M/s Seven H Logistics Private Limited

M/s Seven H Logistics Private Limited (herein after referred to as Petitioner/Corporate Applicant) is a Private Limited Company and was incorporated on 29.02.2008, having CIN: U63010KA2008PTC045462. The registered office of the company is situated at No. 150, I Floor, Maleshwaram Arcade, 7th Cross, Margosa Road, Malleswaram Bangalore- 560 003. The Authorized Capital of the Corporate Applicant is Rs. 1,00,00,000/- consisting of 10,00,000/- equity shares of Rs 10/- each. The Paid-up Capital is Rs 51,00,000/- consisting of 5,10,000 equity shares of Rs. 10/- each. The main business of the Corporate Applicant is Cargo Handling.

It is submitted that logistics services in relation to the mining operations for SICAL (a Coffee Day Company) was forcefully abandoned due to catastrophic massive landslides in Bharatpur coalmines, resulting in loss of several lives and heavy damages to machinery. The insurance cover could not be availed due to technical objections by the agency and the Corporate Debtor's efforts in seeking compensation from SICAL also failed due to various unfortunate development at SICAL. Further, the Corporate Debtor's operations handled by the Company at the Karaikal Port, Tamil Nadu was also abruptly withdrawn due to the closure of the manual operations in the port to meet the Pollution Control Board's directions

It is submitted that the net worth of the corporate applicant continues to be eroding due to huge financial losses being incurred by the Petitioner on account of collapse of the substratum of the Company consequent to closure of its main operations caused by factors beyond the control of the management. The Petitioner had defaulted in making payments to its creditors, and recovery proceedings where initiated by the creditors against the Petitioner.

It is submitted that alternative plans for revival of the company proposed by the Board of Directors were found to be unviable despite the best efforts of the Board and the management of the company. It is stated that these events has resulted in accumulation of amounts due to vendors, non-servicing of loans availed from Banks and NBFC’s towards purchase of capital equipment, workmen and statutory dues. It is contended that the company has a total debt of Rs 27,84,31,366/- out of which accepted default dues are Rs 15,54,40,912/-, comprising of Financial debt Secured and unsecured in default amounting to Rs 7,38,11,208/- and Rs 5,67,48,205/- respectively, as mentioned in Annexure 12 and 13 of the Petition, as follows:

In the above circumstances, the Corporate Applicant has applied before this Tribunal to initiate proceedings under Section 10 of the IBC, 2016 for commencing Corporate Insolvency Resolution Process.

The Operational Creditor No.2 submits that that the Petition is filed with malafide intention and oblique motive in order to defraud the Operational Creditor No.2 and to make unlawful gain by the Petitioner Company and its Directors. It is further submitted that this Respondent ought to have been arraigned as a Secured Creditor since they have carried out maintenance and repair work which is a perennial service as far as the Petitioner Company is concerned. Arraigning the respondent as an operational creditor was done with malafide intention and oblique motive in order to defraud and defeat the rights of the Creditor, to have preferential right over the proceedings of the Company on being liquidated.

The Respondent submits that there is principal amount of a sum of Rs. 14,96,860/- payable by the Petitioner towards the invoices raised on maintenance services, repairs and spare parts supplied and the Creditor is entitled to 18% interest p.a and the total amount payable with interest as on 21.01.2021 works out to Rs 22,87,592/- and further the creditor is entitled to current and further interest @ 18% p.a. A legal notice dated 21.01.2021 was caused by the creditor company wherein the entire liability payable by the Petitioner Corporate Debtor has been mentioned and the demand was also made. Despite receipt of the notice, the petitioner has not replied and has resorted to file the above petition with malafide intention to avoid recovery proceedings.

Respondent submits that it is reliably learnt that the Petitioner through its Directors has committed mismanagement and a major share of the assets of the Company has been clandestinely diverted and converted into private assets so as to cause the insolvency of the Debtor company and in these circumstances the above petition filed by the Petitioner is fraudulent and is liable to be dismissed.

Petitioner submits that it is denied that the Operational Creditor ought to have been arraigned as a secured creditor. There is no basis for claiming as such. The Operational Creditor having admittedly provided a service to the Corporate Debtor is legally classified as operational creditor as per Section 5(2) read with Section 5(21) of the IBC, 2016. Moreover, there is no further classification of "secured" or "unsecured" for Operational Creditors as per the IBC, 2016. It is further denied that the Objector has been arraigned as an Operational Creditor to defraud and defeat the rights of the Objector, to have a preferential right over the proceedings of the Corporate Debtor on being liquidated.

It is submitted that the operational creditor has issued demand notice dated 22.01.2020 under section 8 of the IBC in furtherance of initiating CIRP against the Corporate Debtor. The respondent having attempted to initiate CIRP against the Corporate Debtor in 2020 is not only hypocritical but has also contradicted its own actions by opposing the instant petition. It is further submitted that the respondent ought to be estopped from taking such contrary stances.

Moreover, the Petitioner has categorically denied the allegation regarding diverting the assets of the Company clandestinely by the Directors and intention to defraud the creditors; and requested for strict proof of these allegation made by the Operational Creditor.

a. The information relating to its books of account and such other documents for such period as may be specified:

b. The information relating to the resolution professional proposed to be appointed as an interim resolution professional; and

c. The Special resolution passed by shareholders of the Corporate Debtor or the resolution passed by at least three-fourth of the total number of partners of the Corporate Debtor, as the case may be, approving filing of the application.

M/s. Unigreen Global Private Limited Vs. Punjab National Bank & 3 Ors., in Company Appeal (AT) (Insolvency)No.81 of 2017 dated 01.12.2017, it was observed as under:

In Armada Singapore Pte. Ltd. Vs. Ashapura Minechem Ltd., in I.A.No.3052 of 2019 in Company Appeal (AT) (Insolvency)No.350 of 2019 and batch order dated 30.09.2019, the Hon'ble NCLAT held that a Petition filed under Section 10 of IBC, 2016 is not maintainable without the approval of the shareholders of the Corporate Debtor in its 'Annual General Meeting'/'Extra-Ordinary General Meeting'.

The Hon'ble NCLAT in Vyomit Shares Stock & Investments Pvt. Ltd. vs. Securities and Exchange Board of India (SEBI) in Company Appeal (AT) (Insolvency) No.258 of 2019 dated 15.05.2019, held that an Application filed under Section 10 of the IBC, 2016, can be rejected on the ground that the 'Corporate Debtor' is earning sufficient profit.

a. the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgement, decree or order in any court of law, tribunal, arbitration panel or other authority;

b. transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein;

c. 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 Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002;

d. The recovery of any property by an owner or lessor where such property is occupied by or in the possession of the Corporate Debtor.

a. The term of appointment of Shri Konduru Prasanth Raju shall be in accordance with the provisions of Section 16(5) of the Code;

b. In terms of Section 17 of the Code, from the date of this appointment, the powers of the Board of Directors shall stand suspended and the management of the affairs shall vest with the Interim Resolution Professional and the officers and the managers of the Corporate Debtor shall report to the Interim Resolution Professional, who shall be enjoined to exercise all the powers as are vested with Interim Resolution Professional and strictly perform all the duties as are enjoined on the Interim Resolution Professional under Section 18 and other relevant provisions of the Code, including taking control and custody of the assets over which the Corporate Debtor has ownership rights recorded in the balance sheet of the Corporate Debtor etc. as provided in Section 18 (1) (f) of the Code. The Interim Resolution Professional is directed to prepare a complete list of inventory of assets of the Corporate Debtor;

c. The Interim Resolution Professional shall strictly act in accordance with the Code, all the rules framed thereunder by the Board or the Central Government and in accordance with the Code of Conduct governing his profession and as an Insolvency Professional with high standards of ethics and moral

d. The Interim Resolution Professional shall cause a public announcement within three days as contemplated under Regulation 6 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 of the initiation of the Corporate Insolvency Resolution Process in terms of Section 13 (1) (b) of the Code read with Section 15 calling for the submission of claims against Corporate Debtor;

e. It is hereby directed that the Corporate Debtor, its Directors, personnel and the persons associated with management shall extend all cooperation to the Interim Resolution Professional in managing the affairs of the Corporate Debtor as a going concern and extend all cooperation in accessing books and records as well as assets of the Corporate Debtor;

f. The Interim Resolution Professional shall after collation of all the claims received against the Corporate Debtor and the determination of the financial position of the Corporate Debtor constitute a committee of creditors and shall file a report, certifying of the committee to this Tribunal on or before the expiry of thirty days from the date of his appointment, and shall convene first meeting of the committee within seven days of filing the report of constitution of the committee; and

g. The Interim Resolution Professional is directed to send regular progress report to this Tribunal every fortnight