TMI Blog2017 (8) TMI 491X X X X Extracts X X X X X X X X Extracts X X X X ..... on is section 14(1)(c) of The Code. The outcome of this discussion is that the Moratorium shall prohibit the action against the properties reflected in the Balance Sheet of the Corporate Debtor. The Moratorium has no application on the properties beyond the ownership of the Corporate Debtor. For the sake of completeness it is worth to refer that the provisions of The Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (the SARFAESI Act) may be having different criteria for enforcement of recovery of outstanding debt, which is not the subject matter of this Bench. Before I part with it is necessary to clarify my humble view that The SARFAESI Act may come within the ambits of Moratorium if an action is to foreclose or to recover or to create any interest in respect of the property belonged to or owned by a Corporate Debtor, otherwise not. To conclude the Application under Section 10 of The Code is hereby "Admitted" subject to the exception as carved out supra. The consequential directions shall be that the provisions of Section 14 of The Code i.e. "Moratorium" shall come into operation. - T.C.P. NO. 1117/I&BP/NCLT/MB/MAH/2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. Cash Credit (Hypothecation upto to a limit of ₹ 195 lacs, (with sub-limit of ₹ 30 lacs for book debts), UBD (Supply Bills) up to a limit of ₹ 75 lacs, Import L/C up to a limit of ₹ 60 lacs and Bank Guarantee up to a limit of ₹ 15 lacs. 8. Cash Credit (Hypothecation upto to a limit of ₹ 270 lacs, (with sub-limit of ₹ 50 lacs for book debts), Import L/C up to a limit of ₹ 70 lacs and 9. CCH upto to a limit of ₹ 270 lacs, (with sub-limit of ₹ 50 lacs for Book Debts, Import L/C up to a limit of ₹ 75 lacs and Working Capital Demand Loan up to a limit of ₹ 40 lacs - sanctioned on 12.02.2002. 2.1 In the said Notice it is intimated that in case of non-payment of aggregate sum of ₹ 3,99,79,703/- as on 30th June, 2004 together with interest of 16.5% per annum the Recovery Proceedings shall be initiated against the Guarantors and the Debtor Company. The debt as acknowledged in the Form submitted by the Debtor amounted ₹ 4,43,70,739/-. The said Financial Debt was admittedly incur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) Estimated Value: INR 60,00,000/- (Rupees Sixty Lakhs Only.) 5. Two (2) DDA flats, being 99-B and 100-B, Group 1, Pocket 12, Jasola, New Delhi (negative lien on the flat, no mortgages created). (a) Date of Creation : Negative lien created on 01.11.1999. (b) Estimated Value: INR 50,00,000/- (Rupees Fifty Lakhs Only.) 6. Stocks of surgical equipment's, clinical, pathological, chemical reagents. (a) Date of Creation : Agreement for Hypothecation and Goods dated 12.12.1995. Extension of Mortgage to secured enhanced limits as and by way of Ninth Modification date 11.09.2002. 2.2 Thereafter, vide Deed of Assignment dated 26th August, 2008 the debt was assigned to Asset Reconstruction Company of India Limited (ARCIL) M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3(2) demand notice as well as reply to the representation submitted by the borrower were sent through Advocate and not by the Authorised Officer or the secured creditor as required under the Act and, therefore, the entire action basing on such notice is bad in law. Apart from the above main contention, the Applicants are also disputing the quantum of amount demanded by the Respondent in the 13(2) notice as well as the enforceability of the mortgage said to have been created by the Applicants basing on an insufficiently stamped documents as on the date of issuing demand notice. The counsel appearing for the Applicants also relied on some case law in support of his contention so far as issuing demand notice and reply to the representation through an Advocate. Mr. Rajesh Nagori, the counsel appearing for the Respondent vehemently opposed the above pleas taken by the Applicants and also relied upon some case law in support of his contentions. Disregarding the merits of the above legal pleas raised by the Applicants, the counsel appearing for the Applicants on instruction from his client who is present in the court hall across the Bar submitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch. 3.1 ARGUMENTS OF CREDITOR :- From the side of the Assignee i.e. ARCIL Learned Counsel has vehemently pleaded that the Application under Section 10 should not be admitted at this stage when the Petitioner had exhausted all legal remedies as is evident from the series of Judgements placed on record. The Petitioner is delaying the Recovery Proceeding by filing one Petition/Application after another before one Court or the other, which is nothing but a clear example of Forum Shopping. He has also placed reliance on an Order of the Hon'ble Supreme Court dated 30th September, 2010 pronounced in the case of ICICI Bank Ltd. v. Official Liquidator of APS Star Industries Ltd. [2010] 104 SCL 37/7 taxmann.com 72 wherein a view was expressed by placing reliance on a precedent that the Assignment of a Debt is not contrary to Public Policy solely on the ground that the Assignee had purchased the Debt for a discounted price. Nor will the assignment be contrary to Public Policy simply because the Assignee will make a profit on the transaction at the end of the day. It has also been expressed that the N.P.A. are created on account of breaches committed by the Borrower. It happens when a B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.1 One of the condition as laid down in Section 10 is to furnish requisite information as appearing in the Books of Accounts of the Corporate Debtor. Therefore, The Application contains the Balance Sheet along with Profit/Loss Account drawn as on 31st March, 2017. A question has been raised that under which head of the accounts the impugned debt amount is reflected in the balance sheet for the financial year 2016-17. 4.2 The contents of the unaudited provisional Balance Sheet drawn as on 5th June, 2017 has reflected the liabilities as under :- ALPHA OMEGA DIAGNOSTICS (INDIA) LIMITED PROVISIONAL (UNAUDITED) BALANCE SHEET AS AT 05.06.2017. Particulars Note No. 5th June-17 I. EQUITY AND LIABILITIES (1) Shareholders Funds 3,321,250 (a) Share Capital 2 (10,641,512) (b) Reserve Surplus 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iv) Intangible assets under development. (b) Non-Current Investments. 9 25,000 (c) Deferred Tax Assets (d) Long Term Loans and Advances (e) Other non-current assets (2) Current assets (a) Current Investments (b) Inventories 1,48,84,290 (c) Trade Receivables 59,75,979 (d) Cash Cash Equivalents 64,95,358 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corresponding liabilities shown. The provision for realization of debt appears to be significantly insufficient comparing the assets (whether tangible or intangible) of the Company. The Insolvency Professional can iron out all these creases. I am of the view that by the assistance of an expert such discrepancy can be resolved. For this reason as well the Admission is hereby approved. 4.8 Nevertheless, the decision on Admission as pronounced hereinabove is subject to a qualification. The I BP Code, 2016 has prescribed certain limitations which are inbuilt and must not be overlooked. The 'Moratorium' indeed is an effective tool, sometimes being used by the Corporate Debtor to thwart or frustrate the Recovery Proceedings, as happened in this Case. The Learned Chief Metropolitan Magistrate vide Order (supra) dated 11.04.2017 has appointed a Court Commissioner to take over the possession of the flats. The admitted position is that the Flats in question are not under the Ownership of the Corporate Debtor. A question in this regard was raised during the hearing however not disputed by the either side. Even in the balance sheet of the Corporate Debtor these flats are not re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 'casus omissus'. I hasten to add that the doctrine of 'Noscitur a Sociis' is somewhat applicable that the associated words take their meaning from one another so that common sense meaning coupled together in their cognate sense be interpreted. As a result, its denotes the property owned by the Corporate Debtor. The property not owned by the Corporate Debtor do not fall within the ambits of the Moratorium. Even Section 10 is confined to the Book of the Accounts of the Corporate Debtor, due to the reason that Section 10(3) has specified that the Corporate Applicant shall furnish its Books of Account. This Bench has no legislative authority to expand the meaning of the term its even under the umbrella of Ejusdem generis'. 8. The outcome of this discussion is that the Moratorium shall prohibit the action against the properties reflected in the Balance Sheet of the Corporate Debtor. The Moratorium has no application on the properties beyond the ownership of the Corporate Debtor. For the sake of completeness it is worth to refer that the provisions of The Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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