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TMI Blog2021 (8) TMI 760X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to Adjudicating Authority) Rules, 2016. 2. The present petition is filed before this Adjudicating Authority on the ground that the Corporate Debtor failed to make payment of a sum of Rs. 6,82,53,864/- to the Financial Creditor. 3. The submissions of the Financial Creditor are as follows:- i. The petitioners are Financial Creditors in terms of Section 5(7) of the Insolvency and Bankruptcy Code, 2016 and have preferred the instant petition under Section 7 of the Code for initiating Corporate Insolvency Resolution Process in the matter of Kasata Hometech (India) Pvt. Ltd., Corporate Debtor with respect to financial debts owed to the petitioners under different financial agreements. ii. In March 2016, the Financial Creditor, who is engaged in the business of Development of Housing Societies, issued a Product note inviting interested persons to invest in the Company vide subscription to Non-Convertible Debentures (hereinafter referred to as NCD). The purpose for issuance of the NCDs was to fund the completion of housing projects, as undertaken by the Respondent in Vadodara. As per the Term Sheet attached to the product note the total size of the NCD issue was to be Rs. 25 Cro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e payment of interest, the repayment of the Principal amount is also due. It was stated in the letter that due to adverse Market Conditions in the Real Estate Sector, the sale of units has been negligible, leading to delay in repayment as per the terms of subscription. ix. Even after the assurance by the Respondent, that the payment will be promptly made, till date the dues have not been cleared by the Respondent. x. As on date the total payment outstanding in favour of the petitioners, from the respondent is Rs. 6,82,53,864/-. The said amount also includes the interest to be paid as per the terms of the Subscription. Even after repeated reminders, the petitioners have been denied the return on their investment, by the respondent. xi. In the light of the foregoing the total outstanding amount of Rs. 6,82,523,864/- as per the terms of the NCD Subscription, is a financial debt under Section 5(8) of the Code. Hence this petition. 4. Submissions of the Corporate Debtor are as follows: i. The petitioners have no authority to file the captioned petition. Petitioners have failed to disclose the details of the Debenture Trust Deed. The Debenture Trustee has not filed the present p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity provided under the agreement. However, invoking corporate insolvency is a drastic measure. Such a measure should be taken only in drastic circumstances when the creditor has no other measure to recover the amounts. In the present, case there is enough security to secure all the claims of the debenture holders. The Debenture trustee has unfettered powers over the security as per the agreement, i.e. the power to take possession of the assets and to be power to sell the assets without resorting to the court. Hence, the appropriate and most beneficial manner to recover the amounts would to sell the security in the open market. In the event of corporate insolvency, the debenture holders would be required to start in line as per the waterfall mechanism set out in section 53 of the IBC. vii. Furthermore, it is pertinent to note that, on various occasions the Corporate Debtor made offers to settle the disputes with the petitioners amicably in view of the ongoing pandemic situation. However, unfortunately the applicants were not agreeable. In view of, this Tribunal passed an order dated 25.03.2021, wherein it as inter alia recorded that if the parties do not settle the dispute, the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s within the definition 'Financial Debt'. When once the debt and default are established and the debt is shown to be within limitation, this Bench has no alternative except to admit the above Company Petition. All the above contentions raised by the Corporate Debtor are beyond the scope of this petition as per settled law. 5. As stated above, the Corporate Debtor having admitted before this Bench on 25.03.2021 for automatic admission of the Company Petition if he fails to settle the matter before 25.03.2021, has no legal or moral right to pray for dismissal of the above Company Petition. 6. Therefore, for the reason stated above, there are no valid grounds warranting the rejection of the above Company Petition as the debt and default are clearly established and the debt is also within limitation. The petitioner has also suggested the name of proposed Interim Resolution Professional in part-3 of the Petition along with his consent letter in Form-2. Thus, the present Company Petition satisfies all the necessary requirements for admission. 7. In view of the above observations, this Bench is of the considered view that the above Company Petition is liable to be admitted and accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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