TaxTMI 
TaxTMI 
2022 (9) TMI 630
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....Private Limited(hereinafter referred to as the Corporate Debtor). 3. Submissions on behalf of the Financial Creditor: 5.1 The case of the Financial Creditor is that in or around June 2004, it sanctioned to the Corporate Debtor cash credit facility of Rs.1,50,00,000/- (Rupees One Crore Fifty Lakh Only), Letter of Credit of Rs.7,50,00,000/- (Rupees Seven Crore Fifty Lakh Only)and Bank Guarantee Facility of Rs.5,00,000/- (Rupees Five Lakh Only), aggregating to a total amount of Rs.9,05,00,000/- (Rupees Nine Crore Five Lakh Only). 5.2 Thereafter at the request of the Corporate Debtor, the Financial Creditor on 12thSeptember 2005 enhanced the cash credit facility from Rs.1,50,00,000/- to Rs.2,60,00,000/- (Rupees Two Crore Sixty Lakh Only), the Letter of credit facility from Rs.7,50,00,000/- to Rs.14,00,00,000/- (Rupees Fourteen Crore Only) and the Bank Guarantee from Rs.5,00,000/- to Rs.18,05,000/- (Rupees Eighteen Lakh Five thousand Only), aggregating to Rs.16,78,00,000/- (Rupees Sixteen Crore Seventy- Eight Lakh Only) on the terms and conditions contained in the letter of sanction dated 12.09.2005. 5.3 Thereafter at the request of the Corporate Debtor, th....
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....ult in servicing of interest happened on 31.03.2017and the account of the corporate debtor was declared as a non performing asset (NPA) on 31st May 2017.The total days of default as on 15th March 2020 are 1019 days. 5.11 The principal amount due to the Financial Creditor as on the date of NPA being 31.05.2017 is Rs.35,18,00,000/-. The total amount claimed by the Financial Creditor, including the uncharged interest, other interest and penal interest as on 31st July, 2020 is Rs.58,16,00,000/-. 5.12 The documents produced by the Financial Creditor in support of his claims include: i. Copy of the Master data of Corporate Debtor being Annexure "B"; ii. Copy of the Balance sheet of Corporate Debtor for the year ending on 31st March 2019, being Annexure "D"; iii. Copies of the documents executed between the consortium of banks and Corporate Debtor in December 2013, being Annexure "H"; iv. Confirmation dated 18th April 2016 by the Corporate Debtor regarding the balance due to the Financial Creditor as on 31st March 2016 in form of the balance confirmation certificate of the Bank, being Annexure "I" v. order dated 23rd March 202....
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....plication under Section 7 of the Code and as such, the present application has been filed without proper authorisation. 6.5 Further, the Financial Creditor, in its attempt to show acknowledgement of liability by the Corporate Debtor, has relied upon unsigned financial statements of the Corporate Debtor. The same are also not verified by the Auditor of the Corporate Debtor. As such, the said documents cannot be relied upon to prove any alleged acknowledgment of debt by the Corporate Debtor. 6.6 The Financial Creditor had classified the accounts of Corporate Debtor as Non-Performing Asset on 31st May 2017. In accordance with Clause 2.1.1 of the Master Circular on Income Recognition, Asset Classification, Provisioning & Other Related Matters - UCBs dated 1st July 2009, an asset becomes nonperforming when it ceases to generate income for the bank. Furthermore, in accordance with Clause 2.1.2 of the Master Circular on Income Recognition, Asset Classification, Provisioning & Other Related Matters - UCBs dated 1st July 2009, 90 days overdue norms for identification of NPAs have been made applicable from the year ended March 31, 2004. 6.7 It is submitted that the....
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....dgment dated 18th April 2016, i.e., an alleged acknowledgement issued prior to even commission of default cannot be considered to be as a valid acknowledgement ofunder Section 18 of the Limitation Act, 1963. 6.13 Further, even considering the said letter dated 18th April 2016 to be a valid acknowledgement, the said acknowledgment has been issued beyond the period of 3 years and as such, the same cannot constitute to be a valid acknowledgment under Section 18 of the Limitation Act, 1963. 6.14 Further, with reference to the copy of letter dated 9th October 2018 issued by State Bank of India with copy marked to the Financial Creditor, it is submitted that the said communication dated 9th October 2018 was not issued to the Financial Creditor but the same was issued by the Corporate Debtor to State Bank of India.Since the said proposal for resolution was not accepted by the State Bank of India and as such, the same cannot constitute to be a valid acknowledgment of liability. under Section 18 of the Limitation Act, 1963. 6.15 Further, the communications which can be considered as a valid acknowledgement of liability under Section 18 of the Limitation Act, 1963 ....
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....edient or necessary in connection with any suit or legal proceeding in any court or Tribunal or any other judicial or quasi-judicial authority. A copy of the said Board Resolution along with a Circular dated 20.07.2012 is annexed to the rejoinder and marked with letter "B". 7.4 Further, with regard to the date of a document, the date of notarization is to be construed as the date of the document since the affirmation is happening in the presence of the notary. That is the very purpose and intent of notarization and affirmation before a notary public. 7.5 A board resolution is not required in all cases when the power of attorney is there and branch managers have been specifically authorized. It is therefore denied that the Power of Attorney is defective as alleged or at all. 7.6 Further, pursuant to judgments of the Hon'ble Supreme Court, the bank has a general board resolution that every person designated as "Manager" of a branch is authorized to sign petitions and institute litigations on behalf of the Bank. A copy of the Circular dated 20.07.2012 evidencing that the signatory of the section 7 petition was the Assistant General Manager and duly autho....
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.... dues of the Financial Creditor and promise to pay the Financial Creditor and such letter was also copied to the Financial Creditor. Since State Bank of India is leader of the consortium, the letter was addressed to the consortium leader and copied to the other bankers, which is the Financial Creditor in the instant case. It is denied that none of the documents establish valid acknowledgment of liability as alleged or at all. 7.11 It is further denied that the letter dated 9th October 2018 does not constitute a valid jural relationship between the Corporate Debtor and the Financial Creditor or that the same cannot be construed as a valid document for extension of limitation. 7.12 It is denied that the application has not been filed bonafide or is used to pressurize the Corporate Debtor to succumb to the unjust demands of the Bank or that the Bank has no intention of resolution or that the instant application is not maintainable in facts or in law or is liable to be dismissed as alleged or at all. 6. Supplementary Affidavit on behalf of the Financial Creditor: 8.1 It is submitted that pursuant to the Notification No. 5.0.109 (E) dated 27th February 2019....
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.... 7. Analysis and Findings: 9.1 We had heard the Ld. Counsel on behalf of the Financial Creditor and the Ld. Counsel on behalf of the Corporate Debtor and perused the records. 9.2 The contention of the Corporate Debtor that the instant petition is defective as Financial Creditor has failed to place on record the Board Resolution which authorises Mr. Prasenjit Roy to initiate proceedings under Section 7 of the Code, is not correct as the Ministry of Corporate Affairs, vide Notification No. 5.0.109 (E) dated 27th February 2019 clearly allows for a person duly authorized by the Board of Directors of a company to file an Application for initiating Corporate Insolvency Resolution Process against a Corporate Debtor before the Adjudicating Authority under Sub-Section (1) of Section 7 of the Insolvency and Bankruptcy Code, 2016 on behalf of the Financial Creditor. 9.3 In compliance with the above notification, the directors of the Financial Creditor, vide Item No. H-3 of the Board Resolution dated 21/06/2019, Have authorised the officers in the cadre of Scale-IV to sign applications on behalf of the Financial Creditor to initiate CIRP proceedings. As such, the in....
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.... Financial Creditor in the shape of a letter dated 09.10.2018 (Annexed on pages 264 to 269) as issued by the Corporate Debtor to State Bank of India with a copy marked to the Financial Creditor. In the said letter, the Corporate Debtor has clearly admitted to its liability towards the Financial Creditor herein. Since the said letter was issued within the original limitation period, it would, under section 18 of the Limitation Act, 1963, extend the limitation period. The new limitation period would end on 09.10.2021. As such, the instant petition is well within the period of limitation. The abovementioned letter dated 09.10.2018 would further act as the Corporate Debtor's admission of the debt due to the Financial Creditor. Regarding the Corporate Debtor's contention that the said letter was addressed to the State Bank of India and not the Financial Creditor, page 267 of the petition clearly mentions that a copy of the said letter was to be sent to the Financial Creditor. 9.7 It is to be noted that the parties herein have been given multiple opportunities to settle the instant dispute. On 4th July, 2022, the Ld. Counsel for the Corporate Debtor sought the last opportunity t....
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....shall be compliant with such Regulations, Circulars and Directions as may be issued by the Insolvency & Bankruptcy Board of India (IBBI). The IRP shall carry out his functions as contemplated by sections 15, 17, 18, 19, 20 and 21 of the Code. f) During the CIRP period, the management of the Corporate Debtor shall vest in the IRP orthe RP, as the case may be, in terms of section 17 of the IBC. The officers and managers of the Corporate Debtor shall provide all documents in their possession and furnish every information in their knowledge to the IRP within one week from the date of receipt of this Order, in default of which coercive steps will follow. g) The IRP/RP shall submit to this Adjudicating Authority periodical reports with regard to the progress of the CIRP in respect of the Corporate Debtor. h) The Financial Creditor shall initially deposit a sum of Rs.3,00,000/- (Rupees three lakh only) with the IRP to meet the expenses arising out of issuing public notice and inviting claims. These expenses are subject to approval by the Committee of Creditors (CoC). i) In terms of section 7(5)(a) of the Code, Court Officer of this Court is hereby direc....