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TMI Blog2019 (12) TMI 1364X X X X Extracts X X X X X X X X Extracts X X X X ..... ivate limited company and is engaged in the business of manufacture, produce, process, buy, sell, import, export and otherwise deal In Sponge Iron, Ferro Alloys, Iron and Steel, Colliery, Proprietors, Coke, Tin plate, Iron Fonder and also in minerals and mineral products. It further engaged in commissioning activities such as installing power plant, acquiring ore mines, providing design engineering etc. with respect to the said products. b) That the Corporate Debtor was granted, inter alia, financial assistances by way of OCC limit of Rs. 500 Lakhs and Rs. 450 Lakhs (hereinafter referred to as the "Loans") under respective loan and security agreements entered into and executed between Corporate Debtor and Karur Vysya bank ("Bank/Assignor"), for the purpose and on the terms and conditions contained therein. c) That the Corporate Debtor defaulted in payment of interest and the principal instalments of the Loans and further failed and neglected to clear the overdue amounts under the Loans to the Bank. As a result, the Loans were classified as. Non-Performing Assets by Bank/Assignor on 28.02.2013 in the books of accounts of Bank/Assignor in accordance with the extent guidelines of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... outstanding amounts as on 15.06.2019 owed by the Corporate Debtor to the Financial Creditor along with applicable contractual interest amounts with Certificate. 4. Reiterating the above averments, the counsel for the petitioner prayed to admit the instant application. 5. Respondent filed counter, inter-alia stating that the petition has been filed by suppressing all material facts and therefore, the same is baseless, malicious, motivated and not maintainable under the law and are untenable. Further, following contentions have been raised: a) It is stated that the outstanding amount claimed by the petitioner was Rs. 18,75,35,339.70 (Rupees Eighteen Crores Seventy Five Lakhs Thirty Five Thousand and Three Hundred Thirty Nine and Seventy Paisa only) comprising of (a) Rs. 4,95,61,000 (Rupees Four Crores Ninety Five Thousand Sixty One Thousand only) towards principal amount, (b) Rs. 17,62,71,379.40 (Rupees Seventeen Crores Sixty Two Lakhs Seventy One Thousand Three Hundred Ninety Seven and Forty Paisa only) towards interest as on 15.06.2019 and (c) Rs. 1,43,728.80 (Rupees One Crore Forty Three Lakhs and Seven Twenty Eight and Eighty Paisa only) towards penal interest. The Corporate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eel industry, the Corporate Debtor could not pay the balance amount of Rs. 50,00,000 (Rupees Fifty Lakhs Only) to the Financial Creditor within agreed time however the Corporate Debtor has provided the reasons for non-payment of balance amount. d) It is further stated that Corporate Debtor had not received any notice in Form 3 from the Financial Creditor and in view thereof, Corporate Debtor had been unable to dispute the claim made in the notice. e) It is stated by way of additional counter, that the Petition was barred by the limitation hence the same was liable to dismissed. It is further stated that this petition is required to be dismissed as the authorized representative has not filed any authorization documents in his support to file the petition. It could be concluded that the present petition has been filed without authority hence the same needs to be rejected by this Adjudicating Authority. f) It is stated that on 29.10.2019, during course of hearing, the Financial Creditor admitted that there is a pre-existing dispute between the Financial Creditor and Corporate Debtor with regard to the claim amount. It is relevant to point out that the Financial Creditor has init ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitation commences from 25.01.2019 and therefore, the instant Application is well within limitation and that the contentions of the Corporate Debtor are incorrect and baseless. It is submitted that the Financial Creditor herein had approved the OTS proposal of the Corporate Debtor vide its letter dated 07.08.2018. However, the Corporate Debtor failed to make payments in compliance with the OTS proposal. It is further submitted that the OTS letter of the Corporate Debtor was cancelled by the Financial Creditor vide OTS Cancellation Letter dated 09.05.2019, as the Corporate Debtor failed to honor the payment as per the terms of the sanction letter. iv. It is stated that the Petitioner herein is a Financial Creditor and that the Demand Notice under the provisions of the Insolvency and Bankruptcy Code, 2016 is to be issued by an Operational Creditor and not by a Financial Creditor. v. It is stated that Corporate Debtor herein had also filed Additional Counter Affidavit dated 05.11.2019 wherein they have alleged that the Application has been filed without valid authority. It is submitted that the Petitioner had filed valid authorization at Page No. 300 of the Application and that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record. 15. In the instant Petition, the Petitioner has proved its case by placing documentary evidence viz., Copies of Facility Agreements and sanction letters, date and details of all disbursements of the facilities etc., and copies of entries in Bankers Book in accordance with the Bankers Books Evidence Act, 1891 (18 of 1891) which proves that a default has occurred for which the present Corporate Debtor was liable to pay. In their counter affidavit, the Respondents have not denied the facts regarding the existence of 'financial debt' and 'default' committed by the Corporate Debtor. Even during the hearings on various dates as mentioned in foregoing paragraphs, the learned counsel for the Corporate Debtor had sought time for settling the debt with the Financial Creditor. It is a different matter that settlement talks have not fructified, but the very attempt by the Corporate Debtor to get it settled, establishes the 'debt' and 'default'. 16. The Hon'ble Supreme Court, while deciding the matter in the case of INNOVENTIVE INDUSTRIES LTD. Vs. ICICI BANK & ANR., in Civil Appeal Nos. 8337-8338 of 2017, held as under: ".............The moment th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority; b) Transferring, encumbering, alienating 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 Securitization 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. 21. However, the supply of essential goods or services of the Corporate Debtor shall not be terminated or suspended or interrupted during moratorium period. Further, the provisions of Sub-section (1) of Section 14 shall not apply to such transactions, as notified by the Central Government. 22. The IRP shall comply with the provisions of Sections 13(2), 15, 17 & 18 of the Code. The directors, Promoters or any other person associated with the management of Corporate Debtor are directed to extend all assistance and cooperation to the IRP as stipulated under Section 19 and for discharging his functions under Section 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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