TMI Blog2018 (1) TMI 1356X X X X Extracts X X X X X X X X Extracts X X X X ..... CP(IB) No.90/BB/2017 - - - Dated:- 5-1-2018 - SRI RATAKONDA MURALI, MEMBER JUDICIAL And SRI ASHOK KUMAR MISHRA, MEMBER TECHNICAL Parties Present: For Applicant: Mr. Jitendra CP, Advocate For Respondent: Mr. S.V. Aiyappa and Mr. Sajan P Chinnappa, Advocates Per: Shri Ratakonda Murali, Member (Judicial) - Author ORDER This petition is filed on behalf of the Applicant/Financial Creditors under Section 7 of Insolvency and Bankruptcy Code against the Respondent/Corporate Debtor to initiate Insolvency Resolution Process. The Applicants are Ajay Gopaldas Samat (HUF) represented by its Karta Ajay Gopaldas Samat and Mrs. Manisha A Samat. Details of the petition are furnished in Form-I. The petition is filed under Section 7 of I B Code read with Rule 4 of Insolvency and Bankruptcy (application to Adjudicating Authority) Rules, 2016. The brief case of the applicants as gathered from Form No. 5(1) that the Respondent/Corporate Debtor approached the Petitioners for a loan of ₹ 1.00 Cr. for its business purpose. The Applicants/Petitioners agreed to give advance loan of ₹ 1.00 Cr. to the Corporate Debtor and a loan agreement was executed on 17.07.2014 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed loan of ₹ 1.00 Cr. from the Petitioners on 17.07.2014 and further admitted entering into loan agreement. But stated Corporate Debtor issued cheques for security purpose. Besides it also mortgaged its property. 3. It is a case of Corporate Debtor that it is not liable to pay any money to the Petitioners as it has already repaid the loan. 4. It is also the case of Corporate Debtor that it never admitted any liability as contended by the Petitioners and that the Petitioners have misused the letter shown as Annexure-I-I to Annexure-I-P. 5. Allegation of Corporate Debtor against the Petitioners with reference to the letters that the Applicants fabricated the letters for their unlawful gain. 6. It is also the case of Corporate Debtor that in the past it had dealings with the Petitioners and in that connection they have collected so many blank cheques, on demand promissory notes and also other signed blank documents. When it had cleared two such loans, the Petitioners have not released the mortgage and therefore it had filed complaints against them and they were referred to Vidyaranyapura Police Station for investigation. 7. The case of Corporate Debtor that it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a judgment delivered by NCLT Principal Bench. The Counsel for Corporate Debtor also relied upon the decision passed by the Apex Court in Innoventive Industries Limited Vs. ICICI Bank and Ors., reported in 2017 SCC Online SC 1025. The points urged in the written arguments will be dealt in the course of the order. Both the Counsels submitted oral arguments in line with the written arguments. The undisputed fact is that the Petitioners had advanced loan of ₹ 1.00 Cr. to the Corporate Debtor/ Respondent herein. A loan agreement was executed dated 17.07.2014. The repayment schedule was prepared and that loan amount has to be repaid in accordance with the loan repayment schedule. The Corporate Debtor clearly admitted availing loan of ₹ 1.00 Cr. from the Petitioners and entered into a loan agreement. Petitioners relied on loan agreement marked as Annexure-I-C . Petitioners further alleged that Corporate Debtor executed simple mortgage as security for the loan. Annexure-I-B is the copy of mortgage deed dated 17.07.2014. The Corporate Debtor admitted executing simple mortgage as a security for the loan. The Corporate Debtor further admits that two Director ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sel for the Petitioners any amount beyond ₹ 20,000/- shall be by way of cheque. Therefore, in the absence of the details, it is highly impossible to believe the contention of the Corporate Debtor that a portion of the loan amount was paid by way of cash. So, it cannot be presumed that there existed dispute. For understanding there is a dispute, the Corporate Debtor had to place some piece of evidence. Mere unsupported bare allegation does not by itself leads to conclusion that there exists a dispute. The Corporate Debtor no doubt relied on some documents. As rightly contended by the Counsel for the Petitioners, the documents filed by Corporate Debtor are no way relevant to the present case. Further, the Counsel contended that Corporate Debtor failed to show how these documents are connected to the loan transaction. It is difficult to believe the contention of Corporate Debtor that those cheques were given to the Petitioners in connection with loan repayment transaction. Admittedly Corporate Debtor executed mortgage as security. The two Directors have given personal guarantee and Corporate Debtor also executed hundis. Then, a question arises what was the need to give cheque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 16.07.2015. The three post-dated cheques were asked to be returned and in its place, Corporate Debtor agreed to give one cheque for ₹ 15,00,000/- drawn on ICICI Bank bearing No.779742. Annexure I-J is a letter to the 2 nd Petitioner with the same request to return the three cheques and to take one cheque for ₹ 15,00,000/- drawn on ICICI Bank bearing No.779745 dated 01.09.2015. Again the Corporate Debtor addressed a letter vide Annexure-I-K making a similar request to the 1 st Petitioner as well to the 2 nd Petitioner shown as Annexure-I-L for replacement of old cheques with new cheques. Similarly the Petitioners relied on letters addressed by Corporate Debtor shown as Annexure-I-M and Annexure-I-N dated 27.11.2015. Here also the Corporate Debtor requested for return of earlier cheque and in its place new cheques to be issued and gave an assurance that it will honour the cheques. These cheques were given towards instalments due. Finally, the Petitioners relied on Annexure-A-I-O and Annexure A-I-P . These are the letters addressed to the Petitioner respectively by Corporate Debtor. Here Corporate Debtor categorically admitted that it cannot honour cheque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Office and address details. The Learned Counsel for Corporate Debtor has relied on the decision of Hon'ble Supreme Court in the case of M/s. IBA Health (I) Ltd. Vs. Info-Drive Systems Sdn. Bhd. This decision is rendered under Companies Act, 1956 under Section 433 (e) (f) and Section 434 and 439. So this decision is not rendered under Insolvency and Bankruptcy Code. The facts of the decision are different to the facts of this case. The Learned Counsel for the Petitioners has relied upon the decision of the Apex Court reported in Innoventive Industries Limited Vs. ICICI Bank and Ors. The relevant paragraphs are reproduced hereunder: When it comes to a financial creditor triggering the process, Section 7 becomes relevant. Under the explanation to Section 7(1), a default is in respect of a financial debt owed to any financial creditor of the corporate debtor - it need not be a debt owed to the applicant financial creditor. Under Section 7(2), an application is to be made under subsection (1) in such form and manner as is prescribed, which takes us to the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. Under Rule 4, the application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te debtor. The moment there is existence of such a dispute, the operational creditor gets out of the clutches of the Code. On the other hand, as we have seen, in the case of a corporate debtor who commits a default of a financial debt, the adjudicating authority has merely to see the records of the information utility or other evidence produced by the financial creditor to satisfy itself that a default has occurred. It is of no matter that the debt is disputed so long as the debt is due i.e. payable unless interdicted by some law or has not yet become due in the sense that it is payable at some future date. It is only when this is proved to the satisfaction of the adjudicating authority that the adjudicating authority may reject an application and not otherwise. Petitioners are Financial Creditors. Petitioners are able to establish default in paying the loan amount. Petitioners also furnished the details of the proposed IRP. His name is Shri Ravi Sankar Devarakonda and address D-602, Prestige St. Johns Wood Apartments, No.80, Tavarakere Main Road, Bangalore 560029, Registration No. IBBI/IPA-001/IP-P00095/2017-2018/10915, email ID: ravicacscma@icai.org. He has also gi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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