TaxTMI 
TaxTMI 
2020 (10) TMI 167
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.... and Nineteen Only) as on 07.03.2019 due and payable to the Financial Creditor under Loan Agreement dated 20.03.2015. The Petition is filed by Mr. Rahul Doshi, authorised by Board Resolution dated 23.04.2019. Copy of the Board Resolution is annexed to the Petition. 2. The facts of the case are that the Financial Creditor extended financial assistance to the Corporate Debtor for the construction and sales activity of residential project 'Unishire Xperience' located at Hennur Road, Bengaluru vide Sanction Letter dated 20.03.2015, by sanctioning a loan amount of Rs. 13 Crore only. The Financial Creditor and Corporate Debtor entered into the Loan Agreement dated 20.03.2015 for Rs. 13 Crore with rate of interest at 22% payable on quarterly basis on the last day of each quarter. Copies of the Sanction Letter dated 20.03.2015 and the Loan Agreement are annexed to the Petition. 3. The Designated partners of the Corporate Debtor, Mr. Kirti K Mehta and Mr. Pratik K Mehta, executed Personal Guarantees dated 20.03.2015 in favour of the Financial Creditor. Further, a Mortgage Deed dated 27.03.2015 was also executed by the Corporate Debtor in favour of the Financial Creditor. The Corpo....
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....ued by the Financial Creditor to establish the same. Further the contention of the Corporate Debtor that the petition is filed based on the Indenture of Mortgage Deed dated 20.03.2015 is denied by the Financial Creditor stating that the Petition is filed on the basis of Sanction Letter Loan Agreement dated 20.03.2015, which is the basis of the financial debt. 8. The Financial Creditor states that the contention of the Corporate Debtor that the Financial Creditor has already filed petition under section 138 of the Negotiable Instruments Act, 1881 before the jurisdictional Magistrate Court in Mumbai, Maharashtra is untenable as proceedings under section 138 of the Negotiable Instruments Act 1881 are criminal proceedings and the same do not preclude the Financial Creditor from filing an application under the code seeking initiation of corporate insolvency resolution process against the financial default. 9. The Financial Creditor submits that the contention of the Corporate Debtor that the Financial Creditor has valuable security of over 2 times the debt amount has no bearing on the matter. Further the contention of the Corporate Debtor that the Financial Creditor must comply with t....
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....y Appeal (AT) (Insolvency) No. 1 & 2/2017 in the case of M/s. Innoventive Industries Limited vs. ICICI Bank & Anr. has dealt with the issue of admission of a Petition filed under Section 7 of the Code, under Paras 55 to 58, which are extracted below: "55. Process of initiation of Insolvency Resolution process by a financial creditor is provided in Section 7 of the I&B Code. As per sub-section (1) of Section 7 of the I&B Code, the trigger for filing of an application by a financial creditor before the Adjudicating Authority is when a default in respect of any financial debt has occurred. Sub-section (2) of Section 7 provides that the financial creditor shall make an application in prescribed form and manner and with prescribed documents, including: i. "record of the default" recorded with the information utility or such other record or evidence of default as may be specified; ii. The name of the resolution professional proposed to act as an interim resolution professional; and iii. Any other information as may be specified by the Board. 56. The procedure once an application is filed by the financial creditor with the Adjudicating Authority is specified in sub-section (4) o....
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....licant is to dispatch a copy of the application filed with the adjudicating authority by registered post or speed post to the registered office of the Corporate Debtor. The speed, within which the adjudicating authority is to ascertain the existence of a default from the records of the information utility or on the basis of evidence furnished by the financial creditor, is important. This it must do within 14 days of the receipt of the application. It is at the stage of Section 7(5), where the adjudicating authority is to be satisfied that a default has occurred, that the corporate debtor is entitled to point out that a default has not occurred in the sense that the "debt", which may also include a disputed claim, is not 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 cor....
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.... the Corporate Debtor, is extracted herein below: "Financial statements indicate that the company has accumulated losses as at the balance sheet date and its net worth has been fully eroded. The financial statements have been prepared on a going concern basis notwithstanding accumulated losses as at the balance sheet date". 20. It is seen that the Corporate Debtor has filed its Statement of Solvency in Form 8 along with the Independent Auditor's Report for year ending 31.03.2017 which records that the LLP has not made any profits and the Reserves and Surplus of the Corporate Debtor reflected in the Financial Statement shows negative balance. The Corporate Debtor has failed to file Audited Financial Statement for the year ending 2018 and 2019 to establish the fact that the Corporate Debtor is solvent. 21. Further, on perusal of the NeSL Report dated 18.07.2019 showing that the Corporate Debtor has defaulted in repayment of the financial debt. It is established that the Corporate Debtor is in default of an amount higher than the minimum required for the initiation of CIRP. 22. As regards I.A. No. 554/2019 filed by the Applicants seeking to be impleaded, the same has been con....
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....amaniam Varun, bearing Regn. No. [IBBI/IPA-002/IP-N00290/2017-18/10848], who is a qualified Insolvency Professional, is hereby appointed as Interim Resolution Professional, in respect of the Corporate Debtor namely Unishire Regency Park LLP to carry out the CIRP as mentioned under the Insolvency and Bankruptcy Code, 2016 and various rules issued by IBBI from time to time; 2. The following moratorium is declared prohibiting all of the following, namely: a. the institution of suits or continuation of pending suits or proceedings against the Corporate Debtor/Corporate Debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; b. transferring, encumbering, alienating or disposing of by the Corporate Debtor any of its assets or any legal right or beneficial interest therein; c. any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; d. The recovery of any property by an owner or lessor where such property is occupi....