TaxTMI 
TaxTMI 
2018 (6) TMI 1192
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.... Patiala and State Bank of Travancore. As a 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 De....
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....on, further necessary disclosures have been made by Mr. 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 Oct....
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....et out below: - (a) Description of Security: First pari passu charge on the 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 p....
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....timated Value: As per the valuation report, the fair market value of the said property is Rs. 1,84,00,000 and the consecutive value is Rs. 1,48,00,000. (j) Personal Guarantee executed by Sh. Kunwer Sachdev inter alia in favour of the Financial Creditor (including 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 be....
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.... for enhancement of the working capital facility limits granted pursuant to the Working Capital Consortium Agreement dated 19 April 2012. 25 March 2013 E. ENHANCEMENT OF WORKING CAPITAL FACILITIES TO Rs. 550 CRORES GRANTED BY CONSORTIUM OF LENDERS INCLUDING STATE BANK OF INDIA (including the erstwhile associate banks amalgamated w.e.f. 1 April 2017 vide Gazette 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....
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....Debtor for renewal of working capital facilities granted pursuant to the Supplemental Working Capital Consortium Agreement dated 10 October 2014 and renewed/modified vide sanction letter dated 8 August 2015. 1 February 2017 2. Sanction Letter bearing reference number CBGGN:AMT-II:3267-A issued by State Bank of India in favour of the Corporate Debtor for reduction of working capital facilities granted pursuant to the Supplemental Working 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....
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....; BG (Sub-Limit of LC) (15.00) (30.00) (45.00) --------- 15.13 LOU/LOC (Sub-Limit of LC) (10.00) (30.00) (40.00) --------- --------- CEL (Sub-Limit of LC) (0.60) --------- (0.60) --------- --------- TOTAL 65.80 43.20 109.00 8.78 71.69 By the aforesaid default notice amount in default/overdues including interest and penal interest aggregating to Rs. 71,69,00,000 (Rupees Seventy One Crores and Sixty Nine Lacs Only) was demanded. 16. The 'financial creditor' has placed on record an overwhelming evidence to prove the default. A record of default is also available with the Central Repository of Information on Large Credits (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 stateme....
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.... Mr. Sanjay Prasad, Chief Manager and Relationship Manager is an officer of Senior Management Grade Scale-IV (SMGS-IV). Accordingly, the present petition has been signed by a competent officer who is an authorized person for filing the petition. Therefore, it is claimed that the petition has been filed by a person authorized in accordance with law. The affidavit and the vakalatnama have also been signed by the aforesaid officer. 18. A rejoinder to the counter affidavit has been filed by the Financial Creditor reiterating the submissions made in the application and controverting the assertions in the counter affidavit. 19. Learned counsel for the Corporate Debtor opposed the admission and has argued that a Joint Lender's Forum 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 th....
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.... investor, the same could be examined as well by the Committee of Creditors of the Corporate Debtor along with Interim Resolution Professional after admission the present petition. 21. Another objection raised by the Corporate Debtor is that the application filed by the Financial Creditor is incomplete on account of absence of necessary disclosures in terms of the Insolvency and Bankruptcy Board of India (Insolvency Professional) Regulations, 2016 by the Interim Resolution Professional in form 2 annexed with the application. We are satisfied that the Interim Resolution Professional at pages No. 119-120 have made adequate declaration satisfying the requirement of the Rules/Regulations and therefore the objection raised by the Corporate Debtor in this 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 du....
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....r submitted that the details of the default along with the dates have been clearly stated in part IV along with all the minute details. There is overwhelming evidence available in the shape of the default and name of the resolution professional has also been proposed along with his written communication. 26. Having heard the learned counsel for the petitioner and having perused the paper book with his able assistance we may first examine the provisions of Section 7(2) and section 7(5) of IBC which read as under:- "Initiation of corporate insolvency resolution process by financial creditor. 7(1).................. 7(2) The financial creditor shall make an application under sub-section (1) in such form and manner and accompanied with such fee as may be prescribed. (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 &nb....
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....e essential goods or services to the Corporate Debtor as has been specified are not to be terminated or suspended or interrupted during the moratorium period. These would include supply of water, electricity and similar other supplies of goods or services. 31. The Interim Resolution Professional shall perform all his functions religiously as are contemplated, inter alia, by Sections 15, 17, 18, 19, 20 & 21 of the Code. He must follow best practices and principles of fairness which are to apply at various stages of Corporate Insolvency Resolution Process. His conduct should be above board & he must act independently; and he should work with utmost integrity and honesty. It is further made clear that all the personnel connected with the Corporate Debtor, its promoters or any other person associated with the Management of the Corporate Debtor are under legal 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 ....