TMI Blog2018 (9) TMI 851X X X X Extracts X X X X X X X X Extracts X X X X ..... ration number IBBI/IPA-001/IP-P00528/2017-18/10953 is appointed as the Interim Resolution Professional. - C.P.NO.(IB)-547(PB)/2018 - - - Dated:- 14-8-2018 - MR. M.M. KUMAR, PRESIDENT AND S.K. MOHAPATRA, MEMBER (TECHNICAL) For The Petitioner : Dr. U.K. Chaudhary, Sr.Adv., N. Raja Singh, Ms. Manisha Chaudhary, Sumit Malhotra and Himanshu Vij, Advocates For The Respondent : Vipul Srivastava and Rajendra Vats, Advs. ORDER M.M. KUMAR, PRESIDENT The Petitioner(s) claiming to be the financial creditor have filed the instant Petition 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 M/s HBN Dairies Allied Limited (for brevity the corporate debtor ). 2. It is appropriate to mention that the Corporate Debtor - M/s HBN Dairies Allied Ltd. was incorporated on 29.12.1998. The identification number of the Corporate Debtor given is CIN U15203DL1998PLC097690 and its registered office is situated at 303, Va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al creditors is ₹ 45, 80,000/- (Rupees Forty-five Lakhs Eighty Thousand only). The aforesaid financial debt is on account of the investments made under the Investment Scheme floated by the Corporate Debtor along with total sum of ₹ 91,60,000/-(Rupees Ninety One Lakh Sixty Thousand only) payable as assured return to financial creditors). 2 . AMOUNT CLAIMED TO BE IN DEFAULT AND THE DATE ON WHICH THE DEFAULT OCCURED The total amount to be due ₹ 91,60,000/- (Rupees Ninety One Lakhs Sixty Thousand Only) as on various dates as mentioned in the certificate(s) of the Financial Creditors. 7. In column 2 of part IV the amount claimed to be in default and the date on which the default occurred, have been stated. According to the rejoinder filed by the Financial Creditor-Petitioner(s) vide Diary No. 4239 filed on 02.07.2018, the amount of default has been corrected to be ₹ 90,71,819/- which is the actual amount due and payable as assured return to the Financial Creditors on the date of filing the Application. 8. The detailed particulars of the financial creditors along with the dates of default have been d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is submitted that all the Financial Creditors have invested in Plans of Category I only and the illustration of Plan No. C1 of Category 1 is given as below: Plan No. C 1 for 75 months (6 Years 3 Months) SI. No. Consideration Cost of Cattle/Ghee Expected Cost of Developed Cattle/Ghee Accidental Death Compensation (Rs.) 1 5,000 10000 5,000 2 10,000 20000 10,000 3 15,000 30000 15,000 4 20,000 40000 20,000 5 25,000 50000 25,000 10 50,000 100000 50,000 Terms of Plan No. C 1 of Category I If the Joint Venturer wants to purchase the cattle from the first party s (company) dairy farm and up bringing the cattle into the same dairy farm that can be done as un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom time to time, shall be deemed to be as part of this Certificate. The certificate contains the details such as the name and address of Joint Venture, registration number, date of commencement, plan no./term, cost of cattle/ghee, etc. The Certificate further provides for the expected sum payable on expiry of term C.O.C/Ghee , date of last payment and date of expiry of term. This document is more in the nature of a certificate of investment, recording the investment made by the customer and the appreciated value available on completion of the term. A few other samples of certificate also states that At the end of Term 10% of consideration Amount will be paid as Bonus if the Joint Venture is NOT LAPSED . 14. Certificate also contains the first instalment receipt-cum-acceptance letter which reads as under: RECEIVED with thanks from the person mentioned as Joint Venturer in the schedule below. The amount of first instalment of subscription along with admission fee of ₹ 5/- in pursuance of application made by the said person for Joint Venture with HBN Dairies Allied Ltd. The said application is hereby accepted by the company subject to Rule Book as amen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aged in fund mobilizing activity by floating unauthorized CIS and also observed that Corporate Debtor has not been able to adhere to the timelines given by SEBI to repay the investors and has completely failed to follow the procedure laid down for the repayment and failed to call back the loans and advances given by it to its subsidiaries and others. 20. The SEBI considered in detail the schemes launched by HBN, various submissions made by Corporate Debtor and repayment procedure adopted by Corporate Debtor pursuant to interim order. Thereafter, Mr. Prashant Saran, Whole Time Member of SEBI under Section 19 of SEBI Act, 1992 issued directions against the Corporate Debtor. A copy of order dated 12.02.2015 Bearing No. WTM/PS/71/CIS-NRO/FEB/2015 has been (Annexure-A-9). 21. Aggrieved by the order dated 12.02.2015, the Corporate Debtor filed an appeal before the Securities Appellate Tribunal ( SAT ) and meanwhile, on 13.01.2016 SEBI received another repayment proposal to the compliance of the above said order. After perusal of the repayment schedule, The SEBI rejected the repayment proposal and passed a final order dated 12.08.2016 bearing No. WTM/SR/SEBI/CIS-NRO/42/08/2016. A co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present application and therefore, the Corporate Debtor falls under the definition given under Section 3(8) of the IB Code. This issue has been dealt in detail by the SEBI in its order dated 12.02.2015 concluding that the corporate debtor cannot claim that it had a joint venture with the petitioner. The finding recorded is that it was an investment scheme. The following pertinent observations have been made: it is observed that HBN was inviting applications from the customers/investors for the purchase and upbringing of the cattle under its various plans broadly categorised as lump sum and instalment. I note the following: i. For applying the customer/investor necessarily have to execute a Joint Venture agreement with the Company, in which only the rights of the Company and the returns are mentioned. ii. It is not clear whether on completion of the joint venture, the joint venture/investor will get the cattle or ghee. iii. HBN guarantees assured returns on completion of the term as more specifically mentioned in the Certificate as expected sum payable on expiry of the term . iv. The cattle remain with the Company and the same is reared/deve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to prevail as Section 238 contains an non-obstante clause which is of the widest amplitude. In other words the corporate insolvency resolution process has to be triggered despite the application of any other law. In this regard we draw support from the observation made by the Hon ble Supreme Court in the case of Innoventive Industries Ltd. v. ICICI Bank and Ors reported in (2018) 1 SCC 407. In para 56 the following observations have been made: The non-obstante clause, in the widest terms possible, is contained in Section 238 of the Code, so that any right of the corporate debtor under any other law cannot come in the way of the Code. 30. It is also submitted by the Respondent- Corporate Debtor that the application is not maintainable as the same does not bear the signatures of all the petitioners and the authority given by the petitioners to Sh. Bhanu Ram are neither consistent/similar nor valid in the eyes of law. The Petitioners, in this regard, have placed reliance on all letters of authorization and the power of attorneys are in conformity with the Rule 4 (4) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. The powers of attorn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tated in part IV along with all the minute details. There is overwhelming evidence to prove default and name of the resolution professional has also been clearly specified. 34. Having heard the learned counsels for the Financial Creditor and Corporate Debtor and having perused the paper books with their able assistance we may first examine the provisions of Section 7 (2) and Section 7 (5) of IBC 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) .. 35. A conjoint reading of the aforesaid provision would show that form and manner of the application has to be the one as prescribed. It is evident from the record that the application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... These would include supply of water, electricity and similar other supplies of goods or services as provided by Regulation 32 of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. 40. The Interim Resolution Professional shall perform all his functions religiously and strictly which are contemplated, inter alia, by Sections 15, 17, 18, 19, 20 21 of the Code. He must follow best practices and principles of fairness which are to apply at various stages of Corporate Insolvency Resolution Process. His conduct should be above board independent; and he should work with utmost integrity and honesty. It is further made clear that all the personnel connected with the Corporate Debtor, erstwhile directors, promoters or any other person associated with the Management of the Corporate Debtor are under legal obligation under Section 19 of the Code to extend every assistance and cooperation to the Interim Resolution Professional as may be required by him in managing the affairs of the Corporate Debtor. In case there is any violation by the ex-management or its ex-directors the Interim Resolution Professional would be at liberty to make appropriate application to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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