TMI Blog2019 (3) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... e is also directed to cause public announcement as prescribed under Section 15 of I B Code, 2016, within three days from the date the copy of this order is received, and call for submissions of claim in the manner as prescribed. The moratorium is hereby declared which shall have effect from the date of this Order till the completion of Corporate Insolvency Resolution Process, for the purposes referred to in Section 14 of the I B Code, 2016. - CP/678/IB/2018 - - - Dated:- 3-1-2019 - CH MOHD. SHARIEF TARIQ, MEMBER (JUDICIAL) For The Financial Creditor : P.H. Arvind Pandian, Sr. Counsel For The Corporate Debtor : Nithyaesh Nataraj, Counsel ORDER CH MOHD. SHARIEF TARIQ, MEMBER (JUDICIAL) 1. Under adjudication is CP/678/IB/2018 that has been filed by Mrs. Anita Kumaran and Mr. K. Kumaran (hereinafter referred to as 'Financial Creditors') under Section 7 of the Insolvency and Bankruptcy Code, 2016 r/w Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 against M/s. KGS Developers Limited (hereinafter referred to as 'Corporate Debtor'). The prayer made is to admit the Application, to initiate th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... holding and Board of KDL and PVS and GG assuming complete control of the same, KDL, PVS and GG hereby agree that they shall secure release of the Karasangal Property from ICICI Bank on or before 30.06.2016 or such other extended period as may be mutually agreed in writing between the Parties Pursuant to the transfer of shares amongst the Parties herein, GG would hold approximately 30% of the equity shareholding of KDL and KAIAL. Till the release of the Karasangal Property is secured from ICICI Bank, the Parties have agreed to create the following security mechanism. (i) The documents relating to the shares of KDL, namely Original Share Certificates and Executed Transfer forms, which are being transferred by KK under Clause 2.1 above shall be handled over by KK to M/s. Guru Ram, Chartered Accountants. (ii) The documents relating to the shares of KAIAL, namely Original Share Certificate and Executed Transfer forms, which are being transferred by KK under Clause 2.1 above shall be handed over by KK to M/s. Guru Ram. (iii) PVS and GG shall cause KDL to create a registered simple mortgage over 14 acres of Paddapai Property in favour of KK, morefully described in Sched ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) followed Possession Notice under Section 13(4) of the SARFAESI Act, 2002 and has taken possession of the property of the 1st Applicant/Financial Creditor. In the said Possession Notice, the amount has also been mentioned. The Possession Notice provides that the borrower failed to repay the amount and the Notice is being given to the mortgagor/1st Financial Creditor. Subsequent to the same, the 1st Applicant/Financial Creditor has stepped in and paid an amount of ₹ 16 Crores to the ICICI Bank as reflects from the Letter dated 07.12.2017 which clearly provides that the transactions were made on 11.09.2017, 30.09.2017 and 07.12.2017 for an amount of Rs.l Crores, ₹ 3 Crores and ₹ 12 Crores respectively, grand total amounting to ₹ 16 Crores. 6. It has been submitted by the Learned Sr. Counsel for the Financial Creditors that the Letter dated 07.12.2017 reflects that the money has been paid by M/s. Radiance Realty Developers India Limited on behalf of the 1st Applicant/Financial Creditor which were receivables by the Financial Creditors from the said entity. 7. The Learned Sr. Counsel for the Financial Creditors referred to the document placed at page 121 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Corporate Debtor is taken into consideration, the same will take away the effect of the definitions of Financial Creditor and Financial Debt given under Sections 5 (7) and 5 (8) of the I B Code, 2016. The settled principle of interpretation is that an interpretation must give effect to the provisions of the statutes and not to render them otiose. This view is based on the well-established maxim of interpretation which says 'ut res magisvaleat quam pereat'. This Latin maxim of interpretation when translated into English means that it is better for a thing to have effect than to be void. In order to strengthen the above view, a reference may be made to the principle of interpretation evolved by Hon'ble Apex Court in Guradevdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, wherein the Hon'ble Apex Court has laid down as under:- It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless such construction leads to some absurdity or unless there is something in the context or in the object of the statute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... development by executing Power of Attorney dated 05.01.2007 under joint development agreement. The Counsel has submitted that the said Power of Attorney has been unilaterally cancelled and the Corporate Debtor has spent some money as far as the development of the land is concerned. However, these are the separate issues. The Corporate Debtor is not remediless. The said Power of Attorney has been cancelled on 30.05.2017 but till date no legal remedy has been availed by the Corporate Debtor to challenge the same. 11. The Learned Sr. Counsel for the Financial Creditors has rebutted the contentions made by Learned Counsel for the Corporate Debtor in relation to the continuation of the 2nd Applicant/Financial Creditor as Director of the Corporate Debtor. He has submitted before this Bench the copy of the resignation letter dated 30.06.2017 by which the 2nd Applicant/Financial Creditor has resigned from the Corporate Debtor. The Learned Sr. Counsel for the Financial Creditors has referred to the provisions of Section 168 (1) of the Companies Act, 2013 which provide that a director may resign from his office by giving a notice in writing to the company and the Board shall on receipt o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m filing the Application under Section 7 of the I B Code, 2016, against the Corporate Debtor for initiating the CIRP. 15. The Learned Counsel for the Corporate Debtor as a last resort has submitted that he is not canvassing the issue as to whether the Shareholder and Director/Promoter can be a Financial Creditor or not, but for the purpose of evidence that neither the debt has been assigned in favour of the Financial Creditors nor they have shown that the money has been paid for time value to the ICICI Bank and has prayed to reject the Application. However, in view of the observation made in the preceding paragraphs, the defence taken by the Corporate Debtor is devoid of merits and has already been rejected. 16. The Learned Sr. Counsel for the Financial Creditors in his reply has submitted that the facts contained in Neeraj Bhatia case (supra) are different from the facts involved in the case on hand and further submitted that the 1st Applicant/Financial Creditor is not guarantor but a mortgagor as reflects from the Possession Notice dated 05.09.2017. The Learned Sr. Counsel for the Financial Creditors has referred to the judgment dated 13-07-2018 passed by Hon'ble NCLAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the debt claimed clearly falls under the definition of 'Financial Debt' given under Section 5(8) of the I B Code, 2016. 19. The documentary evidence placed on the case file is sufficient in order to ascertain the existence of a default on the part of the Corporate Debtor. Therefore, in the light of the facts and circumstances and the legal position stated above, the Financial Creditors have fulfilled all the requirements of law, for admission of the Application filed under Section .7 of the I B Code, 2016 and has proposed the name of the IRP after seeking his consent in Form-2. Therefore, the Application stands admitted.The commencement of the Corporate Insolvency Resolution Process is ordered, which ordinarily shall get completed within 180 days, reckoning from the day this order is passed. 20. Mr. Kannan Sambasivam, is hereby appointed as IRP as has been proposed by the Financial Creditor. There is no disciplinary proceeding pending against the IRP as reflects from Form-2. The IRP is directed to take charge of the Respondent Corporate Debtor's management immediately. He is also directed to cause public announcement as prescribed under Section 15 of I B Code, 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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