AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (3) TMI 1751
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....thousand four hundred twenty-five and paise three only) which includes principal amount and interest. 2. The brief facts of the case, as mentioned in the company petition, which are relevant to the issue in question, are as follows : (1) Dena Bank (herein after referred as petitioner/financial creditor) is incorporated on May 26, 1938 is a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970. (2) M/s. Kavveri Telecom Infrastructure Ltd. and others (respondent/ corporate debtor) is a company limited by shares, was incorporated on September 10, 2008 and it is engaged in Telecom business. Its authorized capital is Rs. 5,00,00,000 (rupees five crores only) paid-up share capital is Rs. 1,78,35,300 (rupees one crore seventy eight lakhs thirty five thousand three hundred only). (3) The financial creditor has sanctioned a term loan of Rs. 45 crores to the corporate debtor on December 23, 2011 subsequently, the corporate debtor defaulted on September 30, 2013 in making repayment of the loan as per the sanction terms. Consequently, the amount was classified as nonperforming asset on December 31, 2013. ....
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....he bank would be considered if the ledger balance as on the date of account becoming non-performing asset was paid. It was further informed that the corporate debtor would explore the option of selling the equipment funded by the bank to remit the proceeds to the bank provided a written approval is given by the bank, etc. (8) The corporate debtor in their balance-sheet for 2016-17 has disclosed that financial creditor, Dena Bank has granted a term-loan of Rs. 45 crores and had defaulted in payment of the loan and on the application filed before the Debts Recovery Tribunal, the Tribunal vide orders dated March 27, 2017 directed the corporate debtor to pay a sum of Rs. 52,12,49,438 with interest jointly and severally. The corporate debtor approached the High Court of Karnataka, and High Court has granted interim stay order for execution of the impugned order dated March 27, 2017. (9) The corporate debtor in their balance-sheet for the period from April 1, 2017 to March 31, 2018 filed with the Registrar of Companies has disclosed in auditor's report relating the default in the repayments of financial dues as under : (10) The company has defaulted in repa....
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....nt petition is filed within period of limitation. (13) It is further stated that the petitioner has filed O. A. No. 16/2015-Debts Recovery Tribunal-I (T. A. No. 634 of 2017 for recovery of Rs. 52,12,49,438.60 and the same was allowed by the Tribunal by an order dated March 27, 2017. That the defendants jointly and severally shall pay Rs. 52,12,49,438.60 together with interest at 16.55 per cent. per annum with monthly rests from the date of application till the date of realization. The Debts Recovery Tribunal also issued Recovery Certificate No. 2060 of 2017 on May 25, 2017. Aggrieved by the said order, the respondent has filed W. P. No. 18013 of 2017 against the financial creditor under article 226 of the Constitution of India, before the hon'ble High Court of Karnataka. Ultimately, the case was disposed of vide its order dated February 22, 2019 with a liberty to the petitioner to file an appeal under section 20 of the Recovery of Debts and Bankruptcy Act, 1993 within a period of 3 weeks from the date of receipt of certified copy of that order. It is also ordered that if any interim orders has been granted and the petitioner has complied with the condition made therein....
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....,44,425.03 as the total outstanding dues as on September 30, 2018. (18) The petitioner/financial creditor has suggested Shri B. Hariharan with Registration No. IBBI/IPA-001/IPP00380/2017-2018/10637 as IRP and he has also filed his written consent communication in Form 2, dated November 13, 2018 by, inter alia, declaring that he is a qualified resolution professional ; no disciplinary proceedings are pending against him with the IBBI or insolvency professional agency (IPA) of the ICAI, etc. (19) The petitioner/financial creditor has filed gist of document and he has also filed an application I. A. No. 131 of 2019 by enclosing the addi tional documents in support of the case. The documents are as follows : (1) Legal notice dated December 22, 2014 addressed to the corporate debtor and their reply dated January 5, 2015 thereto. (2) Letter dated March 3, 2017 of corporate debtor where in proposal for one-time settlement is submitted. (3) Letter dated June 19, 2017 of the corporate debtor. (4) Annual report 2016-17 of the corporate debtor. (5) Financial statement April 1, 2017 to March 31, 2018 of the corporate debtor. ....
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....ondent, has defaulted in paying a sum of Rs. 69,12,44,425.03 and has issued a notice under Form 3 dated October 1, 2018. (2) It is submitted that instant application made by the petitioner under section 7 of the Code, is barred by limitation, as the petitioner is seeking to initiate insolvency proceedings against the respondent, in relation to a default committed on September 30, 2013. The present proceed ings were initiated by issuing Form 3 on October 1, 2018, which is more than five (5) years after the alleged default. Thus, the, present application is time barred and liable to be rejected on this sole ground alone. (3) It is further submitted that having regard to section 238A of the IBC, 2016 which specifically states that the Limitation Act, 1963, shall apply to proceedings before this the hon'ble Tribunal, the instant proceedings are barred by limitation. Section 238A of the Code is extracted hereinbelow as follows : "The provisions of the Limitation Act, 1963 (36 of 1963) shall, as far as may be, apply to the proceedings or appeals before the Adjudicating Authority, the National Company Law Appellate Tribunal, the Debts Recovery Tribunal or th....
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....d posted the matter to March 18, 2019. (3) It is submitted that again on March 12, 2019 the petitioners' advocate served an application for producing additional information and filling additional documents to the first respondents advocate, which was pre pared on. (4) It is further to be noted that the petitioner has not pleaded regard ing as to why the interim order passed in W. P. No. 18013 of 2017 by the hon'ble High Court dated March 27, 2017 was not brought to the notice of this hon'ble Tribunal at the time of filing the above petition. No doubt the said writ petition was listed before the hon'ble High Court on February 20, 2019 in the stage of "order" for the acceptance of service notice to R4. Reading of the statement of objection filed by the bank in the said writ petition, it admits as to the error committed by the Debts Recovery Tribunal. However, noting the absence of the petitioner counsel therein, the hon'ble High Court disposed of the said writ petition and the error committed by the Debts Recovery Tribunal was not considered. However, the petitioner therein, has filed an application for recalling the said order in the writ petiti....
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....ed on a issue on facts in respect of which no factual foundation has been laid. The appellant had never raised the issue before the courts below that the Central Government was the tenant and it was holding the premises merely as an agent. In the written statement filed by the appellant, no reference was made to the provisions of the 1995 Act. Even otherwise, the tenancy rights which had vested in the Central Government, stood vested immediately, by operation of law, in the appellant, a public sector undertaking as well as the public limited company having a paid-up share capital of more than rupees one crore, thus the appellant has no protection of the 1999 Act . . . 12. Pleadings and particulars are necessary to enable the court to decide the rights of the parties in the trial. Therefore, the pleadings are more of help to the court in narrowing the controversy involved and to inform the parties concerned to the question in issue, so that the parties may adduce appropriate evidence on the said issue. It is a settled legal proposition that 'as a rule relief not founded on the pleadings should not be granted'. A decision of a case cannot be based on grounds outside ....
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....on (2) is incomplete or any disciplinary proceeding is pending against the proposed resolution professional, it may, by order, reject such application : Provided that the Adjudicating Authority shall, before rejecting the application under clause (b) sub-section (5), give a notice to the applicant to rectify the defect in his application within seven days of receipt of such notice from the Adjudicating Authority. (6) The corporate insolvency resolution process shall commence from the date of admission of the application under sub-section (5). (7) The Adjudicating Authority shall communicate- (a) the order under clause (a) of sub-section (5) to the financial creditor and the corporate debtor. (b) the order under clause (b) of sub-section (5) to the financial creditor, within seven days of admission or rejection of such application, as the case may be. 10. In the instant case, as detailed supra, it is not in dispute that the financial creditor has sanctioned a term loan of Rs. 45 crores to the corporate debtor, and it has defaulted in making repayment of the loan as per the sanction terms leading the account of the company classified as....
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.... payment regularly till January, 2014, although our cash flow was not supporting it due to various fac tors effecting the business because of the Supreme Court judgment in February, 2012 on 2G scam cancelling 122 licenses to various cellular operators and downturn in the general economy of the country. As explained on many occasions during the last few years to your various officials, there was enormous delay in collections and company has been put in to lot difficulties and account turned to non-performing asset in June, 2014. Our company has incurred huge losses from past three years due to the reasons mentioned above and we are unable to service both interest and principal. As explained to you during our meeting with you on February 21, 2016 and subsequently, as we are not able to pay any amounts from the business, the only way for us to make any payments is for our directors to raise any loans from their relatives and friends. Further our director Mr. Shivakurnar Reddy has discussed internally with relatives and friends and after lot of discussions and deliberations, we wish to submit an offer to you for an amount of Rs. 5,50,00,000 (rupees five crores fifty lakhs only....
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....ppression filing of writ petition before the hon'ble High Court of Karnataka against the order of the Debts Recovery Tribunal dated March 27, 2017 is concerned, as rightly contended by learned counsel for the petitioner that proceedings under the Code is independent of other proceedings initiated before other judicial forums as long as cause of action subsists. In any case, all the material documents are placed before the Tribunal to consider them. 15. So far as the permission sought by the petitioner to place additional information and additional documents by way of filing I. A. No. 131 of 2019 is concerned, it is necessary for the Adjudicating Authority to examine all relevant information and documents with reference to the issue and thus we have taken them on record and considered those information and documents. Moreover, proceedings under the IBC are summary in nature and thus all relevant information and documents are to be considered. Therefore, the contentions of learned senior counsel in that regard is not at all tenable and liable to be rejected. Therefore, we are inclined to allow I. A. No. 131 of 2019 by taking additional information and add documents on record. ....
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.... interim resolution professional ; and (iii) any other information as may be specified by the Board. The procedure once an application is filed by the financial creditor with the Adjudicating Authority is specified in sub-section (4) of section 7 to sub-section (7) of section 7 of the Code. As sub-section (4) of section 7 of the I and B Code : '(4) The Adjudicating Authority shall, within fourteen days of the receipt of the application under sub-section (2), ascertain the existence of a default from the records of an information utility or on the basis of other evidence furnished by the financial creditor under sub-section (3).' Sub-section (5) of section 7 of the I and B Code provides for admission or rejection of application of a financial creditor. Where the Adjudicating Authority is satisfied that-. . . the documents are complete or incomplete. The Adjudicating Authority post ascertaining and being satisfied that such a default has occurred may admit the application of the financial creditor. In other words, the statute mandates the Adjudi cating Authority to ascertain and record satisfaction as to the occurrence of default b....
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.... 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 appli cant to rectify the defect within 7 days of receipt of a notice from the adjudicating authority. Under sub-section (7), the adjudicating authority shall then communicate the order passed to the financial creditor and corporate debtor within 7 days of admission or rejection of such application, as the case may be." 19. In the light of provisions of section 7 of the Code, and law as declared by the hon'ble National Company Law Appellate Tribunal and the hon'ble Supreme Court as extracted above, the Adjudicating Authority/Tribunal has to examine the instant case as to whether the application/petition filed is complete with supported evidence ; debt and default established ; suggested a qualified resolution professional to appoint as interim resolution professional, etc. 20. On perusal of the instant company petition along with material documents filed and the objections raised by the respondents as briefly stated supra, and the law as cited above, we are satisfied that the instant company petition is fil....