TaxTMI 
TaxTMI 
2021 (10) TMI 1082
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....6, passed by the Learned 'Adjudicating Authority' ('National Company Law Tribunal', Special Bench, Chennai. 2. The Adjudicating Authority (National Company Law Tribunal, Special Bench, Chennai) while passing the impugned order dated 13.11.2020 in IBA/779/2019 filed by the 1st Respondent/Applicant/Financial Creditor at paragraph 13 to 20 had observed the following: "13. Prima facie it is the contention of the Ld. Counsel for the Corporate Debtor that since the Financial Creditor has initiated recovery proceedings under the SARFAESI Act, 2002 by taking possession of the property under Section 13(4) of the SARFAESI Act, 2002 and as such the Financial Creditor cannot initiate parallel proceedings under IBC, 2016 to recover the said sum from the Corporate Debtor. The identical issue fell for consideration before the Hon'ble NCLAT in the matter of Rakesh Kumar Gupta V. Mahesh Bansal & anr in Company Appeal (AT)(Insolvency) No. 1408 of 2019, dated 20.02.2020, wherein the Hon'ble NCLAT has held as follows: ''.....Insolvency & Bankruptcy Code 2016 is subsequent Code to SARFAESI Act of 2002 and Recovery of Debts Due to Banks & Financial Institution Act, 1993 with provision of Moratorium....
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....under Section 7 of the Code, if the Adjudicating Authority is satisfied that default has not occurred or the application is complete and there is no disciplinary proceedings pending against the proposed resolution professional, it may, by order, admit such application. Contention of the Learned Counsel that applications are mechanically admitted, cannot be accepted. Contention that approach of the 2nd Respondent to NCLT, amounts to forum shopping is not tenable, as the Code enables filing of an application, notwithstanding the pendency of any proceedings, under the SARFAESI Act, 2002. When the Code has not been stayed, the process envisaged in the Code, has to be continued, and cannot be restrained." 15. The Hon'ble NCLAT also in the matter of Harkirat S Bedi Vs Oriental Bank of Commerce (2019) 108 taxmann.com 110 (NCLAT) held as under: "From the aforesaid finding, it is evident that even if a claim is disputed and if the amount payable is more than Rs. 1 lakh, the application u/s 7 of the &B Code is maintainable. Mere pendency of the case before the DRT for adjudicating of such disputed amount cannot be a ground to reject the application u/s7 of the I&B Code, if the Adjudicati....
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....rnment by way of an amendment inserted in Section 10A of I&B Code, 2016 wherein the default in respect of the dues arising from the period 25.03.2020 till 25.09.2020 (now extended upto 25.12.2020) has been excluded and as such in the present case from Part-IV of the Application it is seen that the default has occurred much prior to 25.03.2020 and hence Section 10A of &B Code, 2016 also would not come to the aid of the Corporate Debtor. 20. Thus taking into consideration the facts and circumstances of the case as well as the position of Law, we are of the view that this Application as filed by the Applicant-Financial Creditor is required to be admitted under Section 7(5) of the I&B Code, 2016."' and finally admitted the Application by appointing Mr. A. Mohan Kumar, as 'Interim Resolution Professional' and declared moratorium etc. Appellant's Submissions: 3. Challenging the validity, propriety and legality of the impugned order dated 13.11.2020 passed by the 'Adjudicating Authority', (National Company Law Tribunal, Special Bench, Chennai) in IBA/779/2019 (filed by the 1st Respondent/Financial Creditor), the Learned Counsel for the Appellant submits that the Second Respondent/Com....
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.... 7 Application against the Developer M/s Cal Express Construction (India) Pvt. Ltd. and the matter is still pending in IBA698/2019, yet, the Second Respondent, on 13.04.2017 had paid an additional sum of Rs. 18,38,141/- to the First Respondent with an intention to regularise their account. 7. The Learned Counsel for the Appellant contends that without considering the default on the part of the Developer, the First Respondent had arbitrarily issued a Notice dated 1.2.2017 under Section 13(2) of the SARFAESI Act, 2002 to the Second Respondent alleging that the Second Respondent had defaulted in seven Equal Monthly Instalments and declaring the Account as NPA w.e.f. 31.10.2016. Simultaneously, the First Respondent had also addressed various correspondence to the Developer, calling upon them to cancel the allotment of the flat in favour of the Second Respondent and to refund the amounts received by the Developer from the Respondent No.1 and 2. 8. It is represented on behalf of the Appellant that the First Respondent on 4.4.2018 had issued a possession notice as per Rule 8(1) of SARFAESI Rules, 2002 and went ahead in taking physical possession of the Apartment. As a matter of fact, th....
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....irst Respondent, the First Respondent had neither sold the property nor realised any 'Sale Proceeds'. Apart from this, the construction of the said property was stopped because of the dispute between the developers and purchasers/investors. In fact, the 'Developer' and the 'Corporate Debtor' took no concrete steps to complete the construction of the said property and as on date, the 'Half Constructed Structure' cannot be put to 'any commercial use' unless further investment is made into it. 17. The Learned Counsel for the First Respondent / Financial Creditor refers to the judgement of this Tribunal 'Encore Asset Reconstruction Company(P) Ltd.' Vs. 'Ms. Charu Sandeep Desai' (vide Comp. App. (AT)(Ins.) 719/2018) wherein it is observed and held as under:- "It is not the case of the Appellant that the title of the assets has already been transferred or they have sold the assets in terms of Section 13(4) of the 'SARFAESI Act, 2002'. It is also not the case of the Appellant that the assets owned by a third party is in possession of the 'Corporate Debtor' in terms of Section 18, as it is the duty of the 'Interim Resolution Professional' to take control and custody of any asset over wh....
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....ich took place on 17.12.2020. In fact, the 'Committee of Creditors' comprise of the First Respondent / M/s. Sundarama BNP Paribas Home Finance Ltd. (Financial Creditor). 21. It is the plea of the Learned Counsel for the Second Respondent that the 'Interim Resolution Professional' took note of the claims submitted pursuant to publication of notice, constituted the Committee of Creditors and the voting share of the Committee of Creditors as per Section 25(2)(e) of the Code, r/w Regulation 12 of IBBI(CIRP) Regulations. In the meeting held on 17.12.2020 the Committee of Creditors had affirmed and approved the appointment of IRP Mr. A. Mohan Kumar, as the Resolution Professional. In fact, Mr. Mohd. Abdul Rahim and Mr. M. Kumarenderan were appointed as the Registered Valuers on 24.12.2020. 22. It is brought to the fore that the 'Resolution Professional' through e.mail dated 20.11.2020 sent to the Suspended Directors of the Corporate Debtor had prayed for the following details:- a. Financial Statement for the last 2 years along with Schedules and supporting ledger accounts b. Provisional financial statement for the current financial year till date. c. Guarantees given in relation ....
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....cant Financial Creditor to the builder in the year 2015. The housing loan was utilised by the Corporate Debtor to purchase a flat in the name of the Company, more fully mentioned in the schedule of the mortgaged deal, in June, 2015. In fact, the Company had paid a sum of Rs. 34,44,209/- to the Financial Creditor as 'EMI' along and disbursed a sum of Rs. 18,38,141/- on 13.4.2017, in respect of this project to regularise the 'Equal Monthly Instalment'. 28. The 'Corporate Debtor' in its counter (Before the Adjudicating Authority) had averred that there was no financial debt outstanding, as per definition of Section 5(8) of the I&B Code. The First Respondent / Financial Creditor took possession of the property of the secured assets as on 04.04.2018 and that it is under their possession and further that original title deeds were also available with them. Also that, the outstanding amount claimed was only Rs. 2,74,49,023/- and that the property is worth Rs. 5,05,89,202/-. 29. The 'Corporate Debtor' in the counter (Before the Adjudicating Authority) took a plea that the 'Financial Creditor' can sell the secured assets of which were taken possession as per the SARFAESI Act, 2002 and real....
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....t 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 clam 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), an application is to be made under sub-section (1) in such form and manner as is prescribed, which takes us to the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. Under Rule 4, the application is made by a financial creditor in Form 1 accompanied by documents and records required therein. Form 1 is a detailed form in 5 parts, which requires particulars of the applicant in part 1, particulars of the corporate debtor in Part II, particulars of the proposed interim resolution professional in part III, particulars of the financial debt....
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.... in respect of the SARFAESI Act, 2002, by means of Section 238 of the Code. Claim 34. Section 3(6) of the I&B Code, 2016 defines 'claim' and the word claim is linked with the 'claim of any debt' made by Creditors or claimants. A right to payment refers to any enforceable obligation of the Debtor including payment from the Estate or distribution from the Bankruptcy Estate. In this connection, this Tribunal relevantly points out that in a fixed claim, the Creditor has a right to payment of a specific amount. However, in a legal claim, the right of claimant to the 'payment of debt' or any other payment is legally enforceable. Debt 35. Section 3(11) defines 'debt'. An Insolvency proceeding can be commenced if a default is committed in payment of the debt that is due and become payable by the Corporate Debtor. Of course, inability to pay debt is not sufficient to initiate the process of Insolvency Resolution. A 'Financial Debt' is a debt together with interest, if any, which is disbursed against the consideration for time value of money like loan or borrowing. Default 36. Under Section 3(12) which defines 'default', for a default thereto, there has to be a subsisting debt. Even if....