TMI Blog2018 (11) TMI 1781X X X X Extracts X X X X X X X X Extracts X X X X ..... for admission of petition under Section 7 as discussed supra. The existence of debt and default is proved beyond any doubt in this case. Petition admitted - moratorium declared. - CP (IB) 1886/MB/2018, I.A. NO. 1277/MB/2018, M. A. No. 1156/MB/2018 - - - Dated:- 27-11-2018 - Hon ble Bhaskara Pantula Mohan, Member (J) AND Hon ble V. Nallasenapathy, Member (T) For the Petitioner : Mr. Pankaj Vijayan a/w Ms. Rohini Menon, Advocates i/b Intralegal. For the Respondent : Mr. Uzair Kazib , Ms. Krishma Agarwal, Advocates i/b Vigil Juris For the Intervener : Mr. Yahya Ghoghari i/b Rajesh Kunnerkar, Advocates. ORDER Per: V. Nallasenapathy, Member (T) 1. This Petition is filed by Punjab National Bank (hereinafter called as PNB ), against NRC Limited (hereinafter called Corporate Debtor ), seeking to set in motion the Corporate Insolvency Resolution Process (CIRP) under section 7 of the Insolvency Bankruptcy Code, 2016 (the Code) read with Rule 4 of Insolvency Bankruptcy (Application to Adjudicating Authority), Rules 2016, on the ground that the Respondent defaulted in making payment of a sum of ₹ 273,09,68,793/- as on 31.03.2018, including inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditor triggering the process, Section 7 becomes relevant. Under the Explanation to Section 7(1), a default is in respect of a financial debt owed to any financial creditor of the corporate debtor - it need not be a debt owed to the applicant financial creditor. Under Section 7(2), an application is to be made under sub-section (1) in such form and manner as is prescribed, which takes us to the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. Under Rule 4, the application is made by a financial creditor in Form 1 accompanied by documents and records required therein. Form 1 is a detailed form in 5 parts, which requires particulars of the applicant in Part I, particulars of the corporate debtor in Part II, particulars of the proposed interim resolution professional in Part III, particulars of the financial debt in Part IV and documents, records and evidence of default in Part V. Under Rule 4(3), the applicant is to dispatch a copy of the application filed with the adjudicating authority by registered post or speed post to the registered office of the corporate debtor. The speed, within which the adjudicating authority is to ascertain the existence of a d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und Based Limit of ₹ 11.75 Crores and Corporate Term Loan of ₹ 20.00 Crores on 23.02.2005. b. Short Term Loan of ₹ 10.00 Crores on 02.02.2006. c. On 02.05.2006 there was a renewal of facilities as below: - i. Working Capital Fund Based Limits ₹ 13.75 Crores ii. Working Capital Non-Fund Based Limit ₹ 11.75 Crores iii. Short Term Loan ₹ 40.00 Crores. d. On 10.03.2008, the limits were restructured as below: - i. Working Capital Fund Based Limit ₹ 8.19 Crores ii. Working Capital Non-Fund Based Limit ₹ 3.09 Crores iii. Working Capital Term Loan ₹ 14,22,21,000/-. iv. Corporate Loan of ₹ 15.00 Crores v. Funded Interest Term Loan-I ₹ 4.57 Crores vi. Short Term Loan ₹ 40.00 Crores e. Further, on 30.12.2008 Funded Interest Term Loan-III for ₹ 3.12 Crores was sanctioned. 8. PNB enclosed the following documents in respect of the facilities sanctioned by it -- i. Copy of sanction letters dated 23.02.2005, 02.02.2006, 02.05.2006, 10.03.2008 and 30.12.2008. ii. Statement of account interest calculation sheet. iii. Copy of Deed of mortgage dated 24.05.2005. iv. Copy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with as below: a. The Petitioner has failed to appoint IRP as per Section 7 of the Code. However, this submission has to be rejected in view of the Form 2 filed by the Petitioner. b. Even though it was submitted in the written submission that the debt is time barred, when the Bench put a question how the debt is time barred, the Learned Counsel for the Corporate Debtor submitted that she is not pressing on the aspect of limitation. c. It was submitted that the Application is not signed by the person duly authorised and therefore not maintainable. However, on seeing the Petition, Form-1 is signed by the Chief Manager of PNB and hence this contention fails. d. It was submitted that the Miscellaneous Application filed by the Petitioner for taking additional documents on record is not maintainable. Misc. Application No. 1172/2018 was filed by the Petitioner for amendment of certain defects in the Form 1 filed by the Petitioner for which they are entitled as provided under proviso to section 7 (5), hence the contention of the Corporate Debtor is unsustainable. e. The Corporate Debtor submitted that the alleged debt of ₹ 273 Crores is incorrect and not maintaina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TS proposal in 2013, various consortium meetings were held by the secured lenders in 2014 etc., and now petition under Section 7 of Insolvency and Bankruptcy Code is before this Bench. At this stage, the Corporate Debtor cannot have any grievance regarding the disbursement of debt and hence this contention is unsustainable. h. The Corporate Debtor contended that the Petitioner failed to provide any evidence as to how the debts are in default on 11.02.2010, 12.02.2010 and on 20.05.2010. The SARFAESI Notice issued by the Bank on 31.12.2016 has clearly mentioned the date of default and the fact is that till date the debts were not paid even though the sanction/renewal happened in 2005 and 2006. The default is very apparent and is on the face of the records provided by the Bank and the Corporate Debtor cannot take these kind of hyper technical objections after enjoying the funds of a Public Financial Institution without making any payment since 2009 onwards except on one occasion where the bank itself had sold the pledged shares and appropriated the proceeds against the outstanding due. i. The Corporate Debtor submits that the information given in Part V of Form 1 relating to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... default are there and if so the Petition has to be admitted. m. The Corporate Debtor contended that the Petitioner had sold some of the shares lodged with the Petitioner as security for the loan but the same has been suppressed before this Bench. However, it is clear from the letter dated 15.05.2017 produced by the Corporate Debtor, which was addressed by the Petitioner to the Corporate Debtor, giving details of amount credited to the loan account by sale of the pledged shares. The nonproduction of the said letter can cause no grievance to the Corporate Debtor and the issue of suppression of the letter cannot have any bearing on this case. n. The contention of the Corporate Debtor that the interest claimed in the petition is flawed and baseless, etc. can be raised by the Corporate Debtor before the Insolvency Resolution Professional at the time of admission of the claim and hence this contention fails. o. The Corporate Debtor contended that no Demand Notice was issued by the Petitioner before filing this petition. Section 7 of the Code, unlike Section 9, does not mandate issuance of any demand notice before filing of a petition by a Financial Creditor. Hence, this contenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iate the interest payable. i. As a last attempt, the Counsel for the Corporate Debtor stated that on the basis of the security available with the Petitioners, the amount of ₹ 31 crores agreed upon by the Petitioners was fully justified and there is no scope for further increase in the settlement proposal. 15. All the above objections were already dealt with supra in this order. The new addition is that the Corporate Debtor is ready to settle this matter for a sum of ₹ 31 crores on the basis of the value of the security available with the Petitioner. Since the previous OTS proposal (₹ 51 crores approx) which was much more than the present offering of ₹ 31 crores was already rejected by the Petitioner, there is no point in giving any credence to this proposal. 16. The existence of debt and default is the sole criteria for admission of petition under Section 7 as discussed supra. The existence of debt and default is proved beyond any doubt in this case. 17. The Petitioner has mentioned Mr. Vikas Prakash Gupta, Address G100, Fantasia, Multiplex and Ent Complex, Plot No.47, Sector 30A, Vashi, Navi Mumbai-400703 Email: vikas@quantuum.in having Registra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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