TMI Blog2019 (7) TMI 637X X X X Extracts X X X X X X X X Extracts X X X X ..... ility prescribed under Section 11 of the Code. Therefore, once the IB Petition is found complete, then this Adjudicating Authority cannot reject the application on other grounds as agitated by the IDBI and other objectors - Further, there can be no serious prejudice to their claim when the petition is admitted and CIRP is triggered, as they can still lodge their claim before the IRP/RP which shall be dealt with as per I B Code. The present IB petition is found complete. Hence, it deserves for admission so as to trigger the C.I.R.P under Section 10 the Code - Petition admitted under Section 10 of the Insolvency Bankruptcy Code and the Moratorium under Section 14 of the Code is hereby declared in respect of the Corporate Applicant / Debtor Company. - CP (IB) No. 122/10/NCLT/AHM/2018 - - - Dated:- 10-5-2019 - MR HARIHAR PRAKASH CHATURVEDI, MEMBER (J) For The Petitioner : Tirth Nayak, Adv. For The IDBI : Mr Mr Akshat Khare, Advocate For The IFCO Tokia General Insurance Co. Ltd. : Mr Rushabh Shah, Advocate ORDER 1. The present Application is preferred by the Corporate Applicant/Corpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Account No. Amount due Amount in default 1 Associates Co.Op. Bank Ltd. 1st floor, Surat Vankar Snagh Building Ring Road Surat-395 003 Term Loan 449999900000662 1177110 1177110 2 ICICI Bank Ltd. Anjansalakha Athwalines Parle Point Surat-395 007 Overdraft Account 5205001095 280000 280000 3 IDBI Bank Ltd. Upper Ground Floor 21st Century Building Ring Road Surat-395 002 Cash Credit 9651100001359 30232340 35732340.01 4 Goldline International Finvest Ltd. G-6, Gr. Floor House No.46 Gali No.4-C Ansari Road Darya Ganj New Delhi-110002 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11. The corporate applicant/debtor has also enclosed a copy of its audited financial statements for the years 2015-16 and 2016-17 and the provisioned financial statements for period from 01.04.2017 to 09.03.2018, as Annexure 11A, 11B and 11C, respectively. 12. In the present application, the Corporate Applicant has proposed the name of Mr.Narayan Gajanan Vidvans, as an Interim Resolution Professional (I.R.P), who also duly informed about his willingness to accept the assignment and to act as the IRP in respect of the present corporate applicant through his written communication in Form-2 to the present application. 13. As per record, this Adjudicating Authority by its order dated 29.11.2018 has impleaded M/s. IFCO TOKIO as one of the respondents to the present application. During the course of hearing on 07.12.2018 it expressed its no objection if the present IB Petition is allowed and admitted under Section 10 of the I B Code, provided that its interest to be taken care of by this Adjudicating Authority while admitting the same. 14. In addition to the above, the Income-Tax Officer, Ward-1(1)(1), Surat, vide ref. No. ITO / WD.1(1)(1) / ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5/- as due against the assessee-company. 16. Notwithstanding the above, one of the objectors-Financial Creditors, i.e. IDBI, has opposed the present IB Petition by filing its objections, contending such:- 16.1 the present application filed by the applicant is not maintainable before this Adjudicating Authority. It is alleged that the applicant intends to thwart the recovery action initiated by it under Section 13 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act,2002 (SARFAESI Act), then it has been contended that if the applicant feels aggrieved with the action initiated under the SARFAESI Act. It has an alternative efficacious remedy under the said Act to raise its grievance against the respondent. In support of its objection, the IDBI has placed reliance, on a decision of the Hon ble Supreme Court in the matter of United Bank of India v. Satyawati Tandon wherein it has been pleased to observe as such:- In our view while dealing with the applications involving challenge to the action for recovery of the public dues etc., the High Court must keep in mind that the legislations enac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facility of ₹ 3,50 crores and Bank Guarantee of ₹ 30.00 lakhs] against hypothecation of movable assets and mortgage of immovable properties. Shri Raju Jashwantlal Choksi, Shri Bharat Jashwantlal Choksi, Shri Anil Jashwantlal Choksi, Shri Jayesh Jashwantlal Choksi, Shri Mayank Anilbhai Choksi, Smt. Nileshaben Bharatbhai Choksi, Smt. Rekhaben Anilbhai Choksi, Smt. Suhangini Jayesh Choksi and Smt. Mala Raju Choski stood as personal guarantors of the credit facilities sanctioned by it. 16.5 It is contended that the borrowers as well as guarantors have executed various security documents for obtaining the credit facilities, i.e., Loan Facility Agreement, Deed of Hypothecation, Undertaking to Create Supplementary Deed of Hypothecation, Deed of Guarantee / Guarantee Agreement, Undertaking of Borrower and Undertaking of Guarantors, Undertaking to Create Mortgage, Demand Promissory Note, Registered Memorandum of Deposit of Title Deeds. 16.6 It is further alleged that the corporate applicant never paid actual amount of instalments and whatever was paid, was irregular and due to the non-payment of monthly instalments, the account of corporate app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application for initiating corporate insolvency resolution process with the Adjudicating Authority. (2) The application under sub-section (1) shall be filed in such form, containing such particulars and in such manner and accompanied with such fee as maybe prescribed. (3) The corporate applicant shall, along with the application, furnish the information relating to (a) its books of account and such other documents for such period as maybe specified; and (b) the resolution professional proposed to be appointed as an interim resolution professional; and of the corporate debtor, as the case maybe, approving filing of the application. (4) The Adjudicating Authority shall, within a period of fourteen days of the receipt of the application, by an order- (a) admit the application, if it is complete (b) reject the application, if it is incomplete Provided that Adjudicating Authority shall, before rejecting an application, give a notice to the applicant to rectify the defects in his application within seven days from the date of receipt of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and operational creditors. A financial creditor has been defined under Section 5(7) as a person to whom a financial debt is owed and a financial debt is defined in Section 5(8) to mean a debt which is disbursed against consideration for the time value of money. As opposed to this, an operational creditor means a person to whom an operational debt is owed and an operational debt under Section 5 (21) means a claim in respect of provision of goods or services. 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 a 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 applican ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion before this Appellate Tribunal in M/s. Unigreen Global Private Limited v. Punjab National Bank - Company Appeal (AT) (Insolvency) No. 81 of 2017 , wherein this Appellate Tribunal, by its judgment dated 1st December, 2017 taking into consideration the provisions of Section 10 of the I B Code and other relevant provisions, observed and held as follows: 20. Under both Section 7 and Section 10, the two factors are common i.e. the debt is due and there is a default Sub-section (4) of Section 7 is similar to that of sub-section (4) of Section 10. Therefore we, hold that the law laid down by the Hon ble Supreme Court in Innoventive Industries Ltd. (supra) is applicable for Section 10 also, wherein the Hon ble Supreme Court observed as The moment the adjudicating authority is satisfied that a default has occurred, the application must be admitted unless it is incomplete, in which case it may give notice to the applicant to rectify the defect within 7 days of receipt of a notice from the adjudicating authority 21. In an application under Section 10, the financial creditor or operational creditor , may dispute that there is no default or that d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 24. 1st Respondent -financial creditor has referred to pendency of a Civil Suit between Mayank Maheshwari v. Anurag Garg and another suit between Sh. Sugar Nath Mehto v. Vedika Overseas Tradex Ltd. . Pendency of such suits cannot be a ground to deny admission of an application under Section 10, if all the information in terms of Section 10 of the I B Code and Form 6 has been supplied by a Corporate Applicant/Corporate Debtor and the application is otherwise complete. Non-mentioning of suit(s) pending between the parties cannot termed to be suppression of facts nor can be a ground to reject the application. In fact, once the application under Section 10 is admitted, all such related proceedings, including suits for recovery of movable or immovable property of the Corporate Debtor and other proceeding cannot proceed further in any Court or Tribunal or Authority in view of order of moratorium as maybe declared under Section 13 and prohibition that may be imposed under Section 14 of I B Code. 25. Similarly, if any action has been taken by a Financial Creditor under Section 13(4) of the SARFAESI Act, 2002 against the Corporate Debtor or a suit is pending ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C.I.R.P under Section 10 the Code. Therefore, the present IB Petition is hereby admitted under Section 10 of the Insolvency Bankruptcy Code and the Moratorium under Section 14 of the Code is hereby declared in respect of the Corporate Applicant / Debtor Company with following consequential orders/directions; (i) That the order of declaration of Moratorium under Section 14 of the Code shall commence from 10.05.2019 and shall have legal effect till completion of Corporate Insolvency Resolution Process or until this Adjudicating Authority approves the Resolution Plan under Sub- section (1) of Section 31 or to go an order for the Liquidation of Corporate Debtor under as per Section 33 of the I B Code, as the case maybe. (ii) That this Adjudicating Authority hereby appoint Mr. Narayan Gajanan Vidvans, having IP Registration No. IBBI/IPA-002/IP-N00378/2017-2018/11121 (and residing at 604B, Shiv Kartik Enclave, VIP Road, Vesu, Surat-395007), Mobile Nos.919428409398/7506093966, appointed as Interim Insolvency Resolution Professional to carry the functions as mentioned under Insolvency and Bankruptcy Code, 2016. (iii) The IRP so appoi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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