TMI Blog2019 (7) TMI 508X X X X Extracts X X X X X X X X Extracts X X X X ..... se for the purpose of triggering the Corporate Insolvency Resolution Process. It is clear that the application being complete and in absence of any other infirmity, and the corporate debtor having not denied the debt and default, the adjudicating authority cannot reject the application preferred by the appellant company - there is admitted debt and efforts are/were being made by the respondent to come out of the financial obligations. Existence of default - HELD THAT:- There is no dispute in the case that the petitioner is the financial creditor - On perusal of record, it is held that there is existence of default. The application under Section 7(2) of the Code is also complete in all respect. The petitioner/financial creditor having fulfilled all the requirements of Section 7 of the Code, the instant petition deserves to be admitted - Petition admitted - moratorium declared. - C.P. (IB) NO. 157/7/NCLT/AHM/2018 - - - Dated:- 2-5-2019 - MS. MANORAMA KUMARI, MEMBER (J) For The Applicant : Navin Pahwa, Sr. Advocate For The Respondent : Mr . Sunil Bhavsar, Advocate ORDER 1. M/s Asset Reconstruction Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total 134,25,00,000 Nature of Facility Total dues (in Rs.) Term Loan 347,54,90,618 Working capital loan 323,34,19,818 Packing credit 54,63,59,836 Total 725,52,70,272 5. It is further submitted by the applicant that the account has been classified as Non-Performing Asset as on 31st December, 2007. 6. In support of their claim, the applicant has submitted copy of the following documents along with the application: - Sl. No. Annexure Particulars Page No. 01 A Certificate of incorporation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O Letter regarding sanction of ad hoc EPC/PSC credit facilities dated 17.01.2007 430-433 17 P Resolution dated 29.01.2007 accepting terms and conditions of ad hoc EPC/PSC credit facilities 437-467 18 Q Agreement of loan for overall limit dated 29.01.2007 437-467 19 R Agreement for hypothecation of goods and assets dated 29.01.2007 468-480 20 S Revival letter dated 14.11.2007 and Resolutions passed by the Board of Directors of the corporate debtor dated 14.11.2007 481-485 21 T Balance confirmation in respect of term loan, cash credit and EPC facility ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. On notice being issued, respondent/corporate debtor filed affidavit in reply on 28.12.2018 denying the contentions raised in the application. The respondent has raised the following objections: - (i) The power of attorney executed by the applicant company in favour of Mr. Yogesh Nerkar is signed by two Directors and not supported by Board Resolution, nor any other document has been produced before this Bench to show that the applicant company had authorised these two Directors to issue a Power of Attorney on its behalf in favour of Mr. Yogesh Nemkar. (ii) Interest has been calculated from March, 2014 at the rate of 14.75% p.a., whereas, as per the common loan agreement dated 05.03.2005, produced at page 161 of the application, rate of interest as agreed between the parties was fixed at 10.25% p.a. Findings 8. We have gone through the facts of each of the case and heard the submissions made by the parties and perused the relevant provisions and the records. 9. That, first objection raised by the respondent is that the power of attorney is not supported by any Board resolution. The po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Section 7 or 9 do not amount to recovery proceedings, the question of deciding the claim which may include the interest by the Adjudicating Authority does not arise for the purpose of triggering the Corporate Insolvency Resolution Process. 11. To decide the issue, it is desirable to refer to the decision of Hon ble Supreme Court in the matter of Innoventive Industries Ltd. v. ICICI Bank and another (2018) 1 SCC 407 which reads as under: - 28. When it comes to a financial creditor triggering the process, Section 7 becomes relevant. Under the explanation to Section 7(1), a default is in respect of a financial debt owed to any financial creditor of the corporate debtor it need not be debt owed to the applicant financial creditor. Under Section 7(2), an application is to be made under sub-section (1) in such form and manner as is prescribed, which takes us to the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. Under Rule 4, the application is made by a financial creditor in Form 1 accompanied by documents and records required therein. Form 1 is a detailed form in 5 parts, which requires particulars of the applicant in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... banks; (ii) Letter dated 23rd October, 2012 addressed to State Bank of India requesting the respondent company to allow continuing operations and to covert 75% of principal amount as Redeemable Preference Shares; (iii) Letter dated 08.03.2013 addressed to State Bank of India proposing one-time settlement; (iv) Letter dated 29.05.2015 addressed to consortium of banks to review the status of one-time settlement; (v) Letter dated 23.03.2016 addressed to the applicant/financial creditor putting forward a one-time settlement proposal. 14. From the above it is clear that there is admitted debt and efforts are/were being made by the respondent to come out of the financial obligations. 15. There is no dispute in the case that the petitioner is the financial creditor. The application is also filed in the prescribed form-1 of the Rules and the prescribed fee has also been paid. Along with the application, the applicant proposed the name of the Resolution Professional namely Mr. Divyesh Desai, 301, Kadambai, H. N. Compound, M.G. Road, Goregaon West City, Mumbai having Registration Number IBBI/IP ..... X X X X Extracts X X X X X X X X Extracts X X X X
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