TMI Blog2019 (1) TMI 787X X X X Extracts X X X X X X X X Extracts X X X X ..... BER For The Applicant : U.K. Chaudhary, Sr. Adv., Ms. Manisha Chaudhary, Mansumyer Singh and Himanshu Vij, Advs. For The Respondent : . Manik Dogra, Rohan Jaitley and Saakar Sardana, Advocates For the Respondent.P. Nagesh and Dhruv, Advocates ORDER S. K. Mohapatra, Member 1. Applicant Shri Anurag Chandra, claiming as 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 Affinity Beauty Salon Private Limited, referred to as the corporate debtor. 2. The Respondent Company M/s Affinity Beauty Salon Private Limited. (CIN No. U93020 DL2001 PTC 112227) against whom initiation of Corporate Insolvency Resolution Process has been prayed for, was incorporated on 29th August, 2001 having its registered office at C-25 Green Park Ext. New Delhi - 110016. Since the registered office of the respondent corporate debtor is in N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 30.03.2018 the principal loan amount was to be repaid by the Corporate Debtor to the Financial Creditor within a period of 4 years by way of monthly payment along with applicable interest. A copy of the Loan Agreement dated 30.03.2018 has been placed on record. 5. The applicant has relied upon Clause 3.3 of the aforesaid Loan Agreement, under which the Corporate Debtor was to repay the principal debt along with interest by making a minimum monthly payment of ₹ 20,00,000/- (Rupees Twenty Lakhs Only) by end of each month via bank transfer through NEFT/RTGS. Consequently, the Appeal No. 323 of 2017 was disposed of in terms of the aforesaid settlement with the direction to the parties to treat the terms of the settlement as directions of the Hon'ble Appellate Tribunal. 6. It is alleged that the Corporate Debtor did not make the monthly payment of loan amount from 1st April, 2018 to 31st May, 2018, except the payment of ₹ 5,00,000/- (Rupees Five Lakhs Only). As there was a default, applicant served a notice dated 07.06.2018 upon the Corporate Debtor to make payment of all the outstanding amounts along with interest in terms of the Loan Agreement within 15 days ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alleged that the terms of the loan agreement dated 30.03.2018 are completely bias in nature and favorable only to the applicant. The respondent contended that the loan agreement is liable to be quashed as executed under undue influence. The respondent even denied the amount claimed by applicant. 11. In this regard the applicant in its rejoinder has submitted that the said loan agreement was placed before the Hon'ble NCLAT while withdrawing the appeal and Hon'ble NCLAT has taken the loan agreement on record and made it clear that the counsel for respondent also confirmed the settlement. 12. The objection of the respondent disputing the loan agreement dated 30.03.2018 cannot sustain as admittedly the loan agreement dated 30.03.2018 was taken on record by Hon'ble NCLAT in its order dated 06.04.2018 passed in ACPC Enterprises (supra). The order also reveals that Ld. Counsel appearing for the corporate debtor had accepted before the Hon'ble NCLAT that the dispute has been settled and the said loan agreement has been executed between the parties. 13. The order dated 06.04.2018 passed by Hon'ble NCLAT in ACPC Enterprises (supra) is reproduced below: NAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reement at a later stage. Corporate Debtor is under obligation to honour its commitments, especially when made before a court of law. Accordingly, the application has to be decided on the basis of the loan agreement dated 30.03.2018 which has the sanction of the Hon'ble NCLAT. 15. It is pertinent to note here that an application numbering C.A. 1158 (PB)/2018 has been filed by some of the financial creditors as interveners under section 60(5) of the Code. It has been submitted in the application that previously the claim of applicant was rejected by the Tribunal on the ground that the claim of applicant pertains to share application money and cannot be termed as financial debt. It is submitted that the amount paid under Share subscription Agreement is fraudulently converted in a financial debt, without any amount of loan or debt being actually given. 16. In this regard it is reiterated that the applicant and the respondent have settled their dispute before Hon'ble NCLAT and on independent loan agreement dated 30.03.2018 was executed between the parties including the said two partnership firms. In terms of the loan agreement the applicant has now acquired the status of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs 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) 21. It is pertinent to mention here that the Code requires the adjudicating authority to only ascertain and record satisfaction in a summary adjudication as to the occurrence of default before admitting the application. The material on record clearly goes to show that respondent has only paid ₹ 5,00,000/- and thereafter has committed default in repayment of the dues in terms of clause 3.3 of the loan agreement dated 30.03.2018. When there is no ambiguity in the terms and spirit of the agreement and parties have been fully aware of the same and even placed it before a court of law, the agreement has binding obligations and does not require any further interpretation. 22. As a sequel to the aforesaid discussion it is seen that the applicant clearly comes within the definition of Financial Creditor. 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 infir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, as per the Insolvency and Bankruptcy Code (Amendment) Act, 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. 28. 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 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 b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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