TMI Blog2020 (10) TMI 382X X X X Extracts X X X X X X X X Extracts X X X X ..... an by State Bank of India to the Financial Creditor, there has been an acknowledgement by the Corporate Debtor vide their letter dated 18/11/2016. Therefore, it can be safely concluded that any problem regarding the issue of limitation does not arise as the petition was filed on 9/08/2019 and thus, is well in time i.e. before the completion of three years. Amount due and payable by the Corporate Debtor to the Financial Creditor or not - HELD THAT:- This contention raised by the Corporate Debtor that no amount is due and payable by the Corporate Debtor to the Financial Creditor also does not survive because the Annual Report of the Corporate Debtor for the year ended on 31/03/2019 itself acknowledge the outstanding loan payable to the Financial Creditor. Also, it is to be noted that at the time of assignment of the matter to the Financial Creditor, the loan account of the Corporate Debtor in the books of the assignor was a Non-Performing Asset (NPA). There is no doubt that the Adjudicating Authority needs to satisfy itself that the default has occurred before admitting an application under Section 7 of the IBC, 2016. Therefore, after perusing the documents, it has become crysta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Financial Creditor as a major constituent for admission of a petition under section 7 of the I B Code. Therefore, the Application under sub-section (2) of Section 7 is taken as complete, accordingly this Bench hereby admits this Petition - application admitted - moratorium declared. - CP (IB) - 2915/I&B/MB/2019 - - - Dated:- 17-1-2020 - Bhaskara Pantula Mohan , Member ( J ) And Shyam Babu Gautam , Member ( T ) For the Appellant : Rahul Sarda, Rihal Kazi, Aniket Katre and Purva Buch, Advocate i/b M M Legal Ventures For the Respondents : Ashish Pyasi, Advocate i/b Dhir Dhir, Associates ORDER Bhaskara Pantula Mohan, Member ( J ) 1. This is an application filed under Section 7 of the Insolvency and Bankruptcy (I B) Code, 2016 by M/s. Finquest Financial Solutions Private Limited. (hereinafter called the 'Financial Creditor') seeking to set in motion the Corporate Insolvency Resolution Process of Ballarpur Industries Limited (hereinafter called the 'Corporate Debtor') 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 on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esent matter) under Section 5 of the SARFAESI Act, the financial assistance granted by it to M/s. Ballarpur Industries Limited (the Corporate Debtor in present matter) together with all underlying securities, rights, title and interest in respect thereof. 7. Also, the counsel mentioned that the Bank vide its letter dated 09/04/2019 which is annexed as Exhibit E addressed to the Financial Creditor wherein the consent under Section 5 of the SARFAESI Act, 2002 is given stating that Assignment of financial assets of the Corporate Debtor to the Financial Creditor, the Financial Creditor is deemed to be a lender to the Corporate Debtor and therefore, all the rights in relation to such financial assets shall consequently vest with the Financial Creditor. 8. Further, the counsel appearing on behalf of the Financial Creditor mentioned that a notice dated 27/06/2019 was sent by them to the Corporate Debtor for non-payment of outstanding due by them under the duly registered Assignment Agreement dated 17/12/2018 between the State Bank of India and the Financial Creditor company. The counsel submitted that this notice was duly received by the Corporate Debtor but there was neither any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars prior to the filing of the instant petition. 12. The second contention made by the Corporate Debtor was that no amount is due and payable by them and that the Financial Creditor have approached this Tribunal erroneously. It was further submitted that the Financial Creditor in Part IV of Form I has not mentioned the date of default and in absence of it, this petition needs to be dismissed. For this contention, the Corporate Debtor has relied on para 28 from the judgment of the Hon'ble Supreme Court of India in the matter of Innovative Industries Ltd. v. ICICI Bank and Anr., Civil Appeal Nos. 8337-8338 of 2017. Para 28 runs as follows: 28. .....It is at the stage of Section 7(5), where the adjudicating authority is to be satisfied that a default has occurred, that the Corporate Debtor is entitled to point out that a default has not occurred in the sense that the debt , which may also include a disputed claim, is not due. A debt may not be due if it is not payable in law or in fact... Therefore, it was contended that the Adjudicating Authority before admitting an application under Section 7 of the IBC, 2016 needs to satisfy itself that the default has occurred. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate Bank of Travancore was later merged into State Bank of India who disbursed the said loan amount. The said loan was required to be repaid with interest in quarterly structured instalments starting in September, 2014 till June 2022. This loan was further assigned to the Financial Creditor vide Assignment Agreement dated 17/12/2018 and therefore the Financial Creditor is the assignee. This was also communicated to the Corporate Debtor by the State Bank of India vide letter dated 09/04/2019. 17. There were four main contentions raised by the Corporate Debtor which need to be dealt with one by one. Following are the four contentions: i. That the petition is time barred and has failed to establish that the outstanding amount is within period of limitation. But this contention of the Corporate Debtor does not stand upon a careful reading of the Annual Report of the Corporate Debtor for the year ended on 31/03/2017 wherein it is evident that the first default occurred on 23/09/2016 and the said petition has been filed in the month of August, 2019. Moreover, the Balance Sheet, of the Corporate Debtor dated 06/05/2019 also clearly mentions that the amount is due upon them, which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resent petition has been preferred by the Financial Creditor against the Corporate Debtor. iv. There was another contention made by the Corporate Debtor indicating the incompleteness of Form 1 filed by the Financial Creditor in terms of its Part IV wherein it is necessary to provide the date from which the debt fell due. This contention is merely technical in nature which can be easily rectified if the Bench directs so. We would also like to rely on the judgment of the Hon'ble National Company Law Appellate Tribunal in the matter of Satyaprakash Aggarwal v. Vistar Metal Industries (P) Ltd., 2018 SCC OnLine NCLAT 264, dated 21-05-2018 wherein similar technical error was in question, the Hon'ble NCLAT has set aside the impugned order by the NCLT, Mumbai Bench rejecting the petition merely because the date of default was not mentioned in Form I of the petition. The relevant portion runs as follows: Admittedly, we find that on the technical ground i.e. the application is defective, the Adjudicating Authority has rejected the application under Section 7 of the 'I B Code'. Therefore, we cannot appreciate the impugned order, as before rejecting the application the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act); (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. (II) That the supply of essential goods or services to the Corporate Debtor, if continuing, shall not be terminated or suspended or interrupted during moratorium period. (III) That the provisions of sub-section (1) of Section 14 shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator. (IV) That the order of moratorium shall have effect from 17.01.2020 till the completion of the 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 Debtor under section 33, as the case may be. (V) That the public announcement of the corporate insolvency resolution process shall be made immediately as specified under section 13 of the Code. (VI) That this Bench hereb ..... X X X X Extracts X X X X X X X X Extracts X X X X
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