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Bank of Baroda Versus Ultra Home Construction Pvt. Ltd.

2017 (10) TMI 464 - NATIONAL COMPANY LAW TRIBUNAL NEW DELHI

Corporate Insolvency Resolution Process - Held that:- We accept the prayer made in the application as no serious objection has been raised against the substituted Interim Insolvency Professional. - In pursuance of Section 13 (2) of the Code we direct that public announcement shall be made by the Interim Resolution Professional within the statutory period 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. So .....

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tant application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (for brevity the Code') with a prayer to trigger the Corporate Insolvency Resolution Process in the matter of Ultra Home Construction Private Limited. It is appropriate to mention that the financial creditor is a body corporate constituted by and under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (for brevity 'Banking Companies Act'). The 'financial creditor' had its hea .....

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wer to appoint counsel and authorized any officer to sign on behalf of the 'Financial Creditor-Bank of Baroda'. Accordingly, Ms, Archana Mishra has been authorized by the letter dated 03.02.2017 (Exhibit - 1). 3. The Corporate Debtor-Ultra Home Construction Private Limited was incorporated on 07.04.2003. Its authorised share capital is ₹ 20,00,00,000/- (Rupees Twenty Crores) and the paid up share capital is ₹ 6,09,46,120/- (Rupees Six Crore Nine Lakh Forty Six Thousand One Hu .....

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aid agreement the consortium banks along with the financial creditor sanctioned a term loan to the corporate debtor. Under the common loan agreement dated 06.01.2010 the 'Financial Creditor-Bank of Baroda' sanctioned to the corporate debtor a term loan of ₹ 75,00,00,000 (Rupees Seventy Five Crores). However, the financial creditor had disbursed ₹ 65,84,00,000 (Rupees Sixty Five Crores Eighty Four Lakhs) (See part IV-Particulars of Financial Debt). The details of the same have .....

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term loan in June 30, 2016. Further details of the defaulted amount and the period of default has been disclosed (Exhibit-5). The total amount of default under the common loan facility has been further accelerated by the consortium of Bank of Baroda through the notice of acceleration-cum-demand dated 02.03.2017. According to the notice the repayment of the defaulted amount was required to be made within seven days from the date of the acceleration notice. 6. The 'financial creditor' has .....

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on all the movable properties including all receivables and intangible properties except judicial/quasi judicial permissions and permits both present and future; (c) A first pari-passu charge on all the project's bank accounts including, but not limited to, trust and retention account; (d) A first pari-passu charge on the operating cash flows, book debts, commissions, intangibles, goodwill, uncalled capital, revenues of whatsoever nature and wherever arising, and all other incomes pertainin .....

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tor or any third party in favour of the Bob Consortium. The copy of certificate of registration of charges issued by the Registrar of Companies with respect to the aforementioned securities have been annexed herewith at Exhibit - 7. A copy of the memorandum of entry dated January 15, 2010 (the Memorandum of Entry ) in respect of the first charge on a pari passu basis created in favour of the BoB Consortium by way of mortgage by deposit of title deeds of the Immovable Property has been annexed he .....

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em have guaranteed the obligations of the Corporate Debtor under the loan agreement dated 06.01.2010. Copies of the Personal Guarantees have been placed on record (Exhibit-10). The estimated project cost is approximately ₹ 713.15 crore (Rupees Seven Hundred and Thirteen Crore and Seventy Five Lakh. 8. The copies of the loan agreement and the sanction letter have been placed on record (Exhibit - 3 and Exhibit - 21) 9. A record of default is also available with the Credit Information Compani .....

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s are as under:- (a) A copy of notice of acceleration-cum-demand ( Acceleration Notice ) dated March 2, 2017 by BoB to the 'Corporate Debtor' calling upon the 'Corporate Debtor' to repay the default amount within seven days of the date of the notice and reply of the 'Corporate Debtor' to the Acceleration Notice; (b) A copy of reporting of the account of the 'Corporate Debtor' as SMA - II account with the Central Repository of Information on Large Credits (CRILC); .....

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dated 03.02.2017 (Exhibit-1). 12. The 'corporate debtor' has opposed the admission of the application by arguing that the demand of ₹ 36,88,94,153/- is wholly arbitrary. The applicant is part of consortium of banks and the common loan agreement was executed for providing a term loan of ₹ 288,00,00,000/-. In the said agreement the Bank of Baroda, Bank of India, Oriental Bank of Commerce, Punjab National Bank and Union Bank of India are described as consortium or the lenders. .....

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d 03.02.2017 to file the present application. According to the learned Counsel Ms. Archana Mishra would have the same power and authority which were conferred upon Mr. Ravi Kant Thakral vide a power of attorney dated 16.12.2015 and the Board resolution of the company. The power of attorney has not been placed on record. 13. We have duly considered the objection. The power of attorney has been later placed before us. A perusal of power of attorney dated 16.12.2015 executed in favour of Shri Ravi .....

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dental to or arising out of the bankruptcy or insolvency or any composition or arrangement with the creditors. In pursuance thereof, she has signed power of attorney, pleadings and other papers. The application cannot be considered incomplete. Therefore, the objection raised would not survive. 14. It has further been argued that the default amount mentioned in part IV column 2 of the application does not match with the amount mentioned in various other documents annexed by the applicant. A refer .....

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se the 'Corporate Debtor' would be entitled to raise objection of any mismatching before the Committee of Creditors. It was then submitted that consent from other members of consortium has not been obtained. The objection would not require any serious consideration because Explanation to section 7(1) expressly clarifies that for the purposes of section 7 a default includes a default in respect of financial debt, owed not only to the applicant-financial creditor but to any other financial .....

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nd in case of default in payment. It is claimed that the aforesaid stipulation has found further strength from the RERA Act. The respondent has further stated that delay has been caused on account of the order dated 07.04.2015 passed by the National Green Tribunal which had banned construction activity in the area (Annexure R/2). As a result, construction was completely suspended. Reference has also been made to the Joint Lender meetings but no substantial resolution could be achieved. The objec .....

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regarding default in the reply filed by the 'Corporate Debtor' (pr.8 p.7). Therefore, this objection Loo would not cut any ice. 16. The Greater Noida Industrial Development Authority has filed an application for intervention under Order 1 Rule 10 (4) of CPC, and has placed on record a copy of the letter dated 10.07.2017 wrote by the 'Corporate Debtor' and further has placed on record a copy of the intimation dated 26.05.2017 issued by the counsel of the 'Financial Creditor .....

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or' before this Tribunal when a default has occurred. It is obvious that the lead bank like the petitioner is competent to file this application on its own behalf and also on behalf of other banks who are members of the Consortium. 18. 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 h .....

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RTL Facility> ₹ 36,88,94,153 (31,92,31,627+2,28,00,753+2,68,61,773) 30-6-2016 304 days Total ₹ 36,88,94,153 19. The default has again occurred when a demand notice dated 02.03.2017 was issued (acceleration notice) (Exhibit-12) and the repayment of the defaulted amount was required to be made within seven days from the date of acceleration notice. The principal defaulted amount in most documents is the same. However, in one of the documents it may vary as the calculation has been m .....

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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 .....

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cating Authority. A conjoint perusal of the aforesaid provision would reveal that form and manner of the application has to be the one prescribed by the authorities. It is required to be accompanied by the prescribed fee. It is further evident that if the application is incomplete as per the requirement of Section 7 (2) of the Code then this Tribunal being the Adjudicating Authority may reject it. However, proviso to Section 7 (5) of the Code postulates that before rejecting the application on t .....

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the order, an application bearing C.A. No. 340(PB)/2017 was filed by the 'Financial Creditor' withdrawing the name of earlier proposed Insolvency Professional namely Mr. Rajesh Samson and in his place name of Mr. Sanjay Gupta was proposed as Insolvency Professional. A certificate of registration dated 30.06.2017 issued to Mr. Sanjay Gupta by the Insolvency and Bankruptcy Board of India has already been placed on record- He has registration No. IBBI/IPA-001/IP-POO 117/2017-18/10252. He h .....

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ith the original file. Accordingly, we accept the prayer made in the application as no serious objection has been raised against the substituted Interim Insolvency Professional. 23. For the reasons, aforementioned this petition is admitted. Shri Sanjay Gupta who is duly registered with Insolvency and Bankruptcy Board of India (IBBI/IPA-001/IP-P00117/2017-18/10252), has been proposed as an Interim Resolution Professional. He is hereby appointed as an Interim Resolution Professional. He has filed .....

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er Section 7 of the Code. We also declare moratorium in terms of Section 14 of the Code. Some necessary consequences of imposing the moratorium flows from the provisions of Section 14 (1) (a), (b), (c) & (d). Thus, the following prohibitions are imposed: (a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; (b) transferr .....

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