TMI Blog2019 (3) TMI 1235X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is no bar for the applicant to approach this Hon'ble Tribunal for initiating resolution process without seeking consent of other lenders. As per the circular dated 26.02.2018, all such restructuring schemes have been cancelled/ withdrawn by RBI where implementation had not taken place, including S4A Scheme. All requirements of Section 7 of the Code for initiation of Corporate Insolvency Resolution Process by a Financial Creditor stand fulfilled. - this petition is admitted. - C.P. NO IB-948(PB)/2018 - - - Dated:- 8-2-2019 - MR M.M. KUMAR, PRESIDENT AND DR. DEEPTI MUKESH, MEMBER (JUDICIAL) For The Petitioner (s) : Mr. Sanjay Bajaj, Adv. and Anuj Gupta, Adv. For The Respondent (s) : Rajat Srivastava, Adv. and Amit Dhall, Adv. ORDER 1. The present application has been filed under Section 7 of the Insolvency Bankruptcy Code, 2016, (hereinafter referred to as the Code ), read with rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (for brevity 'the Rules') by IDBI Bank Limited through its Deputy General Manager Sri Sabya Sachi Sarkar vide Letter of Authority dated 26.07.2018, under Section 7 of the Insol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the Respondent Company is to pay the outstanding balance against the remaining three Term Loans i.e. Term Loan of ₹ 12.50 Crores, Term Loan of ₹ 5 Crores and Term Loan of ₹ 5 Crores. 6. It is further submitted by the applicant that the Respondent Company had been from time to time availing the Working Capital Facility and lastly availed the Working Capital Facilities of ₹ 132 Crores on the basis of loan/security documents dated 19.12.2014. It is submitted that thereafter the working capital limit was enhanced to ₹ 157 Crores for which loan/ security documents were executed on 01.03.2016. However, the said enhanced limit was not disbursed to the Respondent Company since the Respondent Company failed to adhere to the terms and conditions of sanction. 7. In order to secure the above facilities, the Respondent Company had been creating hypothecation of Current Assets, Fixed/Movable Assets as well as personal guarantees of Shri Sunil Mittal, Shri Vinay Mittal, Smt. Neena Mittal, Shri Ashish Mittal, Shri Amit Sethi, Shri Anil Kumar G. Gupta, Shri Sahil Mittal and corporate guarantee of M/s S.L. Overseas Limited. The Facilities were also duly secured ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppressed several material facts from this Hon'ble Tribunal, notably when the S4A Scheme as per RBI guidelines was sanctioned and the applicant being the lead bank had opened the TRA account. After the opening of the TRA Account, the respondent started operating the account regularly and have been routing the entire sales through the TRA Account and the applicant bank had been deducting the amount as per the understanding. The Account is being operated and the copy of Restructuring Proposal alongwith the opening of the TRA Account and the documents in relation to the restructuring of the account is annexed with the reply. 13. It is further argued by the respondent that most of the financial exposure of the respondent is by way of the Consortium Finance in which the applicant is the lead bank and the other consortium member banks are having the total lending under the Consortium of ₹ 384 Crores out of which the applicant has a share of 25.5% in the total lending. Disregarding the said position, the applicant has unilaterally approached this Hon'ble Tribunal with a mala fide intent of stealing a march over the other creditors. The individual action of the applicant is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng allowed to be operated regularly. The other member banks have the Pari passu charge over the properties including the charge over the working capital limits and in case, if the process which has been adopted by the applicant, is allowed to be continued, the Respondent's right to avail the operation of the account and running of the business operation itself shall stall and which would adversely affect the whole business operation. 17. The respondent has further submitted that the officials of the applicant and the respondent had several meetings only for the purpose of allowing operation in the TRA Account and no further coercive action was required to be initiated against the respondent till the time the resolution is being attempted as per the TRA Account. However, to the utter shock and surprise of the respondent, the present application has been abruptly filed by the applicant seeking initiation of CIRP in respect of the respondent. 18. Since the applicant has already approached the Debt Recovery Tribunal, New Delhi for the recovery of its purported dues from the respondent. The said proceedings, wherein the Guarantors/ Mortgagors are already arrayed as parties, ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ace, including S4A Scheme. 24. The applicant further submitted that the Lenders conducted a joint visit to the factory premised at Bulandshahar of the Corporate Debtor on 19.06.2018 where Sh. P.K. Gupta consultant of the Corporate Debtor was also present. However, there is no operation in the unit, nor there was any stock lying in the go-down, visit report dated 19.06.2018 is annexed with the rejoinder. 25. 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: (i) Default has occurred; (ii) Application is complete, and (iii) No disciplinary proceeding against the proposed IRP is pending . 26. Learned Counsel for the applicant has argued that all requirements of Section 7 of the Code for initiation of Corporate Insolvency Resolution Process by a Financial Creditor stand fulfilled. In that regard, he has submitted that the application is complete as per the requirements of Section 7(2) of the Code and other conditions prescribed by Rule 4(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. He has further submitted that the det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. 30. The Interim Resolution Professional shall perform all his functions religiously and strictly which are contemplated, inter alia, by Sections 15, 17, 18, 19, 20 21 of the Code. He must follow best practices and principles of fairness which are to apply at various stages of Corporate Insolvency Resolution Process. His conduct should be above board independent; and he should work with utmost integrity and honesty. It is further made clear that all the personnel connected with the Corporate Debtor, erstwhile directors, 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 affairs of the Corporate Debtor. In case there is any violation by the ex-management or its ex-directors 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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