TaxTMI 
TaxTMI 
2018 (10) TMI 1215
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....ion of Corporate Insolvency Resolution Process has been prayed for, was incorporated on 06.01.1993 having its registered office at B-292, Chandra Kanta Complex, Shop No. 7, Near Metro Pillar No. 161, New Ashok Nagar, New Delhi - 110096. Since the registered office of the respondent corporate debtor is in New Delhi, this Tribunal having territorial jurisdiction over the NCT of Delhi is the Adjudicating Authority in relation to the prayer for initiation of Corporate Insolvency Resolution Process in respect of respondent corporate debtor under sub-section (1) of Section 60 of the Code. 3. It is appropriate to mention that the applicant ICICI Bank Limited is a public company incorporated under the Companies Act, 1956 and is also a Banking Company within the meaning of the Banking Regulation Act, 1949 having its registered office near Chakli Circle, Old Padra Road, Vadodra - 390 007 and Regional Office at ICICI Bank Tower, NBCC Palace, Bhisham Pitamah Marg, Pragati Vihar, New Delhi - 110003. 4. Mr. Sanjay Sharma, authorized representative of the applicant and working as Legal Manager has preferred the present application on behalf of the applicant ICICI Bank Limited for initiation....
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....ering Limited (Corporate Guarantor) and Mr. H.S. Bharana (Personal Guarantor) through a deed of corporate guarantee and a deed of personal guarantee respectively, both dated 11 November 2011, in favour of the Applicant. The said deed of corporate guarantee and deed of personal guarantee have also been placed on record. 9. The Applicant further extended a working capital facility loan to the tune of INR 60,00,00,000 (INR Sixty Crores) by way of a working capital facility dated 13 December 2011 (WC Loan Facility). The credit arrangement letter (CAL) for the WC Facility dated 14 October 2011 clarifies that the WC Loan of the INR 60 crores comprised of a cash credit facility (CC Facility) of INR 25 crores and a bank guarantee facility of INR 35 crores. The WC Loan Facility was amended vide credit arrangement letter dated 10 December 2012, and the loan facility was reduced to INR 25 crores, comprising CC Facility of INR 10 crores and an overdraft facility (OD Facility) of INR 15 crores, thereby cancelling the earlier bank guarantee facility of INR 35 crores. Further, the other amendments which took place over time, to the WC Loan Facility, were recorded in an amendatory document exec....
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....su charge. The charge over Immovable Properties was also extended to the said OD Facility on a first ranking pari passu charge, by way of a declaration dated 23 March 2013. The charge so created on the OD Facility was filed under Form-8 with the ROC and a certificate of registration was issued on 22 April 2013. 13. Thereafter, in June 2013, the Applicant was inducted into the consortium of lenders lead by the State Bank of India. The members of the SBI Consortium collectively executed an inter se agreement dated 27 June 2013 vide which SBI was designated as the lead bank for the consortium. Pursuant thereto, a working capital consortium agreement on 27 June 2013 was executed securing an overall amount of INR 235.75 crores, including the WC Loan Facility to the extent of INR 10 crores sanctioned by the Applicant (comprising the CC Facility under the WC Loan Facility). To secure the abovementioned facility, the Corporate Debtor executed a joint deed of hypothecation on 27 June 2013, hypothecating its entire current assets on first ranking pari passu charge and its movable fixed assets (both present and future) on a second ranking pari passu charge in favour of the SBI Consortium. ....
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.... movable fixed assets. (ii) Second ranking pari passu charge over the current assets. B. First ranking pari passu charge, on the Immovable Properties created in terms of declaration of mortgage dated 22 November 2012. A. Deed of personal guarantee executed by Personal Guarantor on 11 November 2011. B. Deed of corporate guarantee executed by Corporate Guarantor on 11 November 2011. CC Facility 10 A. Following charge on the assets of the Corporate Debtor in terms of the deed of hypothecation dated 13 December 2011, a amended vide dee of modification dated 23 March 2013 and the joint deed of hypothecation dated 27 June 2013: (i) First ranking pari passu charge on entire current assets. (ii) Second ranking pari passu charge on movable assets. B. Second ranking pari passu charge, on Immovable Properties created in terms of declaration of mortgage dated 22 November 2012 l. Deed of personal guarantee executed by Personal Guarantor on 13 December 2011. 2. Deed of corporate guarantee executed by Corporate Guarantor on 13 December 2011. 3. Deed of corporate guarantee executed by Corporate Guarantor on 27 June.2013 OD Facility 15 A. Following charges A. ....
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....ies that were duly accepted by the Corporate Debtor have been placed on record. 18. Additionally, to secure the Restructured Facilities, the Personal Guarantor executed a deed of guarantee in favour of the Applicant on 31 December 2014. Further, a deed of hypothecation dated 7 July 2015 was executed by the Corporate Debtor, hypothecating its assets to the loans under the Restructuring Agreement at varied ranking of charges. Additionally, by way of a declaration of mortgage as executed on 7 July 2015, the Immovable Properties, and certain movable properties were charged to the Applicant to secure the loans under the Restructuring Agreement at varied ranking of charges. The charges created by the deed of hypothecation and declaration of mortgage to secure the Restructured Facilities were filed with the ROC under Form CHG-1 and a certificate of registration of charge was issued on 20 July 2015. The deed of guarantee executed by the Personal Guarantor on 31 December 2014 against the Restructured Facilities, the deed of hypothecation dated 7 July 2015, the declaration of mortgage dated 7 July 2015 and a copy of the said Form CHG-1 as filed with the ROC have also been placed on record....
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....ntees issued by the Applicant and the invocation letters sent by the beneficiaries have also been placed on record. 23. It is submitted that despite the restructuring of the facilities, the Corporate Debtor was unable to adhere to the repayment schedules for the Restructured Agreement, and that of the various bank guarantees extended by the Applicant, under the purview of the Fresh BG Facility. In view of the same, the account of the Corporate Debtor was classified as a non-performing asset (NPA) with the Applicant on 30 September 2016, with effect from 31 December 2014. Accordingly, on 14 March 2017, the applicant issued a demand notice to the Corporate Debtor for payment of the outstanding amount of INR 16.9 crores. The demand notice dated 14 March 2017 has been placed on record. 24. It is submitted that despite repeated requests and demands made by the Applicant, no payments were remitted by the Corporate Debtor. Therefore, the Applicant was constrained to issue a recall-cum-invocation letter dated 19 May 2017 to the Corporate Debtor recalling the entire credit facilities availed by the Corporate Debtor from the Applicant, and requesting the Corporate Debtor to remit the t....
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....tion of CIRP against the respondent corporate debtor would be detrimental to the assets and business of the corporate debtor. Simply a word of mouth that the respondent company is a solvent company will not suffice. There has been huge default in repayment of loan to various lenders. Applicant bank alone has claimed total outstanding dues amounting to INR 1,663,641,205 as on May 8, 2018. The material on record clearly goes to show that respondent committed default in repayment of the loan amount even after demand made by the applicant bank. Needless to say that the Code gets triggered the moment default is of rupees one lakh or more. 31. The respondent corporate debtor has also taken a stand that due to subdued market conditions in infrastructure sectors, it faced difficulty in realization of receivables making it impossible to match loan repayments with the loan receivables. The respondent has sought for more time to repay the loan in the light of long-term growth expectation for the industry. 32. In this regard it is pertinent to note that in financial transactions, adjustments and compromise are to be left to the parties to settle the matter in their best interest or exige....
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....everal outstanding debts are due to various lenders. Besides the loan agreements, security documents and charge certificates reveal the details of loan facilities availed by the corporate debtor. The applicant has furnished detailed evidence of debt in order to prove its claim and the default committed by the respondent. 35. In addition, subsequent to the restructuring of the loan facility, banker's books for the period of April 2016 to May 2018 has been placed on record. The applicant bank has filed the statement of accounts duly certified in accordance with Banker Books Evidence Act, 1891 as per requirement of Form 1 part V column 7 of the application. Certified copy of statement of account kept during the course of banking business basing on which the claim has been raised can be termed as supporting evidence of the financial debt. 36. Respondent has also disputed over the amount of default, which cannot be a ground of rejection of an application under Section 7 of the Code as the determination of quantum of financial debt is not within the domain of the Adjudicating Authority. In the present proceeding the Tribunal is not supposed to ascertain the quantum of amount of def....
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.... the parties. The loan was disbursed against the consideration of time value of money with a clear commercial effect of borrowing. In that view of the matter not only the present claim will come within the purview of 'Financial Debt' but also the applicant bank can clearly be termed as 'Financial Creditor' so as to prefer the present application under Section 7 of the Code. 43. Under sub-section 5(a) of Section 7 of the code, the application filed by the applicant financial creditor has to be admitted on satisfaction that: 1. Default has occurred. 2. Application is complete, and 3. No disciplinary proceeding against the proposed IRP is pending 44. Hon'ble Supreme Court in the case of Mobilox Innovations Private Limited V. Kirusa Software Private Limited reported in AIR 2017 SC 4532 at Para 19 has observed that: "Once the adjudicating authority / Tribunal is satisfied as to the existence of the default and has ensured that the application is complete and no disciplinary proceedings are pending against the proposed resolution professional, it shall admit the application. The adjudicating authority/Tribunal is not required to look into any oth....
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....n payment of the financial debt. 50. As a sequel to the above discussion and in terms of Section 7(5)(a) of the Code, the present application is admitted. 51. Mr. Gian Chand Narang, having registration number IBBI /IPA-002 /IP-N000362 /2017-18/ 11031, resident of Block B2, Flat No. 214, Varun Apartment, Sector-9, Rohini, Delhi-110085, email-id [email protected] is appointed as an Interim Resolution Professional. 52. In pursuance of Section 13(2) of the Code, we direct that public announcement shall be made by the Interim Resolution Professional immediately (3 days as prescribed by the IBBI Regulations) with regard to admission of this application under Section 7 of the Insolvency & Bankruptcy Code, 2016. 53. We also declare moratorium in terms of Section 14 of the Code. The necessary consequences of imposing the moratorium flows from the provisions of Section 14(1)(a), (b), (c) & (d). Thus, the following prohibitions are imposed: "(a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; ....