TMI Blog2020 (9) TMI 1072X X X X Extracts X X X X X X X X Extracts X X X X ..... B/2019 - - - Dated:- 19-2-2020 - Rajeswara Rao Vittanala, Member (J) And Ashutosh Chandra, Member (T) For Appellant/Respondent: G. Sathyanarayana, PCA, Ramachandra A.S., Senior Manager and Veena J. Kamath ORDER Rajeswara Rao Vittanala, Member (J) 1. C.P. (IB) No.319/BB/2019 is filed by Sir M. Visvesvaraya Co-operative Bank Limited (hereinafter referred to as 'Petitioner/ Financial Creditor') under Section 7 of the IBC, 2016 read with Rule 4 of the I B (Application to Adjudicating Authority) Rules, 2016, by inter alia seeking to initiate Corporate Insolvency Resolution Process in respect of M/s. Ind-Lab Equipments Private Limited (hereinafter referred to as 'Respondent/Corporate Debtor') on the ground that it has committed default for total amount of ₹ 3,03,82,953/- (Rupees Three Crores Three Lakhs Eighty Two Thousand Nine Hundred and Fifty Three only) as on 30.06.2019 along with further interest. 2. Brief facts of the case, as mentioned in the Company Petition, which are relevant to the issue in question, are as follows: (1) Sir M. Visvesvaraya Co-operative Bank Limited (hereinafter referred to as 'Petitioner/Financial Creditor' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ards Term Loan TL-4-44, the Corporate Debtor has offered the security of existing computers, plant and machinery, electrical equipments, furniture and fixtures and computers, interiors, equipments purchased out of Bank's finance in the form of Hypothecation; all the piece of property purchased out of Bank's finance bearing No.11F (P-II) of Doddaballapura Industrial Area, situated in Sy.No.95 of Bashettihally Village, Kasaba Hobli, Doddaballapura Taluk, Bangalore Rural District, measuring East to West 45 meters and North to South 22.50 meters, totally measuring 1012.50 sq.mtrs, which belongs to the Corporate Debtor by Memorandum of Deposit of Title Deeds. The Directors of the Corporate Debtor Smt. Uma Devi, Dr. Vasanth Kumar, Smt.Shivamma B.V. offered their personal guarantees. (6) However, after disbursement of loan, the Corporate Debtor did not repay the loan instalments including interest, which had the repayment period of 174 months and 144 months respectively as under: Account No. Principal Outstanding as on 30.06.2019 Interest Outstanding as on 30.06.2019 Date of Default ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Referred to Counsel for filing case 1 Cheque bounce case under 138 of Negotiable Instruments Act 1 Total 30 The Corporate Debtor M/s. Indlab Equipments Private Limited is also one of the top 30 NPA accounts in the list as mentioned supra. The Bank extended full cooperation to the Corporate Debtor to the funding requirements of the business. But the Corporate Debtor defaulted and put the Bank also in trouble to invite SAF by RBI. The loan extended to the Corporate Debtor is payable in instalments on monthly basis as per the loan agreement, but the same is defaulted by the Corporate Debtor. The default is reported by the Auditors of the Company in their audit report of the Company. It is evident from the Audited Accounts that the Company is incurred losses, there is no drawing power, no capital infusion by the promoters/directors to make good the erosion of funds and hence the solvency and value of the Company is deteriorated. Since the default is happened, the Adjudicating Authority may admit the instant Petition. Further, the settlement proposa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n phase and released till 21.06.2016) and released ₹ 2,27,00,000/- second term loan sanctioned for ₹ 48,00,000/- on 16.11.2016 (released in phase and released till 25.01.2017) and released ₹ 33,46,000/-. The Respondent has paid more than ₹ 1,08,11,399/- as on 23.09.2019. From these payments, it is clear that ₹ 58,08,574/- has been paid post the sanction of the second loan on 16.11.2016. Without prejudice to the above, even assuming that the second term loan was fully disbursed in part and parcel until 25.01.2017, then too in so far as the aforementioned term sheet is concerned, the Respondent has duly discharged its dues. There is no debt or default in respect of the 2nd term loan dated 16.11.2016. The Petitioner cannot club Petitions pertaining to two different loan agreements. (4) It is stated that the Respondent is going through various hurdles because of which there is a delay in payment from their customers these includes Demonetization, introduction of Goods and Service Tax law. However, the Respondent Company is continued to be solvent and that it has around 10 full time employees at its office, several others, who work outside the premises ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to the Respondent in order to resolve the claim in question. The allegations made by the Respondent are not at tenable. Mr. Ramachandra A.S., Senior Manager of the Petitioner-Bank, who is present on several occasions has also submitted that they have extended full co-operation to the Respondent to see any solution to the issue in question. The Bank run on public money cannot extend co-operation beyond a point. He has further submitted that the Debt in question is established beyond doubt and not controverted by the Respondent except raising frivolous contentions allegations and the instant Petition is filed in accordance with law, and a qualified Insolvency Professional namely Mr. Addanki Haresh, who also has filed his written consent in Form 2 dated 10.08.2019. 7. Ms. Veena J. Kamath, learned Counsel for the Respondent, while strongly opposing the instant Company Petition has again reiterated the averments made in the statement of objections, as briefly stated supra, has further submitted that though the loan in question is not in dispute and not accepting the proposal of settlement, not furnishing full details payments of loan in question etc., are arbitrary and against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 H, particulars of the proposed interim resolution professional in Part HI, 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 default from the records of the information utility or on the basis of evidence fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 016 in question was also executed between the parties. 10. Therefore, there is no dispute with regard to sanction of loans in question by the Bank. Moreover, it is not the case of Respondent that the Loans in question were not sanctioned and has committed its defaults. Payment of some part of instalments of loan, not accepting its proposal of settlement by the Bank etc. are not tenable grounds in a Petition filed U/s 7 of Code. And requesting the Bank for settlement of claim in question itself show that the Debt in question is established and default of Account of Respondent is not in dispute. 11. In view of pleas raised by the Respondent claims that it is a solvent Company and trying to resolve the issue in question, the Adjudicating Authority, therefore, has extended several opportunities to the Respondent, and also suggested to the Petitioner-Bank to extend requisite cooperation to resolve the issue. Therefore, though the instant Company Petition is filed on 11.09.2019, the case was adjourned on several viz., 29.10.2019, 21.11.2019, 26.11.2019, 09.12.2019, 20.12.2019, 20.01.2020, 27.01.2020. The Respondent, though officially accepting notice on 24.10.2019, has not filed an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h action plans/review notes/etc, as per the time lines indicated in the Annex and also ensure submission of quarterly financial statements in the Proforma of inspection statements 1, 2, 4 10 within one month from the closure of the quarter to which it relates. 4. It may be noted that any non-compliance with SAF instructions or delay in submission of the information/data indicated in paragraph 3 above would be viewed seriously. 13. They have also stated that the Bank continued the thrust on regularising the default NPA accounts listed the top 30 accounts, the action taken and started reporting to RBI. The summary of action taken is as follows: Particulars No. of Accounts Under SARFAESI Act 6 U/s 70 of Karnataka Co-operative Societies Act 19 U/s 7 of IBC, 2016 3 Referred to Counsel for filing case 1 Cheque bounce case under 138 of Negotiable Instruments Act 1 Total 30 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein; c. 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 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 transaction as may be notified by the Central Government in consultation with any financial regulator; a surety in a contract of guarantee to a corporate debtor. g. The order of moratorium shall have effect from the date of such order till the completion of the Corporate Insolvency Resolution Process. (3) Fees for the IRP is fixed at ₹ 1,00,000/- per month. (4) The Board of Directors and all the staff of the Corporate Debtor are hereb ..... X X X X Extracts X X X X X X X X Extracts X X X X
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