TaxTMI 
TaxTMI 
2019 (9) TMI 960
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....tion to Adjudicating Authority) Rules, 2016, ("IB Rules" for short) styling itself as 'Financial Creditor' for initiation of Corporate Insolvency Resolution Process in respect of Neesa Leisure Limited, treating it as 'Corporate Debtor'. 2. Respondent Company was originally incorporated as a Private Limited Company under the Companies Act, 1956 on 29.11.1998 and thereafter converted into Limited Company on 15.12.2005 with its Registered Office at Cambay Square, X-22, 23 & 24, G.I.D.C Electronic Estate, Sector 25, Gandhinagar 382 044. The Authorised Share Capital of the Respondent Company is Rs. 1,35,00,00,000/-. The Paid-Up Share Capital of the Respondent Company is Rs. 1,07,71,67,660/-. The Respondent Company is engaged in the business of owning, operating and managing hotels and resorts, providing club and vacation ownership services and hospitality education. 3. Respondent Company approached ICICI Bank Limited in 2010 for grant of Term Loan of Rs. 140.00 crores towards refinancing of existing Term Loans availed by the Respondent Company from other lenders to the extent of Rs. 108.00 crores and the remaining amount of Rs. 32.00 crores towards the additional c....
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....ndent Company also executed Agreement of Guarantee, Promoter's Undertaking and Non-Compete Undertaking. It is stated that the Term Loan granted by the ICICI Bank Limited is secured by Hypothecation of entire movable assets more particularly described in Part A of Schedule of O.A. and mortgage of immovable properties more particularly described in Part B of the Schedule of O.A filed with DRT and pledge of shares owned by the Chairman and the Managing Director and the Director of the Respondent Company and the guarantees given by the Chairman and the Managing Director and the Director of the Respondent Company. 6. It is submitted that inspite of more than sufficient time given by the lenders, the Respondent Company failed and neglected to repay the loan. It is further submitted that the Respondent Company is guilty of committing breach of various terms and conditions of the restructuring package and ultimately CDR Empowered Group took a decision to exit from approved restructuring package in its meeting held on March 18, 2015 and the said decision was confirmed by the CDR vide its letter dated March 23, 2015. 7. It is stated that ICICI Bank Limited has assigned its right pe....
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....nt Company Shri Jigar Dalai, is not authorised to give any further authority to any person to do the acts specified in Power of Attorney on behalf of the Financial Creditor. While the Power of Attorney is specifically in favour of Mr. Jigar Dalal and while the application also shows the name of Mr. Jigar Dalai, Vice president and Group Head Business Group of the Applicant Company, as the person authorized to act on behalf of the Financial Creditor, it is required to be noted that the institution of the proceedings is sought to be done by some Mr. Piyush Kumar Gupta, Chief Manager of the Financial Creditor and there is no authorization in favour of Mr. Piyush Kumar Gupta. (e) Form No. 2 written communication from the proposed IRP is not submitted. (f) The minutes of the meeting of the Joint Lenders Meeting dated 08.06.2017 are not annexed with the application. (g) There is misstatement of fact in the application in as much as the "Funding to the Corporate Debtor is made by two consortiums, i.e. the consortium led by ICICI Bank Limited (Now ARCIL) and consortium led by Axis Bank Ltd. Whereas in the JLF Meeting held on 08.06.2017, it was resolved to initiate....
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....(d) The fourth objection is on the authorization of the officer who has filed this petition. The Financial Creditor has filed an additional affidavit dated 21.11.2017 and thereafter 28.2.2019. The Financial Creditor has explained in its first affidavit as to in what circumstance Shri Piyush Kumar Gupta, the Chief Manager of Petitioner, affirmed the petition and filed the same before the Registry. Further the petitioner Financial Creditor has filed another additional affidavit thereby placing on record a specific letter of authorization-cum-power of attorney in favour of Shri Piyush Kumar Gupta, the Chief Manager to file the present CP (IB). 11. (e) The written communication of the proposed IRP is annexed with the petition. 11. (f) The allegation of the Corporate Debtor that the minutes of JLM Dated 8.6.2017 are not annexed with the petition is unfounded. The minutes of JLM dated 8.6.2017 are already placed on record at Pg.468-469 of the Petition. Hence this objection is not maintainable. 11. (g) As far as objection contained in Para 9(g) is concerned, it is observed on perusal of the minutes of the JLM dated 8.6.2017 that State Bank of India, the consortium member did not ....
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....d neither has it raised any question on default in repayment of debt. Hence, the debt and default is admitted. The only contention of the respondent is regarding the assignment of the said debt which is already settled as per our discussion above. Therefore, the there is clear existence of a debt as defined in Section 3(11) of IBC, also there is default in this case within the meaning of Section 3(12) of IBC without any evidence of dispute with regard to the claim amount." 12.1 At this stage, it is also relevant to make a reference to judgment of Hon'ble NCLAT in the case of Lalan Kumar Singh v. Phoenix Arc (P.) Ltd. Private Limited, Company Appeal (AT) (Insolvency) No. 485 of 2018.. Para 19 and 21 which are relevant are reproduced: - "19. In the present case we find that the appellant has sought declaration that the assignment made by HSBC to 'Phoenix' as illegal, which can be raised only in a civil suit. The appellant is trying to convert the proceedings under the 'I&B Code' as civil proceedings akin to a trial which is not the legislative intent. 21. The objective of the I&B Code is to ensure reorganization and insolvency resolution of th....
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....ancial debt' within the meaning of Clause (a) of sub-section (8) of Section 5 of the IB Code. The debt is due from the Respondent Company which is registered under the Companies Act. Therefore, the Respondent Company is a 'Corporate Debtor'. 14. A perusal of the Assignment Agreement dated 30.03.2015, which is available at Page No. 305 of the application, clearly goes to show that the ICICI Bank Limited has assigned its debt to the Applicant Company which is an Asset Reconstruction Company and the same is within the knowledge of the Respondent Company. 15. Rule 4(1) of the IB Rules says, a Financial Creditor either by itself or jointly is entitled to file an application for initiation of Corporate Insolvency Resolution Process against the Corporate Debtor under Section 7 of the IB Code in Form No.1. 16. Sub-Rule (2) of Rule 4 of the IB Rules says, where the Applicant is an assignee, the Application shall be accompanied by a copy of the Assignment Deed/Agreement. In the case on hand, the Applicant is the assignee of the debt from the ICICI Bank Limited in an Assignment Agreement. The copy of the Assignment Agreement dated 30.03.2015 is filed along with the applic....
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....egorically reaffirmed by the Hon'ble Appellate Court that for the purpose of jurisdiction in respect of application filed under Section 7 of IB Code, the Adjudicating Authority is only required to satisfy itself regarding the occurrence and existence of a default of an amount equal to or exceeding Rs. 1 Lakh. No person other than the Corporate Debtor has a right to be heard. The relevant part of the said judgment reads thus: - "6. From the aforesaid decision, it is clear that the Adjudicating Authority is only to satisfy that the default has occurred and that the Corporate Debtor is entitled to point out that the default has not been occurred in the sense that the debt is not due. No other person has a right to be heard at the stage of admission of the application under Section 7 and 9 of the I & B Code including the shareholders of the personal guarantor etc." The Adjudicating Authority following the above referred judgments also made an order dated 19.11.2018 in the case of KKR Jupiter Investors (P.) Ltd. v. JBF Petrochemicals Limited thereby rejecting the intervention application filed by a third party. Para 17 of the said judgment reads thus: - "17. Thu....
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....on of credit facilities to 30.03.2015. This Adjudicating Authority considers this IA as an addition/extension of objections already made by the Corporate Debtor to the CP(IB) No. 127 of 2017. As per section 7 of IBC, petition is required to be admitted if a financial creditor is able to show debt, default and a complete application. If there is any incompleteness, the Adjudicating Authority would give a notice to the applicant to rectify the defect. In the case on hand, all the documents and the required information has been provided by the Applicant Company and no other information or documents are necessary to be produced or considered. The Financial Creditor has been able to prove the debt and default and has also filed complete application in Form-1. Reliance is placed on the judgment of Innoventive Industries Ltd's case (supra) Para 28. Accordingly, the instant IA is dismissed. 20.3 IA 474 of 2018 The Corporate Debtor has filed this IA alleging that Assignment Agreement dated 30.03.2015 signed between ICICI Bank Limited and the ARCIL is illegal and has no sanctity of law and prayed to this Bench to dismiss/reject the Company Petition No. C.P.(IB) 127 of 2017. I....
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....e of shares and the Deed of Assignment contained necessary disclosure about the invocation of pledged shares by ICICI Bank Limited. Accordingly, the instant IA stands dismissed. 20.6 IA 94 of 2019 The instant IA is filed by the Corporate Debtor alleging that the Trust created by ARCIL and ICICI Bank viz. Arcil-AST-002-I Trust and Arcil-AST-002-II Trust are not valid trusts and an illegal one till date since this Trust has not been issued registration certificate. Perusal of the Assignment Agreement dated 30.03.2015 demonstrates that ICICI Bank Limited has assigned its debts in favour of ARCIL on its own behalf and in the capacity as Trustee of the Trusts. ARCIL is an Asset Reconstruction Company duly registered u/s. 3 of SARFAESI Act with the Reserve Bank of India and the assignment of debts is as per the guidelines issued by the Reserve Bank of India. This issue has already been discussed elaborately in the foregoing paras and the IA stands dismissed in view of the Judgment of Mumbai NCLT in CP(IB) No. 1882 of 2018 in the case of ARCIL (P.) Ltd.(supra) wherein it is held that ARCIL being an assignee, falls in the definition of "Financial Creditor" as per Sec. 5(7) of I....