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Judgment
PER: Hon'ble Shri Narender Kumar Bhola- Member (Technical)
This petition is filed by Andhra Bank which is the Financial Creditor, stating that M/s. Samyu Glass Private Limited, the Corporate Debtor herein had defaulted in repaying a sum of Rs. 35,00,74,293/-. Hence this petition is filed under Section 7 of Insolvency and Bankruptcy Code, 2016, R/w Rule 4 of Insolvency & Bankruptcy (Application to the Adjudicating Authority) Rules, 2016, seeking admission of the Petition, initiation of Corporate Insolvency Resolution Process, granting moratorium and appointment of Interim Resolution Professional as prescribed under the Code and Rules thereon.
The brief averments made in the petition are as follows:
It is averred that the Corporate Debtor, M/s. Samyu Glass Private Limited had availed credit facilities from the Financial Creditor.
The Corporate Debtor availed credit facilities since 2010 and the credit facilities have been sanctioned/enhanced/renewed from time to time and it was renewed last in 2014. Details of availed credit facilities.
November 2009
The Corporate Debtor availed a Term Loan of Rs 30.00 Crores, OCC Limit of Rs 1 Crores, Letter of Credit (Inland/Foreign) of Rs.10.00 Crores and PC/FUBD of Rs.3.00 Crores.
March 2011
The Corporate Debtor availed enhancement of Open Cash Credit (OCC) from Rs.1.00 Crores to Rs.1.95 Crores, PC/ UBD from Rs. 3.00 Crores to Rs. 3. 82 Crores, and further availed a Fresh FDBP/ FUBD Limit of Rs. 5.00 Crores, ILC/FLC and fresh limit of Rs. 2.00 Crores, and Sanction of B.G. Limit of Rs. 0.50 Crores.
August 2012
The Corporate Debtor availed enhancement of OCC limit from Rs.1.95 Crores to Rs.10.00 Crores ,(Fresh Sublimit of PC/FUBD of Rs.4.00 Crores under OCC limit), Renewal /Enhancement of ILC.FLC from Rs.2.00 Crores to Rs.3.50 Crores, Reduction of DUBD/DBP/FDBP/FUBD from Rs.5.00 Crores to Rs.2.00 Crores and Renewal/Enhancement of Bank Guarantee from Rs.0.50 Crores to Rs.1.50 Crores .
February 2015: Restructuring the credit facilities:
The Corporate Debtor had availed the following restructure, Open Cash Credit (OCC) was enhanced from Rs.10.00 Crores to Rs.13.60 Crores, Sanction of Working Capital Term Loan limit of Rs.11.10 Crores ( by converting the existing Adhoc OCC liability of Rs.2.08 Crores, Term Loan liability of Rs.4.23 Crores, Bill Purchased/Discounted liability of Rs.2.14 Crores and Deficit in DP in OCC account of Rs.7.65 Crores), Enhancement of FLC/ILC limit from 1.50 Crores to Rs.2.35 Crores, Reduction of Bank Guarantee limit from Rs.3.50 Crores to Rs.3.35 Crores to meet working capital requirements and rescheduling Term Loan of Rs. 12.50 Crores .
Outstanding as on 31-12-2016
| Facility | Limit in Rs | Outstanding as on 31-12-2016 (Rs). |
|---|---|---|
| OCC | 13,60,00,000 | 15,32,68,125 |
| FLC/ILC | 2,35,00,000 | 3,69,431 |
| LC Devolments | 80,02,949 | |
| B.G | 3,35,00,000 | 2,84,60,500 |
| Invoked BG | 50,02,220 | |
| TL I | 12,50,00,000 | 9,41,48,796 |
| WCTL | 11,10,00,000 | 8,96,52,203 |
| Total | 42,90,00,000 | 35,00,74,293 |
It is averred that the Corporate Debtor has deposited the document of title relating to all that piece and parcel of Plot No. 11 admeasuring Ac.26.00 or 105222.00 Square Mts or 125844 Square Yards with buildings, sheds, Plant and Machinery in Survey No. 528/1(Pt) 528/2(Pt), 531 (Pt) and 532 (part at Industrial Development Park, APIIC-IALA, Gundlamadugu Village, Thondur Mandal, YSR Kadapa District, A.P. and other connected documents relating to A schedule and created mortgage by deposit of title deeds over the said property. The corporate debtor has also confirmed the creation of mortgage. It is further submitted that to further secure the repayment of the loan facilities advanced to the corporate debtor, its guarantors have mortgaged other properties.
It is averred that Form 8 was filed with ROC, Hyderabad for Registration of the Charge on Schedule A and thus ROC, Hyderabad has issued the charge certificate dated 26.10.2017 for Rs.42.90 crores.
It is averred that Corporate Debtor has failed to repay the dues in accordance with the agreed terms as such the financial creditor was constrained to classify the account as NPA, as per the prudential norms prescribed by the RBI on 31.12.2016.
It is averred that the Financial Creditor issued notice for default on 01.07.2016 demanding for payment of total dues. On the failure of the Corporate Debtor the financial creditor has taken recovery steps under the provisions of SARFAESI Act and the same were challenged by one of the mortgagor Mr. Madi Reddy Chandrabhushan Reddy and filed S.A.No.1208/2017 before the Hon'ble Debts Recovery Tribunal II which is pending.
Counsel for corporate debtor reported that corporate debtor has no objection for starting CIRP against corporate debtor by admitting the petition.
We have heard the Counsel for Financial Creditor and also the Counsel for Corporate Debtor.
The present petition is filed under Section 7 of the Code by the Financial Creditor stating that the corporate debtor had defaulted in payment of Rs. 35,00,74,293/- Crores.
The Learned Counsel for Financial Creditor contended that Financial Creditor granted various credit Facilities to the Corporate Debtor from time to time. The Counsel contended the Corporate Debtor committed default of Rs. Rs.35,00,74,293/-. The Financial Creditor filed particulars of financial debt(Documents, Records and evidence of default). The Corporate Debtor reported no objection for starting CIRP by admitting the petition. The Petition is well within the Limitation. The account of the Corporate Debtor is treated as NPA from 31.12.2016 by the Financial Creditor.
Before admitting the Petition filed under Section 7 of IBC, this Tribunal has to see whether there is a debt due and if it is in default. Hon'ble Apex Court held in "Innoventive Industries Ltd Vs. ICICI Bank and Ors (2018) 1 SCC 407 that "The moment the Adjudicating Authority is satisfied that a default has occurred, the application must be admitted unless it is incomplete, in which case it may give notice to the Applicant to rectify the defect within 7 days of receipt of notice from the Adjudicating Authority"
The Corporate Debtor admitted the default. The present petition is well within the Limitation. The Petition is in order. The petition is complete and therefore deserves to be admitted.
The Financial Creditor has suggested the name of IRP who has given consent in Form-2 and there is no disciplinary action pending against present IRP. The account of Corporate Debtor is treated as NPA and there are grounds to admit the petition.
Hence, the Adjudicating Authority admits this Petition under Section 7 of IBC, 2016, declaring moratorium for the purposes referred to in Section 14 of the Code, with following directions:
a) The Bench hereby prohibits 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 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 possession of the corporate Debtor.
b) That the supply of essential goods or services to the Corporate Debtor, if continuing, shall not be terminated or suspended or interrupted during moratorium period.
c) That the provisions of sub-section (1) of Section 14 shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator.
That the order of moratorium shall have effect from 18.10.2019 till the completion of the Corporate Insolvency Resolution Process or until this Bench approves the Resolution Plan under Sub-Section (1) of Section 31 or passes an order for liquidation of Corporate Debtor under Section 33, whichever is earlier.
That the Public announcement of Corporate Insolvency Resolution Process shall be made immediately as specified under section 13 of the code.
That this Bench hereby appoints Shri Sreenivasa Rao Ravinuthala as IRP having registration number IBBI/IPA-003/N00081/2017-18/10704 residing at F.26, Ragahvarathana Towers, Chirag Ali Lane, Abids, Hyderabad-500 001.
Accordingly, this Petition is admitted.