TMI Blog2019 (5) TMI 389X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 can clearly be termed as 'Financial Creditor' so as to prefer the present application under Section 7 of the Code. In the facts 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 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. In terms of Section 7(5)(a) of the Code, the present application is admitted - Moratorium also declared. - COMPANY PETITION (IB) NO. 816 (PB)/2018 - - - Dated:- 25-3-2019 - MR M.M. KUMAR, PRESIDENT AND S.K. MOHAPATRA, MEMBER (TECHNICAL) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al has agreed to accept the appointment as the interim resolution professional and has signed a communication dated 03.07.2018 in Form 2 in terms of Rule 9(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. There is a declaration made by him 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. Alok Kumar Agarwal 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 applicant that pursuant to the request of the respondent company, Applicant Bank sanctioned various facilities including cash credit limit and term loan, vide sanction letter dated 28.08.2012 and further restructured the said financial facilities vide letter dated 27.02.2015. 7. It is submitted that the latest sanction letter dated 27.02.2015 establishes that credit facilities were availed by the respondent Corporate Debtor (i.e., cash credit facility to the tune of ₹ 300.00/- lakhs, Term Loan Facility (for Factory and Land Build ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;s Certificate in terms of Banker's Books of Evidence Act, 1891. 10. It is alleged that the respondent corporate debtor had availed various credit facilities but failed to pay- its dues to the Applicant Bank. Consequently, the Applicant Bank declared the Account of the Corporate Debtor as a Non-Performing Asset ( NPA ) on 31.10.2017 as per the extant guidelines of Reserve Bank of India. 11. It is contended that despite reminders and written demands, respondent corporate debtor did not pay the dues outstanding in the loan account. Thereafter, a Recall Letter/Demand Notice under Section 13 (2) of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ( SARFAESI ) dated 22.02.2018 was issued by the Applicant Bank to the Corporate Debtor demanding a sum of ₹ 19,42,37,169.95/- as on 31.12.2017. Subsequently applicant bank has filed Original application before DRT-1 New Delhi against the respondent company, which is pending for adjudication. 12. It has been claimed in the application that the respondent Corporate Debtor is liable to pay to the Applicant Bank a sum of ₹ 20.56 cror ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 7 of the Code, there being default in payment of financial debt. 22. It is also alleged that the respondent approached the officials of the financial creditor for review of the highest part of interest and processing fees charged in the loan account and unreasonable penal interest imposed. Nevertheless, the financial creditor intentionally and deliberately did not provide any benefit to the corporate debtor. It is further alleged that the entries on the debit and credit side of the statement are false and fabricated inasmuch as the applicant has not acted reasonably in applying the Clayton's rule while computing the liability of the respondent. It is further alleged that there has been discrepancy in the amount of claim Lodged from time to time. 23. Be that as it may, dispute over the quantum of default, cannot also be a ground for rejection of an application under Section 7 of Code, as the determination of quantum of financial debt is not within the domain of the Adjudicating Authority. In the present proceeding the Tribunal is not supposed to ascertain the quantum of amount of default or to pass a decree as to how much is actually due ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olvency Resolution Process by the Financial Creditor is delineated under Section 7 of the Code, wherein only Financial Creditor / Financial Creditors can file an application. As per Section 7(1) of the Code an application could be maintained by a Financial Creditor either by itself or jointly with other Financial Creditors. 29. The expressions Financial Creditor and Financial debt have been defined in Section 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. 30. In the present case the applicant bank had sanctioned and disbursed the loan amount recoverable with applicable interest by entering into 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 pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o secure the loan facility availed from the applicant bank. 35. Besides the Corporate Debtor has executed and acknowledged the debt amount vide its letter dated 01.02.2018. In addition, applicant bank has filed the statement of accounts duly certified in accordance with Bankers' Books Evidence Act, 1891 as per requirement of Form-1 part V column 7 of the application. Certified copy of statement of account pertaining to various loan facilities, kept during the course of banking business basing on which the claim has been raised can be termed as sufficient evidence of the financial debt. 36. It is thus seen that the applicant 'financial creditor' has placed on record voluminous and overwhelming evidence in support of the financial debt as well as to prove the default. 37. 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 had availed the loan facilities and has committed default in repayment of the outstand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (d) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor. 43. It is made clear that the provisions of moratorium shall not apply to transactions which might be notified by the Central Government or the supply of the essential goods or services to the Corporate Debtor as maybe specified, are not to be terminated or suspended or interrupted during the moratorium period. In addition, 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. 44. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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