TMI Blog2019 (3) TMI 1693X X X X Extracts X X X X X X X X Extracts X X X X ..... r time value of money. In the present case PNB had sanctioned and disbursed the loan amount recoverable with applicable interest by entering into loan agreements with the corporate debtor. The corporate debtor had borrowed the credit facility against payment of interest as agreed between the parties. The loan was disbursed against the consideration for time value of money with a clear commercial effect of borrowing. Moreover, the debt claimed in the present application includes both the component of outstanding principal and interest. In that view of the matter not only the present claim comes within the purview of 'Financial Debt' but also the applicant bank can clearly be termed as 'Financial Creditor' so as to prefer the present application under Section 7 of the Code. It is pertinent to mention here that the Code requires the adjudicating authority to only ascertain and record satisfaction in a summary adjudication as to the occurrence of default before admitting the application. The material on record clearly goes to show that respondent had availed the loan facilities and has committed default in repayment of the outstanding loan amount - In the facts it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts Registered Office at Plot No.4, Sector 10, Dwarka, New Delhi- 110075. 4. Shri Sanjay Kumar Garg authorized representative and working as Assistant General Manager of the applicant bank, has preferred the present application on behalf of the applicant for initiation of corporate insolvency resolution process against the respondent corporate debtor in terms of the provisions of the Code. 5. The applicant has proposed the name of Shri Arvinder Singh, registration number IBB / IPA-OOI / IP-P00683/ 2017-18 / Il 160 for appointment as Interim Resolution Professional having address Elite Insolvency Resolution Pvt. Ltd., 808, Eros Apartments, 56, Nehru Place, New Delhi 110019 with email - id finsmartglobal@gmail.com. Shri Arvinder Singh has agreed to accept the appointment as the interim resolution professional and has signed a communication dated 28.05.2018 in Form 2 in terms of Rule 9(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. He has enclosed the copy of Certificate of Registration dated 06.04.2018 issued by IBBI. There is a declaration made by him that no disciplinary proceedings are pending against him in Insolvency a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... came Non-Performing Asset on 31.12.2013. 13. Corporate debtor's proposal for CDR was approved by consortium led by the financial creditor. Accordingly, Master Restructuring Agreement dated 30.06.2014 was executed between consortium led by Financial Creditor and the Corporate Debtor. 14. It is alleged that since the Corporate Debtor failed to fulfil its commitment under CDR, the same was revoked. As CDR could not be implemented the account was to be treated as NPA w.e.f. 31.12.2013. 15. Thereafter the applicant sent Demand Notice under Section 13(2) of the SARFAESI Act but the corporate debtor ignored the same. 16. It has been stated at Part-IV of Form-I that as on 30.06.2018 total amount of default is ₹ 540.12/ Applicant has annexed with the application facility wise details Of working sheet showing balance outstanding dues. 17. The applicant has filed copies of all the relevant loan agreements, guarantee deeds and mortgage deeds executed by the respondent company in order to secure the loan facilities sanctioned/enhanced/revised from time to time. Moreover, applicant has annexed the Certificate of Registration of Charge d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s absolutely correct in applying Section 238 of the Code to an independent proceeding instituted by a secured financial creditor, namely, the Alchemist Asset Reconstruction Company Ltd. (emphasis given) 23. Similarly, in the case of Forech India Ltd. v. Edelewiss Assets Reconstruction Co. Ltd. in Civil Appeal No. 818 of 2018, despite pendency of winding up proceedings before High Court, Hon ble Supreme Court vide order dated 22.01.2019 has observed that, financial creditor's application which has been admitted by the Tribunal is clearly an independent proceeding which must be decided in accordance with the provisions of the Code . 24. Hon ble Supreme Court has thus made it clear that Section 7 application filed under the Code is an independent proceeding and must run its entire course, which has nothing to do with the pendency of winding up proceedings before High Court. In view of the precedent laid down by Hon ble Supreme Court, pendency of winding up petition before High Court will not be a bar for initiation of proceedings under Section 7 of the Code. 25. The objection on the maintainability of Section 7 application cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Section 7 of the Code, once there is a debt and default. 31. 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. 32. 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 (I) of the Code an application could be maintained by a Financial Creditor either by itself or jointly with other Financial Creditors. 33. The expressions Financial Creditor and Financial debt have been defined in Section 5 (7) and 5 (8) of the Code and precisely Financial debt is a debt along with interest, if any, which is disbursed against the consideration for time value of money. 34. In the present case PNB had sanctioned and disbursed the loan amount recoverable with applicable interest by entering into loan agreements with the corporate debtor. The corporate debtor had borrowed the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te guarantees were executed in order to secure the loan facility. The charge certificate issued by the registrar of Companies has been placed on record, which supports the claim of creation of charge to secure the loan facility availed from the applicant bank. 39. In addition, the applicant bank has filed the statement of accounts duly certified in accordance with Bankers' Books Evidence Act, 1891 as per requirement of Form-I part V column 7 of the application. Certified copy of statement of account pertaining to various loan facilities, kept during the course of banking business basing on which the claim has been raised can be termed as sufficient evidence of the financial debt. 40. It is thus seen that the applicant financial creditor' has placed on record voluminous and overwhelming evidence in support of the financial debt as well as to prove the default. 41. It is pertinent to mention here that the Code requires the adjudicating authority to only ascertain and record satisfaction in a summary adjudication as to the occurrence of default before admitting the application. The material on record clearly goes to show that respondent had availe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2; (d) the recover-y of any property by an Owner or lessor where such property is occupied by or in the possession of the corporate debtor. 47. It is made clear that the provisions of moratorium shall not apply to transactions which might be notified by the Central Government or the supply of the essential goods or services to the Corporate Debtor as may be specified, are not to be terminated or suspended or interrupted during the moratorium period. In addition, as per the Insolvency and Bankruptcy Code (Amendment) Act, 2018 which has come into force w.e.f. 06.06.2018, the provisions of moratorium shall not apply to the surety in a contract of guarantee to the corporate debtor in terms of Section 14 (3) (b) of the Code. 48. The Interim Resolution professional shall perform all his functions contemplated, inter-alia, by Sections 15, 17, 18, 19, 20 21 of the Code and transact proceedings with utmost dedication, honesty and strictly in accordance with the provisions of the Code, Rules and Regulations. It is further made clear that all the personnel connected with the Corporate Debtor, its promoters or any other person associated with the Management of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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