TaxTMI 
TaxTMI 
2020 (9) TMI 1072
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....d Fifty Three only) as on 30.06.2019 along with further interest. 2. Brief facts of the case, as mentioned in the Company Petition, which are relevant to the issue in question, are as follows: (1) Sir M. Visvesvaraya Co-operative Bank Limited (hereinafter referred to as 'Petitioner/Financial Creditor') is a Co-operative Bank incorporated on 15.04.1979 with Regn. No. JRB/REGN: 3:4880/78-79-25.09.1978, having its registered office situated at No.109, Shankarmutt Road, Shankarpuram, Bengaluru-560004. It has obtained banking license from Reserve Bank of India with Registration No.UBD:BC:BL:O.A.310-05.11.1978 and is carrying on operations since 1979. The Financial Creditor is one of the leading co-operative urban banks in Karnataka. (2) M/s. Ind-Lab Equipments Private Limited (hereinafter referred to as 'Respondent/Corporate Debtor') is a Private Limited Company incorporated on 05.11.2012 under the Companies Act, 1956 with CIN: U29248KA2012PTC066590 and having its registered office situated at No.561, 7th Main 'A' Sector, Yelahanka New Town, Bengaluru-560064. Its Nominal Share Capital is Rs. 5,00,000/- (Rupees Five Lakhs only) and Paid-up Cap....
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....Outstanding as on 30.06.2019 Date of Default TL-4-30 2,06,60,849 58,90,340 31.07.2018 TL-4-44 33,45,994 4,85,770 31.07.2018 Total 2,40,06,843 63,76,110 Hence, the Corporate Debtor defaulted in repayment of loan to the Financial Creditor as per the agreed terms. (7) The Financial Creditor has issued notices calling for repayment of agreed instalment amounts from time to time for which the Corporate Debtor has not responded. The Corporate Debtor neither responded nor regularised the loan and interest. The Financial Creditor has also issued a notice on 20.08.2018 to the Corporate Debtor to repay the loan immediately on account of this default. The Corporate Debtor replied on 15.09.2018 to the Financial Creditor stating that it needs some more time to regularise the default, as it is recovering from the adverse effects of Demonetization and Goods and Services Tax. In view of the above, the Financial Creditor filed the instant Petition U/s 7 of the Code for initiating CIRP, appointing IRP, imposing moratorium etc. 3. Subsequently, the Petitioner has filed a Memo dated 19.02.2020 by inter alia stating that the Bank has....
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....o has given his consent. Also, as per the latest Notification No. IBBI/2019-20/GN/ REG051 dated 20.11.2019 IBBI (Bankruptcy Process for Personal Guarantors to Corporate Debtors) Regulations, 2019 ,the Directors of the Company, who are personal Guarantors to this financial debt also may be included for CIRP. Therefore, it is prayed to include Corporate Guarantors also in this CIRP. 4. The Respondent/Corporate Debtor has filed a Statement of objections dated 18.02.2020 by inter alia contending as follows: (1) The Respondent denies that there is a debt and default and the Petition is liable to be dismissed on preliminary grounds as well as on merits. There is no debt/default owed by/ committed by the Respondent so as to attract the provisions of the Code and the instant Application is incomplete and the Respondent is not in a situation of financial insolvency. Therefore, the Petition is liable to be dismissed. (2) It is contended that the Petitioner has failed to provide a complete Form 1, including failure to provide all the particulars in Part II and Part V of the Form 1. Further, the Petitioner has failed to provide particulars of amount claimed to be in defaul....
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....ession that the Petitioner would cooperate and resolve the issue in question amicably between the parties. However, they have suddenly filed the instant Company Petition. (5) The Respondent proposed settlement of total claim in question for a full and final settlement of all claims by the Petitioner vide email dated 07.02.2020. The Petitioner has not responded to the said offer as on today, despite there being an email dated 07.02.2020 that the Petitioner would revert to the said proposal. Such an act of not showing any interest in amicably resolving the dispute and aiding the Respondent in continuing with the business as a going concern, sufficiently establishes that the Petitioner has initiated the above proceedings fraudulently and with a malicious intent for a purpose other than insolvency resolution. The said proceedings are initiated by the Petitioner to avoid payment of court fee which the Petitioner would have out to pay in case of initiating civil proceedings. Further, the aim of the IBC is to promote companies as a going concern and not to use provisions of Code to coercive proceedings to recover alleged debts, as observed by the Hon'ble Supreme Court in the ....
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.... the Code. 8. For an application filed U/s 7 of the Code, the parameters/requisite conditions to be considered by the Adjudicating Authority is whether the default is committed for the debt or not, and whether the Application is filed in accordance with law by suggesting suitable IRP or not. It is relevant to refer the judgement of Hon'ble Supreme Court in "Innoventive Industries Ltd. Vs. ICICI Bank and Anr. - (2018) 1 SCC 407" is extracted below: "27. The scheme of the Code is to ensure that when a default takes place, in the sense that a debt becomes due and is not paid, the insolvency resolution process begins. Default is defined in Section 3(12) in very wide terms as meaning non-payment of a debt once it becomes due and payable, which includes non-payment of even part thereof or an instalment amount. For the meaning of "debt", we have to go to Section 3(11), which in turn tells us that a debt means a liability of obligation in respect of a "claim" and for the meaning of "claim", we have to go back to Section 3(6) which defines "claim" to mean a right to payment even if it is disputed. The Code gets triggered the moment default is of rupees one lakh or more (Sect....
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....ot due. A debt may not be due if it is not payable in law or in fact. The moment the 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 applicant 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." 9. In the light of the above ratio as laid down by the Hon'ble Supreme Court and as per the provisions of the Code, It is necessary to examine whether the Debt in question is established; the Application is filed in accordance with Law or not; a qualified Resolution Professional is suggested as IRP etc. As stated supra, the Petitioner has addressed a letter dated 25.09.2014 to Respondent by informing that the Central Loan Committee in its meeting held on 25.09.2014, has sanctioned a Term Loan of Rs. 227.00 lakhs (Rupees Two Hundred Twenty Seven Lakhs only) for the purpose of purchase of KIADB Industrial land at Dodda....
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....rd in the Memo filed by the Appellant dated 19.02.2020, it is seen that in the Balance Sheet under the head Current Liabilities its Liabilities from Short term borrowings have increased from Rs. 3,59,52,305/- as at 31.03.2018 to Rs. 3,79,28,638/- as at 31.03.2019 and its other Current Liabilities have also increased from Rs. 54,67,389/- as at 31.03.2018 to Rs. 1,36,38,012/- as at 31.03.2019. Further, the Profit and Loss Account Statement also shows that as against the Profit of Rs. 3,82,956/- declared for the year ended 31.03.2018, the Respondent has earned a loss of Rs.(89,97,077)/- for the year ended 31.03.2019. It is thus seen that the Respondent has been showing inactive results as far as its business financials are concerned. Therefore, the contention of the Respondent that it is solvent Company is not born out of record. 12. The Petitioner has filed a Memo dated 19.02.2020 by enclosing a copy of the RBI letter vide Ref:DCBS(BG)No.458/13.03.142/2019-20 dated 17.09.2019 addressed to the Chief Executive Officer, Sir M. Visvesvaraya Co-operative Bank Limited in respect of Supervisory Action Framework (SAF) for Urban Co-operative Banks - Continuation of Regulatory Action, which....
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....ied Insolvency Professional namely Mr. Addanki Haresh bearing Regn. No.IBBI/IPA-001/IP-P-01064/2017-18/11757 is suggested as the IRP, who also has filed his written consent in Form 2 dated 10.08.2019 by inter alia affirming that he is eligible to be appointed as an Interim Resolution Professional in respect of the Corporate Debtor, and certified that there are no disciplinary proceedings pending against him with the Board or ICAI Insolvency Professionals Agency along with Affidavit dated 10.08.2019 in this regard. Thus, it is a fit case to initiate CIRP by appointing IRP and imposing moratorium, etc. 15. For the aforesaid facts and circumstances of the case, and following the settled position of law on the issue, by exercising powers conferred on this Adjudicating Authority, under Section 7(5)(a) and other extant provisions of the Code, Company Petition bearing C.P. (IB) No. 319/BB/2019 is hereby admitted with the following consequential directions: (1) We hereby appointed Mr. Addanki Haresh having Regn. No. IBBI/IPA-001/IP-P-01064/2017-18/11757 as the Interim Resolution Professional (IRP) to conduct the Corporate Insolvency Resolution Process (CIRP) in respect of Corporate D....