TMI Blog2018 (9) TMI 1529X X X X Extracts X X X X X X X X Extracts X X X X ..... erate the banking facilities on behalf of the company. There is no dispute that the respondent company has availed the card facilities. However except part payment of ₹ 1 lac, no other repayment was made by the respondent. Consequently, respondent company was liable to pay interest and other card charges as per binding card agreement. The amount was disbursed against time value of money and for commercial purpose. The debt claimed in the application includes outstanding principal, interest and other card charges as per mutual agreement and therefore comes within the purview of ‘financial debt’. The applicant accordingly comes within the definition of ‘financial creditor’ in respect of ‘financial debt’ in question and has a clear right to file application under Section 7 of the Code. The material on record clearly goes to show that respondent had availed the loan facilities and has committed default in repayment of the loan amount. Moreover, the application of the financial creditor is complete and there is no disciplinary proceeding pending against the proposed IRP. We are satisfied that the present application is complete and the applicant financial creditor is entitle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration number IBBI/IPA-001/IP-P00149 / 2017-18/10313, resident of 45-46, Basement, Satya Niketan, Moti Bagh-II, New Delhi-110021, email id ritaca 1996@.yahoo.com . Ms. Rita Gupta has agreed to accept appointment as the IRP and has signed a communication dated 24.10.2017 in Form 2 in terms of Rule 9(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. There is a declaration made by her that no disciplinary proceedings are pending against her in Insolvency and Bankruptcy Board of India or elsewhere. In addition, further necessary disclosures have been made by Ms. Rita Gupta as per the requirement of the IBBI Regulations. Accordingly, she satisfies the requirement of Section 7(3)(b) of the Code. 6. It has been stated in Part-IV of the application that as on 15.07.2017, ₹ 52,45,020.60/- is due and recoverable from the respondent corporate debtor. 7. Facts which are material to the controversy raised may first be noticed. In the year, 2015, the respondent Corporate Debtor alongwith its Director Gaurav Vasudeva jointly singed the Card Member Application dated 21.09.2015 for availing Corporate Card Facility from the applicant. 8. Thereaft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vency Resolution Process against the respondent corporate debtor. 13. The Respondent Corporate Debtor has filed its reply on 28.02.2017. The respondent has also raised preliminary objection that the applicant is neither a company nor a body corporate as defined under the Companies Act, 2013 and therefore the applicant does not come under the purview of person as defined under Section 3(23) of the Code. Accordingly, it is claimed that the applicant, being not a person , cannot be a financial creditor and hence cannot file the present application under Section 7 of the Code. 14. It is further argued that the power of attorney authorising Mr. Dipender Singh, is not in order and is defective. It is stated that no specific power has been assigned to Mr. Dipender Singh to initiate proceedings under the Code. It is further contended that Mr. Dipender Singh has only been authorised by Mr. Manoj Adlakha, Chief Executive Officer and not by the applicant itself. Reliance has been placed on the ratio of the order passed in matter of Palogix Infrastructure (P.) Ltd. v. ICICI Bank Ltd . 15. The respondent has raised a further objection regarding non-joinder of necessary party, i.e. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be enclosed. That in case the amount has been disbursed to third party on the basis of corporate guarantee and third party has made re-payments; the said third party may be added as a party respondent and the memo of parties may be amended. 19. The applicant in compliance of the aforesaid order dated 16.05.2018 has made the following submissions: A. On 27.02.2018, the License No. MUM: 79 was granted by the Reserve Bank of India, Department of Banking Operations and Development, Central Office, Mumbai in the name of the financial creditor, American Express Banking Corp. Under Section 22(1) of the Banking Regulations Act, 1949 for carrying on banking business in India. As per the said Banking Lincense, the financial creditor has to register itself under the respective Provisions of the Companies Act, 1956 within 30 days of establishment of place of business and also display a copy of the registration at the office in India. Thereafter, on 27.03.2008, the registrar of companies issued a Certificate of Establishment of Place of Business of India in the name of the financial creditor. Vide the order dated 18.01.2018, this Hon ble Tribunal was pleased to seek clarific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 15.03.2016 (P.30 of the main petition), the respondent is in default since then. C. As directed by the Hon ble Tribunal legible typed copy of the relevant card members application and agreement is enclosed alongwith the present application at Annexure-2 (Colly). D. That in respect of query D, it is submitted that in the present case no repayment has been made by any third party. 20. It is relevant to note that the applicant financial creditor has filed and relied upon the following additional documents: (i) Organization Certificate of American Express Banking Corp. of New York. (ii) Certificate for Establishment of Place of Business in India. (iii) Reserve Bank of India approval dated 27.02.2008 for commencement of banking business in India. (iv) Licence to carry on banking business in India. 21. We have heard the parties and perused the case records. The various objections raised by the respondent are discussed in seriatim below. 22. One of the main objections of the respondent was that the applicant does not come under the purview of person as defined under Section 3(23) of the Code. Accordingly, it is claimed that the applicant, not being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncial creditor in order to maintain the present application filed under Section 7 of the Code. 27. The expressions Financial Creditor and Financial debt have been defined in Section 5(7) and 5(8) of the Code, which are reproduced below. 5. In this part, unless the context otherwise requires, - . (7) financial creditor means any person to whom a financial debt is owed and includes a person to whom such debt has been legally assigned or transferred to; (8) financial debt means a debt alongwith interest, if any, which is disbursed against the consideration for the time value of money and includes- (a) money borrowed against the payment of interest; (b) any amount raised by acceptance under any acceptance credit facility or its de-materialised equivalent; (c) any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument; (d) the amount of any liability in respect of any lease or hire purchase contract which is deemed as a finance or capital lease under the Indian Accounting Standards or such other accounting standards as may be pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent company dated 18.09.2015 wherein it was resolved to authorise Gaurav Vasudeva, Director to sign and avail banking facilities in the name of and on behalf of the company from American Express Banking Corp. He was further authorised to operate the banking facilities on behalf of the company. 31. There is no dispute that the respondent company has availed the card facilities. However except part payment of ₹ 1 lac, no other repayment was made by the respondent. Consequently, respondent company was liable to pay interest and other card charges as per binding card agreement. The amount was disbursed against time value of money and for commercial purpose. The debt claimed in the application includes outstanding principal, interest and other card charges as per mutual agreement and therefore comes within the purview of financial debt . The applicant accordingly comes within the definition of financial creditor in respect of financial debt in question and has a clear right to file application under Section 7 of the Code. 32. Another objection taken by the respondent is that the power of attorney authorising Mr. Dipender Singh, is not in order as no specific power has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 37. 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 38. Hon ble Supreme Court in the case of Mobilox Innovations (P.) Ltd. v. Kirusa Software (P.) Ltd. [2017] 85 reported in AIR 2017 SC 4532 at Para 19 has observed that: Once the adjudicating authority / Tribunal is satisfied as to the existence of the default and has ensured that the application is complete and no disciplinary proceedings are pending against the proposed resolution professional, it shall admit the application. The adjudicating authority/Tribunal is not required to look into any other criteria for admission of the application . (Emphasis given) 39. The material on record clearly goes to show that respondent company had availed the loan facilities and has committed default in repayment of the loan amount. The Board resolution of the respondent company dated 18.09.2015 clearly reveals that banking facilities were to be availed in the name of and on behalf of the respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Code. The 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) transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein; (c) any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; (d) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor. 46. 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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