TMI Blog2019 (3) TMI 1751X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner : T. P. Muthanna For the Respondent : Dr. Aditya Sondhi , Senior Counsel with Gowtham S. Bharadwaj ORDER RAJESWARA RAO VITTANALA (JUDICIAL MEMBER). - 1. C. P. (IB) No. 244/ BB/2018 is filed by Dena Bank (petitioner/financial creditor) under section 7 of the Insolvency and Bankruptcy Code, 2016 read with rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, by inter alia, seeking to initiate the corporate insolvency resolution process (CIRP) in respect of M/s. Kavveri Telecom Infrastructure Ltd., and others (respondent/corporate debtor) on the ground that the corporate debtor committed a default amount of ₹ 69,18,44,425.03 (rupees sixty nine crores eighteen lakhs forty four thousand four hundred twenty-five and paise three only) which includes principal amount and interest. 2. The brief facts of the case, as mentioned in the company petition, which are relevant to the issue in question, are as follows : (1) Dena Bank (herein after referred as petitioner/financial creditor) is incorporated on May 26, 1938 is a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertaki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rm-loan. During the meeting, the chairman requested the corporate debtor amongst others to pay two months interest of ₹ 111 lakhs to be serviced on or before March 31, 2014. An amount of ₹ 111 lakhs was credited to current account No. 02911023878 and the same was transferred to the loan account from March 27, 2014 to March 29, 2014. Further, the corporate debtor in the said letter has made an offer for one time settlement of ₹ 5.50 crores towards full and final settlement of the dues and they will make the payment of one time settlement before March 31, 2018, etc. (7) The corporate debtor vide their letter dated June 19, 2017 addressed to the General Manager, Dena Bank informing that the one-time settlement proposal given to the bank would be considered if the ledger balance as on the date of account becoming non-performing asset was paid. It was further informed that the corporate debtor would explore the option of selling the equipment funded by the bank to remit the proceeds to the bank provided a written approval is given by the bank, etc. (8) The corporate debtor in their balance-sheet for 2016-17 has disclosed that financial creditor, Dena Bank has gra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y can start making the payments from 2016. In the letter dated March 5, 2017 the corporate debtor has made an offer for one time settlement of ₹ 5.50 crores towards full and final settlement of the dues and that they would make the payment of one time settlement before March 31, 2018, etc. In the letter dated June 19, 2017 it was also informed that the corporate debtor would explore the option of selling the equipment funded by the bank to remit the proceeds to the bank provided a written approval is given by the bank, etc. The balance sheet of the corporate debtor for the year 2016-17 and 2017-18 discloses relating the default in the repayments of financial dues to the financial creditor. Therefore, it, is contended that the instant petition is filed within period of limitation. (13) It is further stated that the petitioner has filed O. A. No. 16/2015-Debts Recovery Tribunal-I (T. A. No. 634 of 2017 for recovery of ₹ 52,12,49,438.60 and the same was allowed by the Tribunal by an order dated March 27, 2017. That the defendants jointly and severally shall pay ₹ 52,12,49,438.60 together with interest at 16.55 per cent. per annum with monthly rests from the date o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sri Shivakumar Reddy, promoter director, Smt. R. H. Kasturi, promoter director and Smt. C. Uma Reddy, promoter director. CBI has registered a regular case under section 120B read with sections 420, 468, 471 of the IPC and section 13(2) read with section 13(1)(D) of the PC Act, 1988 and registered the case against the above accused and the matter is under investigation. (17) The petitioner further submit that the Debts Recovery Tribunal has issued the recovery certificate on May 25, 2017 for ₹ 52,12,49,438.60 as on January 1, 2015 together with interest at 16.55 percent. per annum with monthly rests from the date of application till the date of realization. Therefore, the financial creditor has claimed ₹ 69,18,44,425.03 as the total outstanding dues as on September 30, 2018. (18) The petitioner/financial creditor has suggested Shri B. Hariharan with Registration No. IBBI/IPA-001/IPP00380/2017-2018/10637 as IRP and he has also filed his written consent communication in Form 2, dated November 13, 2018 by, inter alia, declaring that he is a qualified resolution professional ; no disciplinary proceedings are pending against him with the IBBI or insolvency professional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enior counsel for the respondent has opposed the maintainability of the company petition by, inter alia, contending as follows : (1) It is submitted that petitioner has filed the instant application under section 7 of the Code, alleging that the respondent has failed to clear the certain financial debts in relation to terms loans. From the averments in the application filed by the petitioner, it is case of the petitioner that the alleged date of default by the respondent was September 30, 2013 and the date from which the account of the respondent was declare a non-per forming asset was December 31, 2013. The petitioner is alleging that the respondent, has defaulted in paying a sum of ₹ 69,12,44,425.03 and has issued a notice under Form 3 dated October 1, 2018. (2) It is submitted that instant application made by the petitioner under section 7 of the Code, is barred by limitation, as the petitioner is seeking to initiate insolvency proceedings against the respondent, in relation to a default committed on September 30, 2013. The present proceed ings were initiated by issuing Form 3 on October 1, 2018, which is more than five (5) years after the alleged default. Thus, the, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Karnataka, including non-disclosure to the hon'ble High Court of Karnataka . . . (2) As such, what was expected by this hon'ble Tribunal from the petitioner was to file Gist of the case as per the pleadings already made in the above case in the petition and explain regarding non-disclosure of order passed by the hon'ble High Court. Per contra, in the guise of filling such gist, the petitioner served a memo along with certain documents to the advocate appearing for the first respondent on March 6, 2019. This hon'ble Tribunal directed the petitioner to file the same in the registry and posted the matter to March 18, 2019. (3) It is submitted that again on March 12, 2019 the petitioners' advocate served an application for producing additional information and filling additional documents to the first respondents advocate, which was pre pared on. (4) It is further to be noted that the petitioner has not pleaded regard ing as to why the interim order passed in W. P. No. 18013 of 2017 by the hon'ble High Court dated March 27, 2017 was not brought to the notice of this hon'ble Tribunal at the time of filing the above petition. No doubt the said writ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in filing such application. In another judgment rendered in National Textile Corporation Ltd. v. Nareshkumar Bardrikumar Jagad, Civil Appeal No. 7448 of 2011, it is, inter alia, held that paragraphs 8 and 12 of the judgment is extracted herein below as follows : 8. Per contra, Shri Mukul Rohatgi, learned senior counsel appear ing for the respondents, submitted that it is not permissible for the court to travel beyond the pleadings. No evidence can beted on an issue in respect of which proper pleadings have not been taken. Findings of fact cannot be recorded on a issue on facts in respect of which no factual foundation has been laid. The appellant had never raised the issue before the courts below that the Central Government was the tenant and it was holding the premises merely as an agent. In the written statement filed by the appellant, no reference was made to the provisions of the 1995 Act. Even otherwise, the tenancy rights which had vested in the Central Government, stood vested immediately, by operation of law, in the appellant, a public sector undertaking as well as the public limited company having a paid-up share capital of more than rupees one crore, thus the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a default from the records of an information utility or on the basis of other evidence furnished by the financial creditor under subsection (3). (5) Where the Adjudicating Authority is satisfied that- (a) a default has occurred and the application under sub-section (2) is complete, and there is no disciplinary proceedings pending against the proposed resolution professional, it may, by order, admit such application ; or (b) default has not occurred or the application under sub-section (2) is incomplete or any disciplinary proceeding is pending against the proposed resolution professional, it may, by order, reject such application : Provided that the Adjudicating Authority shall, before rejecting the application under clause (b) sub-section (5), give a notice to the applicant to rectify the defect in his application within seven days of receipt of such notice from the Adjudicating Authority. (6) The corporate insolvency resolution process shall commence from the date of admission of the application under sub-section (5). (7) The Adjudicating Authority shall communicate- (a) the order under clause (a) of sub-section (5) to the financial creditor and the corporat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e matter as any action other than restructuring would harm the interests of their company, which will directly affect their ability to make the payments of instalments and interests as per the restructuring plans agreed. 13. Subsequently, the respondent has addressed another letter No. KTIL/ 2016-2017/0055 dated March 3, 2017 by, inter alia, stating as follows : We were servicing the interest from the beginning as per the sanction and we were also making the payment regularly till January, 2014, although our cash flow was not supporting it due to various fac tors effecting the business because of the Supreme Court judgment in February, 2012 on 2G scam cancelling 122 licenses to various cellular operators and downturn in the general economy of the country. As explained on many occasions during the last few years to your various officials, there was enormous delay in collections and company has been put in to lot difficulties and account turned to non-performing asset in June, 2014. Our company has incurred huge losses from past three years due to the reasons mentioned above and we are unable to service both interest and principal. As explained to you during our meeting wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We have thus submitted our one-time settlement proposal to your zonal office on March 3, 2017. A copy of the said proposal is attached herewith for your ready reference. We have till today not received any official response to our request for one-time settlement submitted on March 3, 2017.' Therefore, the instant petition is not barred by laches and limitation as contended by learned counsel for the respondents. 14. So far as the allegation of suppression filing of writ petition before the hon'ble High Court of Karnataka against the order of the Debts Recovery Tribunal dated March 27, 2017 is concerned, as rightly contended by learned counsel for the petitioner that proceedings under the Code is independent of other proceedings initiated before other judicial forums as long as cause of action subsists. In any case, all the material documents are placed before the Tribunal to consider them. 15. So far as the permission sought by the petitioner to place additional information and additional documents by way of filing I. A. No. 131 of 2019 is concerned, it is necessary for the Adjudicating Authority to examine all relevant information and documents with reference to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is when a default in respect of any financial debt has occurred. Sub-section (2) of section 7 provides that the financial cre ditor shall make an application in prescribed form and manner and with prescribed documents, including : (i) 'record of the default' recorded with the information utility or such other record or evidence of default as may be specified ; (ii) the name of the resolution professional proposed to act as an interim resolution professional ; and (iii) any other information as may be specified by the Board. The procedure once an application is filed by the financial creditor with the Adjudicating Authority is specified in sub-section (4) of section 7 to sub-section (7) of section 7 of the Code. As sub-section (4) of section 7 of the I and B Code : '(4) The Adjudicating Authority shall, within fourteen days of the receipt of the application under sub-section (2), ascertain the existence of a default from the records of an information utility or on the basis of other evidence furnished by the financial creditor under sub-section (3).' Sub-section (5) of section 7 of the I and B Code provides for admission or rejection of application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thin 14 days of the receipt 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 appli cant 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 may be. 19. In the light of provisions of section 7 of the Code, and law as declared by the hon'ble National Company Law Appellate Tribunal and the hon'ble Supreme Court as extracted above, the Adjudicating Authority/Tribunal has to examine the instant case as to whether the application/petition filed i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation 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 ; (e) The supply of essential goods or services to the corporate debtor as may be specified shall not be terminated or suspended or interrupted during moratorium period ; (f) The provisions of sub-section (1) shall not apply to such trans actions as may be notified by the Central Government in consultation with any financial sector regulator as also not applicable to surety ; (g) The order of moratorium shall have effect from the date of such order till the completion of the corporate insolvency resolution process ; (h) The IRP should follow all extant provisions of the IBC, 2016 and the rules including fees rules as framed by IBBI. The IRP is hereby directed to file his report in the Tribunal from time-to-time. 4. The board of directors and all the staff of corporate debtor are hereby directed to extend full ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
