TaxTMI 
TaxTMI 
TaxTMI 
2019 (4) TMI 2002
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....issue in question, are as follows: 1) M/s. Karnataka State Financial Corporation (KSFC)(herein after referred as Petitioner/Financial Creditor) is incorporated ~ on 31.03.1959 and is a Body Corporate established under the State Financial Corporation Act, 1951. 2) M/s. Innovative Studios Private Limited (herein after referred asRespondent/Corporate Debtorjis a Company limited by shares, was incorporated under the Indian Companies Act, 1956 on 16.09.2003, which inter alia engaged in the business of putting up multiplexes and conducting entertaining, dance musical and other cultural programs. The promoters of the Respondent Company have considerable experience in the field of event management and entertainment industry as well. Its Authorized Capital is Rs. 15,50,00,000/- (Rupees Fifteen Crores Fifty lakhs only) Paid-up Share Capital is Rs. 14,53,00,000/- (Rupees Fourteen Crore Fifty Three lakhs only). 3) The Petitioner/Financial Creditor has sanctioned a term loan of Rs. 300 lakhson 11.01.2008 to Respondent/Corporate Debtor under the 'General Scheme' towards part funding for establishment of proposed film city project. Subsequently additional term loan of Rs. 700 lakhs was....
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....eurs. 3. Mrs. Radhika Achutha, Director of M/s. Innovative Studios Private Limited (Respondent/Corporate Debtor) has filed an Affidavit dated 10.04.2019 by inter alia contending as follows: 1) The Respondent/Corporate Debtor is a Company incorporated under the Indian Companies Act, 1956 on 16.09.2003 inter alia engaged in the business of putting up multiplexes and conducting entertaining, dance, musical and other cultural programs. The promoters of the Respondent Company have considerable experience in the field of event management and entertainment industry as well. 2) The Respondent/Corporate Debtor was formally launched on 18.01.2008 and is one of the major tourist attractions in Karnataka and project is directly or indirectly responsible for the livelihood of more than 500 people residing in the vicinity of the Project. At present, Respondent Company employees more than 100 individuals. Unlike other industries, the promoters of the Respondent Company play a vital role in driving the business of the Respondent Company especially since the entertainment industry is personality driven. 3) The Respondent/Corporate Debtor Company being in the entertainment business....
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....uently, Mr. Somashekar preferred an appeal against the said judgment vide Company Appeal 7 of 2014 before the Hon'ble High Court of Karnataka. Consequently, the earlier interim orders dated 21.09.2010 restraining the Respondent from altering its share capital or encumbering its assets stood vacated. And the Company Appeal is pending consideration before the Hon'ble High Court of Karnataka. Basing on the undertaking on behalf of Respondent that it would not create any encumbrance in so far as the assets are concerned, nor would not change shareholding pattern, without permission of Court, the case was admitted on 29.01.2015. Therefore, as on the date of filing of this affidavit, the Respondent Company is retrained from raising fresh Capital or creating any encumbrances on its properties for repayment of the loan amount. The Respondent Company has even filed Interlocutory Application No.2 of 2018 in CA No. 7 of 2014 seeking leave to withdraw the undertaking and the same is stated to be pending before the Court. 7) Itis stated that many investors are ready and willing to invest in the Respondent Company. However, the Respondent Company is unable to avail the funds bec....
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....High Court of Karnataka in W.P.No.38663 of 2013 (GMKSFC), the representation dated 12.03.2019 was disposed of by speaking order dated 22.03.2019, and the same was communicated to the Respondent Company vide letter No. D-Recy/2018-19/653 dated 23.03.2019. It is further stated that no other request/representation of the Respondent Company in respect of the payment of dues to the Corporation is pending for consideration with the Corporation. Therefore, the learned Counsel for Petitioner urged the Tribunal to initiate Corporate Insolvency Resolution Process in the interest of justice and they have extended sufficient time for the Respondent. 7. Shri Dhyan Chinnappa, learned Sr. Counsel for Respondent, while reiterating the averments made in the affidavit dated 10.04.2019, which are briefly stated supra, has further inter alia submitted that further time may be granted, and they are ready to pay further amount and also contemplating to file writ petition before the Hon'ble High Court of Karnataka by challenging the speaking order dated 22.03.2019. 8. The case was listed for admission on various dated viz., 17.10.2018, 25.10.2018, 29.11.2018, 07.12.2018, 03.01.2019, 01.02.20....
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....2. It is relevant to refer law on the points to be considered while considering a petition/application filed under provisions of Section 7 of Code. We may advert to the order dated 15th May 2017 of Hon'ble NCLAT passed in Company Appeal (AT) (Insolvency) No.1 & 2/2017, wherein the Hon'ble NCLAT, New Delhi, in the matter of M/s Inventive Industries Ltd. Vs. ICICI Bank and another has dealt the issue of admission of a case filed under Section 7 of the Code , under Paras 55 to 58, which are extracted below: "55) Process of initiation of Insolvency Resolution process by a financial creditor is provided in Section 7 of the I& B Code. As per sub-section (1) of Section 7 of the I & B Code, the trigger for filing of an application by a financial creditor before the Adjudicating Authority is when a default in respect of any financial debt has occurred. Sub-section (2) of Section 7 provides that the financial creditor shall make an application in prescribed form and manner and with prescribed documents, including: i. "record of the default" recorded with the information utility or such other record or evidence of default as may be specified; ii. the name of the resolution professiona....
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....etailed form in 5 parts, which requires particulars of the applicant in Part I, particulars of the corporate debtor in Part 11, particulars of the proposed interim resolution professional in part 111, particulars of the financial debt in part IV and documents, records and evidence of default in Part V. Under Rule 4(3), the applicant is to dispatch a copy of the application filed with the adjudicating authority by registered post or speed post to the registered office of the Corporate Debtor. The speed, within which the adjudicating authority is to ascertain the existence of a default from the records of the information utility or on the basis of evidence furnished by the financial creditor, is important. This it must do within 14 days of the receipt of the application. It is at the stage of Section 7 (5), where the adjudicating authority is to be satisfied that a default has occurred, that the corporate debtor is entitled to point out that a default has not occurred in the sense that the "debt", which may also include a disputed claim, is not due. A debt may not be due if it is not payable in law or in fact, The moment the adjudicating authority is satisfied that a default has occu....