Financial Creditor's Petition Admitted: Interim Resolution Professional Appointed

The petition is admitted as the Financial Creditor has established the existence of a financial debt and default. An Interim Resolution Professional is appointed to conduct the Insolvency Resolution Process, with Moratorium under Section 14 of the Code in effect. The Corporate Insolvency Resolution Process commences from the date of the order.

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Issues Involved:
1. Whether the debt is time-barred and hit by limitation.
2. Whether the petitioner has filed false and incomplete statements of accounts.
3. The relevance of the Joint Lenders’ Forum (JLF) in the context of the petition.
4. The validity of the assignment of Term Loan II and Term Loan III to the petitioner.
5. The existence of a financial debt and default by the Corporate Debtor.

Detailed Analysis:

1. Whether the debt is time-barred and hit by limitation:
The primary question regarding the maintainability of the petition is whether the debt is time-barred. The Limitation Act is applicable to applications filed under Sections 7 and 9 of the Insolvency and Bankruptcy Code (IBC) from the inception of the Code. Article 137 of the Limitation Act prescribes a three-year limitation period for the right to sue, which accrues when a default occurs. However, for enforcing payment of money secured by a mortgage of immovable property, Article 62 of the Limitation Act prescribes a twelve-year limitation period from the date when the money sued for becomes due. In this case, the date of default is 11.03.2015, and the petition was filed on 29.09.2017, well within the twelve-year limitation period. Hence, the contention that the debt is time-barred is rejected.

2. Whether the petitioner has filed false and incomplete statements of accounts:
The petitioner has relied on Standard Chartered Bank & DBS Bank Ltd. V. Ruchi Soya Industries Ltd., which clarifies that the statement of accounts must be a copy of the entry in a Bankers Book and attached with Form No. 1. It does not need to be a certified copy under the Bankers Book Evidence Act. The petitioner has provided the necessary documentation, and the contention that the statements are false or incomplete is not valid.

3. The relevance of the Joint Lenders’ Forum (JLF):
The Corporate Debtor argued that the petitioner obstructed the formation of the JLF and did not abide by its decisions. However, the adjudicating authority is not required to consider the JLF's decisions when deciding a petition under Section 7 of the IBC. The decision of the creditor to join a lending forum is a prerogative of the lender and cannot be intervened by the borrower. Therefore, the argument regarding the JLF is irrelevant for this petition.

4. The validity of the assignment of Term Loan II and Term Loan III to the petitioner:
The Corporate Debtor contended that the assignment of Term Loan II to the petitioner by IDFC is invalid as part payment had already been made. However, the Demand Promissory Note dated 24.05.2012 for Term Loan III establishes the debt. The assignment of Term Loan III to the petitioner is valid and legal. The Corporate Debtor is obligated to repay the outstanding amounts under Term Loan II and Term Loan III.

5. The existence of a financial debt and default by the Corporate Debtor:
The Financial Creditor has established that the loan was sanctioned and disbursed to the Corporate Debtor, who defaulted in payment. The debt is a "Financial Debt" as defined under Section 5(8) of the Code, and there is a "Default" as defined under Section 3(12) of the Code. The petition is complete, and the Financial Creditor has complied with the prescribed formalities.

Conclusion:
The petition is admitted as the Financial Creditor has established the existence of a financial debt and default. The proposed Interim Resolution Professional, Mr. Jayesh Shah, is appointed to conduct the Insolvency Resolution Process. The provisions of Moratorium under Section 14 of the Code are operative, prohibiting any suit or transfer of assets by the Corporate Debtor. The Interim Resolution Professional shall perform duties as assigned under Sections 18 and 15 of the Code and report progress within 30 days. The Corporate Insolvency Resolution Process commences from the date of the order.

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