TaxTMI 
TaxTMI 
2021 (6) TMI 208
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....rporate Debtor for a sum of Rs. 200 Lakh. Thus, in all, the IDBI Bank has sanctioned a sum of Rs. 485 Lakhs as term loan and Rs. 215 Lakh as Foreign Currency Loan in favour of the Corporate Debtor and in pursuance of the same, the amounts were disbursed to the accounts of the Corporate Debtor. 2. The Board of Directors of the Corporate Debtor at the Board Meeting held on 19.07.2000 after going through the duly audited Financial Statement and the Profit and Loss Account for the year ended 31.03.2000 evidenced erosion of net worth of the Company and as such as per the provisions of Section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), the accumulated losses were exceeding its entire net worth and hence by their letter dated 18.08.2000 had stated that the Company has become sick and referred the matter to the Board for Industrial & Financial Reconstruction (BIFR) as per Section 15(1) of SICA along with Form A. Pursuant thereto, by the Order of the BIFR dated 09.05.2001, the IDBI Bank was appointed as the Operating Agency by BIFR. 3. In the meantime, it is seen that the IDBI Bank by way of a Transfer Deed dated 30.09.2004 had transferred and assigned....
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....o complete the formalities within a period of 30 days. It is seen that on 25.08.2007, IDBI released the entire documents in favour of the Corporate Debtor, which were handed over to the successful bidder M/s. Karur KCP Packagings Limited and that the successful bidder was running the Pollachi Unit. However, it is seen that IDBI/SASF has failed to comply with the mandate of the BIFR as regards the appropriation and as a result of which, SIPCOT filed an Appeal before the Appellate Authority for Industrial and Financial Reconstruction (AAIFR) and secured and order of stay against the implementation of the order passed by the BIFR dated 27.06.2007. Thereafter, it was alleged that the entire amount was appropriated by the IDBI Bank towards their dues and the monies were not discharged to the other secured creditors and since stay order was granted by the AAIFR, the proceedings before the BIFR was adjourned sine die vide its order dated 09.12.2010. 7. Subsequent thereto, after the advent of Insolvency and Bankruptcy Code, 2016, the BIFR and AAIFR were abolished and the proceedings before these fora stood abated. However, now, the Financial Creditor viz. SASF has filed the present Applic....
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..... Ltd. Vs. Parag Gupta and Associates; (2019) 11 SCC 633 and also in Gaurav Hargovindbhai Dave Vs. Asset Reconstruction Company (India) Ltd. & Anr. (2019) 10 SCC 572. 11. Further, it was contended by the Learned Counsel for the Corporate Debtor that balance sheet cannot be construed as an acknowledgment of debt as per the decision of the Hon'ble NCLAT in the matter of V. Padmakumar Vs. Stressed Assets Stabilization Fund (SASF) & Anr. MANU/NL/0192/2020. However, this Tribunal at this juncture, would like to point out that the said decision of the Hon'ble NCLAT has been overruled by the Hon'ble Supreme Court in the matter of Asset Reconstruction Company(India) Limited Vs. Bishal Jaiswal & Anr. in Civil Appeal No. 321of 2021, wherein at para 22, 33 and 34 has held as follows; 22. A perusal of the aforesaid Sections would show that there is no doubt that the filing of a balance sheet in accordance with the provisions of the Companies Act is mandatory, any transgression of the same being punishable by law. However, what is of importance is that notes that are annexed to or forming part of such financial statements are expressly recognised by Section 134(7). Equally, the a....
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....rst and foremost aspect which required to be decided by this Tribunal is the point of limitation as raised by the Learned Counsel for the Corporate Debtor. In so far as the point of limitation is concerned, from the brief facts which are narrated above, it can be seen that the account of the Corporate Debtor was declared as NPA on 31.03.1999. The Corporate Debtor vide their letter dated 18.08.2000 have stated that the Company has become sick and referred the matter to the Board for Industrial & Financial Reconstruction (BIFR) as per Section 15(1) of SICA and the proceedings before the BIFR commenced on 09.05.2001 passed in Case No. 267/2000. At this juncture, it is relevant to refer to Section 22(5) of SICA, which is as follows; 22. Suspension of legal proceedings, contracts, etc. (1)......... (2)......... (3)......... (4)......... (5) In computing the period of limitation for the enforcement of any right, privilege, obligation or liability, the period during which it or the remedy for the enforcement thereof remains suspended under this section shall be excluded. 14. On a plain reading of above extracted provisions, it is made clear that the remedy for the enforcement....
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....s. 772 Lakh from the Financial Creditor and requested for the OTS proposal of Rs. 450 Lakh. This letter in terms of Section 18 of the Limitation Act, 1963 extends the period of limitation. Thus, the present Application which is filed before this Tribunal on 05.07.2019, by taking into consideration the reasonings as stated supra, is not barred by limitation. Viewed in this context, the contention put forward on behalf of Corporate Debtor in regard to plea of limitation has to be repelled as being devoid of merit. It is also noted without adverting the acknowledgment, if any made by the Corporate Debtor in the balance Sheet, the claim of the Financial Creditor is proved to be falling within the period of limitation. 18. Next adverting to the issue as to whether there is any debt and default being committed by the Corporate Debtor, the letter dated 14.03.2017 written by the Corporate Debtor would operate on the maxim "Res ipsa loquitur" which means the thing which speaks for itself. Further, the letter dated 09.08.2018 wherein the Corporate Debtor has increased their OTS from Rs. 450 Lakh to Rs. 550 Lakh, which also came to be rejected by the Financial Creditor by their letter dated ....
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..... 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." 19. From the aforesaid decision, after going through the Scheme of I & B Code, 2016 in depth in relation to an Application under Section 7 filed by a Financial Creditor as compared to the one filed under Section 9 by an Operational Creditor, in relation to a Section 7 Application where there is an existence of a 'financial debt' and its default in excess of Rs. 1,00,000/-, (now increased to Rs. 1 Crore on and from 24.03.2020) this Tribunal is bound to admit the Application and as a consequence trigger the Corporate Insolvency Resolution Process (CIRP) and in relation to a Section 7 Application defence or set off or counter claim put forth by the Corporate Debtor cannot be considered as a dispute in relation to the Financial debt and default in relation to it. Thus, it is clear that there is a default on the part of the Corporate Debtor for a sum exceeding Rs. 1 Lakh. 20. Also the default arising in the present Application is much prior to the advent of th....
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....to be admitted under Section 7(5) of the I & B Code, 2016. 24. The Financial Creditor has proposed the name of Mr. Ramakrishnan Sadasivan, with Registration Number: IBBI/IPA-001/IP-P00108/2017-18/10215 (email id:[email protected]) as the Interim Resolution Professional (IRP) who has also filed his written consent in Form 2 of the Insolvency and Bankruptcy Board of India (Application to Adjudicating Authority) Rules, 2016. The proposed IRP who is appointed shall take forward the process of Corporate Insolvency Resolution of the Corporate Debtor. The IRP appointed shall take in this regard such other and further steps as are required under the Statute, more specifically in terms of Section 15,17,18 of the Code and file his report within 20 days before this Bench. The powers of the Board of Directors of the Corporate Debtor shall stand superseded as a consequence of the initiation of the CIRP in relation to the Corporate Debtor in terms of the provisions of IBC, 2016. 25. As a consequence of the Application being admitted in terms of Section 7 of the Code, moratorium as envisaged under provisions of Section 14(1) and as extracted hereunder shall follow in relation to the Corpora....