TaxTMI 
TaxTMI 
2022 (4) TMI 1000
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.... 3. The Authorized Share Capital of the Corporate Debtor (CD) Company i.e. Byrnihat Coal Private Limited is Rs. 1,20,00,000 (Rupees One Crore Twenty Lakh only) and the Paid-Up Share Capital is Rs. 1,17,85,000 (Rupees One Crore Seventeen Lakh Eighty-Five Thousand only). The Registered office is situated at House No. 3/1, Rajdeep Complex, First Floor, F.A. Road, Kumarpara, Guwahati-781009. 4. The Corporate Applicant submits that: 4.1 As on August 23, 2021, the Corporate Applicant has the following debts. Name of Creditor Address of the Creditor Nature of Debt Amount Outstanding (Rs.) Sharma & Sons Corporation Lal Bazar, Opp- Bharat Vikash Parishad, Jharia, Dhanbad-828111, Jharkhand Coal Purchase 15,00,000.00 R.S.H Agro Products Limited Village Ambher, 12th Mile, Jorabat, Guwahati-781023, Kamrup (M), Assam Other Liabilities 21,60,000.00 Naresh Kumar Harlalka Subham Apartment, Narayan Nagar, Guwahati-781009, Assam Advance from Director 5,10,000.00 Punjab National Bank LIC Building, Fancy Bazar Branch, Fancy Bazar, Guwahati-781023, Assam Cash Credit 6,43,84,315.89 Punjab National Bank LIC Building, Fancy Bazar Bra....
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....was to be done as per the terms of the Sanction Letter. b. Rs. 2.50 crores were disbursed as Inland Letter of Credit interchangeable with ILG Limit with a cash margin of 15 percent. The said amount was disbursed for the purpose of procurement of raw materials within India and to be issued in favour of Coal India Ltd. or other coal suppliers for procurement of coal for the purpose of trading. The Corporate Applicant had undertaken to comply with all the exchange/import trade control regulations of RBI in respect of imports under the aforesaid limit. c. The Corporate Applicant, was in extreme financial distress due to ban on coal mining imposed by the Hon'ble Supreme Court of India and in view of the same, the Corporate Applicant was unable to repay the cash credit facility granted to it. Due to the failure to honor the obligations of the Sanction Letter, the banks issued letter dated September 4, 2019 and September 10, 2019, requesting the Corporate Applicant to clear its outstanding dues vide letters dated November 5, 2019 and December 3, 2019. 4.2 The Corporate Applicant received letters dated December 3, 2019 and December 4, 2019 from the Bank, reiterating it....
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....nder Covid-19 regulatory package for Reserve Bank of India for accounts having exposure of above Rs. 50 lakhs on August 22, 2020. Accordingly, the Bank disbursed an amount of Rs. 38,10,574 (Rupees Thirty-Eight Lakh Ten Thousand Five Hundred Seventy-Four only) on September 16, 2020 to the Corporate Applicant. However, the Corporate Applicant failed to pay the outstanding dues and an amount of Rs. 42,63,078.00 (Rupees Forty-Two Lakhs Sixty-Three Thousand and Seventy-Eight only) is still payable. 4.8 On account of non-payment of due interest/installment/overdue amount as per the guidelines of Reserve Bank of India, the bank sent a recall notice to the Corporate Applicant dated April 13, 2021 ("Recall Notice") whereby the Bank stated that the Cash Credit and CFITL accounts of the Corporate Applicant have become an NPA on March 31, 2021 and the bank refused to permit the continuation of the said accounts. The cash credit account shows a debit of Rs. 7,07,96,649 (Rupees Seven Crore Seven Lakh Ninety-Six Thousand Six Hundred Forty-Nine only) and CFITL account shows a debit balance of Rs. 40,64,950 (Rupees Forty Lakh Sixty-Four Thousand Nine Hundred Fifty only) as on March 31, 2021. Acc....
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....siderably depleted due to losses, the Board of Director of the Corporate Applicant decided to initiate proceedings under section 10 of the Code. Accordingly, a notice for an Extra Ordinary General Meeting dated May 10, 2021 to initiate CIRP against the Corporate Applicant was issued and a resolution dated June 4, 2021 was passed to initiate corporate insolvency proceedings under section 10 of the Code. 5. It is also submitted that the major financial creditor Punjab National Bank (PNB) issued 13 (2) notice under SARFAESI Act, 2002, dated 23.04.2021 declaring the Petitioner's cash credit account, NFB account and CFITL account credit as non-performing asset. 6. The Petitioner has submitted the details of securities for Bank Credit facilities. The same are mentioned as below: Sl. No. Charge ID and date Amount Assets on which charge is created 1. 10554755 9th Feb, 2015 7,00,00,000.00 Hypothecation of inventory lying at 12th Mile stock yard, including stock in transit, book debt arising out of genuine credit sales of the company both present and future, domestic and imported consisting of coal. 2. 10247935 29th Sept, 2010 22,55,00,000.00 All tha....
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....URE 32 8. The Petitioner has prayed for admitting the Section 10 application filed by the Petitioner to initiate Corporate Insolvency Resolution Process against the Corporate Debtor. 9. On the other hand, the Respondent No. 4 i.e. Punjab National Bank has submitted that: 9.1 The entire contents of the application filed by the petitioner may be treated to be denied by the respondent Bank unless any part thereof is specifically admitted hereinafter. The application filed under section 10 by the petitioner is an attempt to escape its outstanding liabilities which are due and payable to the respondent bank, by using the mechanism of the IBC in order to obtain an order of moratorium in respect of the various recovery proceedings which have been instituted by the respondent bank. 9.2 Though there is an admitted default committed by the petitioner in the repayment in the repayment of its dues, mere commission of such default is not sufficient to trigger the provisions of the IBC. The objective of the IBC is resolution and reorganization of the stressed debtors but in the case of the petitioner it is the humble submission of the bank that the business model and financial struct....
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....he situation so as to lead to degradation of the accounts and slippage into NPA category. 9.6 The respondent Bank has strong reasons to object to the application under section filed by the petitioner, and prays that the same may be dismissed and the recovery proceedings may not be allowed to be delayed and frustrated due to the pendency of the same before this Hon'ble Tribunal. 10. The Corporate Applicant has filed a rejoinder to the reply of Respondent No. 4. The following submissions have been made by the applicant: 10.1 The Reply filed by the Respondent No. 4 is devoid of any substance and merit. The submissions made by the Respondent No. 4 are denied to the extent that they are contrary to and/or inconsistent with the averments and/or submissions made in this Rejoinder and the Application. The Corporate Applicant has filed the Insolvency Application in compliance with all the requirements under Section 10 of the Code, read with IBBI (Application to Adjudicating Authority) Rules, 2016. As per section 10(3) of the Code, the Corporate Applicant is required to comply with the following requirements, which have been duly complied. 10.2 As long as the application is compl....
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.... by virtue of any such law." 10.6 The Code shall have an overriding effect over Recovery and Debts and Bankruptcy Act, 1993 and pendency of any proceedings under the said act shall not bar any proceedings under the Code. Without any prejudice, it is further submitted that both the objectives of both the statutes are completely different and independent of each other and the right to seek reliefs under the Code of the Corporate Applicant cannot be taken away merely because of pendency of proceedings under Recovery and Debts and Bankruptcy Act, 1993. 11. The Applicant has further stated that: 11.1 The Corporate Applicant thus proposes to appoint Mr. Akhil Ahuja, an Insolvency Professional, having Registration No. IBBI/IPA-001/IP-P02072/2020-2021/13213 resident at D-65, Defence Colony, New Delhi-110024 to be the Interim Resolution Professional if the said application is admitted in to CIRP by this Hon'ble Bench. The written communication from the proposed Interim Resolution Professional has been annexed 11.2 That, to the best of Applicant's knowledge, Mr. Akhil Ahuja is fully qualified and permitted to act as an insolvency professional in accordance with the Code and the a....
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....rs filed by the Petitioner and the Respondents, this Adjudicative Authority is satisfied that: 14.1 The Corporate Applicant availed the loan/credit facilities from the Financial Creditor-PNB 14.2 The Applicant CD has also furnished: i. The information relating to its books of account and such other documents, ii. The information relating to the resolution professional proposed to be appointed as an interim resolution Professional; and iii. The special resolution passed by shareholders of the Corporate Debtor approving filing of the application. 14.3 Existence of debt is above Rupees One Crore; 14.4 Debt is due, payable and defaulted; 14.5 Default has occurred on 31.03.2021 with the major Financial Creditor to the CD R4-PNB; The FC-PNB has issued Recall Notice on 13/04/2021(notice copy at page no 114 of the application) stating the date of NPA of the Applicant account with them is 31/03/2021. 14.6 Application has been filed within the limitation period, as the existence of the debt due, payable and defaulted is on 31.03.2021 with PNB; when the Application under Section 10 of the IBC has been filed by the CD on 07.09.2021; 14.7 Copy of ....
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....order/direction issued by this Adjudicating Authority and to follow the provisions under Section 13 and 14 and other relevant provisions of the Insolvency and Bankruptcy Code. The IRP has to submit Assignment Declaration before the Registry within 2 days from today. 17. The IRP is hereby advised to adhere to the time limit as stipulated for completion of the Corporate Insolvency Resolution Process ("CIRP") and perform the duties as specified under Section 17, 18, 20 and 21 of IB Code. The IRP shall perform all his functions contemplated, inter-alia, in Sections 15,17,18,19,20 & 21 of the Code and transact proceedings with utmost dedication, honesty and strictly in accordance with the provisions of the 'Code', Rules and Regulations. It is further made clear that all the personnel connected with the Corporate Debtor, its promoters or any other persons associated with the Management of the Corporate Debtor are under legal obligation under Section 19 of the Code to extend every assistance and cooperation to the IRP as may be required by him in managing the day-to-day affairs of the Corporate Debtor. In case there is any violation, the IRP would be at liberty to make appropriate appl....