TaxTMI 
TaxTMI 
2019 (4) TMI 820
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....tiation of Corporate Insolvency Resolution Process has been prayed for, was incorporated on 06.04.1999 and presently has its registered office at 68/5339, Regharpura Karol Bagh, New Delhi-110005. 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 Mr. Rishi Thakur working as Legal Manager of ICICI Bank, has preferred the present application on behalf of the applicant for initiation of Corporate Insolvency Resolution Process against the respondent corporate debtor in terms of the provisions of the Code. Mr. Rishi Thakur, being Legal Manager of ICICI Bank has been authorized by the Board Resolution dated 27.10.2017 of the applicant bank to file the present application on behalf of the applicant. A copy of the relevant Board Resolution of the applicant held on 27.10.2017 has been placed on record. 4. The applicant financial creditor has proposed the n....
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....cility of Rs. 400 Million, a Master Facility Agreement dated 15.12.2010 was entered into between the applicant bank and the respondent Corporate Debtor. A copy of the master facility agreement dated 15.12.2010 has also been placed on record. 8. As per Clause 2.5 (i) Article II of the Master Facility Agreement dated 15.12.2010, the Corporate Debtor was agreed to pay interest, commission, discount and other charges on the amounts outstanding from time to time under the WC Facilities of INR 400 Million at the rate(s), on the date(s) and in the manner specified in Schedule-I of the Master Facility Agreement or at such rates as may be decided by the Applicant from time to time at its sole discretion. 9. The enhanced working facility for Rs. 400 Million was secured by deed of guarantee dated 15.12.2010 executed by both Shri Harjit Singh Sahni and Ms. Pummy Sahni in favour of the applicant. In addition, M/s. Sahni Agro Private Limited also stood as guarantor vide guarantee deed dated 15.12.2010 in order to secure the enhanced working facility of INR 400 million. 10. Subsequently, on 17.08.2011 an additional cash credit facility of Rs. 20 million was sanctioned in favour of the responde....
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....applicable interests and charges. A tabular computation of default amount has been annexed with the application. 18. The respondent corporate debtor has filed its reply on 16.11.2018. Rejoinder to the reply was filed by the applicant on 10.12.2018. 19. We have heard the learned counsels for the parties and have perused the case records. 20. The various objections raised by the respondent corporate debtor are discussed below. 21. The respondent has submitted that it is not a sick company and is able to pay its debts. It is submitted that the corporate debtor is a going concern and has also availed credit facilities from Indian Overseas Bank and Bank of India to the tune of Rs. 144 crores (fund based and non- fund based) and the said accounts are completely operative and functional without any blemishes. Respondent has annexed comprehensive list of ongoing projects assigned to it. It is contended that respondent is not a sick company nor is unable to pay its debts nor has been declared as insolvent and therefore there is no requirement for restructuring or winding up of the company. 22. In this regard applicant in its rejoinder has submitted that the assertions of the corporate ....
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....ed on the statement of Account maintained by the Bank in its ordinary and usual course of business and in accordance with the banking systems. 27. Similarly, the objection on the ground of discrepancies in the amount of claim also cannot sustain. The variance in the amount of default is mainly on account of difference of dates. Be that as it may the corporate debtor would be entitled to raise objection of mismatching of dues and excess charging of interest before the resolution professional/ committee of creditors. Adjudicating Authority is only to ascertain the existence of a default and not to adjudicate and crystalize the claim as to how much is actually due and payable. Mere mismatch of the figures and dispute over quantum of default will ipso facto not estop the admission of corporate insolvency resolution process under Section 7 of the Code. 28. It is also the case of the respondent that the account of the corporate debtor has been wrongly declared as NPA. It is alleged that the financial creditor has blatantly failed to adhere to the guidelines issued by the Reserve Bank of India in its Master Circular for classification of the assets. 29. In the rejoinder applicant bank ....
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....norms nor it has ever attempted to disturb the operations of the corporate debtor. It is emphasized that the role of lender bank was limited to providing credit facilities to the corporate debtor and it was not in any way involved with the day to day working of the company and therefore the allegations are baseless. Applicant has submitted that the alleged triable issues and unrelated ground cited by the corporate debtor have no relevance in deciding admission of the application under the Code. 35. In the present proceeding under Section 7(5)(a) of the Code, application of the financial creditor has to be admitted on satisfaction that default has occurred, the application is complete, and that no disciplinary proceeding against the proposed IRP is pending. Respondent corporate debtor has not disputed that the loan was availed and that loan and security documents were executed. Applicant financial creditor has placed on record renewal of working capital facility letter aggregating to Rs. 420 million dated 21.12.2012, which was confirmed and accepted by the respondent company by affixing its seal and also duly supported by its Board Resolution dated 20th December, 2012. The Certific....
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....nd pay the financial creditor. The Corporate Debtor time and again has been requesting the Financial Creditor for rescheduling/regularizing the invoked amount of Bank Guarantees including the rate of interest, as applicable for commercial loans but Financial Creditor has neither considered nor responded to any of the said request. 40. In this connection applicant has denied that any efforts were made by the corporate debtor to regularize its account held with the financial creditor. It is alleged that respondent has not placed any document on record to establish that it has ever attempted to regularize the account held with the financial creditor. 41. 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 exigencies of the business. However, in the absence of any binding compromise agreement/ debt restructuring 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. 42. Needless to say, that time is the essence of the Code. A far strict t....
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....rusa Software Private Limited reported in AIR 2017 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 other criteria for admission of the application." (Emphasis given) 49. An application of financial creditor under Section 7 of the Code is acceptable so long as the debt is proved to be due and there has been occurrence of existence of default. It is reiterated that the material on record clearly goes to show that respondent had availed the loan facilities and has committed default in repayment of the huge outstanding financial debt. 50. In the facts, 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....
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....roperty is occupied by or in the possession of the corporate debtor." 55. 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. 56. 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 is further made clear that all the personnel connected with the Corporate Debtor, its promoters or any other person associated with the Management of the Corporate Debtor are under legal obligation under Section 19 of the Code to extend every assista....