TMI Blog2019 (11) TMI 963X X X X Extracts X X X X X X X X Extracts X X X X ..... he Code. As per the provisions of Section 7 of the Code, no prior notice under Section 8 of the Code is required in respect of a financial debt. An application under Section 7 of the Code is acceptable so long as the debt is proved to be due and there has been occurrence of existence of default. What is material is that the default is at least 1 lakh. In view of Section 4 of the Code, the moment default is of Rupees one lakh or more, the application to trigger Corporate Insolvency Resolution Process under the Code is maintainable. In the present case the claimed financial debt in the light of the award exceeds ₹ 564 Lacs and the respondent has defaulted in making payment of the debt. The present application is complete in all respect and the applicant financial creditor is entitled to claim its outstanding financial debt from the corporate debtor and that there has been default in payment of the financial debt - in terms of Section 7(5)(a) of the Code, the present application is admitted. - COMPANY PETITION No. (IB)-229(PB)/2019 - - - Dated:- 17-9-2019 - JUSTICE (RTD.) M.M. KUMAR, PRESIDENT AND MR. S.K. MOHAPATRA, MEMBER (TECHNICAL) For The Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or, which was to be repaid by the Corporate Debtor as per the agreements. The Corporate Debtor after availing of the loan/financial debt failed and defaulted in making the payments of the due EMI s to the Financial Creditor and committed default in the payment of the Financial Debt to the Corporate Debtor. 6. Consequently, the Financial Creditor invoked arbitration proceedings against the Corporate Debtor by invoking the arbitration agreements contained in 27 Loan cum Hypothecation Agreements. 7. Initially Sh. Rajesh Kumar, ADJ (Retd.) was appointed as the sole arbitrator to adjudicate the dispute between the parties. It is submitted that respondent contested the claims by filing reply as well as counter claims. Upon the unfortunate demise of the sole arbitrator, Mr. B.L.Gupta, Additional District and Sessions Judge (Retd.) was appointed on 05.04.2017 as the sole arbitrator to adjudicate the dispute between the parties with respect to 27 of the 29 Loan cum Hypothecation Agreements. After loan recall notice in respect of remaining two of the 29 Loan cum Hypothecation Agreements, Mr. B.L.Gupta, Additional District and Sessions Judge (Retd.) was appointed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts reply on 20.03.2019. Rejoinder to the reply was filed by the applicant on 04.04.2019. 13. We have heard the learned counsels for the parties and have perused the case records. 14. It is pertinent to mention here that the scheme of the Code provides for triggering the insolvency resolution process by three categories of persons namely,- a) Financial creditor b) Operational creditor, and c) Corporate debtor itself. 15. The procedure in relation to the Initiation of Corporate Insolvency 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. 16. One of the objections raised by the respondent is that the applicant is not a financial creditor , nor the debts claimed in the application come within the purview of financial debt as defined under the Code. It is further stated that no notice under Section 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 5 (a) of Section 7 of the code, it is seen that the present application is complete and has been filed by the petitioner financial creditor in Form-1 in terms of Rule 4 of Insolvency and Bankruptcy (application to Adjudicating Authority) Rules, 2016 accompanied with the required information, documents and records as prescribed under the Rules. 23. The applicant inter-alia has annexed to the application detail particulars of financial debt including documents, records and relevant arbitral awards as evidence of default as required under sub-section 3 (a) of Section 7 of the Code. It is reiterated that the Form-1 filed in the present case under Section 7 of the Code read with Rule 4 of the Rules, shows that the Form is complete in all respect and there is no infirmity in the same. 24. Sub-section (3)(b) of Section 7 of the Code further mandates the financial creditor to furnish the name of an Interim Resolution Professional. In compliance thereof the applicant has proposed the name of Mr. Navjit Singh, for appointment as Interim Resolution Professional having registration number IBBI/IPA-001/IP-P00314/2017- 18/10578 resident of 218-a, 1st Floor, Shop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be an impediment or bar to initiate the Corporate Insolvency Process against the corporate debtor under the provisions of Section 7 of the Code. Simply pendency of proceedings cannot be a ground to deny admission of an application under Section 7 of the Code, once the application is complete and there has been commission of default. 29. Hon ble NCLAT in the matter of Ksheerrabd Constructions (P.) Ltd. v. Vijay Nirman Co. (P.) Ltd. in Company Appeal (AT) Insolvency) No 167 of 2017 has observed that: The I B Code being a complete code will prevail over other Acts. No person can take advantage of pendency of a case to stall Corporate Insolvency Resolution Process under the I B Code . 30. Similarly, in the case of Innoventive Industries Ltd. v. ICICI Bank Ltd. and Ors. reported in AIR 2017 SC 4084, Hon ble Supreme Court has also held at para 56 that: The non-obstante clause, in the widest terms possible, is contained in Section 238 of the Code, so that any right of the corporate debtor under any other law cannot come in the way of the Code . 31. In view of the above discussion, the objection in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... debt. 35. As a sequel to the above discussion and in terms of Section 7(5)(a) of the Code, the present application is admitted. 36. Mr. Navjit Singh having registration number IBBI/IPA-001/IP-P00314/2017-18/10578 resident of 218-a, 1st Floor, Shop No. 4, Rama Market, Pitampura, Delhi - 110034 with email - id navjit92ca@gmail.com is appointed as an Interim Resolution Professional. 37. We direct the applicant Financial Creditor to deposit a sum of ₹ 2 Lac with the Interim Resolution Professional namely Mr. Navjit Singh to meet out the expenses to perform the functions assigned to him in accordance with Regulation 6 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Person) Regulations, 2016. The needful shall be done within three days from the date of receipt of this order by the Financial Creditor. The said amount however be subject to adjustment towards Resolution Process cost as per applicable rules. 38. In pursuance of Section 13 (2) of the Code, we direct that public announcement shall be made by the Interim Resolution Professional immediately (3 days as prescribed by Explana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extend every assistance and cooperation to the Interim Resolution Professional as may be required by him in managing the day to day affairs of the Corporate Debtor . In case there is any violation committed by the ex-management or any tainted/illegal transaction by ex-directors or anyone else, the Interim Resolution Professional would be at liberty to make appropriate application to this Tribunal with a prayer for passing an appropriate order. The Interim Resolution Professional shall be under duty to protect and preserve the value of the property of the Corporate Debtor as a part of its obligation imposed by Section 20 of the Code and perform all his functions strictly in accordance with the provisions of the Code, Rules and Regulations. 42. The office is directed to communicate a copy of the order to the Financial Creditor, the Corporate Debtor, the Interim Resolution Professional and the Registrar of Companies, NCT of Delhi Haryana at the earliest possible but not later than seven days from today. The Registrar of Companies shall update its website by updating the status of Corporate Debtor and specific mention regarding admission of this petition must be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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