Corporation Bank vs Ideal Energy Projects Limited

Per: V. Nallasenapathy, Member (Technical)

Corporation Bank (hereinafter called 'Petitioner') has sought the Corporate Insolvency Resolution Process against M/s Ideal Energy Projects Limited (hereinafter called the 'Corporate Debtor') on the

(4^{\text{th}}) Indenture of Mortgage dated 23.10.2013;

I) Copy of Master Restructuring Agreement dated 30.12.2013;

Copy of Pledge Agreement dated 14.02.2014;

Copy of (5^{\text{th}}) indenture of Mortgage dated 29.03.2014;

Copy of Sanction Letter dated 25.06.2015;

Copy of latest search report from SVP Associates, Cs report dated 29.09.2017;

Copy of CIBIL report dated 24.06.2019;

Copy of Certificate of Registration for Modification of Charge;

Copy od the Demand Notice dated 17.05.2018.

The Petitioner enclosed the Statements of accounts of the Corporate Debtor. The Petitioner has also annexed Commercial Credit Information Report of TransUnion (CIBIL) dated 24.06.2019 to further show the default of Corporate Debtor.

The Petitioner submits that the Corporate Debtor's account was declared as non-performing assets (NPA) on 28.12.2013. The Petitioner issued demand notice on 17.05.2018 to the Corporate Debtor.

The Corporate Debtor in its reply submitted the followings:

a. The amended Form 1 filed by the Petitioner as per the direction of the Adjudicating Authority is not valid and cannot be taken on record.

b. The amended Form 1 filed after seven days' time is time barred.

c. Due to change in coal policy by the government the coal India ltd refused to supply the coal to the Corporate Debtor impacted the project adversely to the extent of entire equity erosion.

d. Due to policy constraints which plagued the power and infrastructure sector the Corporate debtor could not commence their regular operations, etc.

e. The Petitioner scuttled the efforts of the Corporate debtor to sell the business of the Corporate Debtor to strategic investors.

f. The OTS offer submitted by the Corporate Debtor was accepted by the Union Bank of India, Bank of Baroda and Punjab National Bank, the other financial creditors the corporate debtor.

g. The Corporate Debtor was declared as an NPA way back on 28.12.2013, the date of default mentioned in amended form 1 is 26.06.2015 and petition filed on 29.06.2019 is hopelessly time barred.

The above submissions of the Corporate debtor from 7(a) to 7(f) cannot come in the way of the admission, in view of the fact that there is debt above ₹1 lakh and the Corporate Debtor committed default in repayment of the debt and the limitation issue referred in 7(g) is dealt with separately.

It is appropriate to mention the decision of the Hon'ble Supreme Court in Innoventive Industries Ltd. Vs. ICICI Bank and Ors. - (2018) 1 SCC 407, wherein it was held as below:

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."

In view of the categorical ruling of the Hon'ble Supreme Court in the case of Innoventive Industries Ltd. Vs. ICICI Bank and Ors., cited supra, the contentions raised by the Corporate Debtor in the reply does not hold water and has to be rejected in limine.

In respect of the limitation issue raised by the Corporate debtor at para 7 (g) supra, to have a better understanding of the date of

We do hereby acknowledge, for the purposes of Section 18 of the Indian Limitation Act 1963 and in order to preclude any question being raised on limitation regarding our liability to your Bank and other Banks of the consortium of lenders for the payment of the outstanding amounts in respect of the present as well as future indebtedness and liabilities under the said Term Loan Account(s) and / or other accounts together with interest, compound interest, additional interest, liquidated damages, costs, charges, expenses and other moneys in terms of the above mentioned documents that our liability shall remain in full force and with all relative securities, agreements and obligations as mentioned therein. For IDEAL ENERGY PROJECTS LTD. J. D. MHAISKAR CHAIRMAN & MANAGING DIRECTOR

c. In view of the above acknowledgement of liability dated 17.07.18, the limitation to file this preceding got extended by the action of the corporate debtor as provided under Section 18 of the Limitation Act, 1963 and this petition filed on 04.07.2019, within 3 years from 17.07.18, is well within the period of limitation.

This Adjudicating Authority, on perusal of the documents filed by the Petitioner, is of the view that the Corporate Debtor defaulted in repaying the loan availed and also placed the name of the Insolvency Resolution Professional to act as Interim Resolution Professional and there being no disciplinary proceedings pending against the proposed resolution professional, therefore the Application under sub-section (2) of Section 7 is taken as complete, accordingly this Bench hereby admits this Petition prohibiting all of the following of item-I, namely:

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 (SARFAESI Act);

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 Registry is hereby directed to communicate this order to both the parties and the Interim Resolution Professional immediately.