TaxTMI 
TaxTMI 
TaxTMI 
2024 (1) TMI 1518
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....hir, seeking to initiate Corporate Insolvency Resolution Process ("CIRP") against M/s M.G. Finvest Private Limited ("Corporate Debtor"). 2. The Corporate Debtor was incorporated on 24.07.2007, having CIN: U65923DL2007PTC166212 under the Companies Act, 1956. Its registered office is at 98, Shahzada Bagh, Industrial Area, Old Rohtak Road, Delhi - 110035. Since, the registered office of the Corporate Debtor is situated at Delhi, this Tribunal having territorial jurisdiction over the NCT of Delhi is the Adjudicating Authority in relation to the prayer for initiation of Corporate Insolvency Resolution Process in respect of respondent Corporate Debtor under sub-section (1) of Section 60 of the Code. The Authorised Share Capital of the Corporate Debtor is Rs. 2,00,00,000 (Two Crores). The Paid-Up Capital of the Corporate Debtor is Rs. 2,00,00,000 (Two Crores). 3. The present petition was filed on 25.09.2021 before this Adjudicating Authority on the ground that the Corporate Debtor has defaulted to make a payment of Rs. 1025,53,60,198.71/- (Rupees One Thousand Twenty-Five Crore Fifty-Three Lakh Sixty Thousand One Hundred Ninety-Eight and Seventy-One Paisa only). The averments made by....
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....ed either on behalf of the Borrower or its guarantors. f) The SBI and the Applicant had executed an Assignment Agreement dated 18 January 2021 ("Assignment Agreement"), by virtue of which SBI had assigned its rights, title and interest in the financing documents, all agreements, deed and documents related thereto and all collateral and underlying Security interest and/or pledges created to secure, and/or guarantees issued in respect of the repayment of the Loans extended to the Borrower, to the Applicant (M/s. CFM Asset Reconstruction Private Limited) and the charge was modified and registered in favour of the applicant on 16.04.2021 to that effect. g) As default continued a Section 7 Petition C.P. (IB) No. 1096/2018 was filed by SBI against the Principal Borrower and the same was admitted by the Hon'ble Principal Bench of this Hon'ble Tribunal on 23 March 2022. Section 7 petitions were also filed against other guarantors of Action Ispat & Power Pvt. Ltd. (Principal Borrower) i.e., Micro Stock Holding Pvt. Ltd. and Nikhil Footwear Pvt. Ltd. The Section 7 petition against Micro Stock Holding Pvt. Ltd. was admitted by the Adjudicating Authority on 11 May 2022 and ag....
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....res dated 12 June 2015. xxii. Copy of Share Pledge Power of Attorney executed by Corporate Debtor dated 12 June 2015. The defence placed by the Corporate Debtor in its reply and submissions made and argued by the Learned Counsel of the Corporate Debtor are summarized hereunder: - 5. The details of the submissions made by the Corporate Debtor are as follows: a) The applicant does not fall under the ambit of 'Financial Creditor' under Section 5(7) of the Code, 2016 as the Assignment Agreement/Deed dated 18.01.2021, executed between State Bank of India (SBI) and the Applicant is not enforceable on the pretext that the same is not registered under Section 17 of the Registration Act, 1908 and become futile as per Section 49 of the Registration Act, 1908. Therefore, the alleged Assignment Deed relied by the Financial Creditor does not legally assign the Debt to the Financial Creditor, and hence, the Financial Creditor is not a 'Financial creditor'. b) There exists no Privity of Contract between the Applicant and the Corporate Debtor since the deed of guarantee dated 30.09.2013 was executed in favour of SBICAP Trustee Company and can be enforced only by th....
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....he existence of debt and default committed by the Corporate debtor is already been established by the Principal Bench in Insolvency Petition C.P. (IB) No. 1096/2018 filed against the Principal Borrower. Therefore, in terms of Regulation 2A(b) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for the Corporate Debtor) Regulations, 2016, the Default of the Corporate Debtor is liable to be admitted. c) The SBI has absolutely assigned and transferred all of its rights in the credit facilities extended to the Borrower along with all underlying security interests to the Applicant vide Assignment Agreement dated 18.01.2021. The Applicant adds that by virtue of the Assignment Agreement, the Applicant has stepped into the shoes of the erstwhile Financial Creditor (SBI) and can enforce such Security Interests, Pledges and/or Guarantees and appropriate the amounts realized towards the Debt. d) Section 128 of the Indian Contract Act, 1872 stipulates that the liability of the guarantor/surety is co-extensive with that of Principal Debtor. Therefore, the Petitioner can rightfully enforce its rights against the Corporate Debtor. The liability of the ....
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....ar Singh v. Phoenix ARC (P) Ltd., [2018 SCC OnLine NCLAT 835] observed that the declaration of Assignment Agreement is essentially a civil proceeding. The relevant extract is reproduced below: "19. In the present case we find that the appellant has sought declaration that the assignment made by HSBC to 'Phoenix' as illegal, which can be raised only in a civil suit. The appellant is trying to convert the proceedings under the 'I&B Code' as civil proceedings akin to a trial which is not the legislative intent" 11. The Corporate Debtor has relied upon Palm Products Pvt. Ltd. Vs T.V.L. Narsimha Rao & Anr. C.A. (AT)(INS) No. 809 of 2020 to submit that if an assignment deed is not registered, it cannot fall within the ambit of claim and consequently, will not fall within the ambit of debt under the Code. On a perusal of given citation, the issue is with regard to admission of claim by the Resolution Professional not for admission of an application filed under Sec 7 of the Code, 2016. 12. As regards to the Corporate Debtor's contention that the Assignment Agreement dated 18.01.2021 lacks legal enforceability due to non-registration under Section 17 of the Registration Act, ....
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....igned or transferred to." Section 5(8) of IBC defines Financial Debt. "Financial Debt means a debt along with interest, if any, which is disbursed against the consideration for the time value of money and includes- (a) Money borrowed against the payment of interest; (b) Any amount raised by acceptance under any acceptance credit facility or its de-materialised equivalent; (c) Any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument; (d) The amount of any liability is respect of any lease or hire purchase contract which is deemed as a finance or capital lease under the Indian Accounting Standards or such other accounting standards as maybe prescribed; (e) Receivables sold or discounted other than any receivables sold on non-recourse basis; (f) Any amount raised under any other transaction, including any forward sale or purchase agreement, having the commercial effect of a borrowing; (g) Any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price and for calculating the....
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....ty is coextensive with that of the principal borrower and more so when it activates from the written acknowledgment of liability and failure of both to discharge that liability." 17. The Corporate Debtor failed to bring on record any document to prove that there exists any such provision in the Guarantee Agreement which provides for discharge of the surety before the entire dues guaranteed under the Guarantee Agreement are repaid. Therefore, we are of considered view that the liability of the Corporate Debtor cannot be extinguished simply because CIRP has been initiated against the Principal Borrower. Therefore, this contention of the Corporate Debtor is overruled. 18. As regard to Corporate Debtor's contention that the date of default as relied by the applicant is 29.08.2017 i.e., the date when SBI issued demand notice upon Borrower and its guarantors (including Corporate Debtor) calling upon to repay the outstanding amount is sent after the default has taken place and not prior to that therefore, the date of default relied upon by the Applicant is not tenable, for the purpose of limitation. As far as the question of limitation is concerned, from the records, we observe that....
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....te Debtor as to the present application being barred by limitation is not sustainable. Hence, in all respects the 'debt' as claimed by the Financial Creditor is well within the period of limitation. It is not denied that the Corporate Debtor has committed 'default' in repayment of the said 'financial debt'. 20. The Hon'ble Supreme Court in the matter of Innoventive Industries Ltd. vs. ICICI Bank & Anr (2018) 1 SCC 407, held as follows :- "29. The scheme of Section 7 stands in contrast with the scheme under Section 8 where an operational creditor is, on the occurrence of a default, to first deliver a demand notice of the unpaid debt to the operational debtor in the manner provided in Section 8(1) of the Code. Under Section 8(2), the corporate debtor can, within a period of 10 days of receipt of the demand notice or copy of the invoice mentioned in subsection (1), bring to the notice of the operational creditor the existence of a dispute or the record of the pendency of a suit or arbitration proceedings, which is pre-existing - i.e. before such notice or invoice was received by the corporate debtor. The moment there is existence of such a dispute, the ....
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....Rules, 2016 for initiating CIRP against M.G. Finvest Private Limited, the Corporate Debtor, stands admitted. 23. That the petitioner in part-III of the petition has proposed the name of Mr. Shiv Nandan Sharma, as Interim Resolution Professional, having Registration Number IBBI/IPA-001/IPP00384/2017-2018/10641 and E-mail ID [email protected], is hereby appointed as an Interim Resolution Professional (IRP) for corporate debtor. Resolution Professional so appointed also directed to file Valid AFA along with requisite FORM 2 within the 5 days of receipt of this order. 24. We also declare moratorium in terms of Section 14 of the Code. The necessary consequences of imposing the moratorium flows from the provisions of Section 14 (1) (a), (b), (c) & (d) of the Code. Thus, the following prohibitions are imposed: (a) The institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; (b) Transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial....