M/s. HDB Financial Services Ltd. vs M/s. Hint Publication Private Limited

Per se : Smt. Ina Malhotra, Member, Judicial

The present petition has been filed by the petitioner in the capacity of Financial Creditor. Based on an unpaid liability of Rs.8,49,58,980.30/-, a prayer has been made by the petitioner for initiation of Corporate Insolvency Resolution Process of the Corporate Debtor i.e "M/S HINT PUBLICATION PRIVATE LIMITED".

As per the averments made in the petition, the corporate debtor had approached the financial creditor a Non-Banking Financial Company for availing a term loan of Rs.4.75 Crores. Pursuant to a letter of sanction and execution of the loan agreement dated 29.04.2017, the loan was disbursed in two tranches of Rs.3.4 Crores and Rs.1.35 Crores on 16.10.2014 and 17.10.2014 respectively. To secure the repayment of the aforesaid loan, the Corporate Debtor had created equitable mortgage over their property being Hint House 18-A, Raj Nagar, Ghaziabad, U.P. and a charge over the same was recorded with the ROC. It is submitted that the Corporate Debtor did not adhere to the financial discipline and had defaulted in repaying several instalments. The said loan was recalled vide notices dated 16.10.2015 and 16.11.2015 respectively and in terms of the guidelines issued by the RBI was declared a Non-Performing Asset on 02.02.2016. The financial creditor has also submitted that they had invoked arbitration as per their agreement and two Awards were passed in their favour on 20.05.2016 and 27.06.2016 for recovery of Rs.1,50,04,860/- and Rs.3,89,43,724.86/- alongwith 18% interest from the date of award till realization thereof.

It is further submitted that the Corporate Debtor had shown its willingness to settle the amount amicably. A Memorandum of Understanding was executed on 18.08.2017, agreeing to repay the outstanding amounts under the two loan accounts as follows :-

Ld. Counsel appearing for financial creditor submits that the corporate debtor has failed to adhere to the repayment schedule as per the terms of the MOU. Accordingly, the MOU stood terminated. It is submitted that a sum of Rs.6,21,21,601.98/- is recoverable in the first loan account and Rs.2,28,37,378.32/- in the second loan account.

The Corporate Debtor on being served has put in appearance and has filed its reply. Though it is admitted that the Financial Creditor is a Non-Banking Financial Company, objection raised is that the interest levied is in contravention with the provisions of Uttar Pradesh Money Lending Act.

Mr. Ashok Nath Tripathi, Ld. Counsel appearing for the Corporate Debtor has argued at length. His main defence is that the claim is time barred. It is submitted that the MOU stands terminated and cannot be looked into. This Bench fails to appreciate the arguments advanced by the learned counsel for the corporate debtor. The MOU at 18.08.2017 was terminated on account of non-adherence to the time schedule for payment of instalments but the Corporate Debtor cannot reside from the acknowledgment of liability made thereunder. In view of the categorical admission to repay the debt as noted in the Memorandum of Understanding between the parties, which is also settled by an Award in favour of the Financial Creditor, the submissions made by the learned counsel for the corporate debtor are unfounded. Equally meritless are the other grounds raised by the Ld. Counsel for the Corporate Debtor that the consent of the proposed IRP/ his declaration is not proper, or that the petition has not been instituted by a duly authorized person.

The objection raised on behalf of the Corporate Debtor being frivolous, are therefore rejected. The prayer of the petitioner merits consideration is allowed. Petition stands Admitted. Moratorium in terms of Section 14 of the Code comes into force forthwith stating :

The Financial Creditor has proposed the name of Mr. Gautam Singhal, Registration Number IBBI/IPA-001/IP/P01437/2018-19/12240 as the Interim Resolution Professional (IRP). His consent and declaration in Form 2 affirming that he is a registered insolvency professional and has no disciplinary proceeding pending against him, is on record. We accordingly confirm his appointment as the IRP. He is directed to take such other and further steps as are required under the statute, more specifically in terms of Sec 15, 17, 18, 20 & 21 of the Code and file his report before this Bench.

The registry is directed to communicate this Order to Financial Creditor, Corporate Debtor as well as to the IRP.

Urgent Photostat certified copies of this order, if applied for, be supplied to parties upon compliance of requisite formalities.

List on 13th April, 2020 for the filing of the progress report.