TaxTMI 
TaxTMI 
2019 (7) TMI 637
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....before this Bench, under Section 10 of the Code, seeking C.I.R.P for itself. 2. The Corporate Applicant/Debtor, i.e. M/s. Ace Worldwide Tours Ltd., is a Company, incorporated on 13th September, 2011 and registered under the Companies Act, 1956, bearing CIN: U63040GJ2007PLC051318. The registered office of the company is situated at F-22-23-24, Jolly Arcade, Ghod Dod Road, Surat-395 007, Gujarat. The Nominal Share Capital of the Company is Rs. 16,00,00,000/- (Rupees Sixteen Crores only) and Paid-Up Share Capital of the Company is Rs. 12,67,04,560/- (Rupees Twelve Crores Sixty Seven Lacs Four Thousand Five Hundred Sixty only). 3. The present application is filed and signed by Mr.Raju J. Choksi, being the Managing Director of the corporate of the applicant company. A perusal of the Company's Board Resolution, dated 10th February, 2018, shows that by such resolution Mr. Raju J Choksi, Managing Director, or Mr. Bharat Choksi, Director, are duly authorized to file the present IB Petition seeking initiation of the Corporate Insolvency Resolution Process for the Corporate Applicant/Debtor in terms of Section 10 of the Insolvency and Bankruptcy Code, 2016. 4. The Part-Ill of the applicati....
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....en issued Demand Notices on 03.11.2015 and on 03.12.2015 by insisting for making repayment of dues. 9. It is further reported that the above stated Financial Creditor - IDBI has also initiated a proceeding, under Sections 13(2) and 13(4) of the SARFAESI Act, against the Corporate Applicant and issued notices. 10. That apart, some of the operational creditors have also issued letter/ notice to the corporate applicant/ corporate debtor seeking repayment of their dues. It is stated that United Credit Solutions Pvt. Ltd. as well as the Bombay Stock Exchange (BSE) have issued Demand Notices to the present Corporate Debtor company. A copy thereof is annexed with the present IB petition. 11. The corporate applicant/debtor has also enclosed a copy of its audited financial statements for the years 2015-16 and 2016-17 and the provisioned financial statements for period from 01.04.2017 to 09.03.2018, as Annexure 11A, 11B and 11C, respectively. 12. In the present application, the Corporate Applicant has proposed the name of Mr.Narayan Gajanan Vidvans, as an Interim Resolution Professional (I.R.P), who also duly informed about his willingness to accept the assignment and to act as the IRP i....
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....bjections, contending such:- 16.1 the present application filed by the applicant is not maintainable before this Adjudicating Authority. It is alleged that the applicant intends to thwart the recovery action initiated by it under Section 13 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act,2002 (SARFAESI Act), then it has been contended that if the applicant feels aggrieved with the action initiated under the SARFAESI Act. It has an alternative efficacious remedy under the said Act to raise its grievance against the respondent. In support of its objection, the IDBI has placed reliance, on a decision of the Hon'ble Supreme Court in the matter of United Bank of India v. Satyawati Tandon wherein it has been pleased to observe as such:- "In our view while dealing with the applications involving challenge to the action for recovery of the public dues etc., the High Court must keep in mind that the legislations enacted by the Parliament and State Legislatures for recovery of such dues are code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasi-ju....
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....lbhai Choksi, Smt. Nileshaben Bharatbhai Choksi, Smt. Rekhaben Anilbhai Choksi, Smt. Suhangini Jayesh Choksi and Smt. Mala Raju Choski stood as personal guarantors of the credit facilities sanctioned by it. 16.5 It is contended that the borrowers as well as guarantors have executed various security documents for obtaining the credit facilities, i.e., Loan Facility Agreement, Deed of Hypothecation, Undertaking to Create Supplementary Deed of Hypothecation, Deed of Guarantee / Guarantee Agreement, Undertaking of Borrower and Undertaking of Guarantors, Undertaking to Create Mortgage, Demand Promissory Note, Registered Memorandum of Deposit of Title Deeds. 16.6 It is further alleged that the corporate applicant never paid actual amount of instalments and whatever was paid, was irregular and due to the non-payment of monthly instalments, the account of corporate applicant company has been classified as Non-Performing Assets (NPA) on 30.08.2015 as per the guidelines of Reserve Bank of India. The recall notice was also issued to the corporate applicant as well as to its guarantors for making repayment of the entire outstanding amount. 16.7 It is further contended that the borrowers ....
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....ts for such period as maybe specified; and (b) the resolution professional proposed to be appointed as an interim resolution professional; and of the corporate debtor, as the case maybe, approving filing of the application. (4) The Adjudicating Authority shall, within a period of fourteen days of the receipt of the application, by an order- (a) admit the application, if it is complete (b) reject the application, if it is incomplete Provided that Adjudicating Authority shall, before rejecting an application, give a notice to the applicant to rectify the defects in his application within seven days from the date of receipt of such notice from the Adjudicating Authority. 5 The corporate insolvency resolution process shall commence from the date of admission of the application under sub-section (4) of this section." 19. On the aforesaid provisions of Section 10, the Hon'ble NCLAT in its decision in the case of Unigreen Global (P.) Ltd. v. Punjab National Bank, New Delhi [2018] 145 SCL 272 has pleased to interpret the same, by observing as such; "Section 10 does not empower the Adjudicating Authority to go beyond the records as prescribed under Section 10 and the inform....
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....ial debt owed to any financial creditor of the corporate debtor - it need not be a debt owed to the applicant financial creditor. Under Section 7(2), an application is to be made under sub-section (1) in such form and manner as is prescribed, which takes us to the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. Under Rule 4, the application is made by a financial creditor in Form 1 accompanied by documents and records required therein. Form 1 is a detailed form in 5 parts, which requires particulars of the applicant in Part I, particulars of the corporate debtor in Part II, particulars of the proposed interim resolution professional in part III, particulars of the financial debt in part IV and documents, records and evidence of default in part V. Under Rule 4(3), the applicant is to dispatch a copy of the application filed with the adjudicating authority by registered post or speed post to the registered office of the corporate debtor. The speed, within which the adjudicating authority is to ascertain the existence of a default from the records of the information utility or on the basis of evidence furnished by the financial creditor, is important Thi....
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....in the Hon'ble Supreme Court observed as "The moment the adjudicating authority is satisfied that a 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" 21. In an application under Section 10, the financial creditor' or 'operational creditor', may dispute that there is no default or that debt is not due and is not payable in law or in fact. They may also oppose admission on the ground that the Corporate Applicant is not eligible to make application in view of ineligibility under Section 11 of the I & B Code. The Adjudicating Authority on hearing the parties and on perusal of record, if satisfied that there is a debt and default has occurred and the Corporate Applicant is not ineligible under Section 11, the Adjudicating Authority has no option but to admit the application, unless it is incomplete, in which case the Corporate Applicant is to be granted time to rectify the defects. 22. Section 10 does not empower the Adjudicating Authority to go beyond the records as prescribed under Section 10 and the information....
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....rporate Debtor and other proceeding cannot proceed further in any Court or Tribunal or Authority in view of order of 'moratorium' as maybe declared under Section 13 and prohibition that may be imposed under Section 14 of I & B Code. 25. Similarly, if any action has been taken by a 'Financial Creditor' under Section 13(4) of the SARFAESI Act, 2002 against the Corporate Debtor or a suit is pending against Corporate Debtor under Section 19 of DRT Act, 1993 before a Debt Recovery Tribunal or appeal pending before the Debt Recovery Appellate Tribunal cannot be a ground to reject an application under Section 10, if the application is complete. 26. Any proceeding under Section 13(4) of the SARFAESl Act, 2002 or suit under Section 19 of the DRT Act, 1993 pending before Debt Recovery Tribunal 11 Company Appeal (AT) (Insolvency) No. 174 of 2017 or appeal pending before Debt Recovery Appellate Tribunal cannot proceed in view of the order of moratorium as maybe passed. 32. In view of the provisions aforesaid, we hold that, if any winding up proceeding has been initiated against the Corporate Debtor by the Hon'ble High Court or Tribunal or liquidation order has been passed, in such case t....