TaxTMI 
TaxTMI 
TaxTMI 
2018 (11) TMI 1013
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed on 07.10.1986 having its registered office at 1/5783, Balbir Nagar, Shahdara, Delhi East, Delhi - 110032. Since the registered office of the respondent corporate debtor is in NCT of Delhi, this Tribunal having territorial jurisdiction over the same 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 Asst. 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....re furnished below: * Property at Mumbai bearing No. Unit nos. 1 to 7, admeasuring about 6000 sq. Ft., I.e., 557.62 sq. Mtrs build up area on thereabout the 21st floor (slab level 20th of the building known as Lotus Nilkamal Business Park, alongwith the exclusive right to use the entire terrace portion including water tank and 2 toilets and 12 designated car parks at podium level of the said building situated at plot C-18, C-19, C-20 and C-21 and corresponding city survey nos. 639, 64, 641, 642 at village Oshiwara, Andheri West, Mumbai - 400 053. * Property at Mumbai bearing No. Unit No. 1 and 2, on 7th floor (Slab level 7) admeasuring about 3000 sq. Ft., build up area alongwith exclusive maintenance rights of the refuge area adjacent thereto and 5 designated - car parks at podium level of the building known as Louts Nilkamal Business Park situated at plot C-18, C-19, C-20 and C- 21 and corresponding city survey nos. 639, 640, 641, 642 at village oshiwara, andheri West, Mumbai - 4000 053 together with all the buildings and structures thereon, fixtures, fittings and all plant and machinery attached to the earth or permanently fastened to anything attached to the eart....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e applicant bank has submitted that the respondent corporate debtor failed to clear the outstanding dues and did not adhere to the terms and conditions of the loan agreements. Consequently, applicant bank has initiated action against the corporate debtor under the provisions of SARFAESI Act, 2002 as well as under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. Besides legal notice dated 28.02.2012 was issued demanding repayment of the outstanding dues from the corporate debtor. However the respondent corporate debtor failed to pay the amount despite the demand notice. 12. The petitioner has placed on record the relevant statement of accounts duly certified as per Bankers' Book Evidence Act and has claimed that as on 31.03.2018 a sum of Rs. 177, 00,28,591.80/- is due and payable by the Respondent Corporate Debtor. 13. On the ground that huge amounts are outstanding, it is claimed that the respondent has become commercially insolvent and accordingly it is prayed for initiation of corporate insolvency resolution process against the respondent company by admitting the present application. 14. Respondent has filed its reply on 29.05.2018 opposing the admissio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at there is no Board resolution authorizing Mr. M. Ravindran Menon Asst. General Manager to file the present petition on behalf of the applicant bank. 17. In this regard applicant bank in its rejoinder has affirmed that Mr. M. Ravindran Menon is duly authorized to sign and verify the present application. A copy of the letter of authority dated 02.06.2018 has been placed on record in the rejoinder filed by the applicant bank. 18. Hon'ble NCLAT in the case of Palogix Infrastructure (P.) Ltd. v. ICICI Bank Ltd. in Company Appeal (AT) (Insolvency) Nos. 30, 37 & 54 of 2017 at para 38 has held that: "If an officer, such as senior Manager of a Bank has been authorised to grant loan, for recovery of loan or to initiate a proceeding for 'Corporate Insolvency Resolution Process' against the person who have taken loan, in such case the 'Corporate Debtor' cannot plead that officer has power to sanction loan, but such officer has no power to recover the loan amount or to initiate 'Corporate Insolvency Resolution Process', in spite of default of debt." 19. 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e of the applicant that respondent suo moto had executed security and other loan documents. It is submitted that the respondent after carefully examining the terms and conditions of loan had mutually executed the loan agreements. There is nothing on record to show as to why the express terms of commercial loan agreements, suo moto executed, are not binding on the parties. 22. Respondent corporate debtor has also denied and disputed the claim of the applicant bank. It is alleged that necessary information including the statement of account, rates of interest debited from time to time, rates of penal interest charged etc. were never furnished. Respondent has additionally disputed the claim of interest and the declaration of the account as NPA. 23. In this regard the applicant bank in its rejoinder has submitted that "the liability of the defendant is not only evident from the document of loan and 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 the outstanding dues as claimed are duly supported by the statement of accounts of the corporate debtor which has been duly certif....
X X X X Extracts X X X X
X X X X Extracts X X X X
....turing approval, it is beyond the powers of the Adjudicating Authority to defer the prayer of applicant financial creditor for admission of the petition filed under Section 7 of the Code. 29. Needless to say that time is the essence of the Code. A far strict time frame is expected to be followed by the Adjudicating Authority at every stage of the proceedings. When despite demand there is default in repayment of the loan amount, the applicant gets right to move under the Code. The application under Section 7 is maintainable once the default is more than one lakh, in view of Section 4 of the Code. 30. It is pertinent to mention here that the scheme of the Code provides for triggering the insolvency resolution process by three categories of persons namely: (a) Financial creditor (b) Operational creditor, and (c) Corporate debtor itself. 31. 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in relation to the disbursement of the loan to the respondent company. The materials on record and the loan documents clearly depict that that the loan was sanctioned, disbursed and the loan agreements were properly executed. Respondent company utilized and enjoyed the loan facility. The applicant bank has placed on record the acknowledgement of debt executed by respondent company on 15.02.2011. Additionally, the applicant has also placed on record demand promissory note for Rs. 60 Crores dated 29.11.2010. That apart the applicant has relied upon the letter of respondent company confirming the deposit of title deeds in order to secure the loan. 38. In addition the applicant bank has filed the statement of accounts duly certified in accordance 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. 39. It is thus seen that the applicant 'financial creditor' has placed on record voluminous and overwhelming evidence....
X X X X Extracts X X X X
X X X X Extracts X X X X
....corporate debtor any of its assets or any legal right or beneficial interest therein; (c) any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; (d) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor." 46. It is made clear that the provisions of moratorium shall not apply to transactions which might be notified by the Central Government or the supply of the essential goods or services to the Corporate Debtor as may be specified, are not to be terminated or suspended or interrupted during the moratorium period. In addition, as per the Insolvency and Bankruptcy Code (Amendment) Act, 2018 which has come into force w.e.f. 06.06.2018, the provisions of moratorium shall not apply to the surety in a contract of guarantee to the corporate debtor in terms of Section 14(3)(b) of the Code. 47. The Interim Resolution Professional shall perform all his functions contemplated, inter alia, by Sections 15, 17, 18,....