TaxTMI 
TaxTMI 
2020 (5) TMI 682
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....n 7 of the Insolvency & Bankruptcy Code (the Code for short). 2. The facts leading to the Application may be stated as follows. The Respondent inter alia is a manufacturer of cement with its registered office in Nandyal, Kurnool, and factory at Cement Nagar in the same district in the State of Andhra Pradesh. The Company by its Board Resolution dated 29.12.2015 desired to raise private funds through 978 secured, rated, listed, redeemable, non-convertible debentures at a face value of Rs. 10,00,000/- each for cash at par to be issued and allotted in one or more tranches aggregating to Rs. 97,80,00,000/- only. EW India Special Assets Fund Private Limited and ECAP Equities Limited subscribed to the debentures numbering 330, 300 and 348 resp....
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.... the Courts at Hyderabad would alone have jurisdiction. It is further asserted that the Company had pledged shares to an extent of Rs. 76,63,842/- against the debentures. The rights of the shares were transferred to the Petitioner and as such there was no existence of liability of debt. The Petitioner was authorised to sell or otherwise dispose of all or any part of the promoters' shares and apply the proceeds thereof towards repayment of amount due. The pledge created pursuant to the pledge agreement could be enforced without recourse to any rights of the debentures holders or enforcing any other security. The Petitioner was also entitled to enter upon the secured properties under the transaction documents and utilize the rents and profits....
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....includes non-payment of even part thereof or an instalment amount. For the meaning of debt, we have to go to Section 3(11), which in turn tells us that a debt means a liability of obligation in respect of a claim and for the meaning 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)." 6. The Respondent accordingly was in default in payment of a financial debt. Issue No. II is answered in the affirmative. Issue No. I: 7. The maintainability of the Petition is challenged on the ground that the Petitioner had other avenues available for enforcing the deed and realise the debt. Jurisdicti....
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....rate debtor have, therefore. been bifurcated and separated from that of its promoters / those who are in management. Thus, the resolution process is not adversarial to the corporate debtor but, in fact, protective of its interests." (in re: Swiss Ribbons v. Union of India: (2019) 4 SCC 17). (ii) "19. It is made clear that Insolvency Resolution Process is not a recovery proceeding to recover the dues of the creditors. I & B Code, 2016 is an Act relating to reorganisation and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximisation of value of assets of such persons and to promote entrepreneurship, availability of credit and balance the interests of all the stakeholders including....