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2019 (7) TMI 637

ptcy Code, 2016 read with Rule 7 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 - HELD THAT:- The corporate applicant is having its outstanding debts due to its Financial and Operational Creditors, but is unable to pay the same, which amounts approximately to ₹ 4,25,17,532.01 to the Financial Creditors. That apart, there is some disputed dues of newly impleaded respondent/objector IFFCO-TOKIO General Insurance Company Ltd. to the extent of ₹ 23,27,535/- only. Hence, the corporate applicant has moved for initiation of CIRP for itself. This Adjudicating Authority is bound to admit an application, if it is found complete by providing requisite information under Section 10 of the I& B Code read with Form 6 of the relevant rules and it does not suffer from any ineligibility 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 b .....

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of Section 10 of the Insolvency and Bankruptcy Code, 2016. 4. The Part-Ill of the application provides details about its financial reditors / operational creditors. The details of the Financial Creditors disclose about the financial debts to whom the company owes, but it has committed default in making repayment of the same. The details of Financial Creditors along with outstanding debts and the amount has been defaulted has been annexed as Annexure-6 with the present IB Petition and described as under:- Sr. No. Name & Address of Bank Type of account 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 Term Loan N.A. 5328082 5328082 Grand Total 37017532 42517532.01 5. The present IB Petition describe furth .....

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ignment 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) / ATWPL /2018-19 dated 04.02.2019, wrote a letter to this Court informing about outstanding Income Tax Demand against the Corporate Applicant/Debtor company. 15. For the sake of convenience, the contents of the such letter are being reproduced hereinbelow:- 2. In this connection, it is informed that a request letter has already been sent to your office vide letter No.ITO / Wd.1(1) (1)/ATWPL/2017-18, dated 12.04.2018, for considering the claim of the Revenue Department to the extent of ₹ 4,43,71,945/ -. Fur .....

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odies for redressal of the grievance of any aggrieved persons. Therefore, in all such cases, High Court must insist that before availing remedy under Article 226 of the Constitution, a person must exhaust the remedies available under the relevant statute. Therefore, as per the IDBI, the applicant has filed this petition only to frustrate the legal recovery proceedings initiated by it. Hence, this Tribunal is not having jurisdiction to pass any interim relief against the recovery actions being initiated by the secured creditor, i.e.IDBI. 16.2 It is further contended that as per Section 3 (30) of the IBC Code and as per Section 2(1) (zd) of the SARFAESI Act, a secured creditor is a creditor in favour of whom a security is created, from the list of financial creditors as disclosed by the applicant, IDBI is the only secured creditor in terms of its definition as all security documents have been executed only in favour of IDBI. 16.3 It is further alleged that the corporate debtor was in debt of various operational creditors and only two financial creditors. The corporate debtor was unable to pay its liabilities of taxes and statutory dues in the year 2008-2009. Hence, it is contended th .....

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icant company as well as its guarantors have failed to make payment even after receiving the recall notice. The corporate applicant, being borrower, duly replied to the said recall notice vide letter dated 16.11.2015, wherein it had admitted its liability towards repayment, but made complaints of negative approach of the bank. The IDBI Bank thereafter dated 03.12.2015 by requesting the applicant to repay the entire outstanding amount as per the earlier demand, but the applicant/corporate debtor has failed to comply with. Therefore, the IDBI left with no option, but to invoke the personal guarantee of the personal guarantors by letter dated 31.12.2015. 16.8 For the aforesaid reasons, the IDBI, being objector IDBI has requested for dismissal of the present IB Petition filed under Section 10 of the I & B Code. 17. By considering the above mentioned facts of the present case, it is evident that the corporate applicant is having its outstanding debts due to its Financial and Operational Creditors, but is unable to pay the same, which amounts approximately to ₹ 4,25,17,532.01 to the Financial Creditors. That apart, there is some disputed dues of newly impleaded respondent/objec .....

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ted in Form 6 of the Insolvency and Bankruptcy (Application to the Adjudicating Authority) Rules, 2016 subject to ineligibility prescribed under Section 11. If all information are provided by an applicant as required under Section 10 and Form 6 and if the Corporate Applicant is otherwise not ineligible under Section 11, the Adjudicating Authority is bound to admit the application and cannot reject the application on any other ground. Any fact unrelated or beyond the requirement under I & B Code or Forms prescribed under Adjudicating Authority Rules (Form 6 in the present case) are not required to be stated or pleaded . 20. Further, the Hon ble Supreme Court in the matter of Innoventive Industries Ltd. v. ICICI Bank Ltd. [2017] 143 SCL 625 has ruled by observing as such; 27. The scheme of the Code is to ensure that when a default takes place, in the sense that a debt becomes due and is not paid, the insolvency resolution process begins. Default is defined in Section 3(12) in very wide terms as meaning non-payment of a debt once it becomes due and payable, which includes non-payment of even part thereof or an instalment amount For the meaning of debt , we have to go to Section 3( .....

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eipt of the application. It is at the stage of Section 7(5), where the adjudicating authority is to be satisfied that a default has occurred, that the corporate debtor is entitled to point out that a default has not occurred in the sense that the debt , which may also include a disputed claim, is not due. A debt may not be due if it is not payable in law or in fact. 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. Under sub-section (7), the adjudicating authority shall then communicate the order passed to the financial creditor and corporate debtor within 7 days of admission or rejection of such application, as the case maybe 21. In addition to the above, the Hon ble NCLAT in its decision in the matter of Neeta Chemicals (I) (P.) Ltd. v. State Bank of India wherein the Hon ble NCLAT has pleased to clarify this legal issue by observing as under; 5. The Appellant has highlighted the facts relating to SARFAESI proceedings and action taken thereunder. It is a .....

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y and Bankruptcy (Application to the Adjudicating Authority) Rules, 2016 subject to ineligibility prescribed under Section 11. If all informations are provided by an applicant as required under Section 10 and Form 6 and if the Corporate Applicant is otherwise not ineligible under Section 11, the Adjudicating Authority is bound to admit the application and cannot reject the application on any other ground. 23. Any fact unrelated or beyond the requirement under I & B Code or Forms prescribed under Adjudicating Authority Rules (Form 6 in the present case) are not required to be stated or pleaded. Non-disclosure of any fact, unrelated to Section 10 and Form 6 cannot be termed to be suppression of facts or to hold that the Corporate Applicant has not come with clean hands except the application where the Corporate Applicant has not disclosed disqualification, if any, under Section 11. Non-disclosure of facts, such as that the Corporate Debtor is undergoing a corporate insolvency resolution process; or that the Corporate Debtor has completed corporate insolvency resolution process twelve months preceding the date of making of the application; or that the corporate debtor has violated .....

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pendency of a petition for winding up, where no order of winding up or order of liquidation has been passed, cannot be ground to reject the application under Section 10. 8. It is not the case of the Financial Creditor (State Bank of India) that a winding up proceeding under the Companies Act or liquidation proceeding under the I&B Code has been initiated against the Corporate Debtor . Therefore, the Corporate Applicant is eligible to file application under Section 10 of the I&B Code , if there is a debt and default . 22. By following the above stated Judicial precedents, it is now well settled legal position that this Adjudicating Authority is bound to admit an application, if it is found complete by providing requisite information under Section 10 of the I& B Code read with Form 6 of the relevant rules and it does not suffer from any ineligibility 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, .....

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