TaxTMI 
TaxTMI 
2018 (6) TMI 1192
X X X X Extracts X X X X
X X X X Extracts X X X X
.... result of merger, the combination has become the first Indian lender bank to rank amongst the world's top 50 banks. A document with regard to merger has been placed on record of this petition. The merger has taken place w.e.f. 01.04.2017 vide notification dated 22.02.2017. The gazette notification to this effect has been placed on record (Annexure-1). 2. Sometimes in the history of a nation evolutionary processes are perfected so as to usher in financial stability by striking at the elements of uncertainty. To achieve the object Insolvency and Bankruptcy Code, 2016 has been enacted (for brevity 'the Code'). The problems of ever increasing Non-performing assets is attempted to be resolved in a time bound manner for maximisation of value of assets, inter alia, in respect of Corporate persons and also to promote entrepreneurship, availability of credit and balancing the interests of, and in alteration, the order of priority of Government dues. 3. Taking advantage of the IBC, the present petition has been filed by the State Bank of India under section 7 thereof in the matter of Su Kam Power Systems Limited (for brevity 'the Corporate Debtor') with a prayer to initiate Corporate Inso....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r. Rajiv Chakraborty as per the requirement of the IBBI Regulations. Accordingly, he satisfies the requirement of Section 7(3)(b) of the Code. 7. Facts which are material to the controversy raised may first be noticed. According to the particulars of the debt disclosed in Part IV of Form-1 prescribed under sub-rule (1), of Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 the total amount of debt granted by the Financial Creditor (including the erstwhile associate banks) to the Corporate Debtor towards fund based cash credit limit and non-fund based limits like letters of credit is equivalent to Rs. 109,00,00,000/- (Rupees One Hundred and Nine Crores only). The working capital facilities were initially disbursed individually by State Bank of India and its erstwhile associate banks. These working capital facilities were subsumed into the working capital consortium agreement dated 19 April 2012 and supplemental working capital consortium agreement dated 25 March 2013. Further, the said working capital facilities were consolidated into the working capital consortium agreement dated 10 October 2014 entered into inter alia, between the Corporat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he stock and raw material, semi-finished & finished goods, stores & spares, bills receivable, book debts and all the movables of the Corporate Debtor. Date of ROC Registration: Updated and odified on 18 November 2014. Estimated Value: Rs. 44,57,58,000 (Rupees Forty Four Crores Fifty Seven Lakhs Fifty Eight Thousand Only) (b) Description of Security: Second pari passu charge on the Factory, land and building located at plot No. 7, Industrial Area, Katha, Baddi HP admeasuring 24277 sq. mtrs. Date of ROC Registration: Updated and modified on 11 December 2014. Estimated Value: As per the valuation report, the fair market value of the said property is Rs. 31,91,70,775 and the conservative value is Rs. 25,55,00,000. (c) Description of Security: Second pari passu charge on Factory, land and building located at plot No. 54, Udyog Vihar, Phase-VI, Sector 37, Gurgaon admeasuring 1177 sq. mtrs. Date of ROC Registration: Updated and modified on 11 December 2014. Estimated Value: As per the valuation report, the fair market value of the said property is Rs. 7,88,00,000 and the conservative value is Rs. 6,31,00,000. (d) Description of Security: Second pari passu charge on Facto....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g erstwhile State Bank of Patiala) (k) Omnibus Counter Guarantee Agreement executed by the Corporate Debtor inter alia in favour of the Financial Creditor (including erstwhile State Bank of Patiala) with respect to the guarantee facilities. (l) Demand Promissory Note executed by the Corporate Debtor. Copies of the certificate for registration of charges, as applicable issued by the Registrar of Companies for the creation of the above security along with the forms filed are being annexed herein as ANNEXURE-8 (COLLY). 11. The Financial Creditor also placed on record a list of all the financial facilities granted by the Financial Creditor (including the facilities granted by the erstwhile associate banks) to the Corporate Debtor along with the copies of the said Financial facilities. The details of the said financial facilities which have been described in Annexure-9 (Colly) are set out below: - DETAILS OF FINANCIAL CONTRACTS S. No. PARTICULARS DATE A. AGREEMENT OF LOAN FOR OVERALL LIMIT OF Rs. 50 CRORES GRANTED BY STATE BANK OF INDIA 1. Sanction Letter bearing reference number MC:156 issued by State Bank of India in favour of the Corporate Debtor for....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... notification dated 22 February 2017) 1. Sanction Letter bearing reference number CBGGN:AMT-II:1631 issued by State Bank of India in favour of the Corporate Debtor for renewal of working capital facilities granted pursuant to the Supplemental Working Capital Consortium Agreement dated 25 March 2013. 14 March 2014 2. Sanction Letter bearing reference number MCB/DEL/1193 issued by erstwhile State Bank of Patiala in favour of the Corporate Debtor for grant of working capital facilities of an amount of Rs. 45 Crores. 26 March 2014 3. Agreement of loan for overall limited executed between erstwhile State Bank of Patiala and the Corporate Debtor for grant of working capital facilities for an amount of Rs. 45 Crores. 19 June 2014 4. Supplemental Working Capital Consortium Agreement entered into, inter alia, between State Bank of India (including the erstwhile associate banks amalgamated w.e.f. 1 April 2017 vide Gazette notification dated 22 February 2017) and the Corporate Debtor in relation to enhancement of the working capital facilities granted pursuant to the Supplemental Working Capital Consortium Agreement dated 25 March 2013. 10 October ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng Capital Consortium Agreement dated 10 October 2014 and renewed/modified vide sanction letter dated 27 March 2015 and sanction letter dated 4 April 2016.8 August 2015. 7 February 2017 12. There are then the balance confirmation letter dated 26.06.2017 by the Corporate Debtor in favour of Financial Creditor with regard to as many as nine different accounts. It is pertinent to notice that said letter has been duly signed on behalf of the Corporate Debtor and a seal has also been put by the Corporate Debtor which reads as under:- "I/We confirm that the balance of our loan accounts as on 31.03.2017 due by us to the Bank, as shown in your statement of account as on that date: BRANCH CODE FACILITY A/C NO. CURRENCY AMOUNT 04079 CC 30789858810 INR 325868585.16 DR 04079 EPC 33055420744 INR 0.00 DR 04079 PCFC 35944388614 INR 0.00 DR 04079 BE-LC BILLS 35870570650 USD 0.00 DR 04079 INLAND LC BILLS 32038664111 INR 0.00 DR 04079 LC INLAND 31043223880 INR 0.00 DR 04079 LC IMPORT 33662525034 USD 15700.99 DR 04079 LOC 36053903902 USD 764337.00 DR 04079 BG 31523146275 INR 125257244.00 DR A copy of balance confirmation letter dated....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(CRILC) as per its asset classification report of the Corporate Debtor based on latest two quarters (Annexure-10) in which the account of the Financial Creditor clearly mentions to be substandard. Likewise, entries in Bankers Book in accordance with the Bankers Books Evidence Act, 1891 have been placed on record which relate to the aforesaid accounts of the Corporate Debtor in which financial debt were transferred by the Financial Creditor certifying the statement of accounts of the Corporate Debtor consist of printouts of data stored in various forms (Annexure-11). 17. There are various documents placed on record establishing authority to file the application which include authorization dated 16.06.2017 issued by the Chairman of the State Bank of India. It clearly states that in pursuance of powers conferred under section 27 of the State Bank of India Act, 1955 the Chairman authorized all the officers on whom signing powers have been conferred vide gazette Notification dated 27.03.1987 to sign applications, reply, affidavit, counter affidavit, sur rejoinder and generally all pleadings and file applications for initiation of Corporate Insolvency Resolution Process before the Natio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....m has been constituted in respect of the Corporate Debtor in terms of the guidelines issued by the Reserve Bank of India on 26.02.2014, which is still exploring the possibilities of revival of the company (Corporate Debtor), therefore, these proceedings initiated by the Financial Creditor are premature. The aforesaid argument has not impressed us because a similar kind of contention regarding an ongoing restructuring under the JLF mechanism raised by the Corporate Debtor was considered and rejected by this Tribunal in State Bank of India v. Bhushan Steel Ltd. [C.P. No. (IB) 201 (PB)/2017, dated 26-7-2017]. The relevant para 37 reads as under:- "The other arguments has also not impressed us that the adequate opportunity for restructuring in terms of the policy of the RBI issued vide the press release dated 13.06.2017, master circular dated 01.07.2015, Timelines for Stressed Assets Resolution dated 05.05.2017 or framework for structuring of Stressed Assets in the economy - guidelines in Joint Lender Forum and Corrective Action Plan (CAP) dated 26.02.2014 as all such efforts are the part of external processes which are beyond the scope of the Insolvency and Bankruptcy Code. It is i....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... regard is overruled. 22. An application C.A. No. 136(PB)/2018 under rule 32 of the National Company Law Tribunal Rules, 2016 has been filed on behalf of applicant-Reliance India Power Fund for impalement in the matter. In the aforesaid application it is submitted by the applicant-Reliance India Power Fund that it is an Investor and Venture Capital Fund Trust, having business interest in terms of investment and funding and is duly registered with SEBI. It is further averred that in the year 2006, the Corporate Debtor had approached the applicant-Reliance India Power Fund for financial assistance and funding of Rs. 45/- crores for future expansion of its business. 23. The applicant-Reliance India Power Fund being an investor agreed to invest a total amount of Rs. 45/- crores based on the warranties and representations made by the Corporate Debtor as per the agreement dated 31.03.2016 signed between the applicant-Reliance India Power Fund and the Corporate Debtor and the Promoters with an assured exit at a fixed IRR of Rs. 25%. A copy of the said agreement dated 31.03.2006 has been placed on record (Annexure-B). 24. In the aforesaid application it is asserted averred that by virtu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ibed. (3).................... 7(4................... 7(5) Where the Adjudicating Authority is satisfied that- (a) a default has occurred and the application under sub-section (2) is complete, and there is no disciplinary proceedings pending against the proposed resolution professional, it may, by order, admit such application; or (b) .................." 27. A conjoint reading of the aforesaid provision would show that form and manner of the application has to be the one prescribed by the authorities. It is evident from the record that the application has been filed on the proforma prescribed under rule 4(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 read with Section 7 of IBC. We are satisfied that a default has occurred and the application under sub-section (2) of Section 7 is complete. It is also patent no disciplinary proceedings are pending against the proposed Interim Resolution Professional. Thus, the application warrant admission. 28. As a sequel to the above discussion, this petition is admitted and Mr. Rajiv Chakraborty, 12 Sukhdev Vihar, Ist Floor, New ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l obligation under section 19 of the Code to extend every assistance and co-operation to the Interim Resolution Professional as may be required by him in managing the affairs of the Corporate Debtor. In case there is any violation by the ex-management or its ex-directors the Interim Resolution Professional would be at liberty to make appropriate application to this Tribunal with a prayer for passing an appropriate order. The Interim Resolution Professional shall be under duty to protect and preserve the value of the property of the 'Corporate Debtor' as a part of its obligation imposed by Section 20 of the Code and perform all his functions strictly in accordance with the provisions of the Code. 32. The office is directed to communicate a copy of the order to the Financial Creditor, the Corporate Debtor and the Interim Resolution Professional at the earliest but not later than seven days from today. 33. We have taken notice of the averments made in the intervener's application and the order passed by Hon'ble Bombay High Court. At the outset it is pertinent to point out that the order dated 14.12.2017 (Annexure E/1) shows that between the applicant-Reliance India Power Fund-interv....