under section 9 of the I&B Code and the petitioner will be called as 'operational creditor'.
The operational debt is a claim in respect of the provision of goods or services. If any amount is payable in respect of goods, then it becomes an 'operational debt'. Here the petitioner is claiming that it has paid TDS to the statutory-authorities without deducting the same from the invoices. Firstly, the petitioner is not supplier of goods. The petitioner is only a purchaser. Secondly, no amount is due in respect of the amount payable for purchase of material. The corporate debtor is the supplier - Admittedly, it is not the case of rendering any services to the corporate debtor. Amount paid towards TDS cannot be held to be an 'operational debt'. If the petitioner has paid TDS to the statutory authorities, naturally the petitioner is entitled for refund from the corporate debtor. The petitioner has to initiate separate action against the corporate debtor for recovery of the same by filing a civil suit or taking appropriate action available under the law.
As far as I&B Code is concerned the claim must be in respect of provision of goods or services or other liabilities stated thereunder in section 5(21) of the I&B Code. We are unable to agree with the contention of the operational creditor that the amount paid to the statutory authorities towards TDS is an 'operational debt' - the amount paid by the petitioner towards TDS does not come within the definition of 'operational debt' and as such the petitioner is not an 'operational creditor', who can maintain this petition under section 9 of the I&B Code.
The money given towards advance was held to be not an 'operational debt'. This was confirmed in the decisions cited above. Similarly, the amount paid towards TDS will not come under the definition 'operational debt'. Therefore, the petition cannot be admitted under section 9 of the I&B Code and the petition deserves to be rejected - petition dismissed.
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2019 (12) TMI 1325 - NATIONAL COMPANY LAW TRIBUNAL, BENGALURU
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- The facts and circumstances of the case clearly established that the debt and default in default in question. The Adjudicating Authority also has given several opportunities to the Respondent to settle the issue or to file their objection. However, they have failed to avail the opportunity and thus there is no other alternative for us except to consider the case as per merits. The instant Application/Petition is filed in accordance with law and a qualified Insolvency Professional namely Mr. Ravindranath N. is suggested to appoint him as IRP, who is prima facie eligible to be appointed as the Interim Resolution Professional and he has also filed his written consent in Form 2 dated 12.06.2019 by inter alia affirming that he is eligible to be appointed as a Resolution Professional in respect of the Corporate Debtor and certified that there are no disciplinary proceedings pending against him with the Board or IPA of ICAI.
The instant case is a fit case to admit by initiating CIRP in respect of the Corporate Debtor, appointing IRP, imposing Moratorium etc., as per the Code - Application admitted - moratorium declared.
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2019 (12) TMI 1323 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Maintainability of application - initiation of CIRP - Corporate Debtor or not - Condonation of delay of 14 days in filing appeal - HELD THAT:- Admittedly, the Appellant has not supplied any goods nor rendered any services; the Appellant is not an employee of the Corporate Debtor nor is Government Authority, therefore, it does not come within the meaning of Operational Creditor as defined under Section 5(20) r/w 5(21) of the Insolvency and Bankruptcy Code, 2016 and the application under Section 9 of the I&B Code was not maintainable as held by the Adjudicating Authority.
The delay of 14 days in preferring the appeal is condoned - the appeal is dismissed.
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2019 (12) TMI 1322 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Possession of machinery - whether plant is in possession of the Janata Sahkari Bank Limited and they have put it up for auction and that respondent No. 2 has submitted bid in that process? - HELD THAT:- As per explanation below Section 18 of Insolvency and Bankruptcy Code, 2016, the plant is owned by appellant and thus does not belong to the Corporate Debtor, and is thus owned by third party, i.e. The Appellant - the possession of the plant machinery shall be restored to the appellant through Janata Sahkari Bank Limited, Pune.
Appeal disposed off.
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2019 (12) TMI 1321 - ADJUDICATING AUTHORITY NATIONAL COMPANY LAW TRIBUNAL, AHMEDABAD
Jurisdiction - power of adjudicating authority to interfere with the decision taken by Committee of Creditors - Replacement of IRP - order on the application for replacement of IRP was passed on 08.11.2019, much after the application filed for liquidation by the IRP when IRP/RP become functus officio - section 33(1), 33(2), 33(3) of the IB Code - HELD THAT:- It is found that the Committee of Creditors passed resolution in its 3rd meeting dated 01.10.2019, wherein, COC voted in favour of the liquidation vide 100% voting. Since, the decision is taken by the Committee of Creditors, this Adjudicating Authority has no jurisdiction to interfere into the commercial wisdom of the Committee of Creditors.
The Application so filed by the Committee of Creditors is allowed - The moratorium declared under Section 14 of the 1B Code shall cease to have effect from the date of the order of liquidation.
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2019 (12) TMI 1314 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Cash Withdrawals after approval of IRP - management of Corporate Debtor after admission of Section 9 application is with the IRP/RP - HELD THAT:- Considering the submissions made and serious objections that the learned Counsel for the IRP is raising and considering the fact that the order dated 23.10.2019 was passed by Three Judge Bench headed by Hon’ble Chairperson, considering the gravity and seriousness of the matter, we direct the Registry to place the matter before the Hon’ble Chairperson to constitute appropriate Bench. The matter may be re-listed before the Bench as the Hon’ble Chairperson may direct. Tentatively, we post the matter to 6th January, 2020.
List the appeal on 6th January, 2020 before Bench as may be directed by Hon’ble Chairperson.
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2019 (12) TMI 1313 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
CIRP Process - cash withdrawals without prior approval of the IRP - HELD THAT:- The Appellant and Deepak Daga may file Reply. If the Directors are unable to show prior approvals, it would be taken as a serious act - If the Directors of the Corporate Debtor are unable to show prior approval with regard to any of the impugned withdrawals, the Directors should in the alternative say as to why we should not invoke provisions of Section 74 of IBC, apart from why contempt proceedings should not be initiated.
On the next date, the Appeal as well as the IA No.3878/2019 filed by the IRP will be taken up together for hearing.
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2019 (12) TMI 1311 - NATIONAL COMPANY LAW TRIBUNAL, KOLKATA
Bidding Process - Approval of Resolution Plan - initiation of CIRP - common negotiations between parties - HELD THAT:- Since the provisions of Section 12 have now been amended, and as per 2nd proviso CIRP is mandatorily be completed within period of 330 days and the said 330 days only would expire in the case in hand only on 21st January,2020, it appears to us that this is a fit case to issue direction to COC to reconsider all the three resolution plans by giving a reasonable opportunity to revise their respective bidding offers so as to ensure maximization of the value of the assets of the corporate debtor. The offer found accepted by the COC is 89.86 crores.
The liquidation value is 76.37 crores. On the other hand fair value assessed is 136.12 crores. So an offer enhancing 102 crore cannot be ignored. It cannot be ruled out if an open bidding is permitted it may go high beyond ₹ 102 Crores. In the set of circumstances brought before us and considering the fair value assessed as to the assets of the corporate debtor which is a leading mall in the city in operation, we hope it would fetch more value if the COC have had an open bidding among the resolution applicants - It is settled position of law as to the discretionary power of the COC to take the best decision in the interest of maximisation of asset value. We are also unable to see the recording of deliberations regarding the feasibility and viability of the plan selected among the three Plans in the minutes.
The plan before us is not adhering to the object of the Code i.e. maximising the value of assets and balancing the interests of the stakeholders. There is unjust discrimination in regard to choosing one out of Three Resolution Applicants. In view of the above said factors, the plan submitted for approval is to be returned for submitting a revised plan enhancing the resolution bid amount if the resolution applicant wishes to improve its bid. Since the 330 period of CIRP would expire on 21.01.2020 in the instant case, the COC has to complete the process within a short span of period.
The resolution plan of HI bidder Shrawan Kumar Agarwal is to be returned to RP forthwith.
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2019 (12) TMI 1310 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT:- The applicant has placed on record all the invoices, stating that the respondent itself had acknowledged the said invoices. Once the debt is shown as due, it is for respondent to prove that there are no outstanding dues to be paid to the applicant. The respondent has time and again acknowledged its liability to pay the debt. However, no such payment has been made by the Respondent - The applicant has attached the copy of Bank statements in compliance of the requirement of Section 9(3)(c) of the IBC 2016.
The present application is complete and the Operational Creditor is entitled to claim its dues, establishing the default in payment of the operational debt beyond doubt, and fulfillment of requirements under section 9(5) of the Code. Hence, the present application is admitted - The registered office of respondent is situated in New Delhi and therefore this Tribunal has jurisdiction to entertain and try this application.
Application admitted - moratorium declared.
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2019 (12) TMI 1298 - NATIONAL COMPANY LAW TRIBUNAL, KOLKATA
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - competency of person who has signed and filed the petition - existence of debt and dispute or not - Time Limitation.
Whether the person who has signed and filed the petition is competent? - HELD THAT:- The corporate debtor has placed reliance on the decision of the Hon'ble NCLAT in the case of Palogix Infrastructure Private Limited Vs. ICICI Bank Limited [2017 (10) TMI 913 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] for the proposition that Power of Attorney holder was not competent to file an application on behalf of the Financial Creditor. However, it is observed that in para 36 of the said order it has been held that 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 was to be treated as an authorization by the financial creditor. Thus, in fact, this order supports the case of the Financial Creditor - The Hon'ble NCLAT in para 38 has also observed that if an officer was authorised to grant loan then it could not be said that such person did not the have power to recover the loan amount or to initiate Corporate Insolvency Resolution Process in spite of default in payment of a debt. In the present case there exists two documents which make the case of the Financial Creditor more strong.
Thus, to give effect to the provisions of IBC,2016 a harmonious and liberal approach is needed. Further, Regulations made thereunder must confirm to be substantive provisions of IBC,2016 as prescribed in section 240 of IBC,2016 or to the overall object of IBC, 2016. Thus, on all counts this contention of the corporate debtor fails.
Whether as per contract there exists liability to pay? - HELD THAT:- There is a event of default as an enumerated in the contract/ agreements read with the sanction letter. The consequences thereof follow accordingly. Thus, the amount disbursed till then along with interest becomes due and payable. Thus, this contention of the corporate debtor is rejected.
Whether debt is barred by limitation? - HELD THAT:- The date of default has been stated as 05.08.2014. The financial statements for the year ended 31 st March, 2017, which also contain figures for the financial year ended 31 st March, 2016, show the amount of long term borrowings both secured and unsecured. In Clause 3.4 thereof,it has been stated that the company has made certain defaults payment of term loan and interest. •It is also mentioned that the continuing default as on 31 st March, 2017 was in respect of interest on term loan and the period of delay was more than 180 days.ln the Auditor's report also the fact of default in payment of interest and repayment of principal amount has been mentioned. Thus, there is an admission of continuing default in the financial statements - It is now a settled judicial position that presentation in the financial statements constitutes acknowledgement of debt within the meaning of provisions of section 18 of the Limitation Act, 1963.
Impact of non mentioning of the name of the Financial Creditor in the balance sheet specifically - HELD THAT:- As per explanation to section 7 (1) of IBC,2016, the proceedings under section 7 of IBC,2016 get triggered even in case of a default by the debtor in respect of any financial creditor other than the applicant. In the present case, it is not in dispute that there is a default in respect of payment of financial debts. Thus, for this reason also, there is no merit in this contention of the corporate debtor.
Promise under section 25 (3) of Indian Contract Act, 1872 - HELD THAT:- The presentation of a debt as liability in the balance sheet is a statement made by the corporate debtor to the world at large that this amount is payable by the corporate debtor. Even for commercial purposes such as credit ratings/ renewals, obtaining of financial assistance or fixation of drawing limits or additional loan facilities etc. such liability is taken into consideration for computing net-worth, current ratio, capital gearing debt equity ratio etc.,hence, such presentation is of paramount importance from all perspectives.Thus, the• same cannot be ignored for the purposes of proceedings under section 7 or 9 of IBC, 2016 - such presentation also amount to promise under section 25 (3) of Indian Contract Act, 1872.
The application filed by the Financial Creditor under section 7 of IBC,2016 is complete in all respects - this application is liable to be admitted.
Application admitted - moratorium declared.
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