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Judgment
Per Shri M.B. Gosavi, Member (J):
This application under Section 7 of Insolvency and Bankruptcy Code, 2016 is filed by the Financial Creditor - Allahabad Bank to start Corporate Insolvency Resolution Process (in short "CIRP") of the Corporate Debtor - M/s. Kaaiser Oils Private Limited on the ground that the Corporate Debtor committed default in paying financial debt of Rs. 71,66,22,658/- (Rupees Seventy-One Crore Sixty-Six Lakh Twenty-Two Thousand Six Hundred and Fifty-Eight Only).
The following facts are not in dispute: -
Initially on 31.03.2010, the bank had granted and disbursed term loan and cash credit facilities in favour of the Corporate Debtor. The term loan and cash credit facilities increased and enhanced from time to time. It was lastly increased on 17.01.2012.
It is also not in dispute that loan account of the Corporate Debtor became NPA on 29.03.2015. The Financial Creditor, Allahabad Bank sent notice to the Corporate Debtor under Section 13(2) of SURFAESI Act, 2002 and recall the loan facilities. The Bank filed recovery proceeding bearing no. O.A. No. 513 of 2016 on 04.11.2019 against the Corporate Debtor in DRT, Kolkata. Hon'ble DRT, Kolkata granted recovery Certificate of Rs. 57, 01,04,462/- (Rupees Fifty-Seven Crore One lakh four Thousand Four Hundred and Sixty Two Only) in favour of the Bank.
Since the Corporate Debtor committed default in paying the financial debt, this proceeding is filed to start CIRP of the Corporate Debtor. Financial Creditor suggested name of one Mr. Saurabh Basu having registration No. IBBI/IPA-002/IP-N00319/2017-18/10924 of Alapan Appartment, 3rd Floor, 10/6/2 Raja Rammohan Roy Road, Kolkata-700008 for appointment of IRP.
Corporate Debtor served with the notice of this application. It appeared though one Mr. Aditya Sikdar, one of the Directors of the Corporate Debtor. He filed affidavit in reply.
Affidavit in reply consists of 63 pages. Upon going through the same carefully, we find that Corporate Debtor raised only contentious defense that the claim being time barred and nothing else. The Corporate Debtor contended that how the Bank delayed the proposal of grant and disbursement of loan at each stage. But ultimately, he did not dispute the claim of disbursement of loan in its favour and it has committed default in paying the same. The Corporate Debtor has also contended that Hon'ble Calcutta High Court while admitting the first appeal against the order dated 28.02.2017 passed by Ld. Civil Judge, Senior Division at Burdwan had observed, "the Bank initiated recovery proceeding then the Bank can release its dues by selling mortgage properties etc.” On the basis of above observations, the Corporate Debtor contends that this proceeding is not maintainable.
We heard Ld. Counsel for the Financial Creditor and Ld. Counsel for the Corporate Debtor at length. We have gone through the evidence on record.
We find that the Corporate Debtor did not raise any contentious defense except stating that it is the time barred claim. We have considered that defense. In this case, loan account of the Corporate Debtor was declared to be NPA on 29.03.2015. This proceeding is filed on 05.04.2018. However, on 31.03.2016, the Corporate Debtor admitted and acknowledged this debt in its balance sheet (page no. 145 of the paper book). The corporate debtor itself produced on record deed of settlement with the Bank dated 20.07.2018 wherein again the Corporate Debtor admitted and acknowledged the debt. On the basis of above evidence, we hold that claim is not time barred.
Ld. Counsel for the Corporate Debtor brought to our notice some observation of Hon’ble High Court at Calcutta as noted above. But in our considered opinion, those observations do not help the Corporate Debtor to contest this application. It is not recovery proceeding. Hence, the defenses, say or counter claim etc. on which Hon’ble Calcutta High Court’s observations are based are not available in this proceeding. It is not well settled that in application under Section 7 IBC, 2016, this Authority has to see evidence relating to debt and default by the Corporate Debtor. Both facts are established herein. The debt is also not time barred. No disciplinary enquiry is pending against the proposed IRP. The application is defect free. Hence, we admit the Corporate Debtor in CIRP by following orders: -
ORDER
The application filed by the Financial Creditor under section 9 of the Insolvency & Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process against the Corporate Debtor, M/s Kaaiser Oils Pvt. Ltd. is hereby admitted.
ii) We declare a moratorium and public announcement in accordance with Sections 13 and 15 of the IBC, 2016.
iii) Moratorium is declared for the purposes referred to in Section 14 of the Insolvency & Bankruptcy Code, 2016. The IRP shall cause a public announcement of the initiation of Corporate Insolvency Resolution Process and call for the submission of claims under Section 15. The public announcement referred to in clause (b) of sub-section (1) of Section 15 of Insolvency & Bankruptcy Code, 2016 shall be made immediately.
iv) Moratorium under Section 14 of the Insolvency & Bankruptcy Code, 2016 prohibits the following:
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;
Transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein;
Any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002);
The recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor.
The supply of essential goods or services to the corporate debtor as may be specified shall not be terminated, suspended, or interrupted during moratorium period.
vi) The provisions of sub-section (1) shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator.
vii) The order of moratorium shall have effect from the date of admission till the completion of the corporate insolvency resolution process.
viii) Provided that where at any time during the corporate insolvency resolution process period, if the Adjudicating Authority approves the resolution plan under sub-section (1) of Section 31 or passes an order for liquidation of corporate debtor under Section 33, the moratorium shall cease to have effect from the date of such approval or liquidation order, as the case may be.
ix) Necessary public announcement as per Section 15 of the IBC, 2016 may be made.
Mr. Saurabh Basu having registration No. IBBI/IPA-002/IP-N00319/2017-18/10924 of Alapan Appartment, 3rd Floor, 10/6/2 Raja Rammohan Roy Road, Kolkata-700008 is appointed as Interim Resolution Professional for ascertaining the particulars of creditors and convening a Committee of Creditors for evolving a resolution plan.
xi) The Financial Creditor to pay sum of Rs. 1,00,000/- (Rupees One Lakh Only) to IRP as advance fees as per Regulation 33(2) of IBBI (Insolvency Resolution Process for Corporate Persons) Regulation 2016 which shall be adjusted from final bill.
xii) In case, further funds are required by IRP/RP and in the event of non-provision thereof, IRP/RP can approach this Tribunal so that CIRP would not be hampered for want of funds.
xiii) The Resolution Professional shall conduct CIRP in time bound manner as per Regulation 40A of IBBI (Insolvency Resolution Process for Corporate Persons) Regulation, 2016.
xiv) Registry is hereby directed under section 7(7) of the I.B. Code, 2016 to communicate the order to the Financial Creditor, the Corporate Debtor and to the I.R.P. by Speed Post as well as through e-mail.
List the matter on 30.01.2020 for the filing of the progress report.
Certified copy of the order may be issued to all the concerned parties, if applied for, upon compliance with all requisite formalities.