TaxTMI 
TaxTMI 
2019 (5) TMI 388
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.... on 23.05.1997 having its registered office at Pankaj Galaxy 1, Second Floor, Plot No. 8, Sector-12, Dwarka, New Delhi -110075. 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 ICICI Bank Limited (hereinafter referred as ICICI Bank), is a public company incorporated under the Companies Act, 1956, having its Registered Office at Near Chakli Circle, Old Padra Road, Vadodra - 390 007. 4. Mr. Rishi Thakur Legal Manager of the applicant duly authorized through Power of Attorney dated 4th May, 2017 and Board Resolution dated 27th October , 2017 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. Copy of the Power of Attorney dated 4th May, 2017 and Board Resolution dated 27th October, ....
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....resaid, a master facility agreement dated 29 September 2005 was entered into between the Corporate Debtor and the Applicant with respect to the enhanced WC Facility of INR 257.0 million (Indian Rupees Two Hundred and Fifty-Seven Million) (Master Facility Agreement-II). 9. It is submitted that while working capital facility of INR 250.0 million (Indian Rupees Two Hundred and Fifty Million) was secured by way of charge over the assets of the Corporate Debtor and the Guarantors/third party security providers, the derivative facility of INR 7.0 million was an unsecured facility. 10. Further, by way of a credit arrangement letter dated 13 June 2006, the WC Facility was enhanced from INR 257.0 million (Indian Rupees Two Hundred and Fifty-Seven Million) to INR 407.0 million (Indian Rupees Four Hundred and Seven Million), whereby the bank guarantee facility was enhanced from INR 250.0 million to INR 400.0 million and the derivative facility of INR 7.0 million remained unchanged. Pursuant to the above, a master facility agreement dated 12 December 2006 was entered into between the Corporate Debtor and the Applicant with respect to the enhanced WC Facility of INR 407.0 million (Indian ....
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....es Seven Hundred and Fifty Million) (Supplemental and Amendatory Agreement-I). The WC Facility of INR 750.0 million was renewed by way of a credit arrangement letter dated 16 July 2013. 15. Subsequently, by way of a credit arrangement letter dated 15 January 2015, the WC Facility of INR 750.0 million was further reduced to INR 681.3 million. Accordingly, the Master Facility Agreement-VI was amended by way of supplemental and amendatory agreement dated 28 February 2015. 16. It has been stated in the application that the WC Facilities of INR 681.3 million is secured by charge over assets of third parties/Guarantors, apart from the charge created over the assets of the Corporate Debtor. 17. Lastly by way of a Credit Arrangement Letter dated 30 January 2017, the WC Facility of INR 681.3 million was reduced to INR 616.6 million. It has been submitted that the WC Facility was utilized by the corporate debtor on various dates. 18. However, the Corporate Debtor started defaulting in payment of the WC Facilities from May, 2017 and due to continued defaults in making payments of the amount owed to the Applicant, the account of the Corporate Debtor was classified as a Non-Performi....
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....ial 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 can clearly be termed as 'Financial Creditor' so as to prefer the present application under Section 7 of the Code. 29. It is also the case of the respondent that no sum is due or payable at this stage. It is alleged that there is no debt under Section 3(11) of the IBC, 2016 as no amount is due or payable by the respondent and there has been material discrepancy in the quantum of debt claimed. It is alleged that the Applicant has failed to place any evidence on record that the claimed amount is due or payable by the respondent. 30. In this regard the applicant in its rejoinder has submitted that the respondent has not disputed the existence of debt and has not challenged any of the financial documents, facility agreements, deed of Guarantee and deed of Hypothecation executed with the financial creditor. It is further stated that the respondent in its reply has not raised any challenge to the computation of default....
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....ables. It is submitted that the respondent has taken constant efforts to stabilize the company by requesting the banks to restructure the loan and in this regards the restructuring plan has also been submitted. It is contended that the Restructuring Proposal was submitted to lenders in October 2017 but owing to the changes of the RBI guidelines in February, 2018, the proposal was revised and resubmitted on 16.05.2018 and with further discussions with lenders, the proposal was again resubmitted on 04.07.2018 to all the lenders including the Applicant. However, no further action has been taken place since then. The respondent has sought for more time to repay the loan in the light of long-term growth expectation for the industry. 36. 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 extend time indefinitely or to defer the prayer of the applicant financial creditor for admission of Sect....
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....he purview of 'Financial Debt' but also the applicant can clearly be termed as 'Financial Creditor' so as to prefer the present application under Section 7 of the Code. 42. 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: i. Default has occurred. ii. Application is complete, and iii. No disciplinary proceeding against the proposed IRP is pending. 43. Hon'ble Supreme Court in the case of Mobilox Innovations (P.) Ltd. v. Kirusa Software Private Limited reported in AIR 2017 SC 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) 44. 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 h....
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....tribunal, arbitration panel or other authority; (b) transferring, encumbering, alienating or disposing of by the 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." 50. 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)(....