TaxTMI 
TaxTMI 
2019 (3) TMI 1751
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.... 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. (4) A legal notice dated December 22, 2014 was issued to the cor porat....
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....rming 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 repayment of the loans to Dena Bank and ICICI Bank. The outstanding principal and interest thereon became NPA (non-perf....
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....ts 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, interim order shall continue for a period of 3 weeks from the date of receipt of certified copy of the orders passed. The hon'ble ....
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....BI/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. (6) Copy of original application No. 16 of 2015 filed before the Debts Recovery Tribunal, Bangalore and statement of objections filed thereto by the corporate debtor. (7) Copy of orders dated February 22, 2019 of th....
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....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 the Debts Recovery Appellate Tribunal, as the case may be." (4) Despite, the claims of the petitioner being time barred, the peti tioner with an ulterior motive and with the sole intention of harassing the respondent, filed a notice of admission before this the hon'ble Tribunal t....
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....r 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 petition, which application is yet to be considered by the hon'ble High Court. (5) It is submitted that it is thus submitted that the said application filed by the petitioner is beyond the scope of the direction passed by this Tribunal dated February 8, 2019 and the same is not maintainable and mis conceived, hence liable to rejected....
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....y 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 the pleadings of the parties. The pleadings and issues are to ascertain the real dispute between the parties to nar row the area of conflict and to see just where the two sides differ. (Vide Trojan and Co. v. RM. N. N. Nagappa Chettiar, AIR 1953 SC 235, State of Maharashtra v. Hindustan Construction Co. Ltd. [2010] 4 SCC 518 ; AIR 2010 SC 1299 ; [2010] 2 SCC (Civ) 207 and Kaly....
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....on 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 non-performing asset on December 31, 2013. The financial creditor also filed original application (O. A. No. 16 of 2015) before the Debts Recovery Tribunal, Bangalore and the Debts Recovery Tribunal has decreed an amount by issuing certificate to collect the amount due from the respondent, as stated supra. The statement of accounts of the borrower produced by the petitioner as annexure 2, showed that the outstanding amount is due from the respondent. They have also filed a certificate unde....
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....ming 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) towards our full and final closure of our terra loan account with you as a one time settlement (OTS), we will make the payment within one year from the date of accepting our offer of one-time settlement, i. e., approximately on or before March 31, 2018, if we are able to get the sanction on or before March 31, 2017. Further we request you to issue the sanction letter under one time settlement scheme and issue the no due certificate to the com pany, relieve the personal guarantors Mr. C. Shivakurnar Reddy and....
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....ation 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. 16. We have granted sufficient opportunity to the respondent so as to see whether any viable solution to the issue can be found before admitting the case. However, the respondent did not come forward with any solution to the issue except raising untenable grounds. It is also not known whether any appeal is filed against the order dated March 27, 2017 passed by Debts Recovery Tribunal before the Appellate Tribunal under section 20 of the Recovery of Debts and Bankruptcy Act, 1993. Therefore, there is no other alternative for the Tribu....
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....sis 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 before admitting the application. Mere claim by the financial creditor that the default has occurred is not sufficient. The same is subject to the Adjudicating Authority's summary adjudication, though limited to 'ascertainment' and 'satisfaction'." 18. The hon'ble Supreme Court has also upheld the above judgment in Civil Appeals Nos. 8337-8338 of 2017 in case of Innoventive Industries Ltd. v. ICICI Bank [2017] 205 Comp Cas 57 (SC) vide judgment dated August 31, 2017. The hon'ble Supreme Court has adverted to section 7, at paragraph 28, which reads as under (page 87)....
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....late 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 filed by Dena Bank (financial creditor), under section 7 of the IBC, 2016 strictly in accordance with law, with substantial evidence produced in support of debt and default as per the bank statement ; suggested Shri B. Hariharan, bearing Registration Number IBBI/IPA-001/IP-P00380/2017-2018/10637, to appoint him as the interim resolution professional, who has filed written communication dated November 13, 2018, under rule 9 of the I and B (AAA) Rules, 2016, by inter alia, declaring that he is a qualified insolvency resolution professional registered with IBBI/ IPA-001/IP-P00380/2017-2018/10637 and he is not un....