TMI Blog2019 (10) TMI 1284X X X X Extracts X X X X X X X X Extracts X X X X ..... ny Petition No. (IB) 335/ALD/2018. - - - Dated:- 22-10-2019 - A. R. K. SINHA (Judicial Member) For the Applicant : Sandeep Arora For the Respondent : Kartikeya Saran with Ujjawal Satsangi ORDER A. R. K. SINHA (JUDICIAL MEMBER). - 1. The present petition is 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 the applicant/financial creditor, i. e., Union Bank of India for initiation of corporate insolvency resolution process against the respondent/ corporate debtor-company M/s. U. P. State Spinning Co. Ltd. . 2. The applicant Union Bank of India is a banking institution and corporate body constituted under the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970. Mr. Om Prakash Gautam, chief manager, has been authorised to file this application on behalf of financial creditor (copy of letter of authority is annexed as annexure 1). 3. The respondent/corporate debtor M/s. U. P. State Spinning Co. Ltd. is a company incorporated on August 20, 1974 under the provision of the Companies Act, 1956, bearing Identification N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and on the basis of that statement of account, claimed the date of default on August 1, 2018. It is further case of the applicant that the corporate debtor also mortgaged the property, which are mentioned in Part 5 of the application. (iv) Further learned counsel for the financial creditor submitted that to prove the existence of the financial debt ; they have annexed following documents : (a) The copy of sanction letter dated September 25, 1989 (the copy is annexed as annexure A6 of the application). (b) The applicant has also annexed debit balance confirmation letter dated July 31, 2001, March 31, 2005, August 31, 2006, September 30, 2007, March 1, 2008, March 15, 2010 and August 1, 2011 (annexed as annexure A21). (c) Copy of balance-sheet for financial year ending on March 31, 2004 copy of letter dated April 16, 2015 written by the corporate debtor and letter dated May 22, 2015 and August 28, 2015 written by the applicant (annexed as annexures A22 and A23). (d) Further copy of letter dated July 30, 2018 written by the corporate debtor and letter dated February 6, 2018 and August 2, 2018 written by the applicant annexed as annexure A24. (e) Copy of the registrat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liability of the company to UPSIDC is under consideration before the Government, and necessary formalities are completed and yet final stage of completion and company is in process of arranging suitable funds from UPSIDC for payment of dues of the bank. So the bank may be directed to wait for their payment for two to three months' time (a copy of letter dated November 16, 2018 is annexed as annexure-CA01). (v) And lastly stated that the corporate debtor is fully capable to pay the due to the financial creditor but due to procedural delay and liquidity problem at present the financial debt cannot be paid. (vi) By filing supplementary counter affidavit on September 11, 2019 which is on the record, the corporate debtor further informed that the onetime settlement proposal was made to the financial creditor, which was placed before the competent authority on March 18, 2019 wherein it was duly approved. Under the one-time settlement proposal, the corporate debtor is required to pay a total sum of ₹ 4,24,00,000 plus a simple interest of 9 per cent. on the amount outstanding after April 1, 2019. Moreover, a total liability of ₹ 1,07,30,941.20 occurring out of interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2016 the Sick Industrial Companies (Special Provision) Repeal Act, 2003 was notified and the SICA came to be repealed simultaneously the I and B Code, 2016 was bought into force and according to the Code a company whose reference was pending before BIFR as on December 1, 2016 was entitled to file an application under section 10 of the IBC, 2016 within period of 180 days from the notification of the repeal act 2003 on or before May 31, 2017 but an application was not filed by corporate debtor under section of 10 of the IBC, 2016. Hence, this Tribunal may most graciously be pleased to allow the instant application under section 7 of the IBC and lastly submitted that section 7 of Code allow financial creditor either by itself or jointly with other financial creditor to file an application to initiate CIRP against corporate debtor. The entire short counter affidavit is based only on assumption. The respondent has not disputed the default it is further most respectfully submitted that existence of default has been admitted by the corporate debtor. 8. I have heard the argument of learned counsel of the applicant and perused the record available. 9. It is matter of record that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and on careful consideration of the same, I find, even if it is assumed that the debt of the corporate debtor is declared NPA on March 7, 2013 as per the statement of the corporate debtor, though not pleaded in the application of the applicant, this Adjudicating Authority finds that at page 407, the financial creditor has annexed the letter dated July 30, 2018 addressed to Deputy General Manager, Union Bank of India by the Assistant Company Secretary of the corporate debtor. By this letter, the corporate debtor has admitted the debt and undertake to repay the legal dues of the financial creditor within two or three months and this letter shows that this is the reply in pursuance of letter No. ROK : CRLD : 762 : 17, dated February 6, 2018 issued by DGM, Union Bank of India, which shows, even after the declaration of NPA, there were several correspondences in between the financial creditor and corporate debtor regarding the payment of the debt, which the corporate debtor has admitted by filing the counter affidavit and lastly on July 30, 2018 by sending this letter, acknowledged the debt of financial creditor and, therefore, in view of section 18 of the Limitation Act, fresh period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in contrast with the scheme under section 8 where an operational creditor is, on the occurrence of a default, to first deliver a demand notice of the unpaid debt to the operational debtor in the manner provided in section 8(1) of the Code. Under section 8(2), the corporate debtor can, within a period of 10 days of receipt of the demand notice or copy of the invoice mentioned in sub-section (1), bring to the notice of the operational creditor the existence of a dispute or the record of the pendency of a suit or arbitration proceedings, which is pre-existing, i. e., before such notice or invoice was received by the corporate debtor. The moment there is existence of such a dispute, the operational creditor gets out of the clutches of the court. On the other hand, as we have seen, in the case of a corporate debtor who commits a default of a financial debt, the Adjudicating Authority has merely to see the records of the information utility or other evidence produced by the financial creditor to satisfy itself that a default has occurred. It is of no matter that the debt is disputed so long as the debt is 'due', i. e., payable unless interdicted by some law or has not yet beco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing that he is registered as insolvency professional and no disciplinary proceedings are pending against him and there is default in the payment of the financial debt which is more than rupees one lakh. Therefore, as per section 7(5)(a) of the Code, the present application filed under section 7 of the I and B Code is admitted. 23. Mr. Anupam Tiwari, Registration No. IBBI/IPA-03/IP-N00018/2017-18/ 10131 is appointed as the interim resolution professional (IRP). Further, a moratorium under the provision of sections 13 and 14 of the Code is declared prohibiting the following : (i) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgement, decree or order in any court of law, Tribunal, arbitration panel or other authority ; (ii) transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein ; (iii) any action to foreclose, recover or 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 Enf ..... X X X X Extracts X X X X X X X X Extracts X X X X
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