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TMI Blog2018 (3) TMI 1913X X X X Extracts X X X X X X X X Extracts X X X X ..... eholding pattern is as under : "(1) Nominal share capital is Rs. 200,000,000,000, i. e., 500,00,00,00 equity shares of Rs. 10 each and 1500,00,00,00 cumulative redeemable preference shares of Rs. 10 each. (2) Paid-up share capital is Rs. 83,347,704,430, i. e., 243,243,243 equity shares of Rs. 10 each aggregating to Rs. 2,432,432,430 and 8,091,527,200 cumulative redeemable preference shares of Rs. 10 each aggregating to Rs. 80,915,272,000." 1.1 At the outset, the learned senior advocate Mr. Janak Dwarkadas has explained the necessity of submission of this application by the corporate debtor itself, to be declared as Insolvent, by referring February 12, 2018 Guidelines issued by Reserve Bank of India (RBI/2017-18/131) addressed to all Scheduled Commercial Banks and All India Financial Institutions. As per the Preamble of the said Guidelines, explanation tendered for issuance of the said Guidelines was that "The Reserve Bank of India has issued various instructions aimed at resolution of stressed assets in the economy, including introduction of certain specific schemes at different points of time. In view of the enactment of the Insolvency and Bankruptcy Code, 2016 (IBC), it has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order has been pronounced by the hon'ble National Company Law Appellate Tribunal in the case of Leo Duct Engineers and Consultants Ltd. v. Canara Bank [2018] 2 C-C-OL 168 (NCLAT) (Company Appeal (AT) (Insolvency) No. 100 of 2017), order dated December 13, 2017 is referred wherein the conditions for admission of an application under section 10 of the Code are specified. The observation is that the Adjudicating Authority, on hearing the parties and on perusal of records, if satisfied, that there is a "debt" and there is a "default" occurred then has no option but to admit the application, unless the application is incomplete. In one of the case of Unigreen Global P. Ltd. v. Pun jab National Bank [2018] 1 C-C-OL 284 (NCLAT), Company Appeal (AT) (Insolvency) No. 81 of 2017, order dated December 1, 2017 the verdict says that AA is bound to admit application and not to reject on the ground of unrelated facts. Facts beyond the requirement of the said provision are not required to be pleaded. The restriction for admission is also prescribed in section 11 of the Code that certain persons are not entitled to make application, viz., (i) a corporate debtor undergoing a corporate insolvenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction is being passed against the respondent taking further steps" unquote. Hence it is pleaded that the respondent in the said case, i. e., M/s. Aircel Ltd., is stopped to take any further steps, which includes filing of the impugned application under section 10 of the Code. The operational creditor, viz., GTL Infrastructure Ltd., has a huge amount to recover, almost touching about 800 crores. A trade liability to be recovered from Aircel Ltd. If the application is admitted, then his right of recovery of about 800 crores shall get jeopardised. The financial creditors shall constitute a committee of creditors and vote in their favour; instead of supporting the claim of this operational creditor. It is pleaded that this petition do not deserve admission because the material fact about the pendency of High Court case has not been disclosed by the petitioner, therefore, the petition is malicious and defective due to non-filing of material facts. Further pleaded by Mr. Kamath that some time be granted because the operational creditor came to know about this petition recently, rather only a day ago, hence has a right to respond and for that matter be adjourned for few days. 2.1 As per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Punjab National Bank 400 813.63 4.03 272.49 433.86 1,524.01 Total 3,400 813.63 4.03 272.49 433.86 1,524.01 Unsecured facilities (backed by LOC from sponsor) Sanctioned amount facility** Aircel Ltd. Total Bank guarantees Standard Chartered Bank 343.06 343.06 343.06 *Pending reconcilitation with bank **Amount restricted to outstanding 2.3 The impugned application submitted under section 10 of the I and B Code also contains list of "operational creditors". Volumes Part-IV to Part- VII contains a very long list of operational creditors running from pages 843 to 1571 having about 24,729 in number operational creditors. The total out- standing operational debt is stated to be Rs. 19889,00,10,591. 2.4 The summary of liability on the corporate debtor is listed in one of the column as below : "3. Total debt raised and amount in default Financial creditors : 1. Long-term facility : &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, National Company Law Tribunal is also functioning as a Supervisory Authority so that the provisions of this Code be successfully implemented. Specially when a resolution plan is submitted before the National Company Law Tribunal to record its satisfaction. The suggestions, if any, made while recording satisfaction play a crucial role for re-establishment of a stressed company for the years to come. In this regard, Eradi Committee report, Joint Committee Report of Lok Sabha, Parliamentary Debate, etc., have also been perused. My decision underneath is based upon the thorough study of the said reports and on due consideration of the stressed finances of this corporate debtor. 3.2 Before considering other aspects, at first it is worth to address the objection raised by an intended intervener. It is objected that the right to file this application under section 10 of the Code has already been forfeited by the hon'ble Delhi High Court. In this regard, I have perused the relevant paragraph and specially the said line of the order pointed out for consideration. The petition before the hon'ble High Court is not moved under any of the provisions of the Insolvency Code but it wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hts as per law. Hence the hon'ble court was also not objecting for taking due steps if it is in the benefit of restructuring of the finances. That objective can be achieved by filing section 10 application. It is therefore not in contradiction of the order of the hon'ble Delhi High Court, but toeing the same line. 3.3 I am also of the view that under the changed circumstances when the RBI has issued Guidelines dated February 12, 2018 (supra) withdrawing several restructuring schemes, presently the only remedy available to a corporate debtor is to approach the National Company Law Tribunal. By this method as well, the ultimate motive is to restructure the stressed assets and to revive the revenue generation by inviting resolution plans. The procedure or the law may be different but the ultimate aim is the same. The aim is to protect the interest of all the stakeholders by reviving the finance of a debtor company. Because of this reason as well, I am of the opinion that the action taken by the corporate debtor is meaningful and to be supervised strictly. Appointment of the insolvency resolution professional and his conduct is also to be scrutinized with judicial acumen. Inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 141531,91,134 1023442,40,901 21,17,000 2214376,09,280 Total 18846,52,75,306 1436,91,12,221 12222,50,40,359 25,17,000 3250619,44,886 6. To conclude, considering the voluminous evidences in 8 Volumes annexed along with the application and in the light of the provisions of section 10 of the Code I hereby hold that the conditions as prescribed under section 10 of the Code have duly been fulfilled. Since this is a petition of the "corporate debtor", therefore, the insolvency process shall commence as prescribed under section 10 of the IBC, 2016. On one hand the existence of financial debt as well as operational debt is proved, on the other hand the occurrence of "default" is also established. The corporate debtor had failed to pay the amounts due and also failed to adhere to or comply with the other terms of facility agreements. The financial debts have been classified as "non-performing asset" in the books of the financial creditor. The petition under consideration therefore deserves "admission". 7. The corporate debtor has intimated the name of the IRP Mr. Vijaykumar V. Iyer, address : Deloitte Touche Tohmatsu India LLP, Indiabulls Finance Centre, Tower 2, 27th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 15 of the Code. The IRP shall inform the progress of the insolvency proceedings and submit the report of the compliance of the directions of this order within 30 days to this Bench. A liberty is granted to intimate even at an early date, if need be. 10. The preliminary pronouncement made on the date of hearing shall be part of this order and for ready reference reproduced below : "(1) The applicant is admittedly a corporate debtor and in that capacity moved the impugned application dated February 28, 2018 by invoking the provisions of section 10 of the Insolvency and Bankruptcy Code, 2016. Stated therein that huge loan facilities were availed, however admittedly defaulted. In support, a list of the financial creditors comprising State Bank of India, J & K Bank, etc., as well as loan agreements are annexed. Seeking "admission" of the application and consequent thereupon, commencement of insolvency proceedings against the applicant itself. (2) One of the operational creditors, viz., GTL Infrastructure Ltd., represented by learned counsel pleaded to join as an intervener before admission of section 10 application. Referred a decision of the hon'ble Delhi High Court dated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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