TMI Blog2019 (7) TMI 506X X X X Extracts X X X X X X X X Extracts X X X X ..... CAL) For The Petitioner : Mr D.K. Gupta and V.K. Mahajan, Advocates For The Respondent : Mr Manish Jain and Ms. Divya Sharma, Advocate JUDGMENT Per : R.P. Nagrath, Judicial Member. Punjab National Bank, a body corporate, constituted under the Banking Companies (Acquisition Transfer of Undertakings) Act, 1970, has filed this petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 (for short to be referred hereinafter as the Code ) for initiating Insolvency Resolution Process against the respondent-corporate debtor. The financial creditor has its Head Office at Dwarka, New Delhi and this petition has been filed by the bank through Gurcharan Singh, Chief Manager, Bank Square, Chandigarh in whose favour petitioner-bank has executed a Power of Attorney dated 12.05.1998 (Annexure A-1). The Circle Head of the bank has authorized Gurcharan Singh to file the application under Section 7 of the Code against the respondent-corporate debtor and to do all the acts in the progress of the case. By another authority letter dated 25.05.2018 (Annexure A-2) Mr. D.K. Gupta, Advocate had been pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of FITL (Funded Interest Term Loan) Facility. The Resolution of the Board of Directors is at Annexure A-30. The respondent-corporate debtor executed various documents on 30.03.2015. These are Annexure A-31, Agreement of Hypothecation; Annexure A-32, First Charge Agreement of Hypothecation; Annexure A-33, Agreement of FITL; Annexure A-34, Agreement of Hypothecation; Annexure A-35, Agreement of Guarantee; Annexure A-36, Agreement of Guarantee; Annexure A-37, Agreement of Guarantee; and Annexure A-38, Agreement of Guarantee. In between for commencement of loan from time to time, the decisions were taken by the respondent-corporate debtor for enhancement of the loan facilities from the date of original sanction of the loan. These Resolutions are Annexure A-19 dated 01.08.2005; Annexure A-20 dated 01.10.2006; Annexure A-21 dated 03.03.2008; Annexure A-22 dated 03.06.2009/23.09.2009; Annexure A-23 dated 03.01.2011; and Annexure A-24 dated 28.03.2012. The sanction letter dated 12.07.2013 is at Annexure A-25 and Resolution of the corporate-debtor dated 11.07.2013 is at Annexure A-26. The other documents executed on 13.07.2013 are Annexure A-27, Agreement of Hypothecation; Annexure A-28, F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... antors of the loan. The proof of dispatch of these notices have also been annexed. Legal notice dated 20.02.2017, Annexure A-10, was issued to all the concerned persons. 7. In order to comply with the requirements of Form No.1, in which the application has been filed, the petitioner-financial creditor has also attached Annexure A-8 i.e. copy of Registration of Charge of the immovable property of the corporate debtor, registered with the Registrar of Companies, which is in Form CHG-1. 8. The Punjab National Bank also filed an application, being OA No.2443 of 2017 (Annexure A-9), under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, by impleading necessary parties for recovery of an amount of ₹ 12,14,67,993.00, outstanding as on 17.05.2017. The respondent-corporate debtor filed reply to OA, pending before the Debts Recovery Tribunal, as at Annexure 50. 9. The respondent-corporate debtor also executed the balance confirmation letters admitting the then outstanding amount of loan on 17.04.2008, 28.09.2010, 23.04.2011 and 12.03.2013. These letters are at Annexure A-18 (Colly). The bank has also mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are still pending for the past about four years. The respondent, therefore, moved an application before the Hon ble Punjab and Haryana High Court for the speedy disposal of the said proceedings, pending before the Additional District Judge, Chandigarh. Vide order dated 25.04.2018, Annexure R-5, the Hon ble High Court has directed the Court of Additional District Judge, where the application under Section 34 of the 1996 Act, is pending, to decide the objections within a period of four months positively. It is further stated that pursuant thereto, the Additional District Judge, heard the matter and fixed the case for pronouncement on 24.09.2018. It is submitted that the order/judgment would be placed on record on this file as and when the copy of the order is received. However, till the date arguments were concluded, no such order has been placed on record by the respondent. In any case such a contention would not be of any help to the respondent. 12. It is further averred that respondent-corporate debtor has filed two separate petitions under Section 9 of the Code against two corporate debtors, namely, M/s Regent Land Holdings Pvt. Ltd., and M/s Blessings Resorts Pv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to pay the amount in default and therefore, the financial creditor was constrained to issue such notices to the sundry debtors. 17. With regard to the discrepancy of the adjustment of the amount of sale of one of the mortgage property, it is stated that Plot No.294, Sector 27, Panchkula, has not been mentioned in the application filed in Form 5. In fact that property was the primary security in the Housing Loan Account of Mr. Sanjeev Azad, Director/Promoter of the company, the charge of which was extended in the account of the company. This property was sold by the bank under SARFAESI Act, 2002, in November, 2017, for ₹ 81.10 lakh and not for the sum of ₹ 88 lakh. Copy of the sale certificate is Annexure A-1, of the replication, which shows that the amount of consideration for the sale was as per the assertion of the bank and not the amount of ₹ 88 lacs. The factum of this sale has been mentioned at Page No.21 of the synopsis of the petition and the amount appropriated in the account of the corporate debtor has been reflected in the statement of account at Page No.350 of the paper book. Out of ₹ 81.10 lakh, ₹ 29,89,200/- has been approp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utility or such other record or evidence of default as may be specified; (b) the name of the resolution professional proposed to act as an interim resolution professional; and (c) any other information as may be specified by the Board. 22. In order to satisfy Clause (a) of Section 7(3) of the Code, the petitioner has filed the record of evidence of default in abundance. All the documents of the sanction of the loan, enhancement of loan, execution of the loan, agreements of loan, hypothecation agreement, mortgage deed for creation of the primary security etc., have already been referred. There are then the balance confirmation letters executed by the corporate debtor, admitting the then outstanding loan. 23. The aforesaid evidence is further fortified from the statement of account of cash credit account and term loan account (Annexure A-16 and Annexure A-17). This statement of account is for the period from 01.01.2015 upto 12.03.2017 and there is computation of interest at Page No.350 of the paper book and the statement is duly certified under the Bankers Book Evidence Act, 1891. Similar is the other statement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n terms and conditions of loan. 27. With regard to the letter written to the debtors of the corporate debtor by the bank advising not to pay the amount to the respondent after the account was declared NPA, it seems that the bank has exceeded its competence to write such letters to the debtors of the corporate debtor, though they may be a party in the OA before the Debts Recovery Tribunal. We must rather deprecate such a conduct of the financial creditor as it cannot assume the jurisdiction of an authority to issue such a directives. However, those debtors of the corporate debtor are not debarred from fulfilling their obligations to pay the amount to the corporate debtor under any circumstance, but such a contention would not justify the contention of the respondent-corporate debtor. 28. It is also pertinent to mention that the Central Registry of Securitization Asset Reconstruction and Security Interest of India, has also issued the search result for matching asset in respect of certain properties equitably mortgaged with the bank. These search results dated 02.06.2018 are at Annexure A-51 (Colly). There is also the CIBIL Report (Annexure A-15) relied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he corporate debtor, Ria Constructions Limited, is admitted. 33. We declare the moratorium in terms of sub-section (1) of Section 14 of the Code, as under:- (a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; (b) transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein; (c) any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; (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. 34. It is further directed that the supply of essential goods or services to the corporate debtor as may be specified, shall not be terminated or suspended or interrupt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ics and moral; (v) The Interim Resolution Professional shall cause a public announcement within three days as contemplated under Regulation 6 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 of the initiation of the Corporate Insolvency Resolution Process in terms of Section 13 (1) (b) of the Code read with Section 15 calling for the submission of claims against Corporate Debtor ; (vi) It is hereby directed that the Corporate Debtor , its Directors, personnel and the persons associated with the management shall extend all cooperation to the Interim Resolution Professional in managing the affairs of the Corporate Debtor as a going concern and extend all cooperation in accessing books and records as well as assets of the Corporate Debtor ; (vii) The Interim Resolution Professional shall after collation of all the claims received against the corporate debtor and the determination of the financial position of the corporate debtor constitute a committee of creditors and shall file a report, certifying constitution of the committee to this Tribunal on or before ..... 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