M/s State Bank Of India vs M/s. Varam Bioenergy Private Limited

Orders passed vide separate orders. Petition is admitted.

Per: Hon'ble Shri Ratakonda Murali, Member (Judicial)

This petition is filed by M/s. State Bank of India, which is the Financial Creditor stating that M/s Varam Bioenergy Private Limited, Corporate Debtor herein had defaulted in repaying a sum of Rs. 49,34,34,095/- (Rupees Forty Nine Crores Thirty Four Lakhs Thirty Four Thousand Ninety Five Only). This petition is filed under Section 7 of Insolvency and Bankruptcy Code, 2016, R/w Rule 4 of Insolvency & Bankruptcy (Application to the Adjudicating Authority) Rules, 2016, seeking admission of the Petition, initiation of Corporate Insolvency Resolution Process, granting moratorium and appointment of Interim Resolution Professional as prescribed under the Code and Rules thereon.

The brief averments made in the Petition are as follows:

a) It is averred that the Financial Creditor sanctioned various term loans to the Corporate Debtor.

b) The details of term loans sanctioned by the Financial Creditor to the Corporate Debtor are as follows:

The date of disbursement of the Term loans are given below:

It is averred that the Debts Recovery Tribunal-2, Chennai by order dated 10.01.2018 in O.A. No. 147 of 2015 issued Recover Certificate in favour of the Financial Creditor.

The details of Date of Default are as follows:

SBI - 31.12.2010 (DATE OF NPA) SBH- 15.09.2011 (DATE OF NPA)

The brief averments made in the Counter are as follows:

It is averred that the petition is barred by limitation and the Financial Creditor has admitted in the Petition that the default occurred to SBI on 31-12-2010 and to SBH on 15-09-2011.

It is averred that the Financial Creditor has not filed the loan documents said to have been executed by the Corporate Debtor in favour of the Financial Creditor.

It is averred that the Financial Creditor has not come forward for restructuring of the debt of the Corporate debtor and made the account of the Corporate Debtor as NPA.

It is averred that delay in sanctions of Term Loans and working capital loans by the Financial Creditor which resulted in mismatch the cash flows of respondent company.

It is averred that Financial Creditor has initiated proceedings under SARFAESI Act, 2002 in O.A.147 of 2015 on the file of the Hon'ble Debt Recovery Tribunal-II, at Chennai for adjudication. The amount claimed in the said OA No.147 of 2015 is Rs.38,36,41,406.88 [Rupees Thirty Eight Crores Thirty Six Lakhs Forty One Thousand Four Hundred Six and Paise Eighty Eight Only].

The brief averments made in the Rejoinder are as follows:

It is averred that an application was filed by the Financial Creditor before the Hon'ble Debts Recovery Tribunal-II, Chennai vide O.A.No. 147 of 2015, in which the Corporate Debtor made its appearance and all its Directors have infact admitted the claims and basing upon their admissions, an order was passed by the Hon'ble DRT-II, Chennai in O.A.No. 147 of 2015. Thereafter, a Recovery Certificate was issued by the Tribunal also to that effect in the year 2018.

It is averred that the right to sue arose from the date of passing of the Recovery Certificate by the Hon'ble DRT-II, Chennai in the year 2018 and as such the present application is rightly filed well within limitation.

It is averred that the Financial Creditor had filed the Judgment coupled with Recovery Certificate issued by Debts Recovery Tribunal-II, Chennai, which is sufficient document to establish existence of debt and also default on part of the Corporate Debtor.

I have heard the Counsel for Financial Creditor and also the Counsel for Corporate Debtor. I have pursued the material on record.

The present petition is filed by the financial creditor claiming that the Corporate Debtor defaulted a sum of Rs. 49,34,34,095/-.The Financial Creditor filed this petition under Section 7 of the Code to trigger CIRP against the Corporate Debtor. In order to prove its claim the Financial Creditor has relied on Page Nos. 16 to 79 filed along with the Petition.

The Corporate Debtor has raised following objections:

The Financial Creditor has not filed required documents along with the petition which are said to have been executed by the Corporate Debtor.

The claim of the Financial Creditor is barred by limitation.

The documents filed by the Financial Creditor are as follows:

Statement of Account.

Order of the Debt Recovery Tribunal dated 10.01.2018.

Certificate under Bankers Books of Evidence Act, 1891.

Charge Certificates.

The Present Petition is filed by the Financial Creditor basing on the order of Debt Recovery Tribunal and Recovery Certificate issued in favour of the Financial Creditor. I have seen the Order of the Debt Recovery Tribunal- 2 at Chennai in OA.No. 147 of 2015 passed on 10.01.2018. Wherein the DRT allowed the Application filed by the Financial Creditor and held that the Corporate Debtor admitted the default and issued the Recovery Certificate in favour of the Financial Creditor. The Financial Creditor filed voluminous documents to prove its claim before DRT. The order was not challenged till today and the order of the DRT holds good. The Order of the DRT and documents filed by the Financial Creditor are sufficient to prove its claim. The Corporate Debtor nowhere in the Counter disputed about the disbursement of loan by the Financial Creditor and about default committed by the Corporate Debtor. I am of the view that the documents filed along with application are sufficient to prove that there is a debt and default as per Section 7 of the Code.

The Corporate Debtor further contended that, the claim of the Petitioner is barred by limitation and to support the contention the Ld. Counsel for the Corporate Debtor relied on the decision of the Hon'ble Supreme Court in "B. K. Educational Services Pvt. Ltd. vs Parag Gupta & Associates (2018 SCC OnLine SC 1921)". The Contention of the Corporate Debtor is that, the date of alleged default was on 31.12.2010, 15.09.2011 i.e. the date on which the account was declared as Non Performing Asset (NPA). The Financial Creditor submitted that the right to sue arose from the date of passing of the Recovery Certificate by the Hon'ble DRT-II, Chennai in the year 2018 and as such the present application is rightly filed well within limitation.

It is admitted fact that the Corporate Debtor failed to pay the certified amount as per the Recovery Certificate issued by the DRT. The question involved in the present petition is whether nonpayment of certified amount as per the Debt Recovery Certificate issued by the DRT amounts to default?

The DRC No. 132/2018 dated 02.04.2018 issued in favor of the Financial Creditor by DRT-2, Chennai in O.A.No. 147/2015 realisable from the Corporate Debtor and same has been not paid by the Corporate Debtor. Hence, the Corporate Debtor failed to repay the certified amount. Till date the Corporate has not repaid the certified amount.

The Financial Creditor has proved the existence of debt and default against the Corporate Debtor by showing the Recovery Certificate issued by the DRT-2, Chennai. The Corporate Debtor nowhere in the counter disputed disbursement of loan and default committed by it. Therefore, the objections filed by Corporate Debtor are not sustainable and petition is liable to be admitted.

The Financial Creditor has suggested the name of IRP who has given consent in Form-2 and there is no disciplinary action pending against present IRP. The account of Corporate Debtor is treated as NPA and there are grounds to admit the petition. I am satisfied with the fact that the Corporate Debtor defaulted in making payment as per Recovery Certificate issued by the DRT-2, Chennai, the petition deserves to be admitted.

Hence, the Adjudicating Authority admits this Petition under Section 7 of IBC, 2016, declaring moratorium for the purposes referred to in Section 14 of the Code, with following directions:

The Bench hereby prohibits 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 Securitization 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 possession of the corporate Debtor.

That the supply of essential goods or services to the Corporate Debtor, if continuing, shall not be terminated or suspended or interrupted during moratorium period.

That the provisions of sub-section (1) of Section 14 shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator.

That the order of moratorium shall have effect from 18.07.2019 till the completion of the Corporate Insolvency Resolution Process or until this Bench approves the Resolution Plan under Sub-Section (1) of Section 31 or passes an order for liquidation of Corporate Debtor under Section 33, whichever is earlier.

That the Public announcement of Corporate Insolvency Resolution Process shall be made immediately as specified under section 13 of the code.

That this Bench hereby appoints Mr.Udayraj Patwardhan as IRP having registration number IBBI/IPA-001/IP-P00024/2016-17/10057 residing at C-703, Marathon Innova, Off Ganapatrao Kadam Marg, Lower Parel West, Mumbai- 400013.

Accordingly, this Petition is admitted.