TaxTMI 
TaxTMI 
2019 (4) TMI 1732
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....lution Process has been prayed for, was incorporated on 04.02.2003 having its registered office at C-220, 2nd Floor, Savitri Nagar, New Delhi - 110017. 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 Indian Overseas Bank (hereinafter referred as IOB), is a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 having its Registered Office at 763, Anna Salai, Chennai 600002, India. 4. Mr. M. Ravindran Menon authorized representative and working as Assistant General Manager of the applicant, 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. 5. The applicant has proposed the name of Mr. Ajit Kumar, for appointment as Interim Resol....
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....ebtor to comply with the repayment of the principal and interest dues, the Financial Creditor was constrained to issue a notice dated 24.04.2017 under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 to the Corporate Debtor & its guarantors both personal guarantors and corporate guarantors but inspite of the notice they failed to clear the unpaid debt/liability. 9. The Financial Creditor has also placed on record certificates of charge creation/modification from Registrar of Companies in favour of the Financial Creditor for the aforesaid financial facilities availed by the Corporate Debtor. 10. The Financial Creditor also placed on record a list of all the financial facilities granted by the Financial Creditor to the Corporate Debtor along with the copies of the said Financial Contracts. 11. In Part V of the petition the Financial Creditor has mentioned the particulars of the documents and records that substantiate the factum of the various facilities/loans disbursed and the amount claimed to be in default. 12. The precise case of the Petitioner is that the total amount in default due to the financial cred....
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....renew the sanction amount timely, which eventually laid to the wrongful declaration of the account of the Respondent as NPA. 10. Wrongful levy of interest by the Financial Creditor done solely to penalize the Respondent. The rate of interest charged was gross and penal in nature. 11. The initiation of proceedings under the SARFAESI Act as done by the Financial Creditor before the Ld. Debt Recovery Tribunal-II, New Delhi was malafide and in collusion with Mr. Kshitij Gangwal. 12. The Financial Creditor failed to effectively consider the one time settlement (OTS) proposals as given by the Respondent. The Bank has further illegally and arbitrarily threatened the Respondent to declare it as a wilful defaulter. 13. The Respondent has suffered various losses due to the illegal actions committed by the Financial Creditor. 14. No debt amount or any dues are payable in favour of the Financial Creditor and against the Respondent since no default has been committed on the part of the Respondent. 15. The petition filed by the Financial Creditor is not maintainable since the present factual matrix would require adjudication by the Civil Court of all the claims and counter claims. Th....
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....ing the Corporate Insolvency Resolution Process. 19. There is a vital document placed on record namely Power of Attorney (at pgs. 24-26 of the application) signed and executed by two Directors of the Bank namely Mr. Budur A. Venugopal and Dr. S. Vijayalakshmi and further countersigned by the General Manager of the Bank establishing authority in favour of Mr. Ravindran Menon, Assistant General Manager to file the present application. Clause 12 thereof clearly authorized the power of attorney to act on behalf of the Bank in all matters incidental to or arising out of the bankruptcy or insolvency or any composition or arrangement with the creditors. In pursuance thereof, he has signed power of attorney, pleadings and other papers. Even otherwise the Power of Attorney is a widely worded document and it has various clauses empowering the attorney to file any proceedings before Courts or any other fora. Therefore, it is established that the petition has been filed by a person authorized in accordance with law. The affidavit and the vakalatnama have also been signed by the aforesaid officer. In view thereof, we do not find any substance in the objection raised on behalf of respondent. 2....
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.... of entries in a banker's books in accordance with the Banker's Books Evidence Act, 1891 has been placed before us (at pg. 568) certifying that the statements of accounts filed along with the application are maintained by it in their ordinary course of business. Besides the Financial Creditor has also filed the balance sheet of the Respondent Company for the year ending 31.03.2017, in which the Respondent Company has clearly acknowledged its default and its indebtedness towards the financial creditor. In any case no serious dispute with regard to the amount payable has been raised before us. 24. It is thus seen that the Financial Creditor has placed on record voluminous and overwhelming evidence in support of the claim as well as to prove the default. 25. It is pertinent to mention here that the Code requires the Adjudicating Authority to only ascertain and record satisfaction in a summary adjudication as to the occurrence of default before admitting the application. The material on record clearly goes to show that respondent had availed the loan facilities which were duly disbursed and it has committed default in repayment of the outstanding loan amount. 26. As regards allegati....
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.... financial debt. 30. Hon'ble National Company Law Appellate Tribunal in the case of Ranjit Kapoor v. Asset Reconstruction Co. (India) Ltd. in [Company Appeal (AT) (Insolvency) No. 410 of 2018, dated 30-10-2015] has held that "the provision of NPA relates to SARFAESI Act, 2002 and has nothing to do with Code". Therefore, the objection of the Respondent that the Financial Creditor has wrongly declared the account as NPA, cannot be a ground to reject the application preferred by Financial Creditor under Section 7 of the Code, there being default in payment of financial debt. 31. In connection with the objection regarding pendency of proceedings, it is well settled that the pendency of DRT proceedings and initiation of action under SARFAESI Act cannot be an impediment or a bar to initiate the Corporate Insolvency Resolution Process under Section 7 of the Code. 32. Learned counsel for the Corporate Debtor has then drawn our attention to the RBI Circular dated 12.02.2018 [Annexure-A, pgs. 7-26 attached with C.A. No. 1185(PB)/2018]. It has been submitted that the act of the Financial Creditor is discriminated against the Respondent wherein it has adopted a pick and choose approach thou....
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....sofar as the application of the impugned circular is concerned. It is very difficult to segregate the non-banking financial institutions from banks so as to make the circular applicable to them even if it is ultra vires insofar as banks are concerned. For these reasons also, the impugned circular will have to be declared as ultra vires as a whole, and be declared to be of no effect in law. Consequently, all actions taken under the said circular, including actions by which the Insolvency Code has been triggered must fall along with the said circular. As a result, all cases in which debtors have been proceeded against by financial creditors under Section 7 of the Insolvency Code, only because of the operation of the impugned circular will be proceedings which, being faulted at the very inception, are declared to be non-est." 36. A perusal of the aforesaid para shows that all the cases in which debtors have been proceeded against by the financial creditors under Section 7 of the Code, 2016, only because of the operation of the impugned circular that the proceedings would be declared to be non-est. A glance on the aforesaid circular makes it patent that the circular dated 12.02.2018 w....
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....ion 4 of the Code and the application under sub section 2 of Section 7 is complete; and no disciplinary proceedings are pending against the proposed Interim Resolution Professional. Thus, the application warrant admission as it is complete in all respects. 40. As a sequel to the above discussion, this petition is admitted and Mr. Ajit Kumar, 1A, Sanskriti Apartments, GH-22, Sector 56, Gurgaon-122011, Registration number IBBI/IPA-003/IP-N00062/2017-18/10548, email - id [email protected] is appointed as an Interim Resolution Professional. 41. In pursuance of Section 13 (2) of the Code, we direct that Interim Insolvency Resolution Professional to make public announcement immediately with regard to admission of this application under Section 7 of the Code. The expression 'immediately' means within three days as clarified by Explanation to Regulation 6 (1) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. 42. We also declare moratorium in terms of Section 14 of the Code. A necessary consequence of the moratorium flows from the provisions of Section 14 (1) (a), (b), (c) & (d) and thus the following prohibitions are imposed which must be followed b....