TaxTMI 
TaxTMI 
2019 (6) TMI 1154
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.... of India, Petitioner / Financial Creditor under Section 7 of Insolvency and Bankruptcy Code, 2016 (I&B Code) for initiation of Corporate Insolvency Resolution Process (CIRP) against Jet Airways (India) Limited, Corporate Debtor /Respondent. 2. There are two other petitions filed under section 9 of I&B Code bearing CP no 1968/2019 and 1938/2019 filed by Gaggar Enterprises Private Limited and Shaman Wheels Private Limited respectively claiming to be Operational Creditors of the Corporate Debtor. All these three petitions that are listed today seek to initiate CIRP against the same Corporate Debtor and are therefore being dealt with vide this common order. 3. This CP 2205/2019 under section 7 of the I&B Code is filed on 17th June 2019, but another petition filed earlier U/S 9 of the Code was already listed for argument on 20.06.2019, wherein notice to the Corporate Debtor has been served. Therefore, this petition was also listed for hearing on the same date. 4. The Petitioner granted a term loan of Rs.1090 Cr. vide term loan agreement dated 08.09.2016. It is stated that the Financial Creditor and various other lenders of the Corporate Debtor executed Common Loan Agreement (CLA)....
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....19 has been taken as the date of crystallisation of this default (i.e. 30 days from 15.05.2019). 9. The Petitioner has stated that the loan facilities granted by it to the Corporate Debtor were secured by various security interest created in favour of the Petitioner. The Petitioner has given the details of security held by it or created for its benefits in Part V of Form 1 of this petition. The loan was secured by first ranking pari-passu charge on both present and future Domestic Credit Card Receivables;first ranking pari-passu charge over certain assets including inventories, receivables, ground support vehicles, spares and Data processing Equipments, etc.; and share pledge agreement dated 04.4.2019 for pledge of shareholding of the Corporate Debtor in Jet Privilege Pvt. Ltd. and 10.4.2019 for pledge of shareholding of Mr. Naresh Kumar Goyal in the Corporate Debtor. The copies of various certificates of registration of charges issued by the Registrar of Companies in respect of the security interests created in favour of the Financial Creditor are annexed with the Petition. 10. The Petitioner has annexed repayment history report of the Corporate Debtor issued by Central Reposi....
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.... dated 24.06.2016, the Term Loan Agreement dated 08.09.2016, the Common Loan Agreement dated 11.04.2018, the Additional Term Loan Agreement dated 11.04.2018, the Working Capital Sanction Letter dated 20.11.2012, the Working Capital Consortium Agreement dated 12.12.2014 and the deed of rectification dated 12.12.2014, the First Supplemental Working Capital Consortium Agreement Dated 23.09.2016, the Second Supplemental Working Capital Consortium Agreement dated 22.02.2018 and the Facility Agreement dated 12.04.2019. The Petitioner has also annexed copies of various certificates of registration of charge issued by the Registrar of Companies in respect of the security interests created in favour of the Financial Creditor. These agreements and certificates are not disputed, which establishes the existence of the debt. 18. The CRILC report dated 31.05.2019 mentions that the Petitioner has reported on 08.02.2019 that the Corporate Debtor has caused a default in repayment on 02.02.2019. The CRILC report is annexed to the Petition as Exhibit- 8. The CRILC Report reflects that the account of the Corporate Debtor with the Petitioner has been classified as sub-standard. These documents along ....
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....the judgment of an insolvency court of any Foreign Nation. Thus, even if the judgment of Foreign Court is verified and found to be true, still, sans the relevant provision in the I&B Code, we cannot take this order on record. 22. It is pertinent to mention that Mr. R. Mulder, Administrator in Bankruptcy of Jet Airways (India) Ltd in Noord Holland District Court has filed a written submission in the capacity of Intervenor stating that vide judgement dated 21.5.2019, Hon'ble Noord Holland District Court, Trade, Sub-district and Insolvency, passed an order of bankruptcy against Jet Airways (India) Limited (hereinafter, "Corporate Debtor") in Petition Number: C/ 15/288017/ FT RK 19/ 540R as per the provisions of Bankruptcy Act prevailing in the Netherlands. The Hon'ble Court appointed Mr R. Mulder as the Administrator in bankruptcy of the Corporate Debtor by the said Judgment. A copy of the said judgement (translated. version) is enclosed. 23. It is further contended by the applicant Intervener that on the appointment as the Administrator of the Corporate Debtor, Mr R. Mulder informed the Corporate Debtor and the Chairman, State Bank of India of the initiation of bankruptcy pro....
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....ed by the court of competent jurisdiction is final and binding on the Corporate Debtor and lenders. Despite notice (supra), the Corporate Debtor and State Bank of India have not filed any appeal against the judgement, till date. g. Two parallel proceedings are likely to obstruct smooth and uninterrupted, sustainable and certain proceedings. Also, they are likely to stand in the way of expeditious outcome of the process. 25. The objections raised by the Intervener is based on the order passed by the Noord Holland District Court, Netherland. 26. It is pertinent to mention that Section 234-235 of IBC, 2016 deals with the matter regarding the agreement with foreign countries and the letter of request to a country outside India in the insolvency Resolution Process where the assets of the corporate debtor exist outside India. The provision is given as under: " 234. Agreements with foreign countries. - (1) The Central Government may enter into an agreement with the Government of any country outside India for enforcing the provisions of this Code. (2) The Central Government may, by notification in the Official Gazette, direct that the application of provisions of this Code i....
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....urt is a nullity in the eye of law and such order cannot be given effect. 29. The question of running two parallel proceedings does not arise. The order passed by Noord Holland District Court, Netherland for the company registered in India is nullity ab-initio. 30. It is also pertinent to mention that Section 234 of IBC, 2016 is not yet notified, which provides the application of provisions of this Code in relation to assets or property of corporate debtor or debtor, including a personal guarantor of a corporate debtor, as the case may be, situated at any place in a country outside India with which reciprocal arrangements have been made. 31. In this case, the Indian Government has no such reciprocal arrangement with the Government of Netherland. Therefore, none of the courts has any jurisdiction to pass an order under IBC, where the assets and properties of the Corporate Debtor are situated in a country outside their country. 32. Based on the objections filed by the Intervener, proceedings of Insolvency, in this case, can't be kept pending. 33. It is also important to the point out that this matter is of National Importance. The Corporate Debtor company has more than 20,0....
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....recovery rate is primarily about identifying and combating the sources of delay. xxx xxx xxx xxx Objectives The Committee set the following as objectives desired from implementing anew Code to resolve insolvency and bankruptcy: 1. Low time to resolution. 2. Low loss in recovery. 3. Higher levels of debt financing across a wide variety of debt instruments. The performance of the new Code in implementation will be based on measures of the above outcomes." 36. It is also important to note the scheme of the I&B Code as observed by the Hon'ble Supreme Court in Innoventive Industries Ltd. vs ICICI Bank and Ors., AIR2017SC 4084: "27. The Code schemes to ensure that when a default takes place, in thesense that a debt becomes due and is not paid, the insolvency resolution process begins. Default is defined in Section 3(12) in very wide terms as meaning non-payment of a debt once it becomes due and payable, which includes non-payment of even part thereof or an instalment amount. For the meaning of "debt", we have to go to Section 3(11), which in turn tells us that a debt means a liability of obligation in respect of a"claim" and for the meaning of "claim", we have t....
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....occurred, that the corporate debt or is entitled to point out that a default has not occurred in the sense that the "debt", which may also include a disputed claim, is not due. A debt may not be due if it is not payable in law or in fact. The moment the adjudicating authority is satisfied that default has occurred, the application must be admitted unless it is incomplete, in which case it may give notice to the applicant to rectify the defect within 7 days of receipt of a notice from the adjudicating authority. Under Sub-section (7), the adjudicating authority shall then communicate the order passed to the financial creditor and corporate debtor within 7days of admission or rejection of such application, as the case may be." 37. In light of the above scheme and objects of the I&B Code and the stakes involved in the Corporate Debtor, the prompt disposal of this application is essential, and any further delay or deferment, in this case, would be against the objective of the I&B Code. 38. The Petitioner has proposed the name of Mr Ashish Chhawchharia, a registered insolvency resolution professional having Registration Number [IBBI/IPA-001/IP-P00294/2017-18/10538] as Interim Resolu....
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....ontinuing, shall not be terminated or suspended or interrupted during the moratorium period. III. That the provisions of sub-section (1) of Section 14 of I&B Code shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator. IV. That the order of moratorium shall have effect from the date of this order till the completion of the corporate insolvency resolution process or until this Bench approves the resolution plan under sub-section (1) of section 31 of I&B Code or passes an order for the liquidation of the corporate debtor under section 33 of I&B Code, as the case may be. V. That the public announcement of the corporate insolvency resolution process shall be made immediately as specified under section 13 of I&B Code. VI. That this Bench at this moment appoints Mr Ashish Chhawchharia, a registered insolvency resolution professional having Registration Number [IBBI/IPA-001/IP-P00294/2017-18/10538] as Interim Resolution Professional to carry out the functions as mentioned under I&B Code, the fee payable to IRP/RP shall comply with the IBBI Regulations/Circulars/Directions issued in this regard 40.....