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Judgment
ORDER
The case is fixed for pronouncement of the order. The order is pronounced in open Court vide separate sheet.
O R D E R
The present Petition is filed on 26.10.2024 by the Applicant – Avanti Finance Private Limited (hereinafter referred to as “Financial Creditor”) against the Respondent-Labhanshi Multitrade Private Limited (hereinafter referred to as “Corporate Debtor”) under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “IBC, 2016”) read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (hereinafter referred to as “IB (AAA) Rules, 2016”) for initiation of Corporate Insolvency Resolution Process (CIRP), to appoint Interim Resolution Professional (hereinafter referred to as “IRP”) and declare the moratorium for having defaulted in payment of its outstanding dues of Rs.1,17,78,807 (Principal Rs 1,15,84,205).
The Applicant is registered with RBI as a NBFC.
The Corporate Debtor is engaged in the business of extraction of soyabean oil, soymeal and trading of agricultural commodities.
On perusal of Part-I of the Form-1 revealed that the Financial Creditor is a private limited company by the name of Avanti Finance Private Limited, which was incorporated on 01.08.2016 having CIN: U65929KA2016PTC138355, Registered office at #2727, 2ND Floor, 1ST Main Road, HAL 3rd Stage, Ward No. 58, New Thippasandra, Bangalore, 560075. A copy of the Master Data is annexed at Annexure-1.
This Petition is signed by Ms. Urvashi Prafulla Bahirsheth, Company Secretary, duly authorised through a Board Resolution dated 29.04.2024. The Resolution is annexed as ANNEXURE-2 to the Petition.
On perusal of Part-II of the Form-1 revealed that the Corporate Debtor is one Labhanshi Multitrade Pvt. Ltd. Having CIN No. U93000MP2017PTC044465. The Corporate Debtor was incorporated on 08.11.2017 and has a registered office at 3, 206, Sonam Plaza, Sajan Nagar, Chitawad, Indore, Madhya Pradesh 452001. It has paid up capital of Rs 4,50,00,000. The Corporate Debtor‟s master data is annexed at Annexure-3.
On perusal of Part-III of the Form-1 revealed that the Financial Creditor has named Ms. Chhaya Gupta, having Registration No. IBBI/IPA-002/IP-N-00984/2020-2021/13133, having address at 1, Bima Nagar, Almas, Dreams Apartment, Indore, under section 13 (1)(c) of the Code to act as Interim Resolution Professional (IRP).
On perusal of Part-IV of the Form-1 reveals that the total amount of debt granted on 30.09.2023 was of Rs 2,00,00,000. True copy of the details of transaction by Financial Creditor to the Corporate Debtor depicting the details of disbursement of the amount is annexed as ANNEXURE-9. The date of default is 15.04.2024 and the working for the computation of amount and days of default is annexed as Annexure-10. Form D (Record of Default) issued by the NeSL shows total outstanding amount of Rs 1,26,15,885 and date of default as 15.04.2024. Status of Authentication is “Deemed to be Authenticated”.
Annexure A-9 gives a statement of accounts as on 31.07.2024 pertaining to the loan account number A 100L000114 and that shows that an amount of Rs 2,00,00,000 was outstanding as on 30.09.2023 and the FC received payments on 14.11.2023; 15.12.2023; 18.01. 2024; 17.02.2024; 31.03.2024 and none was received on 15.04.2024 (due date) and the amount outstanding as on 15.04.2024 was Rs 1,22,57,486. Later payments of Rs 3,18,739 was received on 7.5.2024 and Rs 10,36,563 on 01.07.2024. Total amount outstanding as on 31.07.2024 was Rs 1,17,78,807.
In part V of the Form 1, the Applicant has attached Personal Guarantee by Mr. Anup Singhal and Aayush Agarwal (Directors) by way of deed of guarantee dated 28.09.2023. Copy of deed of guarantee is attached as Annexure A-6.
The borrower created first and exclusive charge in favour of the Financial Creditor by way of Hypothecation on the property as defined in the Hypothecation Agreement dated 28.09.2023 (Annexed as Annexure A-7).
The loan agreement dated 28.09.2023 between FC and CD is Annexed as Annexure A-5. The purpose of the loan was to solely and exclusively assisting sustainable and scalable organisations that deliver affordable, critical goods and services in various areas to relieve poverty in India as a wholesaler in agricultural and allied activities.
The FC has attached copy of loan sanction letter (Annexure A-4), Copy of loan agreement dated 28.09.2023 (Annexure A-5); Copy of Deed of Guarantee dated 28.09.2023 (Annexure A-7); Form D (Annexure A-8) with the Application.
However, after availing the aforesaid Loan, the Corporate Debtor failed to maintain financial discipline as per the terms and conditions of the loan agreement and committed in the repayment of the said term loan. Despite several reminders to the CD, no monies towards repayment have been forthcoming.
The FC issued a loan recall notice on 02.07.2024 bringing calling upon them to immediately repay the outstanding loan.
During hearing of the case by this Adjudicating Authority on 11.11.2024, Mr. Rohit Dubey appears for the Respondent/CD and waives service of notice and undertakes to file a reply.
A reply from the CD was filed on 17.12.2024 and notes that the Respondent Company had approached the Petitioner company for availing a loan facility in 2023. However, due to the certain financial crisis and market conditions, the operations of the Respondent Company were completely shut and the Respondent Company faced heavy losses and has ben unable to pay the outstanding debt owed to the Petitioner Company. The CD requires minimum 3 years to pay dues owed by the Respondent Company to the Petitioner. A vakalatnama in favour of Mr. Rohit Dubey was attached with the Reply.
The CD filed an additional affidavit in pursuant to the order of 06.03.2025 and attached a copy of the latest available audited balance sheet for the year 2022-2023 and provisional financial statement for financial year 2023-2024.
The Tribunal heard both parties on 30.07.2025 and the Ld Counsel for the Respondent fairly admitted that there exists a debt and there has been a default in the repayment of the said debt by the Respondent.
The existence of debt and default is undisputed. The amount of default is more than Rs 1,00,00,000. The CD has also paid interest and deducted tax and therefore the money advanced was of the nature of financial debt as per section 5(8) of the IBC, 2016. The application is within the time limitation as per the provisions of the Limitation Act, 1963.
Section 7(5)(a) of the IBC allows admission of a petition if debt and default are established, and procedural requirements are met. The Financial Creditor satisfies these with a debt of more than Rs. One crore and the debt abd default is admitted by the CD.
The petition satisfies Section 7‟s substantive requirements. The present Petition is complete in terms of Section 7 (5) of the Code. The Tribunal finds that the Financial Creditor has discharged its burden of proof under Section 7 of the Code by demonstrating the existence of a financial debt and default in payment of the financial debt by the Corporate Debtor. The outstanding financial debt is of more than rupees one crore, which meets the threshold limit as per section 4 of the Code and is well within the limitation for filing the present Petition, which is supported by comprehensive documentation.
In light of the above findings, this Tribunal is satisfied that the Financial Creditor is entitled to the relief as sought. The Corporate Debtor‟s default justifies the admission of the petition and the initiation of CIRP under the Code. Hence, the Application filed under section 7(2) of the Insolvency and Bankruptcy Code for initiation of the corporate insolvency resolution process against the Corporate Debtor deserves to be admitted.
Accordingly, in light of the above facts and circumstances, it is hereby ordered as under: -
The Respondent/Corporate Debtor – Labhanshi Multitrade Private Limited is admitted in the Corporate Insolvency Resolution Process (CIRP) under section 7 of the IBC, 2016.
As a consequence, thereof, a moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 is declared for prohibiting all of the following in terms of Section 14(1) of the IBC, 2016.
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 interest therein;
c. 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 Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2022;
d. The recovery of any property by an owner or lessor where such property is occupied by or in the possession of the Corporate Debtor.
e. The provisions of sub-Section (1) shall however, not apply to such transactions, agreements as may be notified by the Central Government in consultation with any financial sector regulator and to a surety in a contract of guarantee to a Corporate Debtor.
The order of moratorium under section 14 of the Code shall come to effect from the date of this order till the completion of the Corporate Insolvency Resolution Process or until this Adjudicating Authority approves the Resolution Plan under sub-section (1) of section 31 or passes an order for liquidation of the corporate debtor under Section 33 of the IBC 2016, as the case may be.
However, in terms of Section 14(2) to 14(3) of the Code, the supply of essential goods or services to the corporate debtor as may be specified, if continuing, shall not be terminated or suspended, or interrupted during the moratorium period. The corporate debtor to provide effective assistance to the IRP as and when he takes charge of the assets and management of the corporate debtor.
We appoint Ms. Chhaya Gupta Ms. Chhaya Gupta, having Registration No. IBBI/IPA-002/IP-N-00984/2020-2021/13133, having address at 1, Bima Nagar, Almas, Dreams Apartment, Indore, under section 13 (1)(c) of the Code to act as Interim Resolution Professional (IRP). She shall conduct the Corporate Insolvency Process as per the Insolvency and Bankruptcy Code, 2016 r.w. Regulations made thereunder.
The IRP so appointed shall make a public announcement of the initiation of the Corporate Insolvency Resolution Process and call for submissions of claims under section 15, as required by Section 13(1)(b) of the Code.
The IRP shall perform all his functions as contemplated, inter-alia, by sections 17, 18, 20 and 21 of the Code. It is further made clear that all personnel connected with the corporate debtor, its promoters, or any other person associated with the management of the corporate debtor are under legal obligation as per section 19 of the Code to extend every assistance and cooperation to the IRP. Where any personnel of the corporate debtor, its promoters, or any other person required to assist or co-operate with IRP, do not assist or cooperate, the IRP is at liberty to make appropriate application to this Adjudicating Authority with a prayer for passing an appropriate order.
The IRP is expected to take full charge of the corporate debtor‟s assets, and documents without any delay whatsoever. He is also free to take police assistance in this regard, and this Court hereby directs the Police Authorities to render all assistance as may be required by the IRP in this regard.
The IRP shall be under a duty to protect and preserve the value of the property of the „corporate debtor company‟ and manage the operations of the corporate debtor company as a going concern as a part of obligation imposed by section 20 of the Code.
The IRP or the RP, as the case may be shall submit to this Adjudicating Authority periodical report with regard to the progress of the CIRP in respect of the Corporate Debtor.
Considering the size of the of the business of the Corporate debtor and complexities of the issues involved, we direct the financial creditor to pay IRP a sum of Rs.3,00,000/- (Rupees Three lakhs Only) in advance within a period of 7 days from the date of this order to meet the cost of CIRP arising out of issuing public notice and inviting claims etc. till the CoC decides about his fees/expenses.
The Registry is directed to communicate this order to the financial creditor, corporate debtor, and to the Interim Resolution Professional, the concerned Registrar of Companies and the Insolvency and Bankruptcy Board of India after completion of necessary formalities, within seven working days and upload the same on the website immediately after pronouncement of the order. The Registrar of Companies shall update its website by updating the Master Data of the Corporate Debtor in MCA portal specific mention regarding admission of this Application and shall forward the compliance report to the Registrar, NCLT.
The IRP, in view of the Regulation 6A of the IBBI (Resolution Process for Corporate Persons) Regulations, 2016 shall send a communication along with a copy of public announcement made under Regulation 6, to all creditors as per last available books of account of the corporate debtor and also serve a copy of this order to the various departments such as Income Tax, GST (centre), State Trade Tax, Provident Fund etc. who are likely to have their claim against Corporate Debtor as well as to the trade unions/employees associations so that they are informed of the initiation of CIRP against the Corporate Debtor timely.
The commencement of the Corporate Insolvency Resolution Process shall be effective from the date of this order.
Accordingly, this Application CP(IB)/63/MP/2024 is hereby admitted. A certified copy of this order may be issued, if applied for, upon compliance with all requisite formalities.