TMI Blog2020 (1) TMI 1258X X X X Extracts X X X X X X X X Extracts X X X X ..... cial creditor is well within limitation. That, the documents filed along with the application is sufficient to prove that there exists financial debt and default occurred on the part of the corporate debtor. On perusal of the records, it is found that the letter of authority dated 29.09.2018 issued by Assistant General Manager of the applicant bank authorising Mr. Ashik P. Shah is proper and valid - the Adjudicating Authority is of the considered view that there is a debt due to financial creditor and there is default on the part of the corporate debtor. In the instant case, the documents produced by the Financial Creditor clearly establish the 'debt' and there is default on the part of the Corporate Debtor in payment of the 'financial debt' - In the instant application, from the material placed on record by the Applicant, this Authority is satisfied that the application is complete in all respect and the Corporate Debtor committed default in paying the financial debt to the Applicant and the respondent company has acknowledged the debt. Application admitted - moratorium declared. - C.P. (IB) No. 536/7/NCLT/AHM/2018 - - - Dated:- 8-1-2020 - Manorama ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .03.2016. (iv) Thereafter the respondent company has been sanctioned fresh advance bank guarantee of ₹ 8.00 crores on 21.06.2017 which has not been availed by the company. 6. Learned lawyer for the financial creditor has further stated that against the aforesaid credit facilities, the corporate debtor is in default of a total sum of ₹ 14,39,33,920.30 plus interest of ₹ 10,73,97,344.78 aggregating to ₹ 25,13,31,265.08 (Rupees twenty-five crores thirteen lacs thirty-one thousand two hundred-sixty-five and paise eight only). 7. The financial creditor has further stated that the present Insolvency Resolution Application is filed under Section 7 of the IB Code, 2016 for the purpose of initiating corporate insolvency resolution process against the corporate debtor since it has lost its substratum and is unable to repay outstanding debt. That, the corporate debtor has already committed default of its debt towards the financial creditor by non-payment of instalment and/or interest of the various financial facilities availed through its Ashram Road Branch, Ahmedabad, Gujarat State. 8. The applicant bank has submitted copy of the following documents in sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anager of the applicant bank authorising Mr. Ashik P. Shah is proper and valid. 14. In view of the above discussions, the Adjudicating Authority is of the considered view that there is a debt due to financial creditor and there is default on the part of the corporate debtor. In Innoventive Industries Ltd. v. ICICI Bank Ltd. [2017] 84taxmann.com 320/143 SCL 625, the Hon'ble Supreme Court, while explaining sections 7 and 8 of the IB Code, observed and held as under:-- 27. The scheme of the Code is to ensure that when a default takes place, in the sense that a 'debt' becomes due and is not paid, the insolvency resolution process begins. Default is defined in Section 3(12) in very wide terms as meaning 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 ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e a disputed claim, is not due. A debt may not be-due if it is not payable in law or in fact. The moment the adjudicating authority is satisfied that a default has occurred, the application must be admitted unless it is complete, in which case it may give notice to the applicant to rectify the defect within seven days of receipt of a notice from the adjudicating authority. Under sub-section (7), the adjudicating authority shall then communicate the order passed to the financial creditor and corporate debtor within seven days of admission or rejection of such application, as the case may be. 15. In Mobilox Innovations (P.) Ltd. v. Kirusa Software (P.) Ltd. [2017] 85 taxmann. com 292/144 SCL 37 Hon'ble Supreme Court held as under:-- 38......in the case of a corporate debtor who commits a default of financial debt, the adjudicating authority has merely to see the records of the information utility or other evidences 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lled all the requirements of Section 7 of the Code, the instant petition deserves to be admitted. 23. The petition is, therefore, admitted and the moratorium is declared for prohibiting all of the following in terms of sub-section (1) of section 14 of the Code:-- (i) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, 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 Enforcement of Security Interest Act, 2002 (54 of 2002); (iv) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor. 24. It is further directed that the supply of goods and essential services to the Corporate Debtor, if continuing, shall not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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