TMI Blog2020 (7) TMI 515X X X X Extracts X X X X X X X X Extracts X X X X ..... corporate debtor also confirmed its debts liability, through onetime settlement by offering ₹ 1,600 lakhs to the petitioner by its letter dated December 7, 2017 which could not be materialized. The corporate debtor was irregular in making repayment of its loan and the last payment was made by it on May 31, 2017. Hence, the present IB petition is found to be filed well within limitation and maintainable. Application admitted - moratorium declared. - C. P. (I. B). No. 17/7/NCLT/AHM/2019. - - - Dated:- 27-5-2020 - Harihar Prakash Chaturvedi (Judicial Member) And Prasanta Kumar Mohanty (Technical Member) For the Petitioner : Mahendra P. Parmar For the Respondent : Aditya J. Pandya and Ms. Urvashi Jindal , PCA ORDER HARIHAR PRAKASH CHATURVEDI (JUDICIAL MEMBER). - 1. The present petition is filed by the Union Bank of India (hereinafter referred to as the petitioner), through its authorized signatory (under section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred as I and B Code ) read with rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 ( Adjudication Rules for short) for initiation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Term loan III Date of disbursement Amount (Rs.) 28-09-2012 6,40,00,000 Total ₹ 48,46,00,000 2. Amount claimed to be in default and the date on which the default occurred (attach the workings for computation of amount and days of default in tabular form) ₹ 85,71,54,265.28 Tabular form given hereunder (as on 30-09-2018) Account No. Nature of loan and amount Ledger balance (Rs.) Unpaid interest + penalty Other expenses Date of default Total days of default Total amount claimed to be in default 313505010077425 CC Hyp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 46,00,000. Total value of plant and machinery assessed at about ₹ 6,05,90,000 as per valuation report dated December 30, 2017, annexure A/24. (ii) Equitable mortgage registered with the Sub-Registrar, Ahmedabad-3 (Memnagar) bearing No. 9260 dated September 30, 2009 for ₹ 31,10,00,000 created on the immovable properties jointly belonging to (i) Mr. Champatbhai Rikhabhai Sanghvi, and (ii) Mr. Deepak Champatbhai Sanghvias described in Schedule A of this application, annexure A/18. (iii) Equitable mortgage registered with Sub-Registrar, Ahmedabad-3 (Memnagar) bearing No. 8255 dated June 14, 2010 for ₹ 31,10,00,000 created on the immovable properties jointly belonging to the corporate debtor as described in Schedules B and C of this application, annexure A/19. (iv) Supplemental equitable mortgage registered with the Sub-Registrar, Ahmedabad-3 (Memnagar) bearing No. 13210 dated December 20, 2011 for ₹ 48,49,00,000 (enhanced from ₹ 31,10,00,000) created on the immovable properties as described in Schedules A, B and C of this application, annexure A/20. Estimated market value of three immovable properties ₹ 9,00,26,892 assessed vide valuation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... note dated March 29, 2013, ₹ 6,40,00,000. (8) Demand promissory note dated March 29, 2013, for ₹ 14,45,00,000. (9) Composite deed of hypothecation (SD-20) dated March 29, 2013, for ₹ 48,46,00,000 executed by the corporate debtor. (10) Hypothecation agreement of goods and debts (SD-06) dated March 29, 2013, for ₹ 48,46,00,000 executed by the corporate debtor. (11) Letter of undertaking not to alienate hypothecated goods (AD-12) dated March 29, 2013, for ₹ 48,46,00,000. (12) Letter of continuity (AD-09) dated March 29, 2013 for ₹ 28,50,00,000. (13) Text of the consent clause executed by corporate debtor. (14) Agreement on rate of interest (for base rate) dated March 29, 2013. (15) Memorandum of entry for deposit of title deeds for ₹ 31.10 crores registered with the Sub-Registrar, Ahmedabad-3 (Memnagar) at serial No. 9260, dated September 30, 2009. (16) Supplemental memorandum of deposit of title deeds for ₹ 31.10 crores registered with the Sub-Registrar, Ahmedabad-3 (Memnagar) at serial No. 8255, dated June 14, 2010. (17) Supplemental equitable mortgage to secure the credit facility aggregating to ₹ 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or, vide letter dated August 5, 2015, requested the applicant for allowing operations on cutback basis. The applicant has approved provision of cutback facility of 20 per cent. on credit turnover in the month of September, 2015 subject to the terms and conditions conveyed vide letter dated August, 12, 2015 (acknowledged by the corporate debtor on August 13, 2015). As per the said terms accepted by the corporate debtor, corporate debtor has opened a new CD account in Vadaj Branch of the applicant and started the operations and agreed by the corporate debtor, 20 per cent. of the credits received in the CD account was to be appropriated as cutback towards the recovery in the NPA accounts of the corporate debtor. The applicant opened the said current account on September 24, 2015 in the name of corporate debtor and regular credits payments were arranged by the corporate debtor through their current account towards repayment of dues in their loan account. The corporate debtor has arranged the repayment of dues in its loan account on various dates starting from February 11, 2016 and the last such payment received from the corporate debtor is on May 31, 2017. Thereafter, the corporate deb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the request of the corporate debtor vide FGMO Note No. FGMO/ADV/262/(B) dated September 28, 2012, the credit facilities of the corporate debtor were restructured by sanctioning WCTL of ₹ 640 lakhs comprising of irregular portion of ₹ 205 lakhs from CC account, overdue (instalment + interest) of ₹ 180 lakhs of term loans-I and II and LC devolved of ₹ 240 lakhs. 12. I say that despite restructuring of limits, the corporate debtor failed to serve the interest to the desired extent and overdue instalments of term loans and hence, the account of the corporate debtor was classified as non-performing asset (NPA) on December 31, 2013. 11. On being notice issued to the corporate debtor, in respect of the present IB petition, the corporate debtor-company caused appearance, through its counsel, and filed its reply wherein it did not categorically deny its debts liability towards the petitioner-financial creditor bank, but only sought some time for making acceptable one-time settlement proposal to the petitioner. The relevant paragraphs of the reply are stated as under : 29. That the corporate debtor is trying everything in its power to settle the liability o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied 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) of 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 corporate debtor ; (b) the order under clause (b) of sub-section (5) to the financial creditor, within seven days of admission or rejection of such application, as the case may be. 14. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5(7) as a person to whom a financial debt is owed and a financial debt is defined in section 5(8) to mean a debt which is disbursed against consideration for the time value of money. As opposed to this, an operational creditor means a person to whom an operational debt is owed and an operational debt under section 5(21) means a claim in respect of provision of goods or services. When it comes to a financial creditor 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 resol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade by it on May 31, 2017. Hence, the present IB petition is found to be filed well within limitation and maintainable. 18. Consequently, this Adjudicating Authority hereby admits the IB petition filed under section 7 of the Insolvency and Bankruptcy Code, 2016, for initiation of the corporate insolvency resolution process, in respect of the corporate debtor. Further this the Adjudicating Authority declares moratorium under section 14 of the Code, with following orders and directions : (i) This Adjudicating Authority hereby appoints proposed IRP, by the petitioner, Mr. Chandra Prakash Jain (Registration No. IBBI/IPA-001/IP-P00147/2017-18/1031, having address at C. P. Jain and Co., Chartered Accountants, D-501, Ganesh Meridian, Opp. High Court, S. G. Road, Ahmedabad-380 060, e-mail : cpjain@cpjain.com ; jain_cp@yahoo.com, Mobile : 98240 36127) under section 13(1)(c) of the Code. (ii) That the order of moratorium under section 14 of the Code shall come to effect from May 27, 2020 till the completion of corporate insolvency resolution process or until this Bench approves the resolution plan under sub-section (1) of section 31 or passes an order for liquidation of corporate de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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