TaxTMI 
TaxTMI 
2018 (11) TMI 1046
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....5 having its registered office at 1009, 10th Floor, House No. 27, Barakhamba Road, Connaught Place, New Delhi-110001. 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 Bank of India is a body corporate constituted under the banking companies (Acquisition and Transfer of Undertakings) Act of 1970, having Head Office at Star House, C-5, "G" Block, Bandra-Kurla Complex, Bandra (East), Mumbai-400051 and one of its branch office amongst others at Laxmi Niwas, 172 S.B. Road, Ambala Cantt. (Haryana)-133 001. 4. Shri Suresh Chandra Batra, authorized representative of the applicant and working as Chief Manager has preferred the present application on behalf of the applicant, Bank of India, for initiation of corporate insolvency resolution process against the respondent corporate debtor in terms of the provisions of the Code. 5. The ap....
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.... Facility Sanctioned Limit (Rs.) A. i Term Loan I 8,03,00,000.00 ii Term Loan II 1,86,00,000.00 iii Term Loan III 37,00,000.00 B. i Cash Credit (Hypothecation Stock) 18,00,00,000.00 ii Cash Credit (Hypothecation Books Debts) 8,00,00,000.00 Max Limit - Bi & ii 20,00,00,000.00 C.I EPC 66,00,00,000.00 ii FBP 66,00,00,000.00 Max Limit - Bi & ii 71,00,00,000.00 Total CC + EPC + FBP 91,00,00,000.00 Non Fund Based CEL 1,48,00,000.00 Total 102,74,00,000.00 8. Thereafter, the respondent corporate debtor made a request to the applicant bank for grant of TOL for Rs. 3 Crores for 90 days for completing urgent export orders. The said facility was additionally granted on 26.04.2017 and was availed by the corporate debtor. It is submitted that the corporate debtor acknowledged sanction of the aforesaid facilities and the same continued to be enjoyed by the corporate debtor. 9. In order to secure the various financial facilities the respondent company signed and executed various security and loaning documents in t....
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....ebtor. II. Hypothecation of all movable plant and machinery and all other movable assets of the Corporate Debtor. III. Equitable Mortgage of various properties as detailed in the application. IV. Hypothecation of stocks and Book debts. V. Personal guarantees of Mr. Atharzia, Mrs. Sheezazia, Mr. Papinder Singh & Mr. M.Z. Siddique. VI. Various sanction letters in respect of sanction of loan facilities including renewal of the facilities duly accepted by the Corporate Debtor. VII. Various demand promissory notes letter of continuing security for DP Note supplemental agreement. VIII. Acknowledgement of debts of the outstanding amount made on 30.01.2015 and 25.09.2016. IX. Recording of oral assent extension of equitable mortgage of the properties. X. Statement of account and certificate under the Banker's Book Evidence Act. XI. Form-8 dated 26.04.2017 filed with the Registrar of companies registering charge in favour of the financial creditor. XII. CRILIC Report in support of record of default. 14. The respondent corporate debtor has filed its reply on 12th June, 2018. One of the object....
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....much above the threshold limit of Rs. 1 Lakh, the Code gets triggered in view of Section 4 of the Code. What is material is that the default is at least 1 Lakh. Accordingly such objection of partial adjustment of dues, if any, cannot stop the financial creditor to avail the provisions of the Code. 16. Respondent has raised another objection on the ground that the applicant bank has not provided correct particulars of financial debt. It is alleged that the amount claimed to be in default is completely different from the amount claimed in balance confirmation certificate. The respondent has relied upon the following table to show the discrepancy in the claim: Facility Amount as per Form-1 Amount as per Bank Confirmation Certificate Cash credit (Stocks) 2257.54 2120.62 C.C. Book Debts 233.74 219.99 Term Loan 1 750.96 702.57 Term Loan 2 170.53 161.41 Term Loan 3 33.31 31.15 EPC 6988.3 6722.31 17. In this connection applicant has submitted that 'the difference between the balance confirmation certificate dated 30.09.2017 and as per Form-1 occurred due to uncharged interest up to 13.03.2018 which was not included in the....
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....oinder has denied that the financial creditor ever pressurized and persuaded the respondent to buy the rice factory. It is submitted that the unit was purchased by the respondent in e-auction under SARFAESI Act, 2002. Petitioner has also denied that financial creditor ever assured the Corporate Debtor to provide working capital facility to run the mill at optimal capacity. The applicants contended that they have extended co-operation by extending timely and adequate credit facilities as per loan agreements. It is alleged that Corporate Debtor admitted that they could not sustain the unit and it was difficult for them to run the project with a long term profitable viability. In this connection, it is pertinent to note that as per the provisions of the Code, once there is existence of default and the application is complete and no proceedings are pending against the proposed IRP, the application under Section 7 is to be admitted. The Adjudicating Authority is not required to look into any other criteria while considering the application preferred under Section 7 of the Code. 22. It is also the case of the respondent that efforts are being initiated for compromise under one-time se....
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....6. The expressions "Financial Creditor" and "Financial debt" have been defined in Sections 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. 27. In the present case applicant bank had sanctioned and disbursed the term loan amount recoverable with applicable interest by entering in to 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 application includes both the component of outstanding principal and interest. In that view of the matter not only the present claim comes 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. 28. The application filed by the applicant financial creditor under sub-section 5(a) of Section 7 of the code, has to be admitted on satisfaction that: ....
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....ccurrence 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. 34. 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 has availed the loan and committed default in repayment of the outstanding financial debt. On a bare perusal of Form - I filed under Section 7 of the Code read with Rule 4 of the Rules shows that the form is complete and there is no infirmity in the same. It is also seen that there is no disciplinary proceeding pending against the proposed IRP. We are satisfied that the present application is complete in all respect and the applicant financial creditor is entitled to claim its outstanding financial debt from the corporate debtor and that there has been default in payment of the financial debt. 35. As a sequel to the above discussion and in terms of Section ....