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TMI Blog2022 (6) TMI 1217X X X X Extracts X X X X X X X X Extracts X X X X ..... p a resort at Kumarakom, Kottayam District. Pursuant thereto the Applicant/Financial Creditor sanctioned a Term Loan of Rs 496.90 Lakh (Rupees Four Crore Ninety-Six Lakh and Ninety Thousand Only) to the Corporate Debtor, subject to the covenants specified in the Sanction Letter No. KSIDC/TVM/SCY 8/2010/1580 dated 05.08.2010 and Loan Agreement dated 12.08.2010. 3. The Applicant stated that the Corporate Debtor commenced soft run of the project during the month of January 2012, but it was not able to complete the facilities of the resort. The Corporate Debtor was able to complete only part of the project within the stipulated period. Thereupon considering the request of the Corporate Debtor, the Applicant/ Financial Creditor at its 284th Board Meeting held on 31.07.2013, agreed to reschedule the term loan to be paid in 20 equal quarterly instalments w.e.f. April 2014. 4. The Ld. PCS for the applicant argued that the Corporate Debtor, further approached the Applicant / Financial Creditor for availing an Additional Term Loan of Rs.298.00 Lakh, for meeting the overrun in their existing Project at Kumarakom, Kottayam District. Pursuant thereto the Financial Creditor sanctioned an Addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n view of the extensive loan outstanding, the Applicant/ Financial Creditor held a default review meeting on 15.12.2018 and the promoter of the Corporate Debtor agreed to remit an amount of Rs. 10,000/- on a daily basis from 22.12.2018 onwards in order to clear the dues towards the Applicant/Financial Creditor. 9. The applicant stated that the Corporate Debtor approached the Applicant/Financial Creditor for settling the loan account through One Time Settlement (Hereinafter referred to as OTS). Based on the representation, the Applicant/Financial Creditor sanctioned an OTS as per the COVID Amnesty Scheme amounting to Rs.11,45,40,370/- (Eleven Crores Forty Five Lakh Forty Thousand Three Hundred and Seventy only) subject to the terms and conditions stipulated in its Letter No.KSIDC/TVM/SCY 8/320 BM/2249 dated 11th February,2021. As per the said OTS sanctioned, the OTS shall be valid till 31.03.2021 and 10% of the OTS amount to be remitted within One month from the date of sanction. However, the Corporate Debtor failed to remit 10% of the OTS amount within ONE month from the date of OTS sanction nor concluded the OTS within the stipulated time frame of 31.03.2021 and expressed its unw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... letter dated 24.02.2022 to settle the entire balance amount also before 31.03.2022 by way of post-dated cheques, which was unfair and unreasonable under the backdrop of two long years of Covid impacts. The Hon'ble High Court issued directions to consider the reinstatement of the OTS Vide Order dated 28.03.2022 in WP ( C ) No. 8230 of 2022. 14. The learned counsel for the Corporate Debtor during the course of hearing on 08.06.2022 submitted that he has no allegation on the default claimed. FINDINGS: 15. We have heard the submissions made by the learned PCS for the applicant Shri. Sandeep Kumar and learned counsel for the Respondent Shri. Pratap Pillai through video conferencing and perused all the records. As per the direction of this Tribunal, the learned PCS for the applicant filed the record of default of NeSL website, from which it is clear that the Corporate Debtor has committed default in repayment of its credit facilities availed from the Financial Creditor by way of various credit facilities sanctioned, granted and disbursed by the Applicant. The record produced by the applicant received from the Information Utility shows as "Deemed to be Authenticated". The status of au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fy the defect within 7 days of receipt of a notice from the adjudicating authority. Under sub-section (7), the adjudicating authority shall then communicate the order passed to the financial Creditor and corporate debtor within 7 days of admission or rejection of such Application, as the case may be. 30. On the other hand, as we have seen, in the case of a corporate debtor who commits a default of a financial debt, the adjudicating authority has merely to see the records of the information utility or other evidence produced by the financial Creditor to satisfy itself that a default has occurred. It is of no matter that the debt is disputed so long as the debt is "due" i.e. payable unless interdicted by some law or has not yet become due in the sense that it is payable at some future date. It is only when this is proved to the satisfaction of the adjudicating authority that the adjudicating authority may reject an application and not otherwise." From a reading of the above order makes it clear that to admit an application filed under Section 7 of IBC, the Adjudicating Authority is to be satisfied that a default has occurred; that the Corporate Debtor is entitled to point out th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said shift enables the financial Creditor to prove, based upon solid documentary evidence, that there was an obligation to pay the debt and that the debtor has failed in such obligation." Given the law laid down in Swiss Ribbon case (supra), it becomes clear that rather than the "inability to pay debts", it is the "determination of default" that is relevant for allowing or disallowing an Application filed under Section 7, 9 or 10 of IBC. The said shift enables the Financial Creditor to prove by solid documentary evidence, that there was an obligation to pay the debt and that the debtor has failed to fulfill its obligation. Therefore, to allow the application filed under Section 7, it is not relevant to see the inability of the Corporate Debtor to pay the debt. 18. The Financial Creditor has proposed the name of Mr. Francis Mathew, Registration No. IBBI/IPA-001/IP-P00995/2017-2018/11642, as the Interim Resolution Professional of the Corporate Debtor. He has filed his written consent in Form 2 as required under Rule 9(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 along with a copy of his Certificate of Registration. However, he has not prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect from the date of this order till the completion of the CIRP or until this Adjudicating Authority approves the resolution plan under sub-section (1) of section 31 of the IBC or passes an order for liquidation of Corporate Debtor under section 33 of the IBC, as the case may be. (e) Public announcement of the CIRP shall be made immediately as specified under section 13 of the IBC read with regulation 6 of the Insolvency & Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. (f) As the Interim Resolution Professional proposed by the applicant did not produce the AFA and on verification of the AFA available in the IBBI website (AA1/11642/02/210422/102529), it is seen that the authorisation in respect of Shri. Francis Mathew is valid only up to 21.04.2022. Hence, we appoint Mr. Embrammadam Padmanabhan Madhusudhanan, Registration No. IBBI/IPA-002/IP-N01163/2021-2022/13856, having address at Embram Madam, ,Near Siva Temple, Nettoor PO, ,Ernakulam,Kerala ,682040, [email: [email protected] ] [Mobile: +91 8089359964], whose name appears in the IBBI Panel for the period January 1,2022 to June 30,2022, as Interim Resolution Profess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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