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Judgment
[Per Bench]
The present Application is filed under section 7 of IBC, 2016 by M/s. Bhagyanagar Investments and Trading (P) Ltd (The Financial Creditor) against M/s.Velugu Engineering and Enterprises (P) Ltd (The Corporate Debtor) to initiate Corporate Insolvency Resolution Process of the Corporate Debtor on the ground that on 10.06.2019, the Corporate Debtor committed default on Financial Debt of Rs.2,67,46,301/-.
The Financial Creditor states that in June 2017, the Corporate Debtor has availed a Corporate Loan of Rs.2.00 crores from Financial Creditor which was repayable in 8 Quarterly installments with interest @ 12% per annum.
It is stated that the Corporate Debtor failed to fulfil the obligations of the loan agreement and did not pay even a single installment and thereby committed default in paying the debt. Hence this Application is filed to initiate CIRP of the Corporate Debtor.
The Corporate Debtor was served with the notice of this Application.
It appeared that one of its Directors, Mr. Sama Ravinder Reddy had filed affidavit in reply.
We have gone through the reply affidavit of the Corporate Debtor which inter-alia states as under:
a. That the present Petition has been filed by the Petitioner claiming an alleged disbursed Principal amount of Rs.2,00,00,000/- in "PART-IV SL.No.1" and claimed alleged Principal amount Rs.2,05,02,300/- in "PART-IV SI NO.2". I submit there is a clear inconsistency in the claim of the Petitioner herein.
b. That the Financial Creditor has to submit the record of default recorded with an information utility along with the application. However, the Financial Creditor/Petitioner had failed to submit the proper record. As such the application is liable to be dismissed.
c. That except the alleged unregistered Loan agreement no other proper evidence is filed by the Financial Creditor.
Learned counsel for the Financial Creditor filed rejoinder inter-alia stating as under:-
a. That there is a typographical error in "PART IV Sl.No.2". Therefore, there is no inconsistency with the principal amount and the total claim amount remains unchanged.
b. That the Petitioner is ready to submit the record of default with Information Utility and produce the same before this Adjudicating Authority. However, non-filing of record of default with Information Utility will not vitiate the rights of the Petitioner in approaching this Adjudicating Authority.
We heard learned counsel for the Financial Creditor and learned counsel for the Corporate Debtor.
It is seen from the record that the Financial Creditor has filed a memo dated 06.07.2020 filed on 09.07.2020 whereby the Financial Creditor has submitted an Application before the NATIONAL E-GOVERNANCE SERVICES LIMITED(Information Utility) giving the details of the debt and default.
It is also noted that the Financial Creditor has served the notice relating to filing of the instant Petition along with the material papers through e-mail to the Corporate Debtor.
The Loan Agreement dated 09.06.2017 between the two parties is also filed by the Financial Creditor. The Financial Creditor has also filed copies of correspondence between the parties from which it is clear that the Corporate Debtor has time and again acknowledged the receipt of Loan Amount of Rs.2 crores and have also sought further time for arranging repayment of the said loan.
There are three such acknowledgment letters dated 05.07.2019, 15.10.2019 and 05.12.2019 are on record.
The Corporate Debtor vide its letter dated 05.07.2019, while admitting the debt has stated as under:-
"We regret to inform you that we could not make the payment of Rs.2,00,00,000/- against the loan agreement. We are under acute financial crunch, thus we could not arrange the money, as committed. Hence, we request you to allow us further time of 3 months as we are in the process of raising funds from other sources."
Further, the Corporate Debtor vide its letter dated 15.10.2019 stated as under:-
"We regret to inform you that we could not make the payment in time as per the terms and conditions of the agreement of loan. However, we request you to give us further time of 30 days for making the payment as our realisations are struck."
Again the Corporate Debtor vide its letter dated 05.12.2019 stated as under:-
"Due to unavoidable circumstances we were unable to make the payment of Rs.2,00,00,000/- payable to you. We request you to give us a further time of 2 months, in which time we will be making the payment."
From the above letters, it appears that the Corporate Debtor admitted the fact that the Financial Debt of more than Rs.1,00,000/- (as per Sec.4 of IBC, 2016) is due and payable by them to the Financial Creditor and that they have committed default in paying the same.
This is the only fact involved for consideration of this Application which is proven on record.
Since the Corporate Debtor committed default of financial debt, we admit the Corporate Debtor in CIRP U/s.7 by following order:-
The instant petition is hereby admitted and this Adjudicating Authority Orders the commencement of the Corporate Insolvency Resolution Process which shall ordinarily get completed as per the time line stipulated in section 12 of the IB Code, 2016, reckoning from the day this order is passed.
The Financial Creditor suggested the name of Mr. Bhaskar B, having Registration No. IBBI/IPA-002/IP-N00644/2018-19/12024 for appointment as IRP against whom no departmental enquiry appears to be pending.
Therefore, this Adjudicating Authority hereby appoint Mr. Bhaskar B having Regn. No. IBBI/IPA-002/IP-N00644/2018-19/12024 (IRP) as his name is proposed by the Financial Creditor and is also reflected in IBBI website. He has also filed his written consent in Form – 2 dated 18.05.2020. The IRP is also directed to furnish a valid Authorization for Assignment issued by competent institute in the Registry within 3 days of receipt of copy of this order. The IRP is directed to take charge of the Respondent/Corporate Debtor’s management immediately. He is also directed to cause public announcement as prescribed under Section 15 of the I&B Code, 2016 within three days from the date of receipt of this order and call for submission of claims in the manner as prescribed.
This Adjudicating Authority hereby declares the moratorium which shall have effect from the date of this Order till the completion of corporate insolvency resolution process for the purposes referred to in Section 14 of the I&B Code, 2016. We order to prohibit all of the following, namely:
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 Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002);
The recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor.
Notwithstanding anything contained in any other law for the time being in force, a license, permit, registration, quota, concession, clearances or a similar grant or right given by the Central Government, State Government, local authority, sectoral regulator or any other authority constituted under any other law for the time being in force, shall not be suspended or terminated on the grounds of insolvency, subject to the condition that there is no default in payment of current dues arising for the use or continuation of the license, permit, registration, quota, concessions, clearances or a similar grant or right during the moratorium period.
The supply of essential goods or services of the Corporate Debtor shall not be terminated or suspended or interrupted during moratorium period. Further, if the IRP considers supply of any goods or services critical to protect and preserve the value of the corporate debtor and manage the operations of such corporate debtor as a going concern, then the supply of such goods or services shall not be terminated, suspended or interrupted during the period of moratorium, except where such corporate debtor has not paid dues arising from such supply during the moratorium period. Furthermore, the provisions of Sub-section (1) of Section 14 shall not apply to such transactions, agreements or other arrangement as may be notified by the Central Government in consultation with any financial sector regulator or any other authority.
The IRP shall comply with the provisions of Sections 13(2), 15, 17 & 18 of the Code. The directors, Promoters or any other person associated with the management of Corporate Debtor are directed to extend all assistance and cooperation to the IRP as stipulated under Section 19 and for discharging his functions under Section 20 of the I&B Code, 2016.
The Petitioner/Financial Creditor as well as the Registry is directed to send the copy of this Order to IRP so that he could take charge of the Corporate Debtor's assets etc. and make compliance with this Order as per the provisions of I&B Code, 2016.
The Registry is directed to communicate this Order to the Financial Creditor and the Corporate Debtor.
The Registry shall also communicate this Order to the ROC, Hyderabad for updating the status of the Corporate Debtor in the MCA website.
The address details of the IRP are as follows:-Mr. Bhaskar B Reg.No: IBBI/IPA-002/IP-N00644/2018-19/12024 4/447A, 7th Street, Aruna Nagar, K.Vadamadurai, P.O., Coimbatore – 641017.
The present Company Application bearing CP (IB) No.234/7/HDB/2020 is hereby admitted.