Bank of India vs Vishal Structurals Private Limited

Hypothecation of Stock of Raw materials like stainless steel rods, M.S. Structurals, paints electrodes, etc.

Hypothecation of Book Debts/receivables.

All that piece and parcel of leasehold land bearing Plot No. B-45 area admeasuring 1000 sq. mtrs. in the Engineering Zone, Taloja Industrial Area, MIDC within the Village Limits of Pendhar and Navade, Taluka Panvel, District Raigad in the registration SubDistrict Panvel District Raigaid together with buildings, structures, sheds standing thereon both present and future with fixtures, fittings erected or installed thereon presently valued at INR 3,51,00,000/-approx.

All that piece and parcel of leasehold land bearing Plot No. B-46 area admeasuring 1000 sq. mtrs. in the Engineering Zone, Taloja Industrial Area, MIDC within the Village Limits of Pendhar and Navade, Taluka Panvel, District Raigad in the registration SubDistrict Panvel District Raigaid together with buildings, structures, sheds standing thereon both present and future with fixtures, fittings erected or installed thereon presently valued at INR 3,51,00,000/-approx.

Unit No. 701-706 on the 7^th Floor, area admeasuring 2564 Sq. ft. aggregate in the building known as Krishna Govind Tower, Plot No. 22 - 26, Sector No. 24, Vashi, Navi Mumbai - 400 705 in the registration District of Thane presently valued at INR 7,18,96,000/-approx.

Unit No. 401, 404, 405, 406 on the 4^th Floor, area admeasuring 1918 sq. fi. in the building known as Krishna Govind Tower, Plot No. 22 -26, Sector No. 24, Vashi, Navi Mumbai - 400 705 in the registration District of Thane presently valued at INR 3,64,42,000 approx.

Flat No. D-1902 on the 19^th Floor, admeasuring 1150 sq. ft. and stilt covered parking No. 17 admeasuring 180 sg. ft. in the D -Wing of the building known as Runwal Centre Building D and E Wing CHSL, Behind Deonar Bus Depot, Deonar, Murnbai - 400 088, constructed on land bearing CTS No. 402B, 402/B/L and 402B/3, situate, lying and being at Village Deonar. Taluka Kurla in the registration District and Sub-District of Mumbai Suburban and within the limits of M East Ward of Municipal Corporation of Greater Mumbai presently valued at INR 2,76,00,000 approx.

Mr. Kishore Krishnamoorthy

Mr. M. N. Krishnamoorthy

Mis. Vishal Tanks and Pipelines Pvt. Ltd

The copy of statement of normal uncharged interest is annexed as Exhibit -10.

The copy of statement of Bank Guarantee as on 21.09.2024 is annexed as Exhibit -11.

Copy of NeSL Records for Loan account number 011630110000019,011670310000025 and 011670310000036 are annexed as Exhibit- 12 (Colly).

Copy of NPA Certificate dated 20.06.2024 is annexed as Exhibit-13.

In para 3-d & 3-f of its reply, the Corporate Debtor has admitted that various facilities as mentioned by the Financial Creditor in its application, were sanctioned and granted.

It is stated that due to Covid-19, the Corporate Debtor started facing financial difficulties, leading to irregular payments.

The financial assistance provided by the Applicant helped mitigating losses to some extent, but not sufficient to restore the business to a sustainable level.

It is stated that one of the customers invoked a bank guarantee of Rs. 7 crores during Covid-19, citing delay in project completion, which further aggravated the financial position of the Corporate Debtor.

In para 3(i), Corporate Debtor has stated as under:

Under para 3-l, there is further admission on the side of the Corporate Debtor when they say that “the Respondent has consistently demonstrated its willingness to repay the borrowings due to the Applicant”.

Under para 3-m, it is stated that one restructuring proposal was presented to the Financial Creditor, however, it appears that the same could not find favour with the Financial Creditor.

The Respondent/Corporate Debtor- M/s. Vishal Structurals Private Limited, is admitted in the Corporate Insolvency Resolution Process under Section 7 of the IBC, 2016.

As a consequence, thereof, the moratorium under Section 14 of the IBC, 2016 is declared for prohibiting all of the following in terms of Section 14(1) of the IBC, 2016:

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;

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 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 the Corporate Debtor.

The order of moratorium shall have 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 Corporate Debtor under Section 33 of the IBC, 2016, as the case may be.

It is further directed that the supply of essential goods/services to the Corporate Debtor, if continuing, shall not be terminated or suspended or interrupted during the moratorium period as per provisions of sub-sections (2) and (2A) of Section 14 of IBC, 2016.

Since the Applicant has named an IRP, we hereby appoint Mr. Prashant Jain having registration no. IBBI/IPA-001/IP-P01368/2018-2019/12131 as the IRP of the Corporate Debtor.

The IRP shall perform all his functions as contemplated, inter-alia, under Sections 17, 18, 20 & 21 of the IBC, 2016. 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 under section 19 of the IBC, 2016 for extending assistance and co-operation to the IRP. Where any personnel of the Corporate Debtor, its Promoter or any other person required to assist or co-operate with IRP, do not assist or co-operate, the IRP is at liberty to make appropriate application to this Adjudicating Authority with a prayer for passing an appropriate order.

This Adjudicating Authority directs the IRP to make a public announcement for the initiation of CIRP and call for the submission of claims under Section 15, as required by section 13(1)(b) of the IBC, 2016.

The IRP is expected to take full charge of the Corporate Debtor’s assets, and documents without any delay whatsoever.

The IRP or the RP, as the case may be, shall submit to this Adjudicating Authority periodical reports with regard to the progress of the CIRP in respect of the Corporate Debtor.

The IRP shall be under duty to protect and preserve the value of the property of the Corporate Debtor and manage the operations of the Corporate Debtor as a going concern, to the extent possible, as a part of obligation imposed by Section 20 of the IBC, 2016.

The Financial Creditor is directed to pay an advance of Rs. 2,00,000/- (Rupees Two Lakhs Only) to the IRP 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 a copy of this order to the Financial Creditor, Corporate Debtor and to the IRP and the concerned Registrar of Companies, after completion of necessary formalities, within seven working days and upload the same on the website immediately after the pronouncement of the order. The Registrar of Companies shall update its website by updating the Master Data of the Corporate Debtor in MCA portal specifically mentioning regarding admission of this Application and shall forward the compliance report to the Registrar, NCLT.

The commencement of the Corporate Insolvency Resolution Process shall be effective from the date of this order.