TMI Blog2018 (11) TMI 1046X X X X Extracts X X X X X X X X Extracts X X X X ..... cilities to the respondent corporate debtor and the respondent has availed the loan and committed default in repayment of the outstanding financial debt. On a bare perusal of Form - I filed under Section 7 of the Code read with Rule 4 of the Rules shows that the form is complete and there is no infirmity in the same. It is also seen that there is no disciplinary proceeding pending against the proposed IRP. We are satisfied that the present application is complete in all respect and the applicant financial creditor is entitled to claim its outstanding financial debt from the corporate debtor and that there has been default in payment of the financial debt. As a sequel to the above discussion and in terms of Section 7(5)(a) of the Code, the present application is admitted. - COMPANY PETITION NO. (IB)-397(PB)/2018 - - - Dated:- 12-10-2018 - MR. M.KUMAR, PRESIDENT MR S.K. MOHAPATRA, MEMBER (TECHNICAL) For The Appellant : H.P. Bhardwaj, Advocates For The Respondent : Janender Kumar and Ms. Radhika, Advocates ORDER S. K. Mohapatra, Member 1. Bank of India, claiming as the financial creditor, has filed the instant application under Section 7 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im that no disciplinary proceedings are pending against him in Insolvency and Bankruptcy Board of India or elsewhere. In addition, further necessary disclosures have been made by Mr. Anup Sood as per the requirement of the IBBI Regulations. Accordingly, he satisfies the requirement of Section 7(3)(b) of the Code. 6. It is the case of the petitioner that in the year 2002 the respondent corporate debtor has approached Bank of India for sanction of various credit facilities to the corporate debtor. Consequently, applicant Bank had sanctioned financial facilities to the respondent corporate debtor, which had been renewed/enhanced from time to time. The applicant bank sanctioned/renewed the following financial facilities on 28.08.2013 and the corporate debtor executed the loaning and security documents for the Term Loan I, Term Loan II and Term Loan III as these were sanctioned for the first time and other facilities were renewed. Facility Sanctioned Limit (Rs. in Crore) Term Loan Term Loan 1 11.06 Term Loan 2 2.63 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. Thereafter, the respondent corporate debtor made a request to the applicant bank for grant of TOL for ₹ 3 Crores for 90 days for completing urgent export orders. The said facility was additionally granted on 26.04.2017 and was availed by the corporate debtor. It is submitted that the corporate debtor acknowledged sanction of the aforesaid facilities and the same continued to be enjoyed by the corporate debtor. 9. In order to secure the various financial facilities the respondent company signed and executed various security and loaning documents in the favour of the petitioner bank. In addition the corporate debtor equitably mortgaged properties and hypothecated and created charge on the entire fixed and current assets of the company. Besides in order to secure the facilities personal guarantees were executed by Mr. Athar Zia, Mrs. Sheeza Zia, Mr. Pipinder Singh Mr. M. Z. Siddiqui as personal guarantors. 10. It is the case of the applicant bank that the corporate debtor availed and utilized various financial facilities granted by the petitioner bank but failed to maintain financial discipline and was irregular in servicing the said debt. Consequently, the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l guarantees of Mr. Atharzia, Mrs. Sheezazia, Mr. Papinder Singh Mr. M.Z. Siddique. VI. Various sanction letters in respect of sanction of loan facilities including renewal of the facilities duly accepted by the Corporate Debtor. VII. Various demand promissory notes letter of continuing security for DP Note supplemental agreement. VIII. Acknowledgement of debts of the outstanding amount made on 30.01.2015 and 25.09.2016. IX. Recording of oral assent extension of equitable mortgage of the properties. X. Statement of account and certificate under the Banker s Book Evidence Act. XI. Form-8 dated 26.04.2017 filed with the Registrar of companies registering charge in favour of the financial creditor. XII. CRILIC Report in support of record of default. 14. The respondent corporate debtor has filed its reply on 12th June, 2018. One of the objections raised by the respondent is that FDR amounting to ₹ 3,21,45,728.93 is lying with the applicant bank. It is alleged that once the petitioner is having an FDR, the loan account will neither become an NPA nor there can be any default in the said account. In this regard petitioner in their rejoinder has stated that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Respondent has raised another objection on the ground that the applicant bank has not provided correct particulars of financial debt. It is alleged that the amount claimed to be in default is completely different from the amount claimed in balance confirmation certificate. The respondent has relied upon the following table to show the discrepancy in the claim: Facility Amount as per Form-1 Amount as per Bank Confirmation Certificate Cash credit (Stocks) 2257.54 2120.62 C.C. Book Debts 233.74 219.99 Term Loan 1 750.96 702.57 Term Loan 2 170.53 161.41 Term Loan 3 33.31 31.15 EPC 6988.3 6722.31 17. In this connection applicant has submitted that the difference between the balance confirmation certificate dated 30.09.2017 and as per Form-1 occurred due to uncharged interest up to 13.03.2018 which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicant bank in its rejoinder has denied that the financial creditor ever pressurized and persuaded the respondent to buy the rice factory. It is submitted that the unit was purchased by the respondent in e-auction under SARFAESI Act, 2002. Petitioner has also denied that financial creditor ever assured the Corporate Debtor to provide working capital facility to run the mill at optimal capacity. The applicants contended that they have extended co-operation by extending timely and adequate credit facilities as per loan agreements. It is alleged that Corporate Debtor admitted that they could not sustain the unit and it was difficult for them to run the project with a long term profitable viability. In this connection, it is pertinent to note that as per the provisions of the Code, once there is existence of default and the application is complete and no proceedings are pending against the proposed IRP, the application under Section 7 is to be admitted. The Adjudicating Authority is not required to look into any other criteria while considering the application preferred under Section 7 of the Code. 22. It is also the case of the respondent that efforts are being initiated for comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 26. The expressions Financial Creditor and Financial debt have been defined in Sections 5 (7) and 5 (8) of the Code and precisely Financial debt is a debt along with interest, if any, which is disbursed against the consideration for time value of money. 27. In the present case applicant bank had sanctioned and disbursed the term loan amount recoverable with applicable interest by entering in to loan agreements with the corporate debtor. The corporate debtor had borrowed the credit facility against payment of interest as agreed between the parties. The loan was disbursed against the consideration for time value of money with a clear commercial effect of borrowing. Moreover the debt claimed in the present application includes both the component of outstanding principal and interest. In that view of the matter not only the present claim comes within the purview of Financial Debt but also the applicant bank can clearly be termed as Financial Creditor so as to prefer the present application under Section 7 of the Code. 28. The application filed by the applicant financial creditor under sub-section 5(a) of Section 7 of the code, has to be admitted on satisfaction tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e application. The material on record clearly goes to show that respondent had availed the loan facilities and has committed default in repayment of the outstanding loan amount. 34. As a sequel to the aforesaid discussion it is seen that the applicant bank clearly comes within the definition of Financial Creditor. The material placed on record further confirms that applicant financial creditor had disbursed various loan facilities to the respondent corporate debtor and the respondent has availed the loan and committed default in repayment of the outstanding financial debt. On a bare perusal of Form - I filed under Section 7 of the Code read with Rule 4 of the Rules shows that the form is complete and there is no infirmity in the same. It is also seen that there is no disciplinary proceeding pending against the proposed IRP. We are satisfied that the present application is complete in all respect and the applicant financial creditor is entitled to claim its outstanding financial debt from the corporate debtor and that there has been default in payment of the financial debt. 35. As a sequel to the above discussion and in terms of Section 7(5)(a) of the Code, the present applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 of the Code to extend every assistance and cooperation to the Interim Resolution Professional as may be required by him in managing the day to day affairs of the Corporate Debtor . In case there is any violation, the Interim Resolution Professional would be at liberty to make appropriate application to this Tribunal with a prayer for passing an appropriate order. The Interim Resolution Professional shall be under duty to protect and preserve the value of the property of the Corporate Debtor as a part of its obligation imposed by Section 20 of the Code and perform all his functions strictly in accordance with the provisions of the Code, Rules and Regulations. 41. The office is directed to communicate a copy of the order to the Financial Creditor, the Corporate Debtor, the Interim Resoluti ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
