TaxTMI 
TaxTMI 
2019 (7) TMI 1723
X X X X Extracts X X X X
X X X X Extracts X X X X
....U27100 DL2012 PTC 240299) against whom initiation of Corporate Insolvency Resolution Process has been prayed for, was incorporated on 16.08.2012 having its registered office situated at 401, Mahavir Ji Complex, LSC, Rishabh Vihar, New Delhi - 110092. Since the registered office of the respondent corporate debtor is in New Delhi, this Tribunal having territorial jurisdiction over the NCT of Delhi is the Adjudicating Authority in relation to the prayer for initiation of Corporate Insolvency Resolution Process in respect of respondent corporate debtor under sub-section (1) of Section 60 of the Code. 3. It is appropriate to mention that the applicant Central Bank of India is a body corporate incorporated under the Banking Companies (Acquisition and Transfer of Undertakings) Act 1970 and has its Registered Office at Chander Mukhi, Nariman Point, Mumbai-400021. 4. Shri Rakesh Sharma, Assistant General Manager and authorized representative of the applicant bank, has preferred the present application on behalf of the applicant for initiation of corporate insolvency resolution process against the respondent corporate debtor in terms of the provisions of the Code. 5. The precise cas....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nction of the Scheme of Demerger. 11. As per part IV of the application it is claimed that a sum of Rs. 21,60,57,478/- (Rupees Twenty-One Crores Sixty Lacs Fifty-Seven Thousand Four Hundred Seventy-Eight Only) is due from the respondent company as on 30.11.2018. 12. In support of the financial debt, it is submitted that the applicant bank had entered into a consortium Agreement dated 21.11.2009 with the original borrower, M/s. Abhinav Steel and Power Limited for an overall limit of Rs. 125,00,00,000/-, where the share of the applicant Financial Creditor was Rs. 31 Crores. The Consortium (referred to as PNB Consortium) consisted of Punjab National Bank, Oriental Bank of Commerce and Central Bank of India. 13. Subsequently applicant financial creditor approved enhanced sanction of Fund Based and Non-Fund Based Limits, comprising of - Total Cash Credit sanctioned to the tune of Rs. 14 Crores; total Term Loan sanctioned to the tune of Rs. 49,75,00,000/-and total Working Capital (non-Fund based) sanctioned for Rs. 4,50,00,000/-, vide Sanction Letter dated 14.09.2012. 14. Thereafter, as the original borrower M/s. Abhinav Steel and Power Limited was unable to make repayment, o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....te Debtor has committed a default in repayment of amount aggregating to Rs. 21,60,57,478/- (Rupees Twenty-One Crores Sixty Lac Fifty-Seven Thousand Four Hundred Seventy-Eight Only) as on 30.11. 2018. 20. Accordingly the applicant has prayed for initiation of Corporate Insolvency Resolution Process against the Corporate Debtor for its default in repayment of credit facilities granted for 'Furnace and Rolling Division V of M/s. Abhinav Steels and Power Limited, liability of which stands transferred to the Corporate Debtor pursuant to order dated 27.11.2017 passed by the Tribunal sanctioning the Scheme of Demerger. 21. The respondent corporate debtor has filed its reply on 19.12.2018. Respondent has disputed the demand of Rs. 21,60,57,478/- and interest thereon as not due and payable. It has been alleged that the demand is erroneous and arbitrary. The claim has been disputed as barred by limitation. Another objection has been raised that the petition has not been filed in the prescribed Format as brief facts cannot be given under Part V of the requisite Form-1. It is further alleged that the Form-2 submitted by the named IRP lacks proper disclosures as required under the Reg....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e, Satharia, Distt. Jaunpur, UP (eartwhile unit name of demerged company ie. Abhinav Steels and Power Limited) is transferred to RS Ingot and Billet Private Limited (RSIBPL). The necessary ROC Formalities of said NCLT order are already done and required form no. SH-7, PASS, and Dir-12 filed. We are submitting you the Audited BS alongwith notes and accounts of RSIBPL for the FY 2017-18. The assets and liability of Furnace & Rolling -I are transferred as on 31.03.2018 which are as per order of NCLT dated 27.11.2017. Your Following loans are transferred to the RSIBPL: Rs. In Crores.O/s As on 31.03.2018 RSIBPL PNB OBC CBI Total TL 7.46 11.59 12.06 31.11 CC 13.24 11.80 0.21 25.24 WCTL 5.67 2.00 0 7.67 FITL 3.84 0.82 1.52 6.17 Overdue Interest 11.24 15.66 7.77 34.69 LC 4.50 4.50 BG 0.06 0.06 Total 46.03 41.86 21.55 109.44 We once again request you to do the needful at earliest. Thanking you, For RS Ingot and Billet Private Ltd. Auth....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ault has occurred. II. Application is complete, and III. No disciplinary proceeding against the proposed IRP is pending. 33. An application under Section 7 of the Code is acceptable so long as the debt is proved to be due and there has been occurrence of existence of default. What is material is that the default is at least 1 lakh. In view of Section 4 of the Code, the moment default is of Rupees one lakh or more, the application to trigger Corporate Insolvency Resolution Process under the Code is maintainable. 34. In the present case the respondent corporate debtor has admitted in its letter dated 19.11.2018 that it owes Rs. 21.55 Crores to the applicant Central Bank of India. Besides applicant has filed relevant agreements with chart of debt and disbursements in respect of 'Furnace and Rolling V totaling to Rs. 21,60,57,478/-. Applicant bank has also relied upon the mortgage documents, charge certificates including CIBIL Report dated 13.12.2018. 35. In addition, applicant bank has filed the relevant statement of accounts duly certified in accordance with Bankers' Books Evidence Act, 1891 as per the requirement of Form 1-part V column 7 of the ap....
X X X X Extracts X X X X
X X X X Extracts X X X X
....unal is not required to look into any other criteria for admission of the application." (Emphasis given) 42. There is also an objection that the financial creditor has failed to comply with the requirements of Section 7 of the Code. In this connection it is seen that the present application under Section 7 of the Code for initiation of Corporate Resolution Insolvency Process has been filed by petitioner financial creditor in Form-1 in terms of Rule 4 of Insolvency and Bankruptcy (application to Adjudicating Authority) Rules, 2016 accompanied with required information, documents and records as prescribed under the Rules. 43. The applicant bank inert-alia has annexed to the application detail particulars of 'financial debt' including documents, records and evidence of default as required under subsection 3 (a) of Section 7 of the Code. It is reiterated that the Form-1 filed in the present case under Section 7 of the Code read with Rule 4 of the Rules, shows that the Form is complete in all respect and there is no infirmity in the same. 44. Sub-section (3) (b) of Section 7 of the Code further mandates the financial creditor to furnish the name of an Interim Resolution....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Professional. 48. We direct the Financial Creditor to deposit a sum of Rs. 1 Lac with the Interim Resolution Professional namely Mr. Shravan Kumar Vishnoi to meet out the expenses to perform the functions assigned to him in accordance with Regulation 6 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Person) Regulations, 2016. The needful shall be done within three days from the date of receipt of this order by the Financial Creditor. The said advance amount however be subject to adjustment towards Resolution Process cost as per rules and shall be paid back to the applicant Financial Creditor. 49. In pursuance of Section 13 (2) of the Code, we direct that public announcement shall be made by the Interim Resolution Professional immediately (3 days as prescribed by Explanation to Regulation 6(1) of the IBBI Regulations, 2016) with regard to admission of this application under Section 7 of the Insolvency & Bankruptcy Code, 2016. 50. We also declare moratorium in terms of Section 14 of the Code. The necessary consequences of imposing the moratorium flows from the provisions of Section 14(1) (a), (b), (c) & (d) of the Code. Thus, the fol....