TMI Blog2017 (7) TMI 1018X X X X Extracts X X X X X X X X Extracts X X X X ..... is a different matter and would not be hit by the defect in the performa prescribed by Rule 4 of Adjudicating Authority Rules. It is not that every defect is hit by Section 7 (2) of the Code. Therefore, no notice by the registry was issued. This is a hyper technical legal argument raised on the basis of order dated 30.05.2017. Taking clue from the order of that date this argument has been advanced. Therefore, we do not accept the submission. Going by that conclusion we find that affidavit has been filed on 07.06.2017 which has consumed seven days' time. Therefore, we do not find any substance in the aforesaid submission and reject the same. For the reasons, aforementioned this petition is admitted. In pursuance of Section 13 (2) of the Code we direct that public announcement shall be immediately made by the Interim Resolution Professional with regard to admission of this application under Section 7 of the Code. We also declare moratorium in terms of Section 14 of the Code. A necessary consequence of the moratorium flows from the provisions of Section 14 (1) (a), (b), (c) & (d). - C.P. NO. IB-104(PB)/2017 - - - Dated:- 3-7-2017 - MR. M.M. KUMAR AND Ms. DEEPA KRISHAN, JJ. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or' proposed to develop a hotel and shopping complex on the said plot. Accordingly, a letter dated 15.09.2008 was submitted with a request to grant term loan of ₹ 70 Crores. 4. The 'Financial Creditor' considered the request of the 'Corporate Debtor' and after obtaining necessary information sanctioned a term loan of ₹ 50 Crores to the 'Corporate Debtor' vide its sanction letter dated 19.01.2009 on the terms and conditions stated in that letter. It was duly accepted by the 'Corporate Debtor' and the summary of the terms and conditions is as under:- (Rs. In Crore) Facility Existing Proposed Margin Effective ROI/Commission Fund based Limit - 50 Margin for TL 44% Overall 45% 0.75% over BPLR presently 13.25% p.a. with monthly rest Total Fund Based - 50 Non-Fund Based Limits - - 5. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re A-5). b. The 'Corporate Debtor' also executed on 16.02.2009 a joint deed of hypothecation in favour of the Bank of India Consortium for creating first pari passu charge on all tangible moveable assets situated at the Project Property and/or in transit along with first pari passu charge on all present and future debts of the 'Corporate Debtor' (Annexure A-6). The 'Financial Creditor' was appointed as a lead bank vide Inter Se Agreement dated 16.02.2009 (Annexure A-7). All approvals were duly obtained from the 'Financial Creditor' and three members of the Consortium. That earlier sanctioned term loan of ₹ 200 Crores was increased to ₹ 300.00 Crores as the Corporation Bank, Dena Bank and Bank of Baroda had joined the Consortium (Annexure A-8). Similar term loan facility agreement and joint deed of hypothecation were executed (Annexure A-9 Annexure A-10). The petitioner has also given the details of the Inter Se Agreement dated 06.03.2009 (Annexure A- 11) and the Escrow Agreement dated 01.05.2009 (Annexure A- 12). The details of the mortgage, title deeds and the amount secured have also been specified which include the land wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsolvency Resolution Process against a Corporate Debtor before the present Tribunal when a default has occurred. It is thus obvious that the lead bank like the petitioner is thus competent to file this application on its own behalf and other banks who are members of the Consortium. 12. In order to ascertain whether the default has occurred, it will be profitable to read Section 3 (12) of the Code which states that default means non-payment of debt when whole or any part of the instalment of the debt has become due payable and the same has not been repaid by the 'Corporate Debtor'. In the present case, it has come on record that the default has occurred many a time when the restructuring had taken place in 2011 and 2013. In any case finally a default has occurred when the loan account of the 'Corporate Debtor' was classified as NPA on 30.09.2014 in accordance with the guidelines issued by the Reserve Bank of India. In that regard particulars of financial debt have been mentioned indicating that default occurred on 30.06.2014 when the first quarterly instalment of the term loan was due for payment (Annexure A-46). In part IV of Form-1 a sum of ₹ 86,79,49,06 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the bankruptcy or insolvency or winding up and to take any proceedings and appear or cause an appearance to be entered for the Bank in any proceeding for or in or after any such bankruptcy or insolvency or any winding up and to make, sign, verify, affirm, swear, declare and file any petition, affidavit, declaration, application or other claim or affidavit in proof of any debt due or claimed to be due to the Bank and to attend and Vote or to give a proxy to or authorise any employee or employees of the Bank or any other person to attend and vote at any meeting of creditors in any composition or in insolvency bankruptcy or winding up proceedings to propose, second or vote for or against any resolution or resolutions at any such meeting and to appear at any public examination or any application for discharge and to vote and/or to take part in appointment of any inspector, trustee or liquidator or receiver or committee and generally to act for the Bank in all insolvency or bankruptcy or winding up proceedings or authorise any employees of the Bank or any other person to so act in the premises. The aforesaid narration of facts would show that the petition has been instituted by a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he correct conclusion it would be necessary to examine the provisions of Section 7 (2) and 7 (5) of the Code which read as under: Initiation of corporate insolvency resolution process by financial creditor. 7(1) ......................... 7 (2) The financial creditor shall make an application under sub-section (1) in such form and manner and accompanied with such fee as may be prescribed. 7(3) ......................... 7(4) ......................... 7 (5) Where the Adjudicating Authority is satisfied that- (a) a default has occurred and the application under sub-section (2) is complete, and there is no disciplinary proceedings pending against the proposed resolution professional, it may, by order, admit such application; or (b) default has not occurred or the application under sub-section (2) is incomplete or any disciplinary proceeding is pending against the proposed resolution professional, it may, by order, reject such application: Provided that the Adjudicating Authority shall, before rejecting the application under clause (b) of sub-section (5), give a notice to the applicant to rectify the defect in his application within seven da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he defect in the performa prescribed by Rule 4 of Adjudicating Authority Rules. It is not that every defect is hit by Section 7 (2) of the Code. Therefore, no notice by the registry was issued. This is a hyper technical legal argument raised on the basis of order dated 30.05.2017. Taking clue from the order of that date this argument has been advanced. Therefore, we do not accept the submission. Going by that conclusion we find that affidavit has been filed on 07.06.2017 which has consumed seven days' time. Therefore, we do not find any substance in the aforesaid submission and reject the same. 18. For the reasons, aforementioned this petition is admitted. Shri Anil Kohli (Chartered Accountant, LLB) who is duly registered with Insolvency and Bankruptcy Board of India (IBBI/IPA-01/IP-00049/2016-17/1600) has been proposed as an Interim Resolution Professional. He has filed his certificate of registration with Insolvency and Bankruptcy Board of India. He has also filed his written communication dated 16.05.2017 in connection with the application to initiate Corporate Insolvency Resolution Process (pages 69-72). The disclosure has been made in the letter dated 16.05.2017. 19. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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