KSK Electricity Financing India Private Limited vs M/s. Oryx Energy Services Private Limited

Per: K. Anantha Padmanabha Swamy, Member Judicial

The present petition is filed by 'KSK Electricity Financing India Private Limited' (hereinafter referred to as 'Petitioner/Financial Creditor') under section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as IB Code, 2016) read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 against M/s. Oryx Energy Services Private Limited (hereinafter referred to as 'Respondent/Corporate Debtor'), inter – alia seeking to initiate Corporate Insolvency Resolution Process against the Corporate Debtor herein.

Brief facts of the present case are as under:

That the Corporate Debtor has approached M/s. Sai Wardha Power Generation Limited for grant of Inter Corporate Deposit (ICD) of ₹4,00,00,000 (Rupees Four Crores Only).

That M/s. Sai Wardha Power Corporation Limited had favourably considered the request of the Corporate Debtor and agreed to lend Inter Corporate Deposit (ICD) of ₹4,00,00,000 (Rupees Four Crores Only). M/s. Sai Wardha Power Generation Limited has entered into an agreement with the Corporate Debtor vide agreement dated 11.12.2012.

That the ICD under the agreement entered between the M/s. Sai Wardha Power Generation Limited and the Corporate Debtor shall be chargeable at the rate of 12% per annum which shall be payable along with the principle at the time of repayment.

That the Corporate Debtor had made representation to M/s. Sai Wardha Power Generation Limited several times that there were facing financial difficulties and requested to extend the repayment period. From time to time the Corporate Debtor has acknowledged the debt to be payable to M/s. Sai Wardha Power Generation Limited.

That subsequently, vide agreement dated 01.04.2018, M/s. Sai Wardha Power Generation Limited the assignor has entered into the Inter Corporate Deposit Assignment Agreement with the Financial Creditor and the Corporate Debtor. Wherein, the Assignor had agreed to assign and the Assignee the Financial Creditor herein, has agreed to assume all the rights, interest, title, claims and benefits of the Assignor in the ICD.

That Corporate Debtor vide letter dated 20.01.2019 again informed to the Financial Creditor that there are aggressively up for collecting their long term dues and funding outside agencies, but till date the Financial Creditor did not receive the amount.

That the Financial Creditor vide its letter dated 30.11.2019 called upon the Corporate Debtor to pay the dues outstanding. As on 30.11.2019, the Corporate Debtor is liable to pay a principle sum of ₹2,00,00,000 along with Interest of ₹1,65,23,836. The total outstanding claiming amount is ₹3,65,23,836.

In support of its claim, the Financial Creditor has filed the following Documents :

Reiterating the above, the counsel for the Financial Creditor prayed to admit the instant application.

Counsel for the Respondent filed counter on 26.02.2020, inter-alia stating the following contentions:

That the Corporate Debtor was incorporated with the object of identifying power projects, preparation of project feasibility studies, project report, market research, obtaining project clearances from government agencies and also to assist in identifying land, equipment manufacturers, fuel suppliers and acquisition of land and to do Project Management Services and O & M Contract relating to Generation and Distribution of Power.

That the Corporate Debtor during the course of business activities borrowed a sum of ₹4,00,00,000 at an IRR @12% from M/s. Sai Wardha Power Company Limited through Inter Corporate Deposit Agreement dated 11.12.2012. The Corporate Debtor has to pay the loan within 48 months from the date of the Agreement. The Corporate Debtor has paid the part payment of borrowed amount i.e., ₹2,00,00,000 on 09.01.2013.

That an agreement dated 01.04.2018, M/s. Sai Wardha Power Generation Limited, the assignor has entered into the Inter-Corporate Deposit Assignment Agreement with the Financial Creditor and the Corporate Debtor. Wherein, the Assignor has agreed to assign the Assignee the Financial Creditor herein and has agreed to assume all the rights, interest, title, claims and benefits of the Assignor in the ICD.

That Corporate Debtor had diligently tried to fulfil its commitment under the ICD Agreement, but for certain unavoidable facts and circumstances surrounding the power sector and its ancillary businesses which are beyond the control of Corporate Debtor has resulted in delay in repayment.

That the Corporate Debtor tried to clear the pending payments as stipulated which is also to the knowledge of the Financial Creditor.

Reiterating the above, the counsel for the Corporate Debtor prayed to dismiss the instant application.

The present petition was filed on 10.01.2020 and after scrutiny the same was first listed on 13.02.2020 and the counsel for Financial Creditor was directed to issue notice to the Respondent/Corporate Debtor for appearance and the matter was adjourned to 26.02.2020.

During the hearing held on 26.02.2020, Ms. Sumathi, counsel representing Corporate Debtor filed counter. Heard submissions of both the sides and the matter was reserved for orders.

Heard both the sides and perused the records.

It is the case of the Financial Creditor that it has provided an Inter-Corporate Deposit to the Corporate Debtor herein for which an amount of Rs. 3,65,23,836/- is due and liable to be repaid to the financial creditor. The Corporate Debtor neither denied the debt in default nor raised any valid ground for rejection of the instant application.

The Hon'ble Supreme Court, while deciding the matter in the case of INNOVENTIVE INDUSTRIES LTD. Vs. ICICI BANK & ANR., in Civil Appeal Nos. 8337-8338 of 2017, held as under:

In the present case, this Adjudicating Authority is satisfied with the submissions put forth by the Financial Creditor regarding existence of 'financial debt' and occurrence of 'default'. Further, the Financial Creditor has fulfilled all the requirements as contemplated under IB Code in the present Company Petition and has also proposed the name of IRP after obtaining his written consent in Form-2. In view of the above, this Adjudicating Authority is inclined to admit the petition.

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.

This Adjudicating Authority hereby appoint Mrs. Varalakshmi Narala having Regn. No. IBBI/IPA-002/IP-N00620/2018-2019/11980 (IRP) as her name is proposed by the Financial Creditor and is also reflected in IBBI website. She has also filed her written consent in Form - 2. Authorisation for Assignation (AoA) to be filed within three days. The IRP is directed to take charge of the Respondent/Corporate Debtor's management immediately. She 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.

However, 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:-Mrs. Varalakshmi Narala Reg. No: IBBI/IPA-002/IP-N00620/2018-19/11980. #8-588/29/A, Achhai Nagar, Baghlinngampally, Backside RTC Kalyana Mandapam, Hyderabad, Telangana, 500044 Email ID: [email protected].

The present Company Application bearing CP (IB) No.94/7/HDB/2020 is hereby admitted.