TMI Blog2021 (10) TMI 492X X X X Extracts X X X X X X X X Extracts X X X X ..... Corporate Debtor but there has been default in payment of Debt on the part of the Corporate Debtor - the nature of Debt is a Financial Debt as defined under section 5 (8) of the Code. It has also been established that there is a Default as defined under section 3 (12) of the Code on the part of the Debtor. The two essential qualifications, i.e. existence of debt and default , for admission of a petition under section 7 of the I B Code, have been met in this case. The Petitioner has not received the outstanding Debt from the Respondent and that the formalities as prescribed under the Code have been completed by the Petitioner, this Petition deserves Admission . Petition admitted - moratorium declared. - IA No. 2297/2020 IN CP (IB) 979/MB/2020 - - - Dated:- 6-10-2021 - Mr. Ashok Kumar Borah , Hon ble Member (Judicial) And Mr. Shyam Babu Gautam , Hon ble Member (Technical) For the Petitioner: Senior Counsel, Mr. Darius Khambata For the Respondent: Senior Counsel Mr. Janak Dwarkadas ORDER Per : Shyam Babu Gautam, Member Technical 1. This is a Company Petition filed under section 7 of the Insolvency and Bankruptcy Code, 2016 ( IBC ) seeking to ini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii. Jammu and Kashmir Bank (J K Bank) ix. Punjab National Bank (PNB) x. State Bank of India (SBI) 8. The amount as mentioned by each of the member Bank of the Consortium is as follows: Sr. No. Bank Amt. in Crores (INR) 1. SBI 175 2. SBH 85 3. SBT 80 4. SBP 75 5. J K Bank 63 6. SBS 55 7. SBM 50 8. PNB 30 9. SBOI 25 10. SBBJ 25 Total INR 663 Crores The SBOI was designated as the Lead Bank of the aforesaid consortium by way of an Inter-Se agreement dated 09.09.2008. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T: Vide letter dated 13.03.2013, the Term Loan Facility of INR 80 Crores was restructured with extension in door to door tenor from 9 years to 10 years and 9 months moratorium from 01.01.2013 to 30.09.2013. D. SBH: Vide letter dated 16.05.2013, the Term Loan Facility of INR 85 Crores was restructured with extension in door to door tenor from 9 years to 10 years and 9 months moratorium from 01.01.2013 to 30.09.2013. E. SBM: Vide letter dated 27.04.2013, the Term Loan Facility of INR 50 Crores was restructured with extension in door to door tenor from 9 years to 10 years and 9 months moratorium from 01.01.2013 to 30.09.2013. In Year 2015 F. SBI: The Credit Limit was renewed up to a limit of INR 433.09 Crores vide Sanction Letter Dated 08.04.2015. G. SBP: The Working Capital Facility were renewed vide Sanction Letter Dated 22.01.2015. H. SBBJ: The request of the Corporate Debtor was agreed by SBBJ and issued a restructuring sanction letter dated 08.06.2015 which was duly signed by the Corporate Debtor, as its acknowledgment and acceptance of the terms and conditions was approved by SBBJ. i. Corporate Loan of INR 69 Crores with Door to Door Tenor of 7 years for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bank under both Consortium i.e. SBOI Consortium and IDBI Consortium. 14. In a series of default on part of the Corporate Debtor, SBI along with other Erstwhile Banks declared the account of the Corporate Debtor as an NPA on various dated between 21.05.2016 to 30.09.2016. 15. On 19.12.2014, the Corporate Debtor submitted a restructuring proposal to IDBI Bank whereby, it requested reduction in the Interest rates on the Facilities from existing level to 10.25% per annum ( 2014 Restructuring Proposal ), waiver of penal and compounded interest and margin money. But, it was not approved. 16. Thereafter on 13.07.2016, the Corporate Debtor submitted a draft proposal for Scheme for Sustainable Structuring of Stressed Assets to the Lenders ( 2016 S4A Restructuring ). Same was also not approved even after Restructuring. 17. As the Default of Corporate Debtor Continued and it failed to service the Facilities in terms of the relevant Facility Documents, it led to classification of the Corporate Debtor s Account as an NPA: Sr. no. Bank Date of NPA 1. SBI 21.05.2016 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ancial Creditor, being the trustee of India Resurgence ARC Trust I, acquired the Debt arising out of the Facilities from SBI by way of Deed of Assignment. The same was even notified to the Corporate Debtor through letter sated 07.05.2019 specifying the Debt due from Corporate Debtor to SBI amounts to INR 1401,34,27,711.74. 24. In view to revive the Corporate Debtor, an attempt was made by the Financial Creditor by initialising a non-binding term sheet with the Corporate Debtor on 20.03.2019 for sale of the Corporate Debtor to a Third Party investor by provision for a Standstill period . The corporate Debtor failed to take actions necessary to affect the transaction contemplated under the Non-Binding Term Sheet. 25. Subsequently, a Demand Notice was issued by the Financial Creditor on 23.08.2019, asking the Corporate Debtor to Pay entire due and payable under facilities, amounting to INR 1465,48,55,117.24. the Corporate Debtor responded to the Demand Notice through e-mail dated 30.08.2019. 26. Therefore, the Applicant submits that on account of default made time to time by the Corporate Debtor in servicing of the Facilities, as well as continuous defaults in repayment, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay.joshi@ajayjoshiip.com The Submissions of the Corporate Debtor are as follows :- 32. The Corporate Debtor filed its Additional Affidavit dated 30.08.2021. The Corporate Debtor submits the present Company Petition was filed by India Resurgence ARC Private Limited on 15.07.2020. Thereafter, the Corporate Debtor had filed e reply dated 02.12.2020 along with an Interlocutory Application No. 2297 of 2020 the Maintainability Application. 33. The Corporate Debtor submits and admits that the Corporate Debtor has defaulted in servicing its Financial obligation towards the debt payable to the Financial Creditor. 34. Further the Corporate Debtor submits that they do not wish to press the objections raised in the reply and also the Maintainability Application and also withdraws the same. 35. The Corporate Debtor further submits that the Corporate Debtor Company admits and acknowledges the debt and default as set out in the Insolvency Application as well as unconditionally withdraws the Maintainability Application. The Corporate Debtor also undertakes that such order of this Hon ble Tribunal will not be challenged before any court or tribunal by the Corporate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Section 7 of the Code r.w. Rule 4 of the Rules and come to conclusion that, pursuant to S. 7 (7) (5) (a) of the Code this Application is complete under sub-section (2) of S. 7 of the Code. 40. On going through the facts and submissions of the Petitioner and upon considering the same, it is concluded that the Financial Creditor has established that the loan/ Working Capital Credit facilities was duly sanctioned and duly disbursed to the Corporate Debtor but there has been default in payment of Debt on the part of the Corporate Debtor. 41. Considering the above facts, we come to conclusion that the nature of Debt is a Financial Debt as defined under section 5 (8) of the Code. It has also been established that there is a Default as defined under section 3 (12) of the Code on the part of the Debtor. The two essential qualifications, i.e. existence of debt and default , for admission of a petition under section 7 of the I B Code, have been met in this case. 42. As a consequence, keeping the afore said facts in mind, it is found that the Petitioner has not received the outstanding Debt from the Respondent and that the formalities as prescribed under the Code have been c ..... 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