2019 (7) TMI 508

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....ng its registered office at The Ruby, 10th Floor, 29, Senapati Bapat Marg, Dadar (West), MUMBAI 400 028 Maharashtra State having identification number U65999MH2002PLC134884. 3. M/s. GPT Steel Industries Limited is a company incorporated under the Companies Act, 1956 on 17th October, 2003, having identification No. U27104GJ2003PLC043070 having its registered office at 102, Dev Shruti Complex, Nr. HCG Medisurge Hospital, Mithakhali, Ellisbridge, AHMEDABAD 380 006, Gujarat State (Gujarat). That, the authorised share capital of the respondent company is Rs. 25,50,00,000/- and paid up capital is Rs. 25,23,00,000/-. 4. It is submitted by the applicant company that, total amount of Rs. 725,52,70,272/- (Rupees seven hundred twenty-five crores fifty-two lakhs seventy thousand two hundred seventy-two only) is outstanding against the debts owed by the respondent company to State Bank of India which were transferred in favour of the applicant by way of an assignment agreement dated 27.03.2014. Details of the loan sanctioned, disbursed by the bank and outstanding thereof are placed at Annexure -2 to the application which is reproduced hereunder: - Nature of facility Amount Date o....

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....erm loan, cash credit and EPC facilities 496-497 24 W Revival letter dated 10.11.2009 and resolution passed on 10.11.2009 regarding EPC facility 498-499 25 X Revival letter dated 27.05.2010 and Board of Directors of the Corporate debtor at the meeting held on 27.05.2010 regarding working capital and term loan facilities 500-501 26 Y Deed of Additional security dated 20.09.2006 502-520 27 Z Notice dated 29.09.2010 issued by advocate for the applicant on the corporate debtor 521-531 28 AA Form No. 8 filed before RoC 532-548 29 BB CIBIL report 549-631 30 CC Statement of accounts along with IT certificate of the applicant 632-645 31 DD Annual report for FY 2015-16 646-680 32 II Affidavit in support of Insolvency Application 681-693 33 III Written communication by IRP as set out in form No. 2 694 7. On notice being issued, respondent/corporate debtor filed affidavit in reply on 28.12.2018 denying the contentions raised in the application. The respondent has raised the following objections: - (i) The power of attorney executed by the applicant company in ....

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....e part of the corporate debtor, it has no other option but to admit the application in absence of any other infirmity." 10. The scheme of the code is to ensure that when a default takes place, in the sense that a debt become 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 become due and payable, which includes non-payment of even part thereof or an instalment amount. The meaning of 'debt' as per Section 3(11) is liability or obligation in respect of a 'claim' and the meaning of 'claim', as per Section 3(6) means a right to payment even if it is disputed. The Code gets triggered the moment default is rupees one lakh or more (Sec. 4). 10. Initiation of Corporate Insolvency Resolution Process under Section 7 or 9 do not amount to recovery proceedings, the question of deciding the claim which may include the interest by the Adjudicating Authority does not arise for the purpose of triggering the Corporate Insolvency Resolution Process. 11. To decide the issue, it is desirable to refer to the decision of Hon'ble Supreme Court in the matter of Innoventive Industries Ltd.....

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....application is complete and the Adjudicating Authority is satisfied that there is a debt due to the Financial Creditor and there is a default on the part of the corporate debtor, it has no other option but to admit the application in absence of any other infirmity. 13. It is clear that the application being complete and in absence of any other infirmity, and the corporate debtor having not denied the debt and default, the adjudicating authority cannot reject the application preferred by the appellant company. At this juncture it is pertinent to refer to the following documents wherein the respondent has admitted the debt: - (i) Letter dated 01.12.2010 addressed to consortium of banks proposing for one-time settlement of loans availed from six banks; (ii) Letter dated 23rd October, 2012 addressed to State Bank of India requesting the respondent company to allow continuing operations and to covert 75% of principal amount as Redeemable Preference Shares; (iii) Letter dated 08.03.2013 addressed to State Bank of India proposing one-time settlement; (iv) Letter dated 29.05.2015 addressed to consortium of banks to review the status of one-time settle....