TMI Blog2020 (1) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... eceived as a long-term borrowing, it is evident that the said loan amount was clearly 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. It is seen that not only the present claim comes within the purview of 'Financial Debt' in terms of Section 5(8) of the Code but also the applicant can clearly be termed as 'Financial Creditor' of the respondent corporate debtor so as to prefer the present application under Section 7 of the Code. There is a declaration made by him that no disciplinary proceedings are pending against him in Insolvency and Bankruptcy Board of India or elsewhere. In addition, further necessary disclosures have been made by Mr. Sameer Rastogi as per the requirement of the IBBI Regulations. Accordingly, it is seen that the requirement of Section 7 (3) (b) of the Code has been satisfied - It is thus seen that the requirement of sub-section 5 (a) of Section 7 of the code stands satisfied as default has occurred, the present application filed under Section 7 is complete, and as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cant M/s. Prayag Polytech Private Limited, is a company incorporated on 16.08.1982 having its Registered Office situated at C-587, Industrial Area, Phase-1, Bhiwadi-301019, Rajasthan. 4. Shri Milan Aggarwal, Director of the company authorized through resolution dated 18.12.2018 of the Board of Directors of the company, 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 case of the applicant in brief is that on 01.04.2016 applicant disbursed ₹ 40,00,000/- in favour of respondent company as loan. Thereafter, on 19.12.2016 further amount of ₹ 25,00,000/- was disbursed by the applicant in favour of the respondent. However, it is claimed that the total loan amount of ₹ 65,00,000/- has not been paid till 25.12.2018. 6. As per part IV of the application it is claimed that a sum of ₹ 84,38,656/- including interest is due from the respondent company as on 25.12.2018. 7. The Applicant has filed its relevant statement of bank accounts along with auditors report as on 31st March ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts including bank transactions to show that loan was disbursed to the respondent. Respondent in their reply, although disputed the entire claim of the applicant but admitted that the loan was a long-term borrowing. Respondent therefore has accepted that the debt amount received from the applicant was in the nature of a loan. Once it is accepted that the debt was received as a long-term borrowing, it is evident that the said loan amount was clearly 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. 15. In that view of the matter it is seen that not only the present claim comes within the purview of 'Financial Debt' in terms of Section 5(8) of the Code but also the applicant can clearly be termed as 'Financial Creditor' of the respondent corporate debtor so as to prefer the present application under Section 7 of the Code. 16. The application filed by the applicant financial creditor has to be admitted under sub-section 5 (a) of Section 7 of the code, on satisfaction that: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India or elsewhere. In addition, further necessary disclosures have been made by Mr. Sameer Rastogi as per the requirement of the IBBI Regulations. Accordingly, it is seen that the requirement of Section 7 (3) (b) of the Code has been satisfied. 21. It is thus seen that the requirement of sub-section 5 (a) of Section 7 of the code stands satisfied as default has occurred, the present application filed under Section 7 is complete, and as no disciplinary proceeding against the proposed IRP is pending. 22. One of the main objections of the respondent is that the amount was given under an oral agreement, which was due and payable at the convenience of the respondent within a period of seven years and not on demand by the financial creditor. Accordingly, it is pleaded that default has not yet arisen. 23. In this regard it is seen that even if there is no written loan agreement, the disbursal of loan amount of ₹ 25,00,000/- has not been disputed. It is clearly accepted in the reply of respondent that the amount of ₹ 25,00,000/- was received as a long-term borrowing. An agreement can either be oral or written, and therefore an admitted loan given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has been commission of default. 28. Insolvency and Bankruptcy Code, 2016 being a complete Code and Union Law, will prevail over other earlier laws like the Companies Act, 2013. As per Section 238 of the Code, the provisions of the Code are to be given effect to notwithstanding anything contrary contained in any other earlier laws. 29. Hon'ble NCLAT in the matter of Ksheeraabad Constructions (P.) Ltd. v. Vijay Nirman Co. (P.) Ltd. (NCL - AT) 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 143 SCL 625 (SC) 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 this regard will not sustain as initiation and pendency of proceedings in any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicant has filed its relevant statement of bank accounts along with auditors report as on 31st March, 2017. The applicant has also filed the calculation sheet providing the calculation of the financial debt along with the ledger account of the corporate debtor maintained by the financial creditor till 25.12.2018. In addition, copies of Balance Sheets for the years 2015-16 and 2016-17 of the corporate debtor has been placed on record. The applicant has also relied upon Form-26AS for the period of 2015-16 and 2016-17 of the applicant financial creditor in support of its claim. 38. The materials on record and the loan documents clearly depict that the loan was disbursed and the respondent company utilized and enjoyed the loan amount. In fact, there has been an admission of receipt of debt with an assurance to repay the debt. 39. In the aforesaid discussions, it is seen that the applicant clearly comes within the definition of Financial Creditor. The material placed on record further confirms that the applicant financial creditor had disbursed loan to the respondent corporate debtor and the respondent has availed the loan and committed default in repayment of the ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; (d) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor. 45. 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. 46. 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 Corpo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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