TMI Blog2020 (10) TMI 959X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and Anr Vs M/s Colorhome Developers Pvt. Ltd [ 2019 (9) TMI 968 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI ] the existence of dispute is not relevant for Financial Creditor. Therefore, there are no merit in the contention raised by the Corporate Debtor. Whether application filed by the Financial Creditor under Section 7 of Insolvency and Bankruptcy Code, 2016 is barred by limitation? - HELD THAT:- It is now a settled case law that the acknowledgement of debt in the balance sheet of the Corporate Debtor extends the period of limitation - From the records it is observed that the Corporate Debtor from 2012 to 2019 made entries in the Balance Sheet about the amount due to the Financial Creditor - this amounts to acknowledgement of debt and, therefore, the application is not barred by the limitation. Whether the respondent Corporate Debtor is not a Corporate Debtor as there is no legally recoverable debt? - HELD THAT:- It is evident that the Corporate Debtor defaulted in repaying the loan, Revenue Recovery notice and requisition was initiated by the Financial Creditor against the Corporate Debtor and its guarantors in the year 2012. Against the said action, several ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. U85199KL1998PTCO12446. The registered office of the Corporate Debtor is at XIII/581, Sanchesz Hills, Panniyankara, Palakkad, Kerala 678 683. The Authorised Capital of the Corporate Debtor is ₹ 11,00,00,00 and Paid up Capital is ₹ 10,63,50,00/-. Submissions by the Financial Creditor: 4. The counsel for the Financial Creditor/ Bank submitted that the Financial Creditor had sanctioned two term loans of Rs. 175 Lakhs and Rs. 50 Lakhs to the Corporate Debtor by way of sanction letters dated 16.01.2008 and 10.11.2009 respectively. The loans were granted to close the loan amount of the Corporate Debtor with South Indian Bank, to settle the term loan account with Federal Bank Ltd by way of One Time Settlement and to meet the margin money requirement of fresh working capital sanctioned by Federal Bank Ltd. The Corporate Debtor created charge on its movable assets in favour of Financial Creditor and also created equitable mortgage by deposit of the title deeds of the Corporate Debtor's property with the Financial Creditor. The Financial Creditor's loans have been further secured by creating equitable mortgage by deposit of title deeds of collateral security ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... guarantors filed a Writ Petition before the Hon'ble High Court of Kerala in WP(C) No. 15654/2013. The Hon'ble Court as per judgment dated 15.07.2013, disposed off the petition with the observation that the petitioners can move a representation before the Financial Creditor and that the Financial Creditor can consider the representation and pass orders. 9. The counsel for the Financial Creditor also stated that two other Writ Petitions were filed before the Hon'ble High Court of Kerala, in WP (C) No. 30389 and WP (C) No. 4809/2014, by the Corporate Debtor and the guarantors. An interim order dated 26.02.2014 was passed by the High Court in the case, staying the proceedings for a period of 3 months and the case is pending before the Hon'ble High Court of Kerala. 10. The counsel for the Financial Creditor further submitted that during this period, Federal Bank, the pari passu charge holder, transferred their right to M/s J. M. Financial Asset Reconstruction Company (hereinafter referred to as JMFARC). With the consent of the Financial Creditor, JMFARC initiated steps under the SARFAESI Act, 2002. This was stayed by the DRT in OA No. 48/2011. 11. The counsel f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osit of title deeds of the Corporate Debtor's property with the Financial Creditor. The counsel further submitted that the documents do not show that the execution thereof has been witnessed by anybody nor in the common seal of the company shown to have been affixed in the document, despite the fact that it is stated the parties have put their respective hands and seals on the day and year mentioned in the document. 16. The counsel for the Corporate Debtor submitted that the debt as claimed by the Financial Creditor is not due as it is not payable in law or in fact and is disputed. The applicant has not even filed a statement of accounts along with the application and the details of the debt stated by the Financial Creditor as due from the Corporate Debtor. 17. The counsel for the Corporate Debtor stated that the application filed by the Financial Creditor under Section 7 of the IBC is not complete as it is not supported by the document mandated under the IBC, especially under Section 7. The Financial Creditor submits that as per Section 7(3), the Financial Creditor shall furnish a 'record of default' recorded with the information utility or such other documents t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orities in support of the well-established position that an entry made in the company's balance sheet amounts to an acknowledgement of the debt and has the effect of extending the period of limitation under Section 18 of the Limitation Act, 1963. However, I may refer to only one decision of the learned single judge of this Court (Manmohan, J.) in Bhajan Singh Samra Vs Wimpy International Ltd. (2011) DLT 428 for the simple reason that it collects all the relevant authorities on the issue, including some of the judgments cited before me on behalf of the petitioners. This judgment entirely supports the petitioners on this point 21. The counsel for the Financial Creditor stated that against the Revenue Recovery notice and requisition several Writ Petitions were filed by the Corporate Debtor and its guarantors before the Hon'ble High Court of Kerala to obtain stay against the RR action initiated by the Financial Creditor. It was further stated that various request, were made by the Directors of the Corporate Debtor and its guarantors regarding settlement of the dues. Copy of the letters dated 26.07.2013 sent by the Directors and Guarantors of the Corporate Debtor are annexe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king into account the averments made by both the counsels. Our findings are as under: 25. As regard to Point No. (i), on perusal of the record, we found that the Financial Creditor has the proper authority to file the present application, and the objection raised by the counsel for the Corporate Debtor is merely incongruous, and therefore, holds no water. Moreover, the Financial Creditor has annexed the Board Resolution dated 05.08.2019 authorising Deputy Manager (Legal) to represent the Financial Creditor before various forums from time to time. We find no merit in the argument made by the Corporate Debtor in this connection. 26. As regard to Point No. (ii), it is settled law as decided by the Hon'ble NCLAT in its order in Vinayaka Exports and Anr Vs M/s Colorhome Developers Pvt. Ltd (Company Appeal (at) (Insolvency) No. 06 of 2019 dated 23rd September 2018) (in para 7 para 12) the existence of dispute is not relevant for Financial Creditor. Therefore, we did not find any merit in the contention raised by the Corporate Debtor. 27. As regard to Point No. (iii), we have gone through the judgment of Hon'ble High Court of Delhi in Zest Systems Pvt. Ltd v Centre for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent company is not a Corporate Debtor as there is no legally recoverable debt. 29. In the light of the above findings, we are of the view that, the present application filed by the Financial Creditor is satisfying all the definitions of Financial Creditor , Default and Financial Debt and qualifies for filing an application under Insolvency and Bankruptcy Code. We therefore, are of the opinion that the Application under Sub-Section (4) of Section 7 of I B Code, 2016 is complete and deserves to be admitted for initiation of Corporate Insolvency Resolution Process against the Corporate Debtor. 30. This application is filed by the Financial Creditor under the Insolvency and Bankruptcy Code, 2016 for initiation of Corporate Insolvency Resolution Process against the Corporate Debtor to protect the interests of the stakeholders. Accordingly, the application IBA/55/KOB/2019 has been admitted under CIRP and the following order has been passed. 31. Having admitted the Application, the provisions of Moratorium as prescribed under Section 14 of the Code shall be operative henceforth with effect from the date of order shall be applicable by prohibiting institution of any suit bef ..... X X X X Extracts X X X X X X X X Extracts X X X X
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