TMI Blog2019 (12) TMI 1368X X X X Extracts X X X X X X X X Extracts X X X X ..... on of Financial Creditor. The material placed on record further confirms that applicant financial creditor had disbursed loan facilities to the respondent corporate debtor and the respondent has availed the loan and committed default in repayment of the outstanding financial debt. On a bare perusal of Form - I filed under Section 7 of the Code read with Rule 4 of the Rules shows that the form is complete and there is no infirmity in the same. It is also seen that there is no disciplinary proceeding pending against the proposed Interim Resolution Professional - the present application is complete in all respect and the applicant financial creditor is entitled to claim its outstanding financial debt from the corporate debtor and that there has been default in payment of the financial debt. Application admitted - moratorium declared. - Company Petition No. (IB)-1160(PB)/2019 - - - Dated:- 18-12-2019 - Dr. Deepti Mukesh, Member (J) And Santanu Kumar Mohapatra, Member (T) For the Appellant : Syed Arsalam, Prateek Khaitan and Jatin, Advocates For the Respondents : Kshitiz Garg, Amol Sinha and Anshum Jain, Advocates ORDER Santanu Kumar Mohapatra , Member ( T ) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Financial Creditor further sanctioned an ad- hoc facility of ₹ 3 Crores. Thereafter in the year 2012, at the request of the Corporate Debtor, the Cash Credit Facility was enhanced from 9 Crores to ₹ 15.60 Crores (for meeting Working Capital requirements of the Corporate Debtor). 6. It is alleged that after availing the Credit Facilities the accounts of the Corporate Debtor became and continues to be irregular. The Financial Creditor did not receive any payment from the Corporate Debtor and was left with no other alternative but to declare the account of the Corporate Debtor as NPA. It is farther submitted that the corporate debtor had approached the financial creditor for one-time settlement. Applicant had accepted the same vide letter dated 22.03.2017 and the settlement was modified from time to time at the request of the corporate debtor. However, the corporate debtor failed to make the necessary payments as agreed under One Time Settlement and therefore the applicant was constrained to revoke the said OTS vide letter dated 17.05.2018. 7. In support of its claim applicant bank has placed on record copy of various loan and security documents duly executed by b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thin the purview of 'Financial Debt but also the applicant bank can clearly be termed as 'Financial Creditor' so as to prefer the present application under Section 7 of the Code. 15. The application filed by the applicant financial creditor under sub-section 5(a) of Section 7 of the code, has to be admitted on satisfaction that: I. Default has occurred. II. Application is complete, and III. No disciplinary proceeding against the proposed IRP is pending. 16. An application under Section 7 of the Code is acceptable so long as the debt is proved to be due and there has been occurrence of existence of default. What is material is that the default is at least 1 lakh. In view of Section 4 of the Code, the moment default is of Rupees one lakh or more, the application to trigger Corporate Insolvency Resolution Process under the Code is maintainable. 17. It is seen that the applicant bank has placed on record various documents in relation to the disbursement of the loan to the respondent company. The materials on record and the loan documents clearly depict that the loan was sanctioned, disbursed and the loan agreements were properly executed. Respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m Resolution Professional having registration number IBBI/IPA-001/IP-P00824/2017-18/11400 resident of P-27, 1st Floor, Malviya Nagar, New Delhi - 110017 with email - id nbtracel@yahoo.com. Mr. Neeraj Bhatia has agreed to accept the appointment as the interim resolution professional and has signed a communication dated 01.05.2019 in Form 2 in terms of Rule 9(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. There is a declaration made by him that no disciplinary proceedings are pending against him in Insolvency and Bankruptcy Board of India or elsewhere. In addition, further necessary disclosures have been made by Mr. Neeraj Bhatia as per the requirement of the IBBI Regulations. Accordingly, it is seen that the requirement of Section 7(3)(b) of the Code has been satisfied. 23. It is thus seen that the requirement of sub-section 5(a) of Section 7 of the code stands satisfied as default has occurred, the present application filed under Section 7 is complete, and as no disciplinary proceeding against the proposed IRP is pending. 24. However, before parting with the matter the various objections raised by the respondent in its reply are discu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eements with the corporate debtor. The corporate debtor had borrowed the credit facilities against payment of interest as agreed between the parties. The loan facilities were disbursed against the consideration for time value of money with a clear commercial effect of borrowing. Moreover, the debt claimed in the present application includes both the component of outstanding principal and interest. In that view of the matter not only the present claim comes within the purview of 'Financial Debt but also the applicant bank can clearly be termed as 'Financial Creditor'. 29. The corporate debtor has also alleged that excess interest has been charged by the applicant bank and the amount claimed is incorrect. It is pertinent to mention in this regard that dispute over the quantum of default, cannot be a ground for rejection of an application under Section 7 of Code as the determination of quantum of financial debt is not within the domain of the Adjudicating Authority. In the present proceeding the Tribunal is not supposed to ascertain the quantum of amount of default or to pass a decree as to how much is actually due to the applicant financial creditor. The Code requires ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made by the Respondent and only a small part of Payment was left to be paid. It is alleged that the Applicant/Financial Creditor arbitrarily revoked the OTS when only a small part of payment was left to be made by the Respondent. 35. In this regard it is pertinent to note that in financial transactions, adjustments compromises are to be left to the parties to settle the matter in their best interest or exigencies of the business. During hearing applicant bank specifically submitted that entire OTS amount was not paid by the respondent. It was also confirmed that no settlement in respect of the claim, is pending for their consideration. Accordingly, it is beyond the powers of the Tribunal to defer the prayer of the financial creditor for admission of the present petition. 36. Needless to say, that time is the essence of the Code. A far strict time frame is expected to be followed by the Adjudicating Authority at every stage of the proceedings. When settlement has failed and despite demand there is default in repayment of the loan amount which exceeds much above 1 lakh, the applicant gets right to move under the Code. The application under Section 7 is maintainable once the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er IBBI/IPA-001/IP-P00824/2017-18/11400 resident of P-27, 1st Floor, Malviya Nagar, New Delhi -110017 with email - id nbtrace1@yahoo.com is appointed as an Interim Resolution Professional. 44. In pursuance of Section 13(2) of the Code, we direct that public announcement shall be made by the Interim Resolution Professional immediately (3 days as prescribed by Explanation to Regulation 6(1) of the IBBI Regulations, 2016) with regard to admission of this application under Section 7 of the Insolvency Bankruptcy Code, 2016. 45. We direct the applicant Financial Creditor to deposit a sum of ₹ 2 Lakhs with the Interim Resolution Professional namely Mr. Neeraj Bhatia to meet out the expenses to perform the functions assigned to him in accordance with Regulation 6 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Person) Regulations, 2016. The needful shall be done within three days from the date of receipt of this order by the Financial Creditor. The said amount however be subject to adjustment towards Resolution Process cost as per applicable rules. 46. We also declare moratorium in terms of Section 14 of the Code. The necessary cons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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