TMI Blog2018 (8) TMI 589X X X X Extracts X X X X X X X X Extracts X X X X ..... (India) Limited, claiming to be the financial creditor, has filed the instant application under section 7 of the Insolvency and Bankruptcy Code, 2016 (for brevity 'the Code') read with rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (for brevity 'the Rules') with a prayer to trigger Corporate Insolvency Resolution Process in respect of respondent company M/s White Metals Limited, referred to as the corporate debtor. 2. The Respondent Company M/s White Metals Limited (CIN U2811DL1987PLC29767) against whom initiation of Corporate Insolvency Resolution Process has been prayed for, was incorporated on 13.11.1987 having its registered office at 9009, D.B. Gupta Road, Pahar Ganj, New delhi-110055. Since the registered office of the respondent corporate debtor is in New Delhi, this Tribunal having territorial jurisdiction over the NCT of Delhi is the Adjudicating Authority in relation to the prayer for initiation of Corporate Insolvency Resolution Process in respect of respondent corporate debtor under sub-section (1) of section 60 of the Code. 3. It is appropriate to mention that the applicant M/s Asset and Reconstruction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n letter dated May 6, 2008 * Restructuring of the limits to ₹ 104.91 crores (inclusive of two WCTL loans of ₹ 18 crores) sanctioned by IOB vide its sanction letter dated May 20, 2009. * Reduction of NFB working capital limits from ₹ 40 crores to ₹ 16 crores, enhancement of WCTL limit and creation of FITL limit of ₹ 11.95 crores by IOB vide its sanction letter dated March 31, 2010. * Sanction of ad hoc CC limit of ₹ 2.50 crore by IOB vide its sanction letter dated July 25, 2011. Copies of the sanction letters granted by IOB have been placed on record. 8. It is pertinent to mention here that the aforesaid facilities extended by IOB to the Corporate debtor was duly assigned to the applicant financial creditor (ARCIL) vide assignment agreement dated 17.04.2015. A copy of the assignment agreement dated 17.04.2015 has been placed on record. 9. The description of individual facilities disbursed from time to time and the amount outstanding there under are described in the application as below: (a) Working capital facility. * Pursuant to working capital consortium agreement dated 18.10.2008 and 10.08.2010 entered into between the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and days of default in respect of the above facilities have also been placed on record. 11. It is stated that the account of corporate debtor was declared as Non-Performing Asset (NPA) on 11.11.2011. As per the applicant financial creditor as on 30.06.2017, a sum of ₹ 2,13,68,01,929/- stands due and payable by the respondent corporate debtor. 12. The details of security interest in respect of the loans created through various hypothecation agreements, equitable mortgage deeds and several guarantee agreements in respect of the facilities extended to the corporate debtor have been placed on record. Besides documents showing registration of Charge by Registrar of Companies in respect of the loan facilities have been placed on record in support of claim of creation of charges to secure the debt. 13. In addition copy of Balance sheet and Financial statements for the financial year 2015-2016 of the corporate debtor have been filed with the application. Moreover the relevant statement of accounts as per Banker's Book duly certified in accordance with the Bankers Books Evidence Act, 1891 have been placed on record. That apart balance confirmation letter acknowledging t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot repaid. The aforesaid documents are sufficient to establish the existence of the liability and default on the part of the corporate debtor. The adjudicating authority is not supposed to decide the quantum of claim as to how much is due and payable, which is required to be determined by Resolution Professional and Committee of Creditors. The adjudicating authority is only to ascertain the existence of the default in repayment of the financial debt. 18. Another objection has been taken in the reply that applicant had earlier filed similar application under section 7 of the Code being C.P. No. IB- 621 (PB) / 2017 which was dismissed on 22.12.2017. However a perusal of the said order shows that while dismissing the earlier application under section 7 of the Code liberty was given to the petitioner to file fresh one on the same cause of action by furnishing detailed particulars complete in all respects. Pursuant to such leave the applicant 'financial creditor' has filed the present application on the same cause of action by placing on record voluminous and overwhelming evidence in support of the claim as well as to prove the default. 19. The material on record clearly g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... granted several loan facilities to the respondent as discussed above and the said financial debts have been legally assigned and transferred to the applicant through valid assignment agreement. The applicant accordingly comes within the definition of 'financial creditor' under sub-section (7) of section 5 of the Code on the strength of the deed of assignment. Hence, the applicant financial creditor has clear right to file application under section 7 of the Code in order to recover its dues and the inter se agreement between financial creditors cannot override the said provision of the Code nor can take away the right of the applicant to file application under section 7 of the Code. 23. Under sub-section 5(a) of section 7 of the code, the application filed by the applicant financial creditor has to be admitted on satisfaction that: 1. Default has occurred. 2. Application is complete, and 3. No disciplinary proceeding against the proposed IRP is pending. 24. Hon'ble Supreme Court in the case of Private Limited V. Kinzsa Software Private Limited reported in AIR 2017 SC 4532 at Para 19 has observed that: Once the adjudicating authority/Tribunal is satisf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner or lessor where such property is occupied by or in the possession of the corporate debtor. 30. It is made clear that the provisions of moratorium shall not apply to transactions which might be notified by the Central Government or the supply of the essential goods or services to the Corporate Debtor as may be specified, are not to be terminated or suspended or interrupted during the moratorium period. In addition as per the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018 which has come into force w.e.f. 06.06.2018, the provisions of moratorium shall not apply to the surety in a contract of guarantee to the corporate debtor in terms of Section 14(3)(b) of the Code. 31. The Interim Resolution Professional shall perform all his functions contemplated, inter alia, by Sections 15, 17, 18, 19, 20 21 of the Code and transact proceedings with utmost dedication, honesty and strictly in accordance with the provisions of the Code, Rules and Regulations. It is further made clear that all the personnel connected with the Corporate Debtor, its promoters or any other person associated with the Management of the Corporate Debtor are under legal obligation under Section 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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