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TMI Blog2019 (4) TMI 1999X X X X Extracts X X X X X X X X Extracts X X X X ..... Code and Rules thereon. 2. The brief averments made in the petition are as follows: a) The Corporate Debtor is a Public Limited Company carrying on the business of Hotel, Resorts etc.,. The Corporate Debtor availed various credit limits from Financial Creditor. At request of the Corporate Debtor, the Financial Creditor sanctioned a secured overdraft loan (herein after called as SOD) of Rs. 3.75 Crores and B.G. Limit of Rs. 0.60 Crores and Term Loan of Rs. 3.45 Crores subject to terms and conditions mentioned in the Sanction letter dated. 18-12-2004. b) The Corporate Debtor represented by its Authorised signatory executed the following loan documents on in favour of Financial Creditor. i. Demand Promissory Note for Rs. 3.75 Crores promising to repay the same with interest at 1.50% above the Bank's Prime Lending rate (hereinafter called BMPLR) subject to a minimum of 12% per annum with monthly rest. ii. Demand Promissory Note for Rs. 0.60 Crores promising to repay the same with interest at 1.50% above the BMPLR subject to a minimum of 12% per annum with monthly rest. iii. Composite Agreement. iv. Counter Guarantee form. v. Letter of Continuity. c) It is averred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of setting up Geo Garden , flow Rider, Bulk Kitchen in Ac. 12.36 in Survey No. 420/ 3 situated Shamirpet ( Bommaraspet), Shamirpet Mandal, R.R. District which is fully described in the Annexed 'D' schedule (hereinafter called Project No II) and addition of 105 rooms to Multi facility Convention Center in Ac. 11.00 in Survey No. 420/2 situated Shamirpet (Bommaraspet) , Shamirpet Mandal, R.R. District which is fully described in 'C' schedule. The Guarantors agreed to stand as guarantors for due repayment of said Term loan - Il . On the request of Corporate Debtor and Guarantors, Bank of India and Financial Creditor sanctioned the Term loan - Il as detailed hereunder : S.No. Name of the Bank Sanction letter dated Term loan - II (Rupees in Crores) 1 BOI 28-02-2009 42.00 2 AB / Financial Creditor 28-011-2008 41.54 Total --- 83.54 h) It is averred that the Corporate Debtor again approached in June 2009, the consortium Banks consisting of Financial Creditor, Union Bank of India, Bank of Baroda, Allahabad Bank ( hereinafter called Consortium 'C') in which Financial Creditor is recognized and appointed as Leader of the Consortium for Term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... repay the amount and service the interest, the account has been classified as NPA and Demand Notice is issued as contemplated under the Securitization Act. k) It is averred that the Financial Creditor along with Bank of India, UCO Bank filed a joint O.A. No. 986/ 2017 ( Old O.A. No. 745/ 2015) before Debts Recovery Tribunal II, Hyderabad for recovery of Rs. 121,22,04,797/- due to Bank of India under Term Loan I, II,Rs. 135,03,81,093.92 due to Financial Creditor under Term Loan I, II, III and secured Loan and Rs. 49,33,79,492.93 due to UCO Bank under Term Loan and the said O.A is pending . It is averred that the Hon'ble Debts Recovery Tribunal vide orders dt. 20.08.2015 directed the Corporate Debtor to route all the proceeds through cash flow to the designated Escrow account maintained with Bank of India in terms of Escrow agreement dt. 26.03.2008 & 09.03.2009. It is averred that the corporate debtor failed to comply the direction given by the Debts Recovery Tribunal till date. l) It is averred that that the Financial Creditor along with Bank of Baroda, Union Bank of India , Allahabad bank , Indian Overseas Bank State Bank of Mysore Corporation Bank filed a joint O.A. No. 16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c) It is averred that about 1200 employees are working with the Company and huge contributions of promoters are parted in developing the Projects. It is further averred that the International Institutions declared the Corporate Debtor unit is viable, but the banks did not support the Corporate Debtor units. d) It is averred that due to the acts of the banks in dealing the Corporate Debtor such as releasing of funds, discrimination in considering the Corporate Debt Restructuring lead to huge cost overrun and time overrun. e) It is averred that the Company did not honor its repayment obligations due to deterioration of its financial position, slowdown in economy which impacted the hospitality industry and due to delay in additional funding of the projects leaving the Company with no opportunity to complete the projects and decline in margin from the existing projects and in view of these factors the existing cash accruals were not adequate to service the total debt obligations. f) It is averred that due to Banks indecisiveness the Company has suffered a lot and both the projects namely the 903 hotel room project and the Water theme Park Project could not be completed till dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unts due is Rs. 339,05,12,985.44. The contention of Counsel the Corporate Debtor admits availing various loans sanctioned by Financial Creditor and Corporate Debtor further admits non-payment of debt but alleged various grounds as to why it failed to service the debt. Counsel contended the Corporate Debtor in the reply had mainly contended that the debt claimed by Financial Creditor which is in default is barred by limitation. Secondly, the Financial Creditor cannot maintain the present petition under Section 7 of IBC on the ground that already Financial Creditor and other banks jointly initiated proceedings before DRT Hyderabad and the matter is still pending before the DRT. Counsel contended the Corporate Debtor is challenging the petition on these two grounds. The Learned Counsel for Financial Creditor would contend that Corporate Debtor is a Public Limited Company and that it has been filing its audited balance sheet for every financial year. The Corporate Debtor is showing the debt due to Financial creditor in the Balance sheet. The Financial Creditor has filed the balance sheet of the Corporate Debtor as on 31.03.2017 attached to the written submissions. The Corporate Debtor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontend, the debt borrowed by Corporate Debtor is in the year 2008-2009 and on this ground also the debt is barred by limitation and there is no proper acknowledgement of debt. 7. Counsel also contended Financial Creditor filed OA No.745/2015 before Hon'ble DRT, Hyderabad and hence present petition is not maintainable. The Corporate Debtor alleged that it is unable to service the debt following difficulties faced by the Corporate Debtor. It is also the case of Corporate Debtor that Financial Creditor had not come to the rescue of Corporate Debtor to complete ongoing projects. On these grounds, the petition filed by Financial Creditor cannot be rejected. The Corporate Debtor having availed various loans from Financial Creditor and also from other Banks, committed default. There is no dispute Corporate Debtor committed default of the debt due. There is no dispute with regard to debt due by Corporate Debtor to the Financial Creditor. The total debt shown in the Petition on various loans sanctioned which is committed default is not denied. 8. The next contention is that debt is barred by limitation. There is no proper acknowledgement of debt. The important point for consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13. The petition therefore filed by the Financial Creditor cannot be rejected on the two grounds raised by the Corporate Debtor. Before admitting the Petition filed under Section 7 of IBC, the Tribunal has to see whether there is a debt due and if it is in default. Honble Apex Court held in "Innovative Industries Ltd Vs. ICICI Bank and Ors (2018) 1 SCC 407 that 'The moment the Adjudicating Authority is satisfied that a default has occurred, the application must be admitted unless it is incomplete, in which case it may give notice to the Applicant to rectify the defect within 7 days of receipt of notice from the Adjudicating Authority" 14. The Corporate Debtor admits default. The petition is complete and therefore deserves to be admitted. 15. The Financial Creditor has suggested the name of IRP who has given consent in Form-2 and there is no disciplinary action pending against present IRP. The account of Corporate Debtor is treated as NPA and there are grounds to admit the petition. 16. Hence, the Adjudicating Authority admits this Petition under Section 7 of IBC, 2016, declaring moratorium for the purposes referred to in Section 14 of the Code, with following directions: a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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