TaxTMI 
TaxTMI 
2019 (3) TMI 618
X X X X Extracts X X X X
X X X X Extracts X X X X
....n of Corporate Insolvency Resolution Process has been prayed for, was incorporated on 03.10.2005 and presently has its registered office at 210, 1st Floor, Phool Singh Market, Karkardooma, Main Vikas Marg, New Delhi-110092. 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 Shri Rajesh Kumar working as Assistant General Manager (Law) Zonal Office Delhi and duly authorized by applicant Bank, has filed the present application for initiation of Corporate Insolvency Resolution Process against the respondent corporate debtor in terms of the provisions of the Code. A copy of the specific power of attorney dated 11.08.2017 has been placed on record. 4. The applicant has proposed the name of Ms. Anju Agarwal, for appointment as Interim Resolution Professional having registration number IBBI/IPA - 001/IP- P00106/2017-18/10213 resident of 166 SFS, DDA F....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rough its Directors in favour of the Financial Creditor on 13.12.2012. b. Agreement for Term Loan/Hypothecation of movable executed by Corporate Debtor through its Directors in favour of the Financial Creditor dated 13.12.2012. c. Demand Promissory Noted dated 13.12.2012 executed by Corporate Debtor in favour of Financial Creditor for a sum of Rs. 20 Crores and interest thereon. d. Letter of Guarantee executed by Sh. Arvind Agarwal in favour of the Financial Creditor on 13.12.2012. e. Letter of Guarantee executed by Smt. Vidhushi Agarwal in favour of the Financial Creditor dated 13.12.2012. f. Letter of Guarantee executed by Sh. Ashok Kumar in favour of the Financial Creditor dated 13.12.2012. g. Letter of Guarantee executed by Sh. Rajesh Kumar Bhardwaj in favour of the Financial Creditor dated 13.12.2012. h. Joint Letter of Guarantee executed by Sh. Arvind Agarwal, Smt. Vidhushi Agarwal, Sh. Ashok Kumar and Sh. Rajesh Kumar Bhardwaj in favour of the Financial Creditor on 13.12.2012. i. Consent Letter executed by Sh. Arvind Agarwal in favour of the applicant bank. j. Consent Letter executed by Smt. Vid....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion dated 04.07.2014 along with its directors in the capacity of guarantors accepted the terms and conditions of the sanction letter dated 27.06.2014. A copy of the Board Resolution dated 04.07.2014 has been placed on record. 12. In addition, respondent company along with its directors executed the following security documents, copy of which have been annexed with the present application: a. General Term Loan Agreement for Rs. 20 crores (Term Loan-1) executed by Corporate Debtor through its Directors in favour of the Financial Creditor dated 05.07.2014. b. General Term Loan Agreement for Rs. 15 Crores (Term Loan-2) executed by Corporate Debtor through its Directors in favour of the Financial Creditor dated 05.07.2014. c. Agreement for Term Loan/Hypothecation of movables for Rs. 20 crores (Term Loan-1) executed by Corporate Debtor through its Directors in favour of the Financial Creditor dated 05.06.2014. d. Agreement for Term Loan/Hypothecation of movables for Rs. 15 crores (Term Loan-2) executed by Corporate Debtor through its Directors in favour of the Financial Creditor dated 05.07.2014. e. Demand Promissory Note dated 05.07.2014 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....executed by Sh. Arvind Agarwal and Smt. Vidhushi Agarwal in favour of the applicant bank. u. Letter of Extension of Mortgage (for Term Loan-1) and Term Loan-2) with respect to property located at C-5, Sector-18, Vasundhara Ghaziabad executed by Corporate Debtor through its directors in favour of the applicant bank. v. Letter of undertaking confirming mortgage of property located at C-5, Sector-18, Vasundhara, Ghaziabad executed by Corporate Debtor through its directors in favour of the Financial Creditor dated 05.07.2014. w. Declaration of Sh. Arvind Agarwal confirming mortgage of property located at Flat No. 5/602, 6th Floor, Type-D, East End Apartments Co-operative Group Housing Society Limited built on Plot no. A-05 known as East End Apartments, Mayur Vihar, Phase-1, Extension, Delhi - 110096 area of Flat 1600 sq. ft. Super Area. Declaration of Sh. Arvind Agarwal dated 04.07.2014. x. Copy of Form-8 file before the Registrar of Companies with respect to the above noted security dated 21.07.2014. 13. It is the case of the applicant bank that the amount of loan sanctioned vide Term. Loan-1 and Term Loan-2 was fully disbursed and utilized by th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....b. Equitable mortgage of property located at Flat no.602, 6th Floor Block-V, East and Apartment, Mayur Vihar, Phase-I, Extension, Delhi-110096 measuring 1600 sq. ft. (super area) along with car parking owned by Mr. Arvind Aggarwal valued at Rs.l,78,30,000/-. c. Hypothecation of all tangible movable machineries, plant, machinery, fixtures, fittings, other installments, cranes, furniture's, computers & other accessories, vehicles. d. Hypothecation of the whole of the borrower's movable goods and assets. e. Hypothecation of all the present and future book-debts, outstanding's, monies, receivable, claims, bills, contracts, engagements and securities. 19. The total amount outstanding under the above noted credit facility (Term Loan-1) bearing Account No.513206390000151 is as under:- Particular Amount as on 28.02.2018 Principal with interest applied upto 25.04.2016 Rs. 16,99,00,777.80 Unapplied interest Rs.5,27,76,304.42 Total Rs.22,26,77,082.42 That the total amount outstanding under the credit facility (Term Loan-2) bearing Account no.513206390000154 is as under:- Particular Amount as on 28.02.2018 Principal with interes....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... there is no Board resolution authorizing Shri Rajesh Kumar to file the present petition on behalf of the applicant bank. 26. Respondent company has also contended that applicant financial creditor has proceeded under SARFAESI Act, 2002 and also has filed a case before DRT for the recovery of the aforesaid amount and as such the applicant is not entitled to file the present application under the provisions of Insolvency and Bankruptcy Code. 27. We have heard the learned counsel for the parties and have perused the case records. 28. The various objections raised by the respondent corporate debtor are discussed below. 29. The main objection raised by the respondent corporate debtor is that despite several request the applicant financial creditor failed to provide no objection Certificate (NOC) in favour of buyers of the corporate debtor for registration of the ownership of the commercial space in respect of the buyers. Consequently it is alleged that the corporate debtor could not sale the commercial space as nobody would buy a property in the absence of NOC and therefore significant commercial spaces remained unsold till date. 30. In this respect applicant has relied ....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., the corporate debtor failed to identify any investor or come up with a viable plan. In fact at the end of January, 2018 the corporate debtor was still looking for an investor and till date no concrete plan has been submitted by the said corporate debtor. In this regard copy of letter dated 29.01.2018 addressed to applicant bank by the corporate debtor has been placed on record. 34. Accordingly, applicant has contended that the excuse of getting an investor and failing to get an NOC is false and incorrect as the pre-conditions for getting an NOC was never complied with by the corporate debtor. Admittedly the corporate debtor has not come with any viable investor or any resolution. Accordingly, when the pre-conditions for grant of NOC as per the agreed terms was not complied with, the objection in this regard cannot sustain. 35. The respondent company has also raised objection of forum shopping and submitted that applicant has already initiated action under the provisions of SARFAESI Act and also has filed original application for adjudication of the claim before DRT which is still sub judice. In this regard it is well settled that pendency of proceedings and initiation of ac....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... that the authorization is solely based on a specific power of attorney, and there is no Board resolution authorizing Shri Rajesh Kumar to file the present petition on behalf of the applicant bank. 42. In this regard applicant bank has placed on record the specific power of attorney dated 11th August, 2017 executed by three General Managers appointing Shri Rajesh Kumar to be true and lawful attorney to act on behalf of the applicant bank. It is also stated in the specific power of attorney that the same is executed on behalf of Union Bank of India pursuant to the Board Resolution passed by the Board Directors of Union Bank of India at their meeting held on 27th July, 2017. 43. Hon'ble NCLAT in the case of Palogix Infrastructure Pvt. Ltd. v. ICICI Bank Ltd. [2017] 86 144 SCL 319 (New Delhi) 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to be followed by the Adjudicating Authority at every stage of the proceedings. Accordingly, further time as sought for cannot be allowed in violation of the provisions of the Code. 48. 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. 49. 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. 50. 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. 51. In the present case applicant bank had sanctioned and disbursed loan amounts r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e term loans taken from the applicant bank. 56. Additionally, the applicant has furnished Balance Confirmation of the outstanding amount executed by respondent company in both the term loan accounts from time to time on 31.03.2016 and also on 30.06.2016. Such confirmation of outstanding balance of loan reveals that the company has defaulted in repayment of the loan to the applicant bank and that huge debts are outstanding as reflected in the statement of accounts of the company. 57. Besides 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. 58. 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. 59. It is pertinent to mention here that the Code requires the adjudicating authority to only ascertain an....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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." 65. 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. 66. The Interim Resolution Professional shall perform all his functions contemplated, inter-alia, by Sections 15, 17, 18, 19, 20 & 21 of the Code and transact proceedings with utmost dedication, honesty and strictly in accordance with the provisions of the 'Code', Rules and Regulations. It....