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Judgment
Per: Ashutosh Chandra, Member (Technical)
C.P(IB)No.13/BB/2020 is filed on 08.11.2019 by M/s. Corporation Bank (the 'Petitioner/Financial Creditor') under Section 7 of the I&B Code, 2016 read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 against M/s. Camson Agri-Ventures Private Limited (the 'Respondent/Corporate Debtor') by inter alia seeking to initiate Corporate Insolvency Resolution Process (CIRP) in respect of Corporate Debtor for committing a default in payment of Rs.11,96,65,594/- (Rupees Eleven Crore Ninety Six Lakh Sixty Five Thousand Five Hundred and Ninety Four only) including interest.
M/s. Corporation Bank is a Public Sector Bank having its Office at Airport Road Branch, No.25, N.R. Chambers, Murugesh Palya, Old Airport Road Bangalore – 560 017. M/s. Camson Agri-Ventures Private Limited is a Limited Company incorporated on 25.01.2013 under the Companies Act, 1956 bearing CIN: U01403KA2013PTC067650 and having its office at Survey No.75 & 129, Madagondanahalli Village, Maddhure Hobli, Doddaballapur Bangalore Rural, Karnataka - 561203.
The present Financial Creditor, the Corporation Bank, had lent a sum of Rs.12,00,00,000/- pursuant to a loan agreement. The default occurred on a/c no.CC140001 is total of Rs.3,80,63,199.74/-; a/c no.CC140002 is total of Rs.5,95,37,598.2/-; a/c no.CCK150002 is total of Rs.1,97,00,000/-; a/c no.CBCA510341000677921 is total of Rs.23,64,796/-.
The Securities furnished towards loan a/c no.CC140001 and CC140002 – DPN and Taken Delivery Letter on 21.03.2017 for Rs.3,30,51,828.18/- DPN and Taken Delivery Letter on 21.03.2017 for Rs.5,02,28,916.27/-, Deed of Hypothecation on 02.04.2014 for aggregate limit of Rs.12,00,00,000/-, Undertaking letter dated 02.04.2014, Registered DTD etc., on 02.04.2014 from A.N. Singh for an aggregate sum of Rs.22,00,00,000/-, Guarantee Agreement on 02.04.2014 for aggregate sum of Rs.22,00,00,000/-; on loan a/c no.CCK150002- DPN and Taken Delivery Letter on 31.10.2015 for Rs.1,70,00,000/-; DPN and Taken Delivery Letter on 31.10.2015 for Rs.1,69,00,000/-; Deed of Hypothecation dated 31.10.2015 for Rs.1,70,00,000/-; Undertaking Letter on 31.10.2015 for Rs.1,70,00,000/-; Letter of Continuity dated 31.10.2015, Guarantee Agreement dated 31.10.2015. Left with no other remedy, the Financial Creditor has approached this Tribunal.
The case was listed on various dates viz., 10.01.2020, 29.01.2020, 12.02.2020, 27.02.2020, 17.03.2020, 01.06.2020, 18.06.2020, 08.07.2020, 05.08.2020, 28.08.2020, 03.02.2021 and 10.03.2021 and the same was adjourned on the above dates at the request of parties as the Petitioner was unable to trace out the Corporate Debtor and serve notices upon him. Though the Notice was ordered by this Tribunal on 10.01.2020 but the Petitioner has so far failed to serve the notice on the above dates on the Respondent(s). Only on 03.02.2021, the learned Counsel for the Respondent No.5 was present. The Learned Counsel for the Petitioner was directed to make paper publication and to ascertain the correct position as per their records and to make efforts to trace out the main Respondents and the same was posted for admission on 10.03.2021.
Heard Ms. Ankita Paul, learned Counsel for the Petitioner and Mr. Srinandan Karthikeyan, learned Counsel for the Respondent. We have carefully perused the pleadings of the Parties and extant provisions Code and the Rules made thereunder.
A perusal of the proceedings over the last one year shows that since the issue of notice on 10.01.2020 right up to 10.03.2021 in spite of several hearings and directions for the Petitioner to locate and serve the notice upon the Company and its key management personal that is MD, etc., The Petitioner/Financial Creditor has failed to serve the notice on the above personnel. However, on the last date of hearing it is submitted by the Petitioner that it wants to file an I.A revising the list of Respondents/Corporate Debtors by removing some of them as they are not connected with the instant Petition. Records show that one Sri Gulshan Kumar Khanna, on whom a notice is stated to have been served by affixture on 13.01.2020, as a Respondent, has made a written submission filed on 23.09.2020 stating that he was a only a non-Executive Director in the Respondent Corporate Debtor Company at the time of incorporation but had resigned wef 23.03.2018, that he was not involved in any of the Company's business, had not signed a single paper, and his resignation was accepted by the Board and the same was filed with the ROC through e Form DIR 12. The loan in question was taken without his knowledge and his name is also not mentioned as Guarantor in the loan documents. He was therefore shocked on seeing the notice affixed on his door on 13.01.2020. He has prayed that the Counsel for the Petitioner may be intimated to serve notices to the relevant persons involved in the Loan Agreements and drop his name in their records of the concerned loan taken by the Corporate Debtor and take back the notice affixed on his door. This information leads us to conclude that the Petitioner needs to revise its list of Respondents, before proceedings under the IBC, 2016 can be taken up.
Further, vide our order of 03.02.2021, the Petitioner was permitted to carry out paper publication so as to notify the Respondents/Corporate Debtors about the current proceedings and elicit their response/objections, if any, to the instant Petition. However, in spite of a lapse of more than one month the Petitioner has not carried out the paper publication.
In the above circumstances, and especially as the Petitioner itself intends to revise the list of Respondents, it appears that these proceedings will not serve any purpose at present. Proceedings under IBC are time bound proceedings and cannot be kept pending endlessly.
However, we are mindful of the fact that the Petitioner (Corporation Bank) is an eminent financial institution engaged in borrowing and lending operations which benefit a large number of borrowers engaged in small and medium enterprises. Recovery of loans is one of its key functions. For this reason, we refrain from dismissing the Petition outright. At the same time for the reasons mentioned above, no purpose is being served in continuing with the hearings with the Petitioner unsure about the real Respondents connected with the debt.
It is therefore considered proper to dispose of the Petition by granting liberty to the Petitioner to revive the Petition, or alternatively file a fresh Petition, as it may consider, after it is able to identify the correct Respondents as per its records or other information, connected with the debt in question.
In view of the foregoing, C.P. (IB) No.13/BB/2020 is disposed of, with liberty, as above. No order as to costs.