TMI Blog2020 (9) TMI 599X X X X Extracts X X X X X X X X Extracts X X X X ..... this Adjudicating Authority finds that the corporate debtor has not denied the fact that the debt has been taken from the applicant financial creditor thus it is an admitted debt taken by the corporate debtor as Rupee Term Loan through Facility Agreement from the applicant financial creditor - Further, this Adjudicating Authority finds that as the corporate debtor was under obligation to pay the interest and principal amount in terms of Facility Agreement in 48 equal quarterly instalments and interest at the prescribed rate on a quarterly basis from the date of disbursement under the Facility Agreement and the corporate debtor has failed of fulfil its payment obligation thus default has occurred on part of corporate debtor and the applicant has also attached several documents to prove the existence of debt and default. Thus, this Adjudicating Authority is of the view that there is a default as the corporate debtor has failed repay the amount due to the financial creditor. The petitioner succeeded in establishing that there is a debt and existence of default on behalf of corporate debtor and the application is complete in all respect. Time Limitation - HELD THAT:- The appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under obligation to pay/repay the interest and principal amount in terms in 48 equal quarterly instalments and interest at the prescribed rate on a quarterly basis from the date of disbursement of the PFC Facility. 5. PFC was appointed as the Lenders' Agent under the Lenders' Agent Agreement dated February 28, 2014 and as the Security Agent under the Security Agent Agreement dated February 28, 2014. For securing the aforesaid payment obligations, the Corporate Debtor in terms of the Facility Agreement created security interest in favour of PFC. 6. Further stated that the Project was delayed due to multiple issues including the failure of GIC to adhere to its obligations under the corporate guarantee given by it. The Corporate Debtor was under obligation to repay the principle as well interest component on the respective due dates under the Facility Agreement and failure of which occurred the event of default to fulfil its payment obligation. 7. Subsequently, the Financial Creditor issued demand letters dated July 7, 2017, January 5, 2018 and July It, 2018 to the Corporate Debtor regarding the defaults being committed by the Corporate Debtor. 8. Further, on Octo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort to which parties were bound by the valuation but UPPTCL remained silent about it. Further the applicant financial creditor apprised the respondent that UPPTCL arbitrarily rejected the fair market valuation arrived at by the independent valuers and requested the respondent to conclude discussion with Adani for investment and confer to Financial creditor or else they will file for bankruptcy. To this the respondents negotiated with the investor and vide letter dated 11.02.2019, submitted to the applicant Financial Creditor, an offer signed by the investor for taking over the project but the said offer was rejected by the applicant without assigning any reasons for the same. 13. Further stated that the proceedings before the Hon'ble High Court of Judicature at Allahabad, Lucknow Bench and before Supreme Court against UPPTCL which was dismissed and proceedings has also been initiated before the Hon'ble UP Electricity Regulatory Commission in which financial creditor impleaded itself as necessary party stated that if that petition is allowed in favour of the respondent, the valuation of the project will improve significantly. 14. Further an objection was also raised by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised the issue that the petition is not maintainable on two grounds. Firstly, he has referred to the circular of the RBI dated 7th June, 2019 which has been filed as Annexure-7 to CA No. 216/2010 by the Respondent and stated that the said circular is fully applicable upon the petitioner and they have violated the conditions thereof. Secondly, that the petition has also been filed before the Uttar Pradesh Electricity Regulatory Commission and therefore, the filing of the present petition is also non mandated. 18. Another objection was also taken by the Respondent that the some direct payments has been received by the petitioner from the UPPTCL and other government authorities which they should not have done and if they have received any direct payments, they should have received it under some agreement which has not been brought on record and if some amount has been received, the default itself stands disputed. 19. Shri. Anurag Khanna, Advocate for the respondent has further objected that as the petitioner has not filed any document from information utility showing default, therefore, the present petition is not maintainable. 20. In reply to the arguments raised by the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e application is complete, then the application is required to be admitted.... It is therefore argued on behalf of the petitioner that the circular will not apply in the present case and there was no Resolution Plan which was under consideration at the point when the petition was filed. 21. It is further submitted on behalf of the petitioner that the objection with regard to the filing of the petition before Uttar Pradesh Electricity Regulatory Commission regarding the same will have no effect in the present petition and to support his contention the learned counsel relied upon the judgment of NCLAT, Delhi in the matter of Yes Bank Vs. Namoalloys, CP (IB) 867/2018 and has referred to para 27 and 32 of the said judgment which is quoted below: ...27. Section 7 application filed under the Code is an independent proceeding, which has nothing to do with the pendency of criminal or civil proceedings. ... Pendency of investigation and civil suit, in the absence of specific stay order, cannot be construed as a valid defense against triggering of Corporate Insolvency Resolution Process under the provisions of the Code. Insolvency and Bankruptcy Code, 2016 is a special law having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aning non-payment of a debt once it becomes due and payable, which includes non-payment of even part thereof or an instalment amount For the meaning of debt , we have to go to Section 3(11), which in turn tells us that a debt means a liability of obligation in respect of a claim and for the meaning of claim , we have to go back to Section 3(6) which defines claim to mean a right to payment even if it is disputed. The Code gets triggered the moment default is of rupees one lakh or more (Section 4), The corporate insolvency resolution process may be triggered by the corporate debtor itself or a financial creditor or operational creditor. A distinction is made by the Code between debts owed to financial creditors and operational creditors. A financial creditor has been defined under Section 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. 28. When i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 become due in the sense that it is payable at some future date. It is only when this is proved to the satisfaction of the adjudicating authority that the adjudicating authority may reject an application and not otherwise. It is thus argued on behalf of the petitioner that the record of default can either be from the information utility or other evidence produced by the financial creditor, as is in the present case. 24. Before considering the issues involved, it is to be noted that the reading of the provision shows that in order to make an application under Section 7(1) the financial creditor/petitioner is required to establish: i. (Whether there is duly established financial debt. ii.) Whether there is default in payment by the corporate debtor. iii. (Whether the documents attached with the applicant shows that there is default in payment of debt and name of resolution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the date of disbursement under the Facility Agreement and the corporate debtor has failed of fulfil its payment obligation thus default has occurred on part of corporate debtor and the applicant has also attached several documents to prove the existence of debt and default. Thus, this Adjudicating Authority is of the view that there is a default as the corporate debtor has failed repay the amount due to the financial creditor. 29. Referring to the decision of Hon'ble Supreme court in Innoventive Industries Ltd. v. ICICI Bank, (2017)205 Comp Cas 57(SC) it was held that ...The moment the Adjudicating Authority is satisfied that a default has occurred, the application must be admitted unless it is incomplete.... Further in the matter of Karan Goel v. M/s. Pashupati Jewellers Anr. Company Appeal (AT) (Insolvency) No. 1021 of 2019 dated 01.10.2019 stated: ...it is clear that once the Adjudicating Authority is satisfied on the basis of records that the debt is payable and there is default, the Adjudicating Authority is required to admit the application. 30. Thus the petitioner succeeded in establishing that there is a debt and existence of default on behalf of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Enforcement of Security Interest Act, 2002 (54 of 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. Explanation.-For the purposes of this sub-section, it is hereby clarified that notwithstanding anything contained in any other law for the time being in force, a licence, permit, registration, quota, concession, clearance or a similar grant or right given by the Central Government, State Government, local authority, sectoral regulator or any other authority constituted under any other law for the time being in force, shall not be suspended or terminated on the grounds of insolvency, subject to the condition that there is no default in payment of current dues arising for the use or continuation of the license or a similar grant or right during moratorium period.] (2) The supply of essential goods or services to the corporate debtor as may be specified shall not be terminated or suspended or interrupted dur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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