Bank of Maharashtra vs Supertech Realtors Private Limited

PER: MANNI SANKARIAH SHANMUGA SUNDARAM, MEMBER (J)

The Instant Application is filed on behalf of the Bank of Maharashtra (hereinafter referred to as "Applicant/Financial Creditor") under Section 7 of the Insolvency and Bankruptcy Code, 2016 (‘Code’) read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, for initiating the Corporate Insolvency Resolution Process (‘CIRP’) against Supertech Realtors Private Limited ("Respondent/ Corporate Debtor") having CIN U70200DL2010PTC202282 on the ground that the Corporate Debtor had committed a default in payment for an amount aggregating to Rs. 168,04,59,415/- (Rupees One Hundred Sixty-Eight Crores Four Lakhs Fifty-Nine Thousand Four Hundred Fifteen Only) till the filing of this present application dated 08.04.2022.

The Corporate Debtor, Supertech Realtors Private Limited is incorporated on 05.05.2010, having its registered office situated at 1114, Hemkunt Chambers, 11th Floor 89, Nehru Place New Delhi DL 110019. Since the registered office of the Corporate Debtor is in New Delhi, this Tribunal having territorial jurisdiction over the NCT of Delhi is the Adjudicating Authority in relation to the prayer for initiation of Corporate Insolvency Resolution Process in respect of respondent corporate debtor under sub-section (1) of Section 60 of the Code.

Briefly stated facts of the case as mentioned in the Company Application, which are relevant to the issue in question, are as follows:-

Accordingly, after execution of all the necessary documents, the aforesaid loan facility was made available in accordance with the terms of the sanction.

We have heard the Ld. Counsel on behalf of the Applicant/Financial creditor and further perused the averments made in the application, reply filed by the Corporate Debtor, rejoinder and written submission presented by Financial Creditor and Corporate Debtor.

The issue of consideration before this bench is whether the present application has been filed by authorized representative. On perusal of the record, the Bench had recorded in its order dated 01.06.2022 to file fresh copy of identity card of Authorized Signatory along with Vakalatnama. The Order dated 01.06.2022 is reproduced here-below-

The same had been filed by the Applicant Bank dated 08.06.2022. Upon review of the records, this Adjudicating Authority finds that Power of Attorney dated 07.06.2022 by the Applicant Bank in favour of Mr. Sanjeev Kumar has been backed by Board Meeting of Applicant Bank dated 22.03.2022, has been placed on record. Therefore, the provided Power of Attorney constitutes a valid and sufficient authorization and therefore the contention of the Respondent is rejected.

The next issue for consideration is whether the present application is filed within the limitation period. Owing to the non-adherence of the financial discipline by the Corporate Debtor, the account was declared as NPA on 28.09.2018. the Corporate Debtor had made various re-payments into the loan account between 15.04.2019 to 16.03.2022. Further, during the pendency of the instant petition, at the request of the Corporate Debtor, a One Time Settlement (OTS) dated 15.06.2022 was sanctioned by the Financial Creditor. This OTS was later rescinded by the Financial Creditor as the Corporate Debtor failed to make payments in terms thereof.

The Hon'ble Supreme Court in Laxmi Pat Surana vs. Union Bank of India & Anr. Appeal No. 2734 of 2020 has held that if there is an acknowledgement of debt in writing within a limitation period, a fresh limitation period as per section 18 of Limitation Act commences from the date of the acknowledgement of debt. Therefore, by no stretch of imagination, the application is barred by the law of limitation.

The Respondent have submitted that the Applicant has made contradictory statement with regard to Date of Default. In Part 4 of Form 1 of the Application the date of default has been mentioned as 01.05.2024, whereas in the same breath, the Financial Creditor has also admitted that the Corporate Debtor has made payments till 16.03.2022. The Financial Creditor submitted that the date of default for the purposes of the present Petition is 16.03.2022 and that there has been a typographical error and the date of default has been inadvertently mentioned as 01.05.2021. Further, it has submitted that the correct date of default as 16.03.2022 has been mentioned at page nos. 9, 16, 41 & 283 of the Application. The Applicant has relied on Manmohan Singh Jain Vs. State Bank of India & Anr." [(2021) SCC OnLine NCLAT 5983] wherein the date of default was not mentioned in Part-IV of Form I of the Petition. However, there was sufficient evidence in the form of pleadings and supporting documents to establish the date of default. Therefore, it was held that non-mentioning of the date of default was not fatal to the Petition and the AA had correctly admitted the Petition.

To prove its Contention, the Corporate Debtor has relied upon Ramdas Dutta Vs. IDBI Bank Ltd. [Company Appeal (AT) (Ins.) No. 1285 of 2022], Kodeboyina Srinivas Krishna vs PVM Innvensys Pvt. Ltd." [Company Appeal (AT) (Ins.) No. 205 of 2020], Winntus Scaffolding Pvt. td. vs. Aishwarya Business Corporation Pvt. Ltd. [CP (IB) No. 44/2022], Inakshi Sobti vs Starlight Systems Private Limited'' CP(IB) No. 778/MB-VI/2023, P. Nanikutty and Anr vs K. U. Kalpakadevi and Ors." 2023 sec OnLine Ker 3270. Whereas, on perusal of the record we find that there is a mere typographical error in Part IV of the Application which had been subsequently clarified in the Rejoinder Filed by the Applicant, and the date of default has been mentioned as 16.03.2022 at several places in the pleadings and documents annexed thereto.

It is contended by the Respondent that the Bank of Maharashtra / the Financial Creditor herein holds no authority to prefer the present petition as the same authority solely and unequivocally lies with the lead bank i.e. Union Bank of India. The relevant paragraph of the Inter Se Agreement dated 20.12.2012 have been reproduced below for the Respondent contention-

In its written Submissions, the Respondent/ Corporate Debtor has submitted that Clause 6 of the aforesaid Inter-se Agreement states that for any lender proposing to take any decision/action itself, shall notify the other lenders and the lead bank of such proposed decision and that the lead bank shall within 15 days of the receipt of such notification from such lender convene a meeting of the consortium of lenders for deciding/determining the course of action to be taken on the proposal receipt. The Respondent have further alleged that the instant section 7 Application has been filed without giving due notice and without giving due opportunity to the borrower to discharge its liability. On the day the said section 7 was filed, without due compliance of the binding provisions of these clauses of the inter-se agreement, the said section 7 was premature and non-maintainable.

The Respondent/Corporate Debtor have placed their reliance on “Rakshit Dhirajlal Doshi vs. IDBI Bank Limited”. Accordingly, the relevant paragraphs of Judgement dated 15.11.2022 of the Hon’ble NCLAT passed in the matter of “Rakshit Dhirajlal Doshi vs. IDBI Bank Limited and Others in Company Appeal (AT) (Insolvency) No. 658 of 2022”, have been produced here below wherein the following was held:

Per Contra, the Applicant in its Written Submissions has stated that the facts of Rakshit Dhirajlal (supra) are not applicable to the facts of the present case. Further it has submitted that the lenders being part of the consortium, are privy to the Inter-se Agreement executed in between them. Therefore, the Corporate Debtor, being a third party, has no locus to contend that the Financial Creditor has violated the Inter-se consortium agreement of lenders.

The Applicant Bank has further relied on the Judgement of the Hon’ble NCLAT passed in the matter of Amitabh Kumar Jha vs. Bank of India & Anr. [Company Appeal (AT) (Ins.) No. 1392 of 2019] wherein it was observed that the Corporate Debtor cannot meddle with the internal arrangement and affairs of the creditors and cannot get out of the rigors of its liability on the basis of the Inter-Creditor Agreement The relevant extracts of the Judgement are reproduced below:

In view of the Judgement (supra), we agree with the contention raised by the Applicant Bank that the Respondent cannot take benefit of the inter-se agreement entered by and between the consortium of banks. Hence, we are of the view that the Judgement of Hon’ble NCLAT in the matter of “Rakshit Dhirajlal Doshi vs. IDBI Bank Limited and Others” in Company Appeal (AT) (Insolvency) No. 658 of 2022 does not help the case of the Respondent and is not applicable to the facts of the present case. Even otherwise, as per the Scheme of Section 7 of IBC 2016, an application can be filed by a Financial Creditor alone by itself or jointly with other Financial Creditors. Further, we do not find any objection raised by the Union Bank of India. On the Contrary, there has been a separate Section 7 application filled by the Union Bank of India against Corporate Debtor bearing CP (IB) 209 OF 2021.

Further, it is relevant to refer the definition of Financial Creditor as provided in Clause 5(7) of the Code, 2016. The definition of Financial Creditor is reproduced herein in verbatim: -

Additionally, the Respondent in its Written Submission has stated that Financial Creditor has failed to register the debt of the Corporate Debtor with Nesl. It is submitted that the Financial Creditor in terms of Regulation 20 and 21 Insolvency and Bankruptcy Board of India (Information Utilities) Regulations, 2017. Reliance is being placed upon Circular bearing no. IBBI/IU/59/2023 dated 15.06.2023 issued by the IBBI whereby, a guidance has issued by the IBBI stating that the record of default issued by the information utility shall be appended with the application filed under Section 7, IBC whereby, in the present case no such steps have been taken by the Financial Creditor information process the same and acknowledgement it after due-verification.

As regard to the Corporate Debtor’s contention that record of Default is not annexed with the present application, which is a mandatory requirement. This Adjudicating Authority is of the considered view that Section 7 of the Code, 2016 read with the CIRP Regulations, 2016 empowers the Financial Creditor to file record of the default recorded in the information utility or “such other record and default as may be specified”. This Adjudicating Authority is further persuaded by the decision of Hon’ble NCLAT in the matter of Vijay Kumar Singhania Vs. Bank of Baroda and Anr. Company Appeal (AT) (Insolvency) No.1058 of 2023; Order dated 13.12.2023, had adjudicated on the question, “Whether filing of Record of Default (RoD) of Information Utility is mandatory? and without obtaining an Authentication of Default (AoD) as per IU Regulation 21, no application under Sec. 7 can be filed by Financial Creditor?” and held as follows:-

Therefore, taking into the account of judicial precedent and provisions in the Code, 2016 and its accompanying regulations it is settled proposition that the record of default recorded with the Information Utility cannot be the sole document to be furnished in a Section 7 Application and the financial creditor is at liberty to submit such other record of default as may be specified which proves the existence of debt and default. The Applicant has placed on record Certificates under the Bankers Books Evidence Act 1981 issued by Bank of Maharashtra, reflecting the statement of accounts of the Applicant in relation to the facilities granted by the Applicant to the Corporate Debtor and a copy of the Report by CIBIL pertaining to the Corporate Debtor dated 23.03.2022 to prove the existence of debt and its default. Therefore, the contention of the Corporate Debtor regarding the non-maintainability of the present application in absence of record of default cannot be sustained.

Adverting to the facts of the present case, it is undisputed The Corporate Debtor approached the consortium led by Union Bank of India seeking financial assistance to the tune of Rs. 735.58 crores. Out of this, the Corporate Debtor requested the Financial Creditor to grant credit facilities to the tune of Rs. 150 Crores for partial financing of development of residential apartments, office, retail and luxury hotel in the name and style of “SUPERNOVA”. This term loan was repayable in quarterly instalments spread across 10 years and 4 months.

With regard to the existence of debt and default, on a perusal of Form – I and the documents annexed with the application, we are satisfied that the applicant clearly comes within the definition of Financial Creditor and the loan was disbursed to Corporate Debtor and there exists a debt and its default.

Thus, it is clear that when a default takes place i.e., the debt becomes due and is not paid, the Insolvency Resolution Process shall begin against the corporate debtor. Therefore, on the basis of discussion in the aforesaid paragraphs, we are satisfied that the present application is complete in all respects. The Applicant Bank/financial creditor is entitled to move the application against the corporate debtor in view of outstanding financial debt in default above the pecuniary threshold limit as provided under Section 4 of the Code, 2016. As a sequel to the above discussion and in terms of Section 7(5)(a) of the Code, the present company application (C.P. No. (IB)- 305/(ND)/2022) stands admitted and the CIRP is hereby initiated against Supertech Realtors Private Limited.

The applicant in Part -III of the application has proposed the name of IRP, accordingly, this bench appoint Ms. Anju Agarwal, as the Insolvency Resolution Professional of the corporate debtor. The registration number of the IRP being IBBI/IPA-001/IP-P00106/2017-2018/10213 and email id – [email protected]. Accordingly, Ms. Anju Agarwal is appointed as an Int erim Resolution Professional (IRP) for corporate debtor. The consent of the proposed interim resolution profession in Form-2 is taken on record. The IRP so appointed shall file a valid AFA and disclosure about non-initiation of any disciplinary proceedings against her, within three (3) days of pronouncement of this order.

We also declare moratorium in terms of Section 14 of the Code. The necessary consequences of imposing the moratorium flows from the provisions of Section 14 (1) (a), (b), (c) & (d) of the Code. Thus, the following prohibitions are imposed:

It is made clear that the provisions of moratorium shall not apply to transactions which might be notified by the Central Government or the supply of the essential goods or services to the Corporate Debtor as may be specified, are not to be terminated or suspended or interrupted during the moratorium period. In addition, as per the Insolvency and Bankruptcy Code (Amendment) Act, 2018 which has come into force w.e.f. 06.06.2018, the provisions of moratorium shall not apply to the surety in a contract of guarantee to the corporate debtor in terms of Section 14 (3) (b) of the Code.

In pursuance of Section 13 (2) of the Code, we direct that public announcement shall be made by the Interim Resolution Professional immediately (within 3 days as prescribed by Explanation to Regulation 6(1) of the IBBI Regulations, 2016) with regard to admission of this application under Section 7 of the Insolvency & Bankruptcy Code, 2016.

We direct the Applicant/Financial Creditor to deposit a sum of Rs. Rs. 2,00,000/- (Two Lakh Rupees Only) with the Interim Resolution Professional namely Ms. Anju Agarwal to meet out the expenses to perform the functions assigned to her in accordance with Regulation 6 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Person) Regulations, 2016. The needful shall be done within three days from the date of receipt of this order by the Financial Creditor. The said amount, however, is subject to adjustment towards Resolution Process cost as per applicable rules.

The Interim Resolution Professional shall perform all his functions as contemplated, inter-alia, by Sections 15, 17, 18, 19, 20 & 21 of the Code and transact proceedings with utmost dedication, honesty and strictly in accordance with the provisions of the Code, Rules and Regulations.

It is further made clear that all the 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 Code to extend every assistance and cooperation to the Interim Resolution Professional as may be required by him in managing the day-to-day affairs of the ‘Corporate Debtor’. In case there is any violation committed by the ex-management or any tainted/illegal transaction by ex-directors or anyone else, the Interim Resolution Professional would be at liberty to make appropriate application to this Tribunal with a prayer for passing appropriate orders.

The Interim Resolution Professional shall be under duty to protect and preserve the value of the property of the ‘Corporate Debtor’ as a part of his obligation imposed by Section 20 of the Code and perform all his functions strictly in accordance with the provisions of the Code, Rules and Regulations.

In terms of section 7(7) of the Code, the Registry is hereby directed to communicate a copy of the order to the Financial Creditor, the Corporate Debtor, the Interim Resolution Professional and the Registrar of Companies, NCT of Delhi & Haryana at the earliest possible but not later than seven days from today.

Accordingly, the instant application filed under Section 7 of the Code, 2016 bearing I.B./305/2022 stands admitted.

PER: MANNI SANKARIAH SHANMUGA SUNDARAM, MEMBER (J)

The instant application is being preferred on behalf of allottees of the project titled as Supernova, situated at Sector 96 Noida which is being developed by the Corporate Debtor herein. The captioned application is being preferred through the authorised representative, Mr. Harpal Singh duly authorised vide the letter of authorisations issued by the homebuyers, with the following prayer –

The instant application is being preferred by the Applicant seeking appointment of a Local Commissioner to assess the present situation of the project qua which the captioned proceedings have been initiated.

We have heard counsel for the parties and perused the record with their able assistance.

The issue involved in this case is as to whether an application like the one in hand could have been maintained at the instance of the Appellant before the admission of the application under Section 7 of the Code?

There is no dispute that the Applicants/Appellants are the allottees who have booked their units in the said project being developed by the Corporate Debtor. However, as submitted by counsel for Respondent, the units which has been booked by the Applicants in the Project named Supernova situated at Sector 96 Noida which is far beyond completion. It is further the case of the Applicant that there are large number of Allottees and if all of them keep on filing the application before the order of admission then the timeline which is provided for the purpose of pursuing the application filed under Section 7 of the Code shall be adversely affected as also the interest of the Financial Creditor who has initiated the proceedings.

In ‘Prayag Polytech Pvt. Ltd. vs. Hind Tradex Ltd. 2019 SCC Online NCLAT 1029 decided on 16.08.2019’ the Hon’ble NCLAT had held that

Additionally, in the case of Shrem Residency Pvt. Ltd. 2023 SCC Online NCLAT 70 decided on 11.01.2023 Hon’ble NCLAT had held

In view of the aforesaid facts and circumstances in the present case. We do not find any merit in the present Interlocutory Application and thereby IA NO. 6418 OF 2023 of in CP IB 305 OF 2022 is dismissed though without any order as to costs.