AI Structured Summary
Not yet generated for this judgment
Judgment
[PER: CORAM]
1. BACKGROUND
This C.P. (IB) No.707/MB/2022 (Application) was filed on 07.06.2022 by Axis Bank, the Financial Creditor (Applicant), having CIN No.: L65110GJ1993PLC020769 under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC), read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, for initiating Corporate Insolvency Resolution Process (hereinafter referred to as “CIRP”) in respect of Yashwant Dugdh Prakriya Limited, the Corporate Debtor (CD) having CIN No.: U15201PN2004PLC019598.
The applicant filled an Interim Application being IA No. 1382 of 2023 under Section 60(5)(a) IBC read with rule 11 of NCLT Rules, 2016, requesting to make amendment in FORM 1. The Amendment sought was in regard to the Change in Date of Default, which in the Application was stated as 01.05.2020 (NPA Date), to 01.02.2020. The same was allowed vide order dated 05.06.2025.
As per Part IV of the Application, the amount claimed to be in default as on 31.03.2022 is Rs.11,22,18,723/- (Rupees Eleven Crores Twenty-Two Lakhs Eighteen Thousand Seven Hundred Twenty-Three Only). As per Part IV, the CD was declared as NPA on 01.05.2020.
The Applicant has proposed Mr. Krishna Chamadia, having Registration No. IBBI/IPA-001/IP-P00694/2017-2018/11220 (AFA valid till 31.12.2025), to act as the Interim Resolution Professional (IRP).
2. CONTENTIONS OF APPLICANT (FC)
The Applicant was approached by the CD for seeking financial assistance in the year 2019.The credit facilities granted to the CD were the Cash Credit Facilities of Rs. 8,00,00,000/- (Rupees Eight Crores Only) and Term Loan of Rs. 73,00,000/- (Rupees Seventy-Three Lakhs Only).
The Applicant vide its Sanction letter bearing reference no. AXISB/SME/WG/KOP/2018-19/369 dated 15.01.2019 sanctioned credit facilities including Cash credit facility of Rs. 8,00,00,000/- for 1 year and term loan of Rs. 73,00,000/- for a balance tenor of 42 months, at the interest rate of 11.75% p.a. (3 months MCLR @8.60% + 3.15% bps) for Cash Credit and at the rate of interest of 11.75% p.a. (3 month MCLR @8.80% + 2.95% bps), payable at monthly interval, by way of taking over of existing facilities availed by the Corporate Debtor from DNS Bank, subject to terms and conditions of sanction, as more particularly set-out in the aforesaid sanction letter.
Thereby the total amount of credit facility amounted to Rs 8,73,00,000/-(Rupees Eight Crores Seventy-Three Lakhs Only). The rate of interest for the Term Loan was modified and increased to 11.80% p.a. payable at monthly interval vide Addendum Sanction Letter bearing reference no. AXISB/SME/WEST1/KOP/2018-19/385 dated 29/01/2019.
The loan was last modified by the Addendum Sanction Letter referenced AXISB/SME/WEST-1/KOP/2018-19/428 dated 27.02.2019. This addendum introduced the personal guarantee of Mr. Abhijit Shivarijaro Naik, a shareholder holding more than 10% of the share capital of the Corporate Debtor, as security for all loan limits. It also revised the disbursement terms to include:
Phase I: Disbursement of Rs. 8,00,00,000/- (Rupees Eight Crores) or the outstanding balance of cash credit, pledge loan limit, and term loan at run-down balance with DNS Bank (upon takeover), subject to fulfilment of pre-disbursement conditions.
Phase II: Disbursement of any remaining limits after the creation and perfection of security and completion of takeover guidelines.
Additionally, the Addendum Sanction Letter dated 27.02.2019 required the Corporate Debtor to submit an undertaking to maintain a USL (Unsecured loan) of Rs. 4,00,00,000/- (Rupees Four Crores) as of 31.03.2019. A CA certificate verifying sales of Rs. 67,58,00,000/- (Rupees Sixty-Seven Crores Fifty-Eight Lakhs) up to November 2018 in the current financial year was also to be provided before any limit was released.
The Sanction Letter dated 15.01.2019, the Addendum dated 29.01.2019, and the Addendum dated 27.02.2019 were all accepted and acknowledged by the CD through its Directors.
The dates of disbursements are as under:
The CD is claimed to be in default of repayment of Rs. 11,22,18,723/-(Rupees Eleven Crores Twenty-Two Lakhs Eighteen Thousand Seven Hundred Twenty-Three Only) to the Financial Creditor, along with interest at the contractual rate, costs, and charges as on 31.03.2022 until payment or realization. The total amount disbursed by the Applicant is Rs. 8,59,21,622.00.
The loan account of the CD was classified as a Non-Performing Asset (NPA) on 01.05.2020 as per the guidelines issued by the Reserve Bank of India. Whereas the date of default after the amendment is stated as 01.02.2020. A copy of the NPA Certificate is annexed as Annexure F, as per which the date of NPA is 01.05.2022.
Thereafter, the Applicant issued a Recall Notice dated 29.10.2020 bearing reference number AXIS/SAG/PD/2020-21/121, recalling the entire loan amount along with interest at the contractual rate plus applicable costs and charges. The CD and the personal guarantors were called upon to jointly and severally repay Rs. 9,23,57,310/- (Rupees Nine Crores Twenty-Three Lakhs Fifty-Seven Thousand Three Hundred Ten Only). A copy of the Recall Notice is annexed as Annexure G.
On 20.01.2021, the Applicant caused the Recall Notice to be published in the Financial Express, an English daily, and Loksatta, a Marathi daily newspaper, calling upon the CD and the personal guarantors to repay the sum with further interest at the contractual rate from 01.10.2020 within fifteen days. Extracts of these publications are annexed as Annexure H.
Subsequently, on 15.03.2022, the Applicant issued a Demand-cum-Recall Notice reiterating the recall of the entire loan amount along with interest at the contractual rate. A copy of this Demand-cum-Recall Notice is annexed as Annexure I.
The Applicant has attached the following documents along with the Application and Rejoinder dated 24.05.2022 and 14.07.2025:
Copy of the master data of the Applicant.
Copy of the Board Resolution Authorising Mr. Piyush Deora, Senior Manager of the Financial Creditor.
Copy of the Company Master Data of the Corporate Debtor as available on the website of Ministry of Corporate Affairs.
Copy of Written Communication by Proposed Interim Resolution Professional in Form-2.
Copies of Sanction Letter dated 15th January 2019, Addendum Sanction Letter dated 29th January 2019 and the Addendum Sanction Letter dated 27th February 2019.
Copy of the NPA Certificate dated 23rd May 2022.
Copy of the Recall Notice dated 29th October 2020.
Copy of extract of the e-Newspapers of the Financial Express, an English daily newspaper and in the Loksatta, a Marathi daily newspaper wherein the copy of the Recall Notice dated 20th January 2021 was published.
Copy of Demand-cum-Recall Notice dated 15th March 2022.
Copies of NeSL Record of Default reports dated 29th April 2022 pertaining to the Cash Credit Facility and Term Loan.
Copy of Central Repository of Information on Large Credits (CRILC) report 28th April 2022 pertaining to the Cash Credit Facility and Term Loan.
Copy of the Deed of Hypothecation dated 8th February 2019.
Copy of the Term Loan Agreement dated 8th February 2019.
Copy of the Working Capital Loan Agreement dated 8th February 2019.
Copy of the Deed of Guarantee dated 7th February 2019.
Copy of the Undertaking to Create Mortgage dated 8th February 2019.
Copy of the Undertaking dated 8th February 2019.
Copy of the Deed of Guarantee dated 18th March 2019.
Copy of the Form CH-1 pertaining to Term Loan amounting to Rs. 73,00,000/-.
Copy of the Form CH-1 pertaining to Cash Credit amounting to Rs. 8,00,00,000/-.
Copy of Certificate Of Registration Of Charge Dated 08th March 2019 bearing Charge Identification No. 100242493 issued by the Registrar of Companies.
Copy of the Certificate of Registration of Charge dated 08th March 2019 bearing Charge Identification No. 100242497 issued by the Registrar of Companies.
Copies of the Statement of Accounts for the Cash Credit Account No. 919030015387224 and Term Loan Account No. 919060015387306 along with a certificate under Section 2-A of the amended Bankers' Books Evidence Act, 1891 as prescribed in the Schedule III of the Information Technology Act, 2000 by the officer in charge at the computer system of the bank.
Board Resolution dated 25th January 2019 passed by the Board of Directors of the Corporate Debtor, according approval to the Corporate Debtor to avail financial assistance from the Financial Creditor for an amount not exceeding an aggregate of Rs. 8,73,40,000/- (Rupees Eight Crores Seventy-Three Lakhs Forty Thousand Only) in terms of the Sanction Letter dated 15th January 2019.
Copy of the Power of Attorney dated 5th October 2020 issued by Financial Creditor.
Copy of the reply dated 3rd February 2021 bearing No. YDPL/ADMIN/194-1/2020-21.
aa) Copy of the letter dated 16th February 2021 bearing AXIS/SAG/PD/2020-21/298.
bb) Copy of reply dated 18th March 2022 issued by Advocates for the Corporate Debtor.
cc) Copy of the letter dated 31st March 2022 bearing no. AXIS/SAG/PD/2021-22/851.
dd) Copy of email dated 11th June 2020.
3. CONTENTIONS OF CD
An Affidavit-in-Reply dated 17.11.2022 to the original Application was filed by the CD, affirmed by one Mr. Satyajit Shivajirao, Director of the CD and its authorized representative.
The CD asserts that there has been Non-Compliance with Mandatory Requirements under the Insolvency and Bankruptcy Code –
The present Petition was filed on 20.09.2021. It is a settled principle that a Petition under the Insolvency and Bankruptcy Code (“Code”) can only be entertained if it complies with the mandatory procedural requirements as stipulated under the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (“AA Rules”).
The AA Rules were amended on 24.09.2020 to mandate that every financial creditor must serve a copy of the Petition on the Insolvency and Bankruptcy Board of India (“Board”) prior to filing. This amendment was brought into effect more than one year before the present Petition was filed. The copy of the amended AA Rules dated 24.09.2020 mandating every financial creditor to serve a copy of the Petition on the Board was attached herewith as Annexure No. 1.
The Applicant has failed to comply with this mandatory prior service requirement, as evident from the Petition itself, rendering it defective and incomplete.
Further, the Board has established an online portal to facilitate compliance with this service obligation. The Applicant has not utilized this mechanism. The copy of the webpage of the Board’s website showing the portal is attached as Annexure No. 2
In view of this non-compliance, that the Petitioner has not complied with the requirement of mandatory prior service to the Board. That being so, the present Petition is defective, incomplete and contrary to the provision of the AA Rules and therefore, deserves to be dismissed at the threshold.
The CD claims that the Applicant cannot file an application against CD where default arises on or after 25.03.2020 until the period specified in this behalf -
In the facts of the present matter, the Applicant claims that the date of default is 01.05.2020 i.e., in the midst of the COVID-19 pandemic. That being so, the Petition falls within the scope of Section 10-A of the Code and is barred.
The Central Government and the legislature were well aware of the impact of the COVID-19 pandemic on businesses and corporate persons in India, and therefore envisaged many reliefs to ease the burden on business houses and retail/commercial borrowers. It is undeniable that the legislature and various Ministries, including the Ministry of Corporate Affairs (“MCA”), were aware of the stringent repercussions of the Code and admission of corporate persons into CIRP for a default of a meagre sum, in retrospect, of Rs. 1,00,000/- (Rupees One Lakh only).
Thus, to immediately grant relief to the business houses and corporate persons, the MCA issued a Notification on 24.03.2020 (i.e., the date of announcement of the nationwide lockdown), as per which the minimum threshold under Section 4 of the Code for initiation of CIRP was increased from Rs. 1,00,000/- (Rupees One Lakh only) to Rs. 1,00,00,000/- (Rupees One Crore only). The said revision was granted to provide some relief to businesses caught in the extreme rigours of the Code. The copy of the MCA Notification dated 24.03.2020 increasing the minimum threshold limit was attached herewith as Annexure No. 3.
However, as the impact of COVID-19 pandemic was severe and unending at that time, and the much-needed lockdown was severely impacting many businesses and corporate persons more than anticipated, the legislature, in addition to the various reliefs already provided, deemed it fit to grant additional relief by inserting Section 10A to the Code, on 05.06.2020.
Section 10A of the Code states as follows:
“10A. Suspension of initiation of corporate insolvency resolution process.
Notwithstanding anything contained in sections 7, 9 and 10, no application for initiation of corporate insolvency resolution process of a corporate debtor shall be filed, for any default arising on or after 25th March, 2020 for a period of six months or such further period, not exceeding one year from such date, as may be notified in this behalf:
Provided that no application shall ever be filed for initiation of corporate insolvency resolution process of a corporate debtor for the said default occurring during the said period.
Explanation. - For the removal of doubts, it is hereby clarified that the provisions of this section shall not apply to any default committed under the said sections before 25th March, 2020.”
Thus, on a conjoint reading of the aforesaid, it is clear that the Legislature explicitly envisaged that no application for initiation of CIRP can be filed for any default by a corporate debtor which default has occurred from 25.03.2020 to 24.09.2020.
Further, the aforesaid suspension was extended vide notifications dated 24.09.2020 and 22.12.2020 by the Legislature up to 24.03.2021 i.e. for a period of one year within which the COVID-19 pandemic had created most of its havoc on India. The copies of the notifications dated 24.09.2020 and 22.12.2020 issued by the MCA for suspension of the period of one year for filing an application for initiation of CIRP was attached as Annexure No. 4.
Therefore, it is clear that an application for initiation of CIRP can never be filed by the Applicant for a default that has occurred between 25.03.2020 and 24.03.2021. This position of law is undisputed, and the Applicants cannot have any different view on the same.
Considering the aforesaid, in the facts of the present matter, the CD respectfully submits that the Petition is covered by Section 10-A of the Code and deserves to be dismissed in limine.
The CD claims, even otherwise, there could be no default on 01.05.2020 as the same would be contrary to and fall foul of the moratorium from March 2020 to May 2020 granted by reserve bank of India (RBI) circular dated 27.03.2020 -
Due to the COVID-19 pandemic in March 2020, the RBI vide its Circular dated 27.03.2020 launched a COVID-19 Regulatory Package, permitting Banks to grant a moratorium of three months on payment of term loan instalments falling due between 01.03.2020 and 31.05.2020, and to defer the recovery of interest applied in respect of working capital facilities during the same period. The copy of the RBI Circular dated 27.03.2020 granting moratorium from 01.03.2020 to 31.05.2020 was annexed as Annexure No. 5.
The said Circular specifically clarified that the grant of moratorium would not result in an asset classification downgrade.
The operations of the CD in the dairy industry were seriously hampered due to the COVID-19 pandemic. Accordingly, the CD vide letter dated 30.03.2020 requested the Applicant to grant the moratorium on the loan facilities. The copy of the letter dated 30.03.2020 sent by the CD was annexed as Annexure No. 6.
Subsequently, the RBI vide Circular dated 17.04.2020 prescribed asset classification and provisioning norms regarding the COVID-19 Regulatory Package. The copy of RBI Circular dated 17.04.2020 prescribing the Asset Classification and Provisioning norms regarding COVID -19 Regulatory Package was attached herewith as Annexure No. 7.
It is therefore shocking that the Applicant claims the date of default as 01.05.2020, which squarely falls within the RBI moratorium period, as confirmed by the Applicant’s own correspondence. Hence, the entire Application is based on a false premise and deserves to be dismissed.
The CD states Failure to Grant Further Moratorium from June 2020 to August 2020 Contrary to RBI Circular dated 23.05.2020 -
The RBI, through its Circular dated 23.05.2020, introduced a COVID-19 Regulatory Package allowing Banks to grant an additional moratorium of three months on term loan instalments due between 01.06.2020 and 31.08.2020, and deferred recovery of interest on working capital during the same period. The copy of RBI Circular dated 23.05.2020 granting further moratorium from 01.06.2020 to 31.08.2020 is attached as Annexure No. 9. It was expressly stated that the moratorium period would not result in asset classification downgrade.
The CD, engaged in the milk business—an essential commodity exempt from closure—experienced significant operational disruption and financial losses due to the pandemic. The CD requested the Applicant to grant the further moratorium vide letter dated 06.05.2020, the same is annexed as Annexure No. 10.
Contrary to the RBI guidelines, the Applicant declared the CD’s loan accounts as Non-Performing Assets (NPA) from 01.05.2020 by email dated 16.06.2020, demanding immediate clearance of dues including interest and instalments. The Copy of the email dated 16.06.2020 was annexed as Annexure No. 11. This action was wholly illegal as the moratorium period was ongoing, and RBI directions explicitly excluded such periods from asset classification downgrade.
Despite this, the Applicant persisted in demanding outstanding dues during the moratorium period, as evidenced by email dated 12.08.2020 (The Copy of the e-mail dated 12.08.2020 was attached as Annexure No. 12), ignoring the CD’s repeated requests for moratorium extension, including communications dated 09.07.2020 (The Copy of the e-mail dated 09.07.2020 is attached as Annexure No. 13).
Evidently, the Applicant’s failure to grant additional moratorium as per the RBI Circular dated 23.05.2020 was ex-facie illegal, baseless and that being so, renders the present Petition liable to be dismissed as the declaration of default itself is illegal
The CD states that the applicant renewed the cash credit facility vide sanction letter dated 31.03.2020, therefore, there is no question of it being declared NPA on 01.05.2020 -
The Applicant renewed the Cash Credit Facility of the CD vide Sanction Letter dated 31.03.2020. The Sanction Letter dated 31.03.2020 was sent by e-mail to the CD on 09.06.2020. The copy of the e-mail dated 09.06.2020 sent by the Applicant to the CD attaching the Sanction Letter for renewal of Cash Credit Facility dated 31.03.2020 is annexed as Annexure No. 14.
The Applicant has claimed in the Petition that the account of the CD was marked as Non-Performing Asset (NPA) on 01.05.2020 due to defaults on the part of the CD, whereas on 31.03.2020 itself, the Applicant renewed the Cash Credit Facility of the CD, confirming the same vide e-mail dated 09.06.2020. This itself proves that as on 09.06.2020, the Cash Credit Account was regular. Further, the Applicant acknowledged vide e-mail dated 15.05.2020 that as per RBI guidelines, the moratorium on the loan facilities was granted till 31.05.2020. As per banking norms, a Cash Credit facility which is already overdrawn cannot be renewed unless the amount is repaid to the Applicant. This is a clear acknowledgment that the Cash Credit facility provided to the CD was not overdrawn on 31.03.2020.
For reasons best known to the Applicant, the letter dated 31.03.2020 has been suppressed in the present proceedings. For this reason alone, the present Petition deserves to be dismissed. The said letter unequivocally demonstrates that the Applicant could never have declared the CD as an NPA account on 01.05.2020, i.e., less than 60 days after the extension of the facility.
Considering all that is stated hereinabove, the CD respectfully submits that the present Petition is devoid of merit, contrary to the provisions of the Code, and deserves to be dismissed in limine.
In any event, without prejudice to the aforesaid, assuming but not conceding that there is a default, the CD respectfully submits that even then the present matter is a fit case to exercise the discretion vested in Section 7 of the Code and to not admit the present Petition.
The Hon’ble Supreme Court of India in its Judgment dated 12.07.2022 in Vidarbha Industries v. Axis Bank (2022 SCC OnLine SC 841, paras. 60 to 90) has clarified the law with respect to proceedings under Section 7 of the Code and the factors to be considered prior to admitting a Petition under Section 7(5) of the Code.
Hence, it is clear that along with the existence of debt and default, this Hon’ble Tribunal is also required to examine whether it is expedient to initiate CIRP against the Corporate Debtor, considering all relevant facts and circumstances.
The CD submits that in the facts of the present matter, there exist various factors that need to be considered and unequivocally demonstrate that the Petition deserves to be dismissed in limine.
Losses were foisted on the CD during Covid -19 pandemic, for the larger public interest. CD cannot be punished for the same -
The Corporate Debtor’s (CD) business was severely impacted by the COVID-19 pandemic, with milk sales declining from 1,30,000 litres per day to 40,000 litres per day due to closure of bulk buyers such as hotels, canteens, sweet vendors, and tea vendors.
Government authorities, including the Collector, Milk Commissioner, and District Dairy Development Officer, issued orders dated 22.03.2020, 26.03.2020, and 22.04.2020 respectively, declaring milk as an essential commodity and directing that manufacturing and processing operations should not cease.
Despite incurring cash losses and operating under financial distress, the CD continued its operations as mandated, and repeatedly requested the Applicant to grant moratorium and Emergency Credit Line Guarantee Scheme (ECLGS) benefits, all of which were ignored.
The Applicant’s declaration of the CD’s loan accounts as Non-Performing Assets (NPA) during the moratorium period allowed by itself is illegal and unwarranted.
The Applicant has orchestrated the CD’s Financial situation by not even considering the CD’s request for Emergency Credit Line Guarantee Scheme (ECLGS) -
The National Credit Guarantee Trustee Company (NCGTC), by Circular dated 23.05.2020, launched the Emergency Credit Line Guarantee Scheme (ECLGS) to provide 100% guarantee coverage for additional working capital and term loans, subject to accounts being less than or equal to 60 days past due as on 29.02.2020.
The Reserve Bank of India (RBI), by Circular dated 21.06.2020, instructed Member Lending Institutions to assign zero percent risk weight to credit facilities extended under the ECLGS, backed by an unconditional and irrevocable guarantee of the Government of India.
Pursuant thereto, the CD applied for ECLGS benefits with the Applicant on 27.06.2020 and followed up with letters dated 12.08.2020 and 07.12.2020 .
Despite these requests, the Applicant failed to respond or provide the facility, thereby exacerbating the CD’s financial distress and deliberately orchestrating its difficulties.
The CD further states that as a result of the Illegal Acts of the Applicant, expansion proposal of the CD was rejected by the strategic investors -
The CD had executed a Share Purchase and Shareholders Agreement dated 29.11.2019 with Durha Foods International Private Limited, New Delhi for infusion of Equity for the proposed expansion of SMP project. The Strategic Investors turned down the said proposal during June 2020 due to declaration of the loan accounts of CD as NPA by the Applicant completely illegally. The copy of the Share Purchase and Shareholders Agreement dated 29.11.2019 executed between CD and Durha Foods International Private Limited for infusion of Equity for the proposed expansion of SMP project is attached as Annexure No. 19.
The CD claims that it plays a key role in the economy and generates employment and revenue in the agricultural sector, particularly for small farmers.
The CD respectfully submits that it has 70 Employees, and generates revenue from approximately 3000 farmers from whom the CD usually collects the milk and 200 other people associated with the CD. Irreparable loss and injury will be caused to the prospect of the Business being revived. Whereas on the Contrary, the Applicant has its other ways of recovering its dues from the CD and on those forums all these facts of the Applicant acting arbitrary and illegal would be considered and natural justice will prevail.
CD has executed a Tripartite Agreement for manufacturing and packing milk and fresh dairy products under “AMUL” brand.
The CD has executed a Tripartite Agreement dated 16.08.2022 for Manufacturing and Packing Milk and Fresh Dairy Products under “AMUL” brand with Surat District Co-oprative Milk Producers’ Union Ltd. and Gujarat Co-operative Milk Marketing Federation Ltd. The CD has also prepared the future projections for the said manufacturing and packing process. The copy of Tripartite Agreement dated 16.08.2022 executed between CD, Surat District Co-oprative Milk Producers’ Union Ltd. and Gujarat Co-operative Milk Marketing Federation Ltd. for Manufacturing and Packing Milk and Fresh Dairy Products under “AMUL” brand and future projections are attached as Annexure No. 20. Therefore, the CD has the capacity to recover from its current situation.
The cash credit loan account was standard even after deduction of Rs. 10,94,004.81/- (Rupees Ten Lakhs Ninety-Four Thousand Four Rupee And Eighty One Paise Only) on 29.02.2020 and the said deduction was illegal and arbitrary.
The CD agreed to the above due to a 2% lower interest rate and additional funds, and promptly provided all required documentation as requested.
The sanction included Rs. 7.00 crores to take over the existing Cash Credit loan, Rs. 1.00 crore additional Cash Credit, and Rs. 0.73 crores to take over the outstanding term loan from DNS Bank.
The Applicant also sanctioned Rs. 2.14 crores to the associate Society vide sanction letter dated 21.01.2019. The Applicant disbursed the loan facilities to the CD on 28.02.2019.
However, by email dated 05.03.2019, the Applicant refused disbursement to the Society, citing discrepancies in its bye-laws which, according to the Applicant, did not authorize the Society to avail loans or create charges. The Applicant requested amended bye-laws to be submitted before releasing funds.
The Society amended its bye-laws through the Central Registrar of Cooperative Societies, New Delhi, a process which took considerable time. The amendments were approved and communicated to the Applicant.
Despite submission of the amended bye-laws and a No Dues Certificate dated 31.10.2019, the Applicant withheld the remaining loan amount.
Since DNS Bank held charges on assets of both CD and Society, DNS Bank required the Applicant to take over the Society’s loan before releasing charges on MIDC assets. Although the Society complied fully, the Applicant failed to take over the loan and create securities in its favor.
The CD complied with all formalities, yet the Applicant neglected its duty to take over the Society’s loan and create security despite amended bye-laws and closure of Sunanda Agro Products Company loan. Copies of certification of amended bye-laws and loan closure are annexed as Annexure No. 21.
On the other hand, the Applicant has allegedly imposed a penal interest of Rs. 10,94,004.81/- (Rupees Ten Lac Ninety Four Thousand Four Rupee and Eighty One Paise only) on the CD for not creating security.
The table depicting the alleged penal interest charged by the Applicant is produced below –
In light of the above facts, it is respectfully submitted that the present Application is not maintainable and is liable to be dismissed with exemplary costs.
4. INTERLOCUTORY APPLICATION 1382 OF 2023
The Application was filed by the Applicant (FC) on 07.04.2023 seeking permission of the Hon’ble Tribunal to amend Form-1 of the present Application.
The proposed Amendment was to inter alia incorporate the date of default qua the CD.
The IA was allowed by this bench by the order dated 05.06.2025 for the reasons stated in the said order.
The appeal was filed against the order dated 05.06.2025 being Company Appeal (AT) (Insolvency) No. 938 of 2025 challenging the order of this Bench. The said Company Appeal was dismissed as withdrawn vide order dated 03.07.2025.
5. ADDITIONAL AFFIDAVIT – REPLY (CD)
This Tribunal, vide order dated 05.06.2025, in IA 1382 of 2023, permitted Applicant to make amendments to Form 1. Vide the same order, the CD was allowed to file an Additional Reply Affidavit, which was filed through Affidavit dt. 17.11.2022.
The CD states that the Applicant’s claim in the amended Application for the change of date of default is false pretence to escape the rigors of Section 10-A of the IBC.
It is submitted by the CD that there was no default in the Term Loan or in the Working Facility granted to the CD on 01.02.2020. The limit granted to the CD was Rs. 8,00,00,000/-. This limit was maintained by the Applicant much beyond 01.02.2020. The total debit balance as on 29.02.2020 was Rs. 7,99,32,331/- which shows that the Working Capital Facility was not in default.
The above position was confirmed by the fact that the Working Capital Facility was renewed by Axis Bank on 31st March 2020.
That it is pertinent to note that though if the default date is not 01.02.2020 as contended by the Applicant, the entire Application fails as thereafter, there was a clear Circular of the RBI granting moratorium on payments which was applied by the CD.
The CD therefore submits that the Applicant’s case in the amended Application that the Date of Default is 01.02.2020 is completely false and baseless. The Applicant’s case continues to be covered by the bar under Section 10-A of IBC and for the same, the Application should be dismissed outright.
6. REJOINDER
An additional Rejoinder was filed by the Applicant on 14.07.2025 in response to the amended Reply filed by the CD and Additional Affidavit dated 02.07.2025, affirmed by one Mr. Piyush Deora Sr. manager and authorised officer of the Applicant.
The Applicant submits that the Application is preferred seeking initiation of Corporate Insolvency Resolution Process (CIRP) against the CD under the provisions of the IBC.
It is further submitted that the present Application arises as a consequence of the failure and inability of the CD to make payments towards the legitimate dues of the Applicant with respect to the credit facilities sanctioned in favour of the CD in the year 2019.
The Applicant states that the CD has taken contradictory stands in its Affidavit in Reply, while admitting non-payment of dues since February 2020.
The Applicant submits that the account statements annexed as Exhibit-W and the Central Repository of Information on Large Credits (CRILC) Report dated 28.04.2022, annexed as Exhibit-K to the Application, clearly evidence default on the part of the CD in repayment obligations.
That the applicant submits that the renewal in no way states that the account of the CD is not in default. That the sanction letter dated 31.03.2020 mentioned in para 9 of the reply, expressly states that the facilities sanctioned therein are due to expire on 07.07.2020. However, the CD has failed to demonstrate that it made any payments even after the said sanctioned letter was issued, hence the said sanctioned letter automatically stood expired on 07.07.2020.
Further the applicant has denied all the Averments made by the CD in Affidavit to reply and submits that the allegations in the Affidavit in Reply are false, baseless, and intended to delay the insolvency proceedings. The Applicant has provided full documentation proving default and compliance with all procedural requirements under the IBC.
7. WRITTEN SUBMISSIONS (Applicant)
Short synopsis was filed by the Applicant on 08.09.2025.
The Applicant reiterated that the said facilities have been acknowledged by the CD from time to time, which can be seen from the following exhibits to the Application:
Accounts Statements; (Annexure W, Pg. 287)
Central Repository of Information on Large Credit (CRISIL) Report dated 28th April 2022; (Annexure K, Pg. 85)
Letter dated 3rd February 2021 bearing No. YDPL/ADMIN/194-1/2020-21 (Reply to Recall notice issued by the FC) (Exhibit B, Pg. 18 of the Rejoinder)
Reply dated 18th March 2022 issued by Advocates for CD (in response to the demand cum recall notice dated 15th March 2022 issued by the FC) (Exhibit D, Pg. 24 of the Rejoinder)
The Applicant states that the date of default is 01.02.2020 and the date of NPA is 01.05.2020. Further, the Application was filed on 23.05.2022 and was registered on 08.06.2022. Therefor the Application is well within limitation.
The suspension period under section 10A of IBC is with respect to any default occurring from 25.03.2020 to 24.03.2021. In the present Application, the date of default is 01.02.2020. Hence, section 10A is not applicable to the Application.
The other averments have already been mentioned above in the Contentions of the Applicant and to avoid repetitions it is not reiterated here.
8. WRITTEN SUBMISSIONS (CORPORATE DEBTOR)
Short Synopsis was filed by the Corporate Debtor on 16.09.2025.
The Application is based on alleged default of the Applicant under two facilities viz. (i) a Term Loan of Rs.73,00,000/- (“Term Loan”), which is governed by a Term Loan Agreement dated 8th February 2019 [Petition, Ann. M, Pg. 117]; and (ii) a Working Capital Facility having limit of Rs.8,00,00,000/- (“WC Facility”), which is governed by Working Capital Loan Agreement dated 8th February 2019 [Petition, Ann. N, Pg. 149].
The application is said to be non-maintainable pertaining Section 10A of the IBC attracting the bar due to Covid-19 Period.
The applicant provided multiple contradictory default dates –
01.05.2020 - original Application
01.02.2020 – Amendment
01.05.2022 - NPA certificate
30.03.2021 - NeSL information
06.03.2020 - CRILIC report
There was no default on 01.02.2020 under either of the credit facilities. In respect of the Working Capital Facility, the account remained within the sanctioned limit of ₹8 crore up to 31.01.2020, and although there was a temporary overdrawal, the same was rectified by 28.02.2020. Moreover, the loan recall notice was issued only on 29.10.2020, which falls within the period covered by the bar under Section 10A of IBC. Hence, no subsisting default existed on or before 01.02.2020, nor did any alleged overdrawal cross the minimum threshold prescribed under the Code. Similarly, under the Term Loan facility, all interest and principal instalments were duly paid up to 01.02.2020, with the last recorded payment made on 29.02.2020. These records clearly demonstrate that both loan accounts were regular as of 01.02.2020.
Any alleged default prior to 31.03.2020 stood waived or cured, as Axis Bank voluntarily renewed both the Term Loan and the Working Capital Facility on 31.03.2020. The renewal of these facilities unequivocally indicates that the accounts were treated as regular by the Bank at that time. Therefore, no subsisting default existed prior to the commencement of the Covid-19 moratorium.
During the Covid-19 period, the declaration of any account as Non-Performing Asset (NPA) was expressly barred. The RBI Circular dated 27.03.2020 granted a moratorium on loan repayments, providing relief to borrowers affected by the pandemic. Furthermore, the Hon’ble Supreme Court, by its Order dated 03.09.2020 in W.P. (C) No. 25 of 2020, restrained all banks from classifying any account as NPA during the moratorium period. Accordingly, Applicant could not have lawfully declared the CD’s account as NPA during this period, and any such classification is contrary to the binding directions of the RBI and the Hon’ble Supreme Court.
The letters dated 03.02.2021 and 18.03.2022 relied upon by Applicant do not contain any admission of default by the CD. On the contrary, the letter dated 18.03.2022 clearly records that the CD’s account was regular till February 2020, and that subsequent payments were withheld only due to the Covid-19 moratorium declared by the RBI. Therefore, these communications cannot be construed as admissions of default; rather, they reinforce the CD’s position that no default existed as of 01.02.2020.
The CD has relied on the following judgements –
Dalip Singh Versus State of Utar Pradesh and Others, (2010) 2 S.C.C. 114.
Jagdish Prasad Sarada Vesrsus Allahabad Bank, 2020 SCC Online NCLAT 621.
Babulal Vardharji Gurjar Versus Veer Gurjar Aluminium Industries Pvt. Ltd. and Anr., (2020) 15 S.C.C. 1.
Reliance Asset Recontruction Company Ltd. Versus Hotel Poonja International Pvt. Ltd., (2021) 7 S.C.C. 352.
Vidharbha Industries Power Limited Versus Axis Bank Limited, (2022) 8 S.C.C. 352.
Ramesh Kymal Versus Siemens Gamesa Renewable Power Pvt. Ltd., (2021) 3 S.C.C. 224.
Eye Care Distributors Versus Calix Life Sciences Private Limited, 2022 SCC Online NCLT 168.
9. ANALYSIS AND FINDINGS
We have perused the documents as placed before us and heard the Ld. Counsels for the Applicant and the CD.
The Applicant Financial Creditor has filed this Application claiming a default amount of Rs. 11,22,8073/-.
The Date of Default mentioned in the Application is 01.02.2022. (as per amended Form 1)
The Applicant has proved that they have disbursed a sum of Rs. 8,59,21,622/- to the CD on 28.02.2019.
The CD has nowhere disputed the said disbursement of Rs. 8,59,21,622/-.
Several Objections have been raised by the CD which are summarised as below: -
Advance copy of petition was not served upon the CD.
Advance copy of the Application was not served upon IBBI.
The default date in the original “unamended Application” was on 01.05.2020 which otherwise false within the period prescribed under Section 10 A of IBC 2016.
It is the case of the CD that as per the amended petition the date of default is mentioned as 01.02.2020 and as on that date there was no default.
No restructuring/relief was given to the Applicant in terms of the circular of Reserve Bank of India dated 23.05.2020 in short no COVID relaxation were given to the CD.
The Applicant has renewed the credit facility of the CD through a letter dated 31.03.2020 and such Act of renewal cures the defaults prior to the such date.
Certain portion of the loans sanctioned by the Applicant were not disbursed to the CD.
Arbitrary penal interest of Rs. 10.94 lacs were applied by the Applicant to the various loan accounts of the CD.
CD is financial solvent company and for this purpose CD has relied upon the Judgment of the Hon’ble Supreme Court in the matter Vidarbha Industries Power Limited v. Axis Bank Limited.
We now deal with each of the objections raised by the CD as below.
Advance copy of petition not served upon the CD: -
From the record of this Tribunal it is seen that this petition was first listed before this Tribunal on 14.06.2022 whereat this Tribunal directed the registry as well as the Counsel for the Applicant to issue notice to the CD intimating next date of hearing.
The Counsel for the Applicant was directed to file affidavit of service.
Pursuant to the said direction an affidavit of service dated 24.06.2022 was filed by the Applicant stating that email service was made on 24.05.2022, further service is also done through Shri Maruti Carrier Service Private Ltd. and delivery report for the same is appended along with affidavit of service which reveals that the petition upon the CD was served on 24.06.2022.
It is the case of the CD that advance copy was not served.
It is seen from the record that the CD has duly filed the reply and has attended several hearings before us and the petition/court notice was served upon the CD. In our view and in the interests of justice this objection cannot be sustained, as no prejudiced is caused and as CD has filed the Reply.
Advance copy of the Application was not served upon the IBBI :-
This Tribunal has placed reliance on the order passed by the Coordinate Bench of this Tribunal in Mr. Ishawar Punjabi Versus Silver Jubilee Motors Limited in CP (IB) No. 217/MB/2022, where it was held that –
“The procedural lapse of not serving copy of the Application on the IBBI cannot vitiate or invalidate the Application or take away the right of an applicant under Section 7 of the Code. The requirement under Rule 4(3) of the AAA Rules of serving copy of an Application under Section 7 of the Code to the IBBI is intended for the purpose of record of IBBI which does not have any other consequence.”
In the light of the above order, we are of the view that the contention made by the CD with regard to the service of the Application not made to the IBBI does not hold any relevance in the present case therefore the Application can be accepted.
The default date in the original “unamended Application” was on 01.05.2020 which otherwise falls within the period prescribed under Section 10A of IBC 2016:-
The default date in the Original Application was on 01.05.2022, Applicant filed IA bearing No. IA-1382/2023 which was allowed by this Tribunal for the reasons stated in that order on 05.06.2025.
The date of default thereafter was amended to 01.02.2020. An Appeal against the order in IA-1382/2023 was filed, being Appeal No. Company Appeal (AT) (IB) 138/2025 which was dismissed has withdrawn vide an order dated 03.07.2025 of Hon’ble NCLAT.
As such revised date of default in the present Application is considered as 01.02.2020, the said date clearly is out of the purview of Section 10A period, which commenced on 25.03.2020 and ended on 24.03.2021.
Another contention of the CD was that the account was declared much later as NPA i.e. on 01.05.2020.
The Applicant has attached the certificate of NPA on Page No. 48 of the Application as per which the account of the Applicant was classified as NPA on 01.05.2022 as per RBI guidelines.
In view of the specific certificate placed before us by the Applicant, we are unable to agree with the contentions of the CD that the date of NPA was incorrectly given between the holiday period as per the RBI circulars or as per the provisions of Section 10A of IBC.
In any case, for the purpose of IBC, relevant date is date of default and not the date of NPA. In case, the CD had any grievance in regard to declaration of its accounts as NPA, it should have approached the relevant authorities i.e. RBI. Raising the said issue in the present proceedings is not at all relevant or appropriate.
No relief given to the borrower in terms of RBI circular:
It is the contention of the CD that no relief was given by the Applicant Bank to the CD in terms of the of RBI circular dated 17.04.2022 in short “Covid-19 regulatory package” it is seen from the record that indeed no relief was provided by the Applicant to the CD under the said circular.
It is the contention of the Applicant that moratorium under the said circular was granted only to those accounts who were found eligible.
The Applicant did not find the Corporate Debtor eligible to be granted any relief under the said circular.
We are of the view that it was up to the Applicant bank to give any relief to the CD. Moreover, NCLT is not vested with powers to decide the inter-se dispute between the borrower and his Bank.
Such powers are vested with other Authorities/Courts and certainly not vested with NCLT. If the CD was aggrieved with such a decision of the Applicant, the remedy for the acts of the Applicant lies elsewhere. Moreover, the said issue is totally irrelevant foe the present proceedings.
Subsequent renewal of limits on 31.03.2020 by the Applicant:-
It is the contention of the CD that the Applicant has renewed the limits vide letter dated 31.03.2020. The CD has attached the same along with the Reply at page no. 77.
The Applicant has not denied the issue of such a letter.
It is the contention of the Applicant that the facilities sanctioned vide letter dated 31.03.2020 were due to expire on 07.07.2020, the CD failed to demonstrate that it made any payment even after the said sanction letter and hence the said sanction letter automatically expired on 07.07.2020.
The Applicant has stated the date of default to be on 01.02.2020 and has stated the date of NPA as 01.05.2022. Having considered the two date we are of the view that though there was renewal in the limits but the date of default is correctly mentioned as 01.02.2020 and that the subsequent renewal does not cure the default.
Reliance made to Vidharbha Industries Power Limited Versus Axis Bank Limited:-
The CD thereafter has relied upon the Judgment of Hon’ble Supreme Court in the matter of Vidarbha Industries Power Ltd. Vs. Axis Bank and Hon’ble Supreme Court in the subsequent Judgment of M. Suresh Kumar Reddy Vs. Canara Bank and others clarified that Vidarbha decision was passed in the peculiar facts of that specific case and is not meant to override the established binding precedent and further that the binding judicial precedent, established in Innovative Industries Ltd. VS. ICCI Bank and E.S. Krishnamurti Vs. Bharath High-Tech Builders, held that once an Applicant proves the existence of debt and default, the adjudicating authority has very little discretion and is generally bound to admit the Insolvency Application.
In view of the above Judgments we are unable to agree with the CD so far as the reliance made upon the judgement of Vidharbha Industries Power Limited Versus Axis Bank Limited. Moreover, the Applicant has failed to establish feasibility and viability of its business and the capacity to arrange the necessary funds to repay the dues of its lender Financial Creditor and in the view of the same also, the Vidharbha judgement does not apply to it.
Refusal to disburse and Penal interests:-
From the table as depicted under Para 3.23 of this order, it is seen that the various dates during which penal interest was levied ranged between 08.07.2019 to 06.03.2020.
The CD had enough opportunity to agitate the said issue and also the issue relating to non disbursal of additional funds with the appropriate forum.
The CD has failed to place before us any order from appropriate authority declaring that the Applicant has wrongfully charged the said penal interests or that it has wrongfully not made the disbursal to which CD was entitled. In view of the same, we are reiterating that NCLT is not the appropriate forum for raising the said issue and the said issues are also not relevant for the purpose of deciding this Application where such issues can be agitated specially under a Section 7 Application.
In our considered view these objections are therefore, not sustainable.
Such powers are vested with other Authorities/Courts and certainly are not vested with NCLT. If the CD was aggrieved with such a decision of the Applicant, the remedy for the acts of the Applicant lies elsewhere.
The Applicant once proves the existence of debt and default, then this tribunal is bound to admit the Insolvency Application. The Bench has placed reliance on the order passed by the Hon’ble NCLAT in Vinayak Exports, Mrs. Divya M. Jain Versus M/s. Colorhome Developers Pvt. Ltd.-Company Appeal(AT)(Insolvency) No. 06 of 2019, where in it was held that –
“12.In view of the above reasons, we are of the view that the amounts borrowed by the Respondent is a debt due and payable and it is borrowed against a time value of money. The Hon’ble Supreme Court in the matter of “Innoventive Industries Ltd. Vs. ICICI Bank and Anr.” – (2018)1 SCC 407, in paragraphs 27, 28, 29 & 30 held which read as under:
“27.The scheme of the Code is to ensure that when a default takes place, in the sense that a debt becomes due and is not paid, the insolvency resolution process begins. Default is defined in Section 3(12) in very wide terms as meaning nonpayment of a debt once it becomes due and payable, which includes non-payment of even part thereof or an instalment amount. For the meaning of “debt”, we have to go to Section 3(11), which in turn tells us that a debt means a liability of obligation in respect of a “claim” and for the meaning of “claim”, we have to go back to Section 3(6) which defines “claim” to mean a right to payment even if it is disputed. The Code gets triggered the moment default is of rupees one lakh or more (Section 4). The corporate insolvency resolution process may be triggered by the corporate debtor itself or a financial creditor or operational creditor. A distinction is made by the Code between debts owed to financial creditors and operational creditors. A financial creditor have been defined under Section 5(7) as a person to whom a financial debt is owed and a financial debt is defined in Section 5(8) to mean a debt which is disbursed against consideration for the time value of money. As opposed to this, an operational creditor means a person to whom an operational debt is owed and an operational debt under Section 5 (21) means a claim in respect of provision of goods or services.
28.When it comes to a financial creditor triggering the process, Section 7 becomes relevant. Under the explanation to Section 7(1), a default is in respect of a financial debt owed to any financial creditor of the corporate debtor – it need not be a debt owed to the applicant financial creditor. Under Section 7(2), an application is to be made under sub-section (1) in such form and manner as is prescribed, which takes us to the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. Under Rule 4, the application is made by a financial creditor in Form 1 accompanied by documents and records required therein. Form 1 is a detailed form in 5 parts, which requires particulars of the applicant in Part I, particulars of the corporate debtor in Part II, particulars of the proposed interim resolution professional in part III, particulars of the financial debt in part IV and documents, records and evidence of default in part V. Under Rule 4(3), the applicant is to dispatch a copy of the application filed with the adjudicating authority by registered post or speed post to the registered office of the corporate debtor. The speed, within which the adjudicating authority is to ascertain the existence of a default from the records of the information utility or on the basis of evidence furnished by the financial creditor, is important. This it must do within 14 days of the receipt of the application. It is at the stage of Section 7(5), where the adjudicating authority is to be satisfied that a default has occurred, that the corporate debtor is entitled to point out that a default has not occurred in the sense that the “debt”, which may also include a disputed claim, is not due. A debt may not be due if it is not payable in law or in fact. 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 a notice from the adjudicating authority. Under subsection (7), the adjudicating authority shall then communicate the order passed to the financial creditor and corporate debtor within 7 days of admission or rejection of such application, as the case may be.
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 operational creditor gets out of the clutches of the Code.
30.On the other hand, as we have seen, in the case of a corporate debtor who commits a default of a financial debt, the adjudicating authority has merely to see the records of the information utility or other evidence produced by the financial creditor to satisfy itself that a default has occurred. It is of no matter that the debt is disputed so long as the debt is “due” i.e. payable unless interdicted by some law or has not yet become due in the sense that it is payable at some future date. It is only when this is proved to the satisfaction of the adjudicating authority that the adjudicating authority may reject an application and not otherwise.” (emphasis supplied)
13.We find that there is a debt due and payable which is more than Rs. 1 lakh and the same has been defaulted by the Respondent and being satisfied with the grounds as mentioned by the Appellants and in view of the judgment of Hon’ble Supreme Court (supra), we hereby set aside the impugned order dated 25th October, 2018, and hold that it is a fit case to trigger Insolvency Resolution Process.”
The IBC is not a recovery forum nor it is a shield for delay, especially where the debtor has defaulted and has not come forward with any viable resolution plan or evidence of solvency.
The CD has not produced any plausible restructuring proposal, willingness to settle, or evidence of solvency. On the contrary, it has raised technical objections without rebutting the core evidence of debt and default. The maintainability of the present Application under Section 7 of the IBC rests on whether the Applicant has demonstrated the existence of a “financial debt” and a “default” as required under Sections 5(8) and 3(12), respectively.
The NeSL entries are authenticated, the outstanding amount exceeds Rs. 1 Crore, and default is established through multiple independent sources. Accordingly, the Application satisfies the conditions for admission under Section 7 of the IBC.
The Applicant has also proposed the name of an IRP, Mr. Krishna Chamadia, and as per Additional Affidavit submitted by the Applicant, no disciplinary proceedings are going on against him. Further, this Application is complete as all the required documents have been attached along with the Application.
We find that all pre-requisites of Section 7(5)(a) of the Code are fulfilled and, accordingly, we are satisfied that the instant Application is fit for admission under Section 7 of the Code.
We make it clear that at this stage we have not crystallised the amount as claimed in this Application; the same is left to be collated by the IRP.
ORDER
In view of the aforesaid findings, this Application bearing C.P. (IB) 707/MB/2022 filed under Section 7 of IBC, 2016, by Axis Bank, the Applicant (FC) for initiating CIRP in respect of Yashwant Dugdh Prakriya Limited, the CD, is admitted.
We further declare a moratorium under Section 14 of IBC, 2016 with consequential directions as mentioned below:
I. We prohibit:
the institution of suits or continuation of pending suits or proceedings against the Corporate Debtor, including the 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, and;
the recovery of any property by an owner or lessor where such property is occupied by or in possession of the Corporate Debtor.
II. That the supply of essential goods or services to the Corporate Debtor, if continuing, shall not be terminated or suspended or interrupted during the moratorium period.
III. That the order of moratorium shall have effect from the date of this order till the completion of the CIRP or until this Tribunal approves the resolution plan under Section 31(1) of the IBC or passes an order for the liquidation of the Corporate Debtor under Section 33 thereof, as the case may be.
IV. That the public announcement of the CIRP shall be made immediately as specified under Section 13 of the IBC read with Regulation 6 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 and other Rules and Regulations made thereunder.
V. That this Bench hereby appoints Mr. Krishna Chamadia, having Registration No. as IBBI/IPA-001/IP-P00694/2017-2018/11220 and e-mail address [email protected], having valid Authorisation for Assignment up to 31.12.2025 as the IRP to carry out the functions under the IBC.
VI. That the fee payable to IRP/RP shall be in accordance with such Regulations/Circulars/ Directions as may be issued by the IBBI.
VII. That during the CIRP Period, the management of the Corporate Debtor shall vest in the IRP or, as the case may be, the RP in terms of Section 17 or Section 25, as the case may be, of the IBC. The officers and managers of the Corporate Debtor are directed to provide all assistance to the IRP as and when he takes charge of the assets and management of the Corporate Debtor. Coercive steps will follow against them under the provisions of the IBC read with Rule 11 of the NCLT Rules for any violation of law.
VIII. That the IRP/IP shall submit to this Tribunal monthly reports with regard to the progress of the CIRP in respect of the Corporate Debtor.
IX. In exercise of the powers under Rule 11 of the NCLT Rules, 2016, the Financial Creditor is directed to deposit a sum of Rs.3,00,000/- (Three Lakh Rupees) with the IRP to meet the initial CIRP cost arising out of issuing public notice and inviting claims, etc. The amount so deposited shall be interim finance and paid back to the Financial Creditor on priority upon the funds becoming available with IRP/RP from the Committee of Creditors (CoC). The expenses incurred by IRP out of this fund are subject to approval by the CoC.
X. A copy of this Order be sent to the Registrar of Companies, Maharashtra, Mumbai for updating the Master Data of the Corporate Debtor.
XI. A copy of the Order shall also be forwarded to the IBBI for record and dissemination on their website.
XII. The Registry is directed to immediately communicate this Order to the Financial Creditor, the Corporate Debtor and the IRP by way of Speed Post, e-mail and WhatsApp.
XIII. Compliance report of the order by Designated Registrar is to be submitted today.