TMI Blog2019 (9) TMI 1424X X X X Extracts X X X X X X X X Extracts X X X X ..... e Appellant : R. Ashok Kumar ORDER Rajeswara Rao Vittanala, Member (J) 1. C.P.(IB) No. 43/BB/2019 is filed by M/s. Sri Arumuga Sugars Limited (hereinafter referred to as 'Petitioner/Financial Creditor') U/s 7 of the IBC, 2016, R/w Rule 4 of the I B (Application to Adjudicating Authority) Rules, 2016, by inter alia seeking to initiate Corporate Insolvency Resolution Process (CIRP) in respect of M/s. Badami Sugars Limited, on the ground that it has committed default for total amount of ₹ 22,84,07,970/-(Rupees Twenty Two Crores Eighty Four Lakhs Seven Thousand Nine Hundred and Seventy Only). 2. Brief facts of the case, as mentioned in the Company Petition, are as follows: (1) M/s. Sri Arumuga Sugars Limited ('Petitioner/Financial Creditor') was incorporated on 09.06.2008, having CIN: U15421TZ2008PLC014539, its registered office at 51, Appuswamy Layout, Red Fields, Coimbatore- 641 045. (2) M/s. Badami Sugars Limited ('Respondent/Corporate Debtor') was incorporated on 01.01.2002, having CIN: U15429KA2002PLC029955 and its Authorized Share Capital is ₹ 2,00,00,000/- and Paid Up Capital of ₹ 1,31,05,0070/- (3) It is sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the underlying undertaking including the sugar factory, cogeneration capacity along with its movables and immovable together with all licences and permits in the name of the Factory including the cane area(s) as reserved/allotted to the factory by the Cane Commissioner, Government of Karnataka. (2) It is also stated that upon plain reading of the Agreement, which is in the nature of a Share Purchase Agreement, it is clear that there are there parties to the Agreement viz. a. Group A referring to Mr. Balappa B. Chimmanakatti and his family entities, holdings and associates, who together hold majority of share capital of the Company. b. Group B referring to M/s. Badami Sugars Limited (the Respondent Company in this matter). c. Group C referring to M/s. Sri Amumuga Sugars Private Limited, who are intending buyers of the shares of the Respondent Company. (3) It is stated that the Agreement referred to above is towards purchase by the Petitioner (Group C), of the shares of the Respondent Company (Group B), from the party referred as Group A. The substratum of the agreement is between Group A and Group C. Group B, that is the Respondent Company is only signing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, the learned counsel urged the Tribunal to admit the case as Petition is filed in accordance with law and debt and default are not in question and also suggested a qualified Resolution Professional namely Mr. Madhugir Venkatarayappa Sudarshan, with Registration No. IBBI/IPA-002/IP-N00561/2017-18/11707. 6. The case is listed for admission on various dates viz. 18.01.2019, 23.01.2019, 13.03.2019, 27.03.2019, 03.04.2019, 26.04.2019, 30.05.2019, 24.06.2019, 12.07.2019, 15.07.2019, 17.07.2019, 25.07.2019, 13.08.2019, 26.08.2019, 24.09.2019 27.09.2019. The case is adjourned on all these dates due to various reasons, at the request of the Petitioner for compliance of office objections, serving the notice etc. to settle issue etc. However, the Respondent failed to avail the opportunity given by the Adjudicating Authority to settle the issue. Therefore, there is no other alternative for us except to adjudicate the matter as merits. 7. So far as the law with regard to initiation of CIRP is concerned, Hon'ble NCLAT vide order dated 15th May, 2017 passed in Company Appeal (AT) (Insolvency) No. 1 2/2017 in the case of M/s. Innoventive Industries Limited vs. ICICI Bank Anr. h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t dated 31st August, 2017. The Hon'ble Supreme Court has adverted to Section 7, at para 28, which reads as under: 28. When it comes to financial creditor triggering the process, Section 7 becomes relevant. Under the explanation to Section 7(1), a default is in respect of a financial debt owed to any financial creditor of the Corporate Debtor - it need not be a debt owed to the applicant financial creditor. Under Section 7(2), an application is to be made under sub-section (1) in such form and manner as is prescribed, which takes us to the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. Under Rule 4, the application is made by a financial creditor in Form 1 accompanied by documents and records required therein. Form 1 is a detailed form in 5 pats, which requires particulars of the applicant in Part I, particulars of the corporate debtor in Part II, particulars of the proposed interim resolution professional in Part III, particulars of the financial debt in Part IV and documents, records and evidence of default in Part V. Under Rule 4(3), the applicant is to dispatch a copy of the application filed with the adjudicating authority by registered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor in accordance with provisions of the IBBI (Insolvency Resolution Process for Corporate Debtor) Regulations, 2016. Therefore we are of the considered opinion, that the instant Company Petition is a fit case to admit by initiating CIRP appointing an IRP, and imposing moratorium etc. in respect of the Corporate Debtor. 9. In view of the above facts and circumstances of the case, by exercising powers conferred on this Adjudicating Authority, U/s 7(5)(a) and other extant provisions of the IBC, 2016, we hereby admitted C.P.(IB) No. 43/BB/2019 by initiating Corporate Insolvency Resolution Process (CIRP) in respect of Respondent/Corporate Debtor with the following consequential directions: 1) Mr. Madhugir Venkatarayappa Sudarshan, bearing Registration No. IBBI/IPA-002/IP-N00561/2017-18/11707, who is qualified Resolution Professional, is hereby appointed as Interim Resolution Professional, in respect of the Respondent/Corporate Debtor namely M/s. Badami Sugars Limited to carry out the CIRP as mentioned under the Insolvency and Bankruptcy Code, 2016 and various rules issued by IBBI from time to time; 2) The following moratorium is declared prohibiting all of the following, namel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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