TaxTMI 
TaxTMI 
2018 (11) TMI 609
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....8.11.2001 having its registered office at 1/5783, Balbir Nagar, Shahadara, Delhi - 110032. Since the registered office of the respondent corporate debtor is in 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 Indian Overseas Bank is a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 having its registered office 763, Anna Salai, Chennai - 600002. 4. Mr. M. Ravindran Menon, authorized representative of the applicant and working as Asstt. General Manager has preferred the present application on behalf of the applicant Indian Overseas Bank for initiation of Corporate Insolvency Resolution Process against the respondent corporate debtor in terms of the provisions of the Code. 5. The applicant initially has proposed the name of Mr. Hemant Sharma, for appointment as interim resolution professional. Subsequently, the applicant proposed the name of Mr. ....
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....rmed on 14.07.2010. Once again on the request of Corporate Debtor, the financial limits under Consortium - III were enhanced by the applicant bank from Rs. 21.50 Crore to Rs. 51.50 Crore on 01.07.2011 for which necessary documentation was executed by Corporate Debtor on 04.07.2011. 10. However, soon after the Joint documentation and renewal/enhancement of credit facilities/limits, the Corporate Debtor started committing default in servicing of the interest in violation of the terms of the loan agreements and thus the Account of the Corporate Debtor was declared as a Non Performing Asset on 02.03.2012. 11. The particulars of financial debt as mentioned by the applicant bank in part - IV of the application is furnished below for ready reference: Part IV PARTICULARS OF FINANCIAL DEBT Total Amount of Debt Granted Date(s) of Disbursement Date of Last Sanction :01.07.2011 Total amount of debt granted facility - wise:- Term Loan - I: Rs. 8.61 crores Term Loan - II: Rs. 16.04 Crores Cash Credit: Rs. 44.00 Crores Letter of Credit: Rs. 5.00 crores Letter of Guarantee: Rs. 2.50 crores Amount claimed to be in default and the date on which the default occurred (attach the workings for ....
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....ssory Note Dated 19.01.2009. xxxv. Copy of Letter of Continuity Dated 19.01.2009. xxxvi. Copy of Letter of Hypothecation Dated 19.01.2009. xxxvii. Copy of Hypothecation of Book Debts Dated 19.01.2009. xxxviii. Copy of Letter of Hypothecation for Securing Machinery/Vehicles/Book Debts etc. Dated 19.01.2009. xxxix. Copy of Guarantee for Cash Credit etc. dated 19.01.2009. xl. Copy of Inter-Se Agreement Dated 02.12.2009 (Consortium - III). xli. Copy of Working Capital Consortium Agreement Dated 02.12.2009 (Consortium -III). xlii. Copy of Joint Deed of Hypothecation Dated 02.12.2009 (Consortium - III). xliii. Copy of Guarantee Agreement by both the Guarantors Dated 02.12.2009 (Consortium III). xliv. Copy of Confirmation Letter in respect of Mortgage Dated 03.12.2009 (Consortium-III). xlv. Copy of Confirmation Letter in respect of Flat No. 13, Film City, Noida, UP Dated 03.12.2009 (Consortium. II). xlvi. Copy of Sanction Renewal Letter Dated 18.03.2010. xlvii. Copy of Supplementary Agreement Dated 14.05.2010. xlviii. Copy of Revival Letter Dated 14.06.2010 (Consortium-I) xlix. Copy of Revival Letter Dated 14.06.2010 (Consortium-II). I. Copy....
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....ation of corporate insolvency resolution process against the respondent company by admitting the present application. 15. Respondent has filed its reply on 28.05.2018 opposing the admission of the present application. One of the objections raised in the reply is that the credit facilities were granted by consortium of banks and therefore the applicant bank does not have the requisite legal authority to move against the corporate debtor without approval of other lenders. Respondent has submitted that the applicant Bank alone cannot file the present application without specific consent of the other consortium banks and without impleading them in the proceedings. In this regard it is pertinent to note that Section 7(1) of the Code provides that a financial creditor either by itself or jointly with other financial creditors may file an application for initiating Corporate Insolvency Resolution Process against a corporate debtor when a default has occurred. Therefore, there is no obligation on the part of applicant bank to join the consortium of Banks. Inter-se agreement between the financial creditors cannot override the express provisions of the Code nor can take away the right of an....
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....'Corporate Insolvency Resolution Process', in spite of default of debt." 20. In the present case Applicant bank has filed a copy of letter of authority in favour of M. Ravindran Menon dated 02.06.2018 stating that the board of directors of applicant bank have decided in the meeting held on 29.01.2018 to empower all the chief managers and officers above rank of Scale IV to act as authorized representative on behalf of the applicant bank within the meaning of rule 2(6) of NCLT Rules, 2016, and Rule 10 of the Rules. Admittedly Mr. M. Ravindran Menon is working in a senior post in Scale-V as Asstt. General Manager of the applicant bank and has preferred the present application on behalf of the applicant bank. In the facts there is no doubt that Mr. M. Ravindran Menon not only has been authorized but is also competent to file the present application on behalf of the applicant bank. 21. Respondent has further challenged the selection criteria adopted by applicant bank for appointment of Mr. Hemant Sharma as IRP. In this regard while dealing with Section 7 application under the Code, there is no requirement to examine the various selection criteria for empanelment of IRPs. It is open fo....
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....the account statement but also from various admissions made by the defendant itself which leaves no scope for any doubt." Applicant has further submitted that there are enough documents placed on record to prove the liability of the corporate debtor. Besides it is contented that the outstanding dues as claimed are supported by the statement of accounts of the corporate debtor which has been duly certified under Section 2A of the Banker's Books of Evidence Act, 1891. 25. It is pertinent to mention here that dispute over the quantum of default, cannot be a ground for 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 default or to pass a decree as to how much is actually due to the applicant financial creditor. The Code requires the adjudicating authority to only ascertain and record satisfaction in a summary adjudication as to the occurrence of default before admitting the application. 26. Similarly, the objection on the ground of discrepancies in the amount of claim cannot sustai....
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....ancial creditor (b) Operational creditor, and (c) Corporate debtor itself. 32. The procedure in relation to the Initiation of Corporate Insolvency Resolution Process by the "Financial Creditor" is delineated under Section 7 of the Code, wherein only "Financial Creditor"/"Financial Creditors" can file an application. As per Section 7(1) of the Code an application could be maintained by a Financial Creditor either by itself or jointly with other Financial Creditors. 33. The expressions "Financial Creditor" and "Financial debt" have been defined in Section 5(7) and 5(8) of the Code and precisely "Financial debt" is a debt along with interest, if any, which is disbursed against the consideration for time value of money. 34. In the present case applicant bank had sanctioned and disbursed the term loan amount recoverable with applicable interest by entering into loan agreements with the corporate debtor. The corporate debtor had borrowed the credit facility against payment of interest as agreed between the parties. The loan was disbursed against the consideration for time value of money with a clear commercial effect of borrowing. Moreover the debt claimed in the present applicati....
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....e with Bankers' Books Evidence Act, 1891 as per requirement of Form 1 part V column 7 of the application. Certified copy of statement of account pertaining to various loan facilities, kept during the course of banking business basing on which the claim has been raised can be termed as sufficient evidence of the financial debt. 40. It is thus seen that the applicant 'financial creditor' has placed on record voluminous and overwhelming evidence in support of the claim as well as to prove the default. 41. It is pertinent to mention here that the Code requires the adjudicating authority to only ascertain and record satisfaction in a summary adjudication as to the occurrence of default before admitting the application. The material on record clearly goes to show that respondent had availed the loan facilities and has committed default in repayment of the outstanding loan amount. 42. As a sequel to the aforesaid discussion it is seen that the applicant bank clearly comes within the definition of Financial Creditor. The material placed on record further confirms that applicant financial creditor had disbursed various loan facilities to the respondent corporate debtor and the respondent....