TMI Blog2018 (5) TMI 1832X X X X Extracts X X X X X X X X Extracts X X X X ..... AL MEMBER). - 1. Oriental Bank of Commerce 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 prayer to trigger corporate insolvency resolution process in respect of respondent-company M/s. Bindals Sponnge Industries Ltd., referred to as the corporate debtor. 2. The respondent-M/s. Bindals Sponnge Industries Ltd. (CIN 27109DL2003PLC119070) against whom initiation of the corporate insolvency resolution process has been prayed for, was incorporated on February 20, 2003 having its registered office at 217, 2nd floor, Agarwal Prestige Mall, Plot No. 2, Community Centre, Along Road No. 44, Pitampura, New Delhi-110 088. Since the registered office of the respondent-corporate debtor is in Delhi, this Tribunal having territorial jurisdiction over the place is the Adjudicating Authority in relation to the prayer for initiation of corporate insolvency resolution process in respect of respondent corporate debtor under sub-section (1) of section 60 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riental Bank of Commerce who together sanctioned various credit facilities to the corporate debtor. The applicant-Oriental Bank of Commerce has sanctioned Cash Credit (Hypothecation), Term Loan-I, Term Loan-II, Term Loan-III to the corporate debtor. 8. It is stated in the application that the corporate debtor has been banking with the Indian Overseas bank since 2003 and pursuant to the request of the corporate debtor, the financial creditor, as part of consortium, sanctioned the financial facilities on July 2, 2004. The above facilities were renewed/enhanced from time to time at the request of the corporate debtor. The consortium of banks, i.e., the Indian Overseas Bank, Punjab National Bank and Oriental Bank of Commerce lastly restructured on January 2, 2015 these facilities and joint documentation for the same was done on December 9, 2015. The outstanding amount in various facilities granted by the Oriental Bank of Commerce are as under : Sl. No. Facility Amount outstanding as on December 9, 2015 (Rs. crores) 1. Cash credit (hypothecation of stocks and book debts) 13.37 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice dated June 23, 2016 for taking possession of secured assets under section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. However, physical possession has not yet been taken on behalf of the consortium banks. 14. The applicant has placed on record the following documents in support of its financial debt : (i) Copy of the sanction letter dated January 29, 2015. (ii) Copy of the minutes of meeting of board of directors dated January 29, 2015. (iii) Acknowledgment of company of outstanding balance as on January 27, 2015 due and payable to the applicant-financial creditor. (iv) Copy of letter dated December 21, 2015 along with board resolution dated December 21, 2015. (v) Inter se agreement dated December 9, 2015. (vi) Copy of working capital consortium agreement dated December 9, 2015. (vii) Joint deed of hypothecation dated December 9, 2015. (viii) Copy of deed of guarantee by different directors dated December 9, 2015. (ix) Schedule of mortgaged property. (x) Letter of confirmation evidencing extension of created mortgage dated December 9, 2015 with list of deposited documents. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s loans were sanctioned, loan agreements were executed and the respondent-company utilised the said facilities. Due to nonpayment and non-refund of the outstanding dues the account of the corporate debtor has been declared as NPA. The respondent-company has signed the balance confirmation letters. Besides the applicant-bank has filed the relevant statement of accounts duly certified in accordance with the Bankers' Books Evidence Act, 1891. The certified copy of statement of accounts kept during the course of banking business basing on which the claim has been raised, can be termed as sufficient evidence of outstanding financial debt. The financial creditor has placed on record overwhelming evidence to prove the default. The material on record clearly goes to show that the respondent-corporate debtor has committed default in the payment of the loan amount. 21. The respondent has also raised an objection that the financial facilities to the respondent-corporate debtor was granted by the consortium of banks with the Indian Overseas Bank as lead bank and there is no privity of contract between the applicant and the respondent-corporate debtor. This objection would not detain us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... editor 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. 26. The hon'ble Supreme Court in the case of Mobilox Innovations P. Ltd. v. Kirusa Software P. Ltd. [2017] 205 Comp Cas 324 (SC) at paragraph 19 has observed that (page 349) : 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) 27. In the case in hand there is no dispute that the respondent-company has committed default in repayment of the outstanding 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 entitled to claim its outstanding financial debt from the co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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