TaxTMI 
TaxTMI 
2020 (1) TMI 1240
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....Debtor is a company incorporated under the provisions of the Companies Act, 1956 and is, inter alia, engaged in the business of manufacture of vessels and repairing of rigs. The Corporate Debtor, Reliance Naval and Engineering Limited was earlier known as Reliance Defence and Engineering Limited, which name was subsequently changed to Reliance Naval and Engineering Limited having its Registered Office at Port of Pipavav, Post Ucchaya, Via Rajula, Dist. Amreli, Gujarat - 365 560. The Respondent company, the Corporate Debtor was originally promoted by SKIL Infrastructure Ltd. (SKIL) as Pipavav Defence and Offshore Engineering Ltd. 3. The Authorised Share Capital of the Respondent company, the Corporate Debtor is Rs. 15000,00,00,000/-. (Rupees Fifteen Thousand Crores only). The Paid-Up Share Capital of the Respondent company, the Corporate Debtor is Rs. 779,83,70,270/- (Rupees Seven Hundred and Seventy-Nine Crores Eighty-Three Lakhs Seventy Thousand Two Hundred and Seventy only). The Main Object of the Respondent company, the Corporate Debtor as mentioned in the preceding para is manufacturing of vessels and repairing of rigs. 4. As per Part IV of the application, the total amou....
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.... facts, as under: 5.1 The Respondent company, the Corporate Debtor has been facing financial stress due to down trend in commercial shipbuilding sector, cancellation of contracts & cost overrun of Dry Dock-2 Project. The Dry Dock 2w as being constructed adjacent to the existing Dry Dock 1 facility admeasuring 750 m x 60 m x 19 m for maintenance & repair of ships, boats, and other water craft. Consequent to financial stress, the Respondent company, the Corporate Debtor underwent restructuring of its debt under CDR Scheme. The Restructuring Scheme was approved by CDR EG on march 18, 2015. 5.2 In March 2015, Reliance Defence Systems Pvt. Ltd., part of R-ADA Group and step-down subsidiary of Reliance Infrastructure Ltd., entered into an agreement to take over the management of the Respondent company, the Corporate Debtor from the former promoters. Purchase Agreement to acquire former's promoter stake of about 17.66% in the Respondent company, the Corporate Debtor was also executed. Mandatory Open Offer to acquire 26% shares from public shareholders of the Respondent company, the Corporate Debtor was announced on March 04, 2015. 5.3 R-ADA Group acquired management control o....
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....rantees of founder promoters. Accordingly, recall notice was issued by the IDBI Bank on March 12, 2018 and pledge, Corporate Guarantee and personal guarantees were invoked on March 17, 2018. 5.10 The Respondent company, the Corporate Debtor had submitted an OTS proposal in end of March 2018, the contours of which witnessed frequent and significant changes based on discussions with lenders. The Respondent company, the Corporate Debtor submitted an OTS proposal on May 7, 2018, which had certain issues with lenders. 5.11 The issues raised by lenders on the OTS proposal were communicated to the Respondent company, the Corporate Debtor on May 18, 2018. As the Respondent company, the Corporate Debtor could not resolve the issues raised by lenders to their satisfaction, lenders were not able to proceed with the OTS proposal. The Respondent company, the Corporate Debtor was informed of the same by Applicant Bank, the Financial Creditor vide their letters dated June 7, 2018 and June 25, 2018. 5.12 Since, the OTS proposal of the Respondent company, the Corporate Debtor was not acceptable to the lenders, it was decided to initiate Corporate Insolvency Resolution Process against the R....
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....5. Exhibit "F-7". h. Corporate Debtor's Undertaking dated 31st March, 2015. Exhibit "F-8". i. Share Pledge Agreement dated 20th April, 2015 Pledgers: SKIL Infrastructure Limited, Grevek Investment and Finance Private Limited and SKIL Shipyard Holdings Private Limited. Exhibit "F-9". j. Power of Attorney dated 20th April, 2015 in favour of Security Trustee by SKIL Infrastructure Limited, Grevek Investment and Finance Private Limited and SKIL Holdings Private Limited. Exhibit "F-10". k. Share Pledge Agreement dated 20th April, 2015. Exhibit "F-11". l. Power of Attorney dated 20th April, 2015 in favour of Security Trustee. Exhibit "F-12". m. Promoters Undertaking dated 30th April, 2015. Exhibit "F-13". n. Deed of Hypothecation dated 23rd May, 2015. Exhibit "F-14". o. Indenture of Mortgage dated 14th July, 2015 relating to land located within sub-district of Rajula. Exhibit "F-15". p. Indenture of Mortgage dated 14th July, 2015 relating to land located with sub-district of Jafrabad. Exhibit "F-16". q. Debenture Trust Deed dated 16th June, 2017. Exhibit "F-17". r. Share Pledge Agreemen....
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....y of the said circular, the RBI had repealed all its earlier circulars issued for the purpose of restructuring/refinancing of stressed assets. The said circular provides that all lenders must put in place Board approved policies for resolution of stressed assets under the said circular including the timelines for resolution. The said clause further requires that as soon as there is any default in the borrower entity's account with any lender, all lenders, singly or jointly, shall initiate steps to cure the default. 8.2 It is stated that Shipyards Association of India, wherein the Applicant of the IA, is a Member had challenged the vires of the certain provisions of the Banking Regulation Act, 1949 and the legality and validity of the circular dated 12.02.2018, before the Hon'ble High Court of Gujarat, which was numbered as Special Civil Application No. 12492 of 2018. 8.3 It if further stated that pursuant to Transfer Petitions by the RBI before the Hon'ble Supreme Court, the Petition filed by the Association was transferred for adjudication before the Hon'ble Supreme Court. 8.4 It is submitted that the Hon'ble Supreme Court after hearing all the stakeho....
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.... the Corporate Debtor and not on the basis of the Reserve Bank of India circular dated 12th February, 2018. Further, it is submitted that IA Applicant has not raised any ground on merits to demonstrate and/or establish that the Financial Creditor has sought to initiate CIRP against the Corporate Debtor under the impugned RBI circular. D. It is stated by the Respondent/the Original Applicant/the Financial Creditor that the Applicant/Corporate Debtor gave a settlement offer in March, 2018. However, the proposal was not acceptable to the bankers. The subsequent settlement proposal was rejected by the lenders and the Corporate Debtor/Applicant was intimated to improve the offer. The revised restructuring proposal was under consideration when RBI circular came to be in operation. In terms of the circular, "if any restructuring proposal was not formulated within 180 days of the circular being notified, the Financial Creditor needs to file any application under Section 7 of the IB Code". Even otherwise, in the present facts and circumstances, the lenders would have to take the same course of action viz. Initiate CIRP against the Corporate Debtor irrespective of whether the RBI ci....
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....the parties, this Adjudicating Authority is of the considered view that the debt due to the Financial Creditor is a 'Financial Debt' as defined in sub-section (8) of Section 5 of the IB Code. The Petition is complete in all respects. 10.1 In view of the above discussions, this Petition is admitted under Section 7(5) of the Code. This Adjudicating Authority hereby appoints Shri Rajeev Bal Sawangikar, residing at 475, Professor's Colony, Hanuman Nagar, Nagpur, Maharashtra-440024(E-mail: [email protected]) as "Interim Resolution Professional" under Section 13(1)(b) of the Code. 10.2. Section 13 of the Code says that after admission of the application under Section 7, the Adjudicating Authority shall pass an order declaring a moratorium for the purposes referred to in Section 14. Therefore, in view of the commencement of the Insolvency Resolution Process with the admission of this Petition and appointment of the Interim Resolution Professional, this Adjudicating Authority hereby passes the order declaring moratorium under Section 13(1)(a) prohibiting the following as laid down in Section 14 of the Code; (a) the institution of suits or continuation....