2019 (9) TMI 993

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....2016 (in short, I&B Code) against Rohit Ferro Tech Limited- Corporate Debtor to start Corporate Insolvency Resolution Process (in short, "CIRP") of the Corporate Debtor as the Corporate Debtor allegedly committed default in paying the financial debt of Rs. 1792,12,74,701/-. 2. The following facts are not in dispute: 2.1 Under various loan agreement credit facilities, SBI granted and disbursed loan to the corporate debtor. The Corporate Debtor did not repay the loan as agreed and committed default in paying the sum. Its account became NPA. At the end of July, 2018, sum of Rs. 1792,12,74,701/- is set to be due against the corporate debtor. Since the corporate debtor committed default in paying the debt. This application is filed to start CI....

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.... lakh and (ii) there is a default on their part in paying the debt. 5. The proceeding was challenged on various grounds, which are as follows: (a) Ld. Sr. Counsel, Mr. Kapur appearing for the corporate debtor submitted that corporate debtor does not insist this authority to record the finding on some of disputed facts, i.e., whether authorisation to file proceeding is properly issued in favour of the Assistant General Manager? (b) What is the effect of winding up petition? Pending and admitted against the corporate debtor in the Hon'ble High Court and (c) Information Utility certificate is not produced by the bank. 6. Ld. Sr. Counsel submitted that this proceeding is filed by the State Bank of India on the basis of circular dated 12....

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....y to give finding whether AGM was properly authorised to file this proceeding or whether the proceeding is maintainable for winding up petition is pending against the corporate debtor. His trace was on the point that this proceeding is not maintainable in view the Hon'ble Supreme Court Judgment in case of Dharani Sugars & Chemicals Ltd. (supra). According to the Ld. Sr. Counsel, SBI filed this proceeding on the basis of RBI circular dated 12.08.2018. The Circular declared to be ultra vires and consequently all proceedings initiated on the basis of this circular held to be non est. 9. The real point in dispute appears to be whether SBI initiated this proceeding on the basis of RBI circular dated 12.02.2018 or it is independent proceeding. ....

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....se contained in its circular dated 12.02.2018. 12. In case of Dharani Sugars & Chemicals Ltd. (supra), the Apex Court clearly held that, "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." 13. The Hon'ble Supreme Cou....