TaxTMI 
TaxTMI 
2020 (2) TMI 1448
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.... and Thirty Only). 2. Brief facts of the case, as mentioned in the Company Petition, which are relevant to the issue in question, are as follows: (1) M/s. Allahabad Bank (herein after referred to as Petitioner/Financial Creditor') is a Bank incorporated on 24.04.1865 with PAN No. AACCA8464F and having its registered office at No. 2, Netaji Subhas Road, Calcutta, West Bengal and Branch office at No. 1/32, Ulsoor Road Cross, Ulsoor Road, Bangalore - 560 042. (2) M/s. Southern Batteries Private Limited ('Respondent/Corporate Debtor') is a Private Limited Company incorporated on 02.02.1996 under the provisions of Companies Act, 1956 with CIN: U31404KA1996PTC019739 and having its registered office at Plot No. 30, KIADB, Industrial Area, Bommasandra, Bengaluru - 560 099. Its Authorized Share Capital is Rs. 50,00,00,000/- (Rupees Fifty Crores Only). Its main objectives interalia manufacturing of various types of Batteries and its parts there of viz., UPS, inverters, Industrial, Automotive & Solar Batteries etc., (3) It is stated that the Corporate Debtor availed certain financial facilities from the Financial Creditor. The Corporate Debtor has bee....
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....tter of Hypothecation dated 31.05.2014 b) Guarantee Agreement dated 31.05.2014 executed by B. Radhakrishnan c) Guarantee Agreement dated 31.05.2014 executed by R. Sreenivasan d) Guarantee Agreement dated 31.05.2014 executed by R. Sudarshan e) General counter Indemnity dated 31.05.2014 f) Demand Promissory Note dated 31.05.2014 issued by the Company g) Undertaking dated 31.05.2014 for the review cum enhancement of limits h) Undertaking dated 31.05.2014 i) Undertaking dated 31.05.2014 for review cum enhancement of limits j) Undertaking dated 31.05.2014 for review cum enhancement of limits II. Sanction letter dated 05.11.2015 & 20.11.2015 - loan documents for Working Capital loans are a) Term Loan agreement dated 28.07.2016 executed by the Company in favour of the Bank b) Fourth Supplementary of general letter of Hypothecation dated 28.07.2016 c) Guarantee Agreement dated 28.07.2016 executed by R. Radhakrishnan d) Guarantee Agreement dated 28.07.2016 executed by R. Sreenivasan e) Guarantee Agreement dated 28.07.2016 executed by R. Sudarshan f)....
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....r dated 30.01.2018 & 27.11.2018 d) The loan was recalled on 27.11.2018, 15.04.2019, 02.07.2019 e) The original application (OA) was filed before the DRT, Bangalore on 28.08.2019 8) It is stated that the statement of accounts and audited balance sheet for the year 2016, 2017 and 2018 of the Corporate Debtor shows and acknowledges the loan liability to be paid to the Financial Creditor. The Corporate Debtor has submitted several Resolution plans on 03.10.2018, 15.10.2018, 16.10.2018, 02.11.2018 by promising to regularize the Account by bringing equity funds into the Company. The Financial Creditor conducted joint meeting on 08.01.2019 and MD Mr. R. Sreenivasan assured that they are working on the regularization of the Credit facilities by bringing in Promoter's contribution/private equity/other means. This has not been complied with by the Corporate Debtor and there is a failure to adhere to the plans proposed. 3. Heard Shri H.R. Katti, learned Counsel for the Petitioner and Mr. S. Ramakrishnan, Learned Counsel for the Respondent. We have carefully perused the pleadings of the Parties, and the extant provisions of the Code. 4. Shri H.R. Katti, the....
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....ated 16.11.2019 issued to the borrower. The 1st E-Auction fixed on 23.12.2019. The Reserve price fixed for the immovable and movable properties of s. 14734.87 lacs. 1st E-Auction failed due to no bidders. b) 2nd E-Auctions/SARFAESI was notified by us on 03.01.2020 with sale notice dated 30.12.2019 issued to the borrower. The 2nd E-Auction fixed on 18.01.2020. The Reserve Price fixed for the immovable and movable properties of Rs. 13998.13 lakhs. 2nd E-Auction failed due to no bidders. c) 3rd E-Auction/SARFAESI was notified by us on 11.02.2020 with sale notice dated 07.02.2020 issued to the borrower. The proposed 3rd E-auction fixed on 29.02.2020. The Reserve price fixed for the immovable and movable properties of Rs. 13261.38 lakhs. Proposed 3rd E-Auction is on 29.02.2020 3. OTS Position : No fresh proposal has been submitted by the Company 3A. Previous proposal submitted by the Company for restructuring has been rejected by the Petitioner vide letter dated 31.08.2019 issued by FGMO, Hyderabad. 4. Wilful Defaulter status: Bank has issued showcase notice for declaring as Wilful Defaulter vide letter dated 25.09.2019 and company has replie....
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....g 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 (Section 4). The corporate insolvency resolution process may be triggered by the corporate debtor itself or a financial creditor or operational creditor. A distinction is made by the Code between debts owed to financial creditors and operational creditors. A financial creditor has been defined under Section 5(7) as a person to whom a financial debt is owed and a financial debt is defined in Section 5(8) to mean a debt which is disbursed against consideration for the time value of money. As opposed to this, an operational creditor means a person to whom an operational debt is owed and an operational debt under Section 5(21) means a claim in respect of provision of goods or services. 28. When it comes to a financial creditor triggering the process, Section 7 becomes relevant. Under the Explanation to Section 7(1), a default is in respect of a financial debt owed to any financial creditor of the corporate debtor--it need not be a debt owed to the applicant financial creditor. Under Section 7(2....
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....isions of Code and the Rules made thereunder, a qualified Insolvency Professional namely Shri Ramanahalli Shivanna DoddaByregowda, bearing Registration No. IBBI/IPA-002/IP-N00583/2017-18/11775 is proposed to appoint him as Interim Resolution Professional, who has filed Written Communication and affidavit dated 04.09.2019, in a prescribed forum, who is prima facie eligible to be appointed and the default in question as admittedly occurred. Hence, it is a fit case for admission to initiate the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, appointing IRP, Moratorium etc., as per the Code. 10. There are also five other cases viz., C.P (IB) No. 342/BB/2019, C.P (IB) No. 370/BB/2019, C.P (IB) No. 313/BB/2019, C.P (IB) No. 05/BB/2020, and C.P (IB) No. 420/BB/2019 along with this case seeking to initiate Corporate Insolvency Resolution Process against the same Corporate Debtor. Since the instant Company Petition is being admitted, other cases are disposed of by separate orders by permitting those Petitioners to make its claim before the IRP appointed in the case. 11. So far as the contention of Respondent that there are more than 1200 employees are work....