TMI Blog2019 (9) TMI 1459X X X X Extracts X X X X X X X X Extracts X X X X ..... fault' is of rupees one lakh or more (Section 4). The IBC provision may be trigger by financial creditor or operational creditor - In the instant case as stated the debt is claimed by financial creditor is more than 1 Lakh Rupees. Again, as discussed herein before the Financial Creditor has proved that an amount of term loan along with bank guarantee was disbursed against the consideration for the time value money which was defined under Section 5(8) of the code. Time Limitation - HELD THAT:- The limitation for enforcing payment of money secured by a mortgage charged by the immovable property is twelve years at the time when the money sued become due. Thus for 12 years after becoming due, the debt would be payable by Law. In the Present matter, the sanction letter is on 15.05.2010. Apart from proceeding filed in DRT Ernakulam in the year 2013, the loan was secured by equitable mortgage and as such, it cannot be said that the debt was barred by limitation, when Section 7 application was filed on 31 July 2018 - Hence in this case the admitted fact is that the Corporate Debtor by taking the aforesaid loan from the financial creditor which become a due debt by executing some b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther with subsequent interest at the rate of 18.75 % Per annum with monthly rest and bank guarantee of ₹ 2,66,75,776.40 (Rupees Two Crores Sixty-Six Lakhs Seventy-Five Thousand Seven Hundred and Seventy-six and paisa Forty only) as on 27.07.2018, together with subsequent interest at the rate of 22.95% per annum with monthly rest. The total amount due on 27.07.2018 ₹ 3,39,88,534. 52 (Rupees Three Crores and Five hundred and thirty-Four and paisa Fifty-Two only) with interested as stated above. 4. The Financial Creditor submits that the financial facilities are secured by way of equitable mortgage and depositing title deeds and the period of limitation is Twelve years from the date of Deposit and continues for further period on the acknowledgement by the borrower of the same. The Financial Creditor has filed an application with the DRT, Ernakulam numbered in OA. 258/2018 and the applicant claimed that the debt is not time barred because a term loan of ₹ 70 lakhs and the bank guarantee for ₹ 85 lakhs are not disputed by the Corporate Debtor. The Financial Creditor again submitted the Corporate Debtor has defaulted in the payments due to them. It is also subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... torney, which is neither admissible nor is it valid, and a mere perusal of the Power of Attorney reveals that the same has been executed in the year 2007, due to which such power was only extended to representations made before the Company Law Board and not to the National Company Law Tribunal and therefore the same cannot be taken as an authority to confer the power to institute the proceedings under the Insolvency and Bankruptcy Code, 2016. Further, current designation held by the Applicant differs from the designation as held by him in 2007, thus the power cannot survive once the applicant has changed designations. Since the power of Attorney is defective, thus it is required to be rejected. 11. It is further submitted that the, the Amendment to the Insolvency and Bankruptcy Code, 2016 w.e.f 06.06.2018, section 238A was incorporated in order to specifically provide that the provisions of the Limitation Act will apply to the proceedings under the Code. 12. Learned counsel for the corporate debtor again submitted in his argument that Financial Creditor has filed this petition barred on unpaid debt which is time barred under Article 137 of the Limitation Act and to support th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of SARFAESI Act, 2002. And I.A. No. 1617 of 2013 was filed in the above said S.A praying to stay all further proceedings contemplated in the said demand notice/recall notice. The applicant did not vacate the stay so far, instead of seeking specific concurrence of the DRT, the applicant by supressing the fact, has already withdrawn the said demand/recall notice before the DRT-1 Ernakulam for invoking the petition before this Tribunal. 15. The Corporate debtor further contented that Reserve bank of India circular dated 05.04.2003 deals with guarantees to be issued by banks favouring financial institutions like Kerala State Financial Enterprises (KSFE) wherein it stipulates that: I. The guarantee shall be extended only in respect of borrower constituents and to enable them to avail of additional credit facility from other banks, FIs/lending agencies II. The guaranteeing bank shall assume a funded exposure of at least 10% of the exposure guaranteed. 16. In tune with the above guidelines the Bank has sanctioned bank guarantee limit of ₹ 92,50,000/- (Rupees Ninety-Two Lakh Fifty Thousand Only) in combination with the term loan of ₹ 27.50000/- (Rupees Twenty-Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Banker's Book of Evidence Act 1891 is missing. Finally, in FORM 1 Column 8, the other documents attached to the applications in order to prove the existence of financial debt, the amount and date of default are sought to be filled in. In this row, it is pertinent to note that the applicant has deliberately suppressed the compensation and counterclaiming amounting to ₹ 18,31,15,515.02 filed against the applicant. In OA filed by the applicant comes to only 1,10,25,692.86. So, the respondent is eligible to set off. FINDINGS 20. In view of the submissions of both sides, we have thoroughly perused whole the case records filed by the Financial Creditor the Federal Bank Ltd. and Corporate Debtor M/s. Sargam Builders Private Limited. The Corporate Debtor clearly admitted the debt. 21. Having gone through the matter that there is no dispute with regard to the fact that the Corporate Debtor has taken Credit facilities from the Financial Creditor on 20.08.2011. There is no dispute in the fact that the Corporate debtor has secured Credit Facilities taken by equitable mortgage of immovable property (exhibit B 31). The Filing of the proceeding before the DRT in 2014 un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... panied by documents and records required therein. Form 1 is a detailed form in 5 parts, 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 post or speed post to the registered office of the corporate debtor. The speed, within which the adjudicating authority is to ascertain the existence of a default from the records of the information utility or on the basis of evidence furnished by the financial creditor, is important. This it must do within 14 days of the receipt of the application. It is at the stage of Section 9 Company Appeal (AT) (Ins) No. 772 of 2019 7(5), where the adjudicating authority is to be satisfied that a default has occurred, that the corporate debtor is entitled to point out that a default has not occurred in the sense that the debt , which may also include a disputed claim, is not due. A debt may not be due if it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aimed by the Financial Creditor due from the Corporate Debtor is also payable in Law as well as in Fact. 26. It also appears that Corporate Debtor did not able to show that there was a pre-existing dispute in the aforesaid debt between Corporate Debtor and Financial Creditor. 27. It is also important to note that Learned Counsel for Corporate Debtor during Arguments submitted that the case is barred by Limitation. Learned Counsel to fortify this argument submitted that in B. K. Educational Services Pvt. Ltd. vs. Parag Gupta Associates (2018 SCC Online SC 1921) , wherein the Hon'ble Supreme Court held that It is thus clear that since the Limitation Act is applicable to applications filed under Sections 7 and 9 of the Code from the inception of the Code, Article 137 of the Limitation Act get attracted. The right to sue , therefore, accrues when a default occurs. If the default has occurred over three years prior to the date of filing of the application, the application would be barred under Article 137 of the Limitation Act, save and except in those cases where, in the facts of the case, Section 5 of the Limitation Act may be applied to condone the delay in filing such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P-P00695/2017-2018/11225 (Mobile no. 7760031329 Email id- jasinjoseponmattam@gmail.com as an Interim resolution Professional, to carry out the functions as mentioned under I B Code, and given his Declaration; no disciplinary proceedings are pending against them. 34. In pursuance of Section 13(2) of the Code, this Tribunal direct that Interim Insolvency Resolution Professional shall immediately make public announcement with regard to admission of this application under Section 7 of the Code. We also declare moratorium in terms of Section 14 of the Code. A necessary consequence of the moratorium flows from the provisions of Section 14(l) (a), (b), (c) (d) and thus the following prohibitions are imposed which must be followed by all and sundry: a) 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; 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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