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Judgment
This case listed today for pronouncement of order.
Notwithstanding the above, the Registry of this Bench has pointed out some typographical errors which occurred in the daily proceedings dated 26.06.2019 of the present IB Petition. Hence, the case is taken up suo-motu for the purpose of carrying necessary rectification / modification in the above referred proceedings.
By perusal of the proceedings dated 26.06.2019, it may be seen that due to inadvertence, it is noted as such "the fresh consent letter of the new IRP namely Mr. Haresh Babulal Shah having registration no.IBBI/IPA-001/IP-P00378/2017-2018/10635... is received"
It is matter of record that while the above stated IRP withdrew his consent to be considered for appointment of IRP in the present case. Thereafter, the name of the new IRP, viz., Ms. Anjali Nirav Choksi (having registration no.IBBI/IPA-001/IP-P00820/2017-2018) has been proposed by the applicant, but such has not been reflected in the Court proceedings dated 26.06.2019 and the name of Mr. Haresh Babulal Shah is still reflecting in such proceedings (dated 26.06.2019), which needs necessary correction and suitable modification in the Court proceedings. Therefore, the present IB Petition is suo-motu taken up today for making necessary rectification. Consequently, the paragraph-2 of our order dated 26.06.2019, passed by this Tribunal, is rectified and to be read as under;
“The matter is put on board for clarification. The petitioner has submitted the fresh consent letter of the new IRP namely Ms.Anjali Nirav Choksi having registration no.IBBI/IPA-001/IP-P00820/2017-2018/11382, as the name of the IRP whose willingness has been furnished in the application filed under section 7 of the IBC has withdrawn his consent”.
With the aforesaid rectification and observation, the court proceedings dated 26.06.2019 passed in CP (IB) No.237/7/NCLT/AHM/2018 stands corrected and suitably modified to this extent.
Now this Adjudicating Authority can proceed for pronouncement of final order.
Hence, final order is pronounced vide separate sheet. The IB Petition is admitted and Ms. Anjali Nirav Choksi is appointed as Interim Resolution Professional (IRP) to initiate CIRP in respect of the Corporate Debtor company.
[Per: Mr. Harihar Prakash Chaturvedi, Member (J)]
The present Application is filed by Ms. Sheetal R. Jain, proprietor of M/s. Mahaveer Transport, being a Financial Creditor, under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “I & B Code”) read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 [“Adjudication Rules” for short] to trigger Corporate Insolvency Resolution Process (hereinafter referred to as “CIRP”) against M/s. Neuromed Imaging Centre Private Limited [hereinafter called as “Respondent/Corporate Debtor”].
The petitioner, Mahaveer Transport, a proprietary firm commenced its activities from 20.06.2009, registered office is situated at Bagrecha Arcade No.83, Ward No.32, 1st Floor, Fort Main Road, Ballari, Karnataka-583 102.
The respondent-corporate debtor company, M/s. Neuromed Imaging Centre Private Limited, having CIN: U67120GJ1996PTC030017, incorporated under the provisions of the Companies Act, having its registered office at 403, Sakar-1, Near Gandhigram Railway Station, Opposite Nehru Bridge, Navrangpura, Ahmedabad, Gujarat-380 006.
The nominal share capital and the paid up share capital of the corporate debtor and / or details of guarantee clause as per Memorandum of association (as applicable); Rs.3,00,00,000/- divided into 30,00,000 Equity Shares of Rs.10/- each Rs.98,63,570/- divided into 9,86,357/- Equity Shares of Rs.10/- each.
As per the petitioner-financial creditor, during the year 2011, she had advanced multiple credit facilities to the corporate debtor on various dates, aggregating to Rs.6,55,00,000/-. Details of the said credit facilities are described in Annexure-A, which is annexed to the application. However, the corporate debtor had failed into repay the said credit facilities to the petitioner/financial creditor as per the terms and conditions of loan agreement executed.
The Financial Creditor has described all the requisite details of loan disbursed to the Corporate Debtor company as per the provisions of I & B Code. In Part-IV of the application in prescribed Proforma under Rule-4 of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016 read with Section 7 of the Code, which are described as under;
| Particulars of Financial Debt | ||
| 1 | Total amount of debt granted date(s) of disbursement | Rs.6,55,00,000/- Loan granted on various dates details as per statement attached as Annexure-A. |
| 2 | Amount claimed to be in default and the date on which the default occurred. | Principle Amount Rs.6,55,00,000/- Interest Rs.1,38,79,633/- Total outstanding Rs.7,93,88,633/- |
| Calculation and details of interest as per statement attached as per Annexure-B. |
In addition to the above, the petitioner/financial creditor has also placed on record the status of corporate debtor from the website of Ministry of Corporate Affairs.
In response to the notice issued to the Respondent-Corporate Debtor company, the corporate debtor company through its director, Mr. Amit Jain, filed an affidavit in reply by accepting loan liability and expressing its no objection for initiation of Corporate Insolvency Resolution Process against the corporate debtor company. The relevant extract of the reply affidavit of Mr. Amit Jain is reproduced hereinbelow;
“2.I state that the corporate debtor is under financial distress on account of the poor and negative growth of the Economy and changes in various governmental policies. I, however, state that the corporate maintains the registered office and is a going concern and that the corporate debtor can revive the operations of the company.
3.I state that the corporate debtor admits that the corporate debtor has outstanding dues towards financial creditors. I further state that the present affidavit may not be construed as admission of the quantum of amount of debt due towards the applicant. I state that the same shall be subject to determination and verification of the claim of the applicant and reconciliation of accounts of the parties.
4.In view of the aforesaid, I state that it was unanimously resolved in the Board meeting dated 19.10.2018 that upon admission of the present application, the corporate debtor would be afforded an opportunity to restore the business and the creditors would also be in a position to resolve their outstanding debt.
5.I, therefore, state that the corporate debtor has no objection if the present application is admitted by way of an order and this Hon'ble Tribunal is pleased to direct commencement of Corporate Insolvency Resolution Process of the Corporate Debtor, if this Hon'ble Tribunal find the present application to be in proper form and format and devoid of any defects as contemplated under the provisions of the Insolvency and Bankruptcy Code, 2016 and the Regulations framed thereunder. I beg to annex a copy of Board Resolution dated 19.10.2018 passed by the Board of Directors of the corporate debtor as Annexure-I to the present affidavit."
Further, pursuant to this Tribunal's order dated 29.11.2018, the corporate debtor company has placed on record its list of unsecured loan and creditors as on 01.12.2018.
By taking into consideration of the above stated admission of the debts liability of the corporate debtor company, we examined the relevant provisions of Section 7 of the I & B Code and Rules applicable, which reads as under;
7. Initiation of Corporate Insolvency Resolution Process by Financial Creditor.
(1)A financial creditor either by itself or jointly with other financial creditors may file an application for initiating corporate insolvency resolution process against a corporate debtor before the Adjudicating Authority when a default has occurred.
Explanation.—For the purposes of this sub-section, a default includes a default in respect of a financial debt owed not only to the applicant financial creditor but to any other financial creditor of the corporate debtor.
(2)The financial creditor shall make an application under sub-section (1) in such form and manner and accompanied with such fee as may be prescribed.
(3)The financial creditor shall, along with the application furnish—
(a)record of the default recorded with the information utility or such other record or evidence of default as may be specified;
(b)the name of the resolution professional proposed to act as an interim resolution professional; and
(c)any other information as may be specified by the Board.
(4)The Adjudicating Authority shall, within fourteen days of the receipt of the application under sub-section (2), ascertain the existence of a default from the records of an information utility or on the basis of other evidence furnished by the financial creditor under sub-section (3).
(5)Where the Adjudicating Authority is satisfied that—
(a)a default has occurred and the application under sub-section (2) is complete, and there is no disciplinary proceedings pending against the proposed resolution professional, it may, by order, admit such application; or
(b)default has not occurred or the application under sub-section (2) is incomplete or any disciplinary proceeding is pending against the proposed resolution professional, it may, by order, reject such application:
Provided that the Adjudicating Authority shall, before rejecting the application under clause (b) of sub-section (5), give a notice to the applicant to rectify the defect in his application within seven days of receipt of such notice from the Adjudicating Authority.
(6)The corporate insolvency resolution process shall commence from the date of admission of the application under sub-section (5).
(7)The Adjudicating Authority shall communicate—
(a)the order under clause (a) of sub-section (5) to the financial creditor and the corporate debtor;
(b)the order under clause (b) of sub-section (5) to the financial creditor, within seven days of admission or rejection of such application, as the case may be.
In the light of the above stated statutory provisions and by perusal of the contents of the present IB Petition and the documents annexed therewith, the default of debts is well established which meets the requirement of Section 3(11) and (12) of the I & Code to trigger the CIRP in respect of the Corporate Debtor company. The relevant provisions of Section 3(11) and 3(12) of the Code speaks as under;
3(11) “debt” means a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt;
3(12) “default” means non-payment of debt when whole or any part or instalment of the amount of debt has become due and payable and is not repaid by the debtor or the corporate debtor, as the case may be.
The Petitioner, in the present IB petition had mentioned the name of Mr. Haresh Babulal Shah as Interim Resolution Professional. Since Mr. Haresh Babulal Shah withdrew his consent to act as an Interim Resolution Professional, the petitioner further proposed another name, i.e, Ms. Anjali Nirav Choksi (having address at 4th Floor, Galaxy line, Behind Samartheshwar Mahadev Temple, Law Garden, Ahmedabad-380 006, Registration No.IBBI/IPA-001/IP- P00820/2017-2018/11382). The petitioner further annexed a Written Communication received from the proposed Interim Resolution Professional by giving consent in prescribed Form 2, wherein she also mentioned her Registration No.IBBI/IPA-001/IP-P00820/2017-18/11382. Further stated that there is no disciplinary proceeding pending against her. Thus, it satisfies the requirement of Section 7 (3) (b) of the I & B Code.
By perusal of the record, it is well established that there is default of debts which comes to Rs.7,93,88,633/- [Principle amount Rs.6,55,00,000 + Interest Rs.1,38,79,633/-], which is in excess of Rs.1,00,000/. Hence, the present application is found complete as per the provisions of the I & B Code.
It may also be noted that the Hon'ble Supreme Court in the matter of M/s. Innoventive Industries Ltd. vs. ICICI Bank & Anr. [Civil Appeal Nos.8337-8338 of 2017] has laid down the law by observing as such;
"27.The scheme of the Code is to ensure that when a default takes place, in the sense that a debt becomes due and is not paid, the insolvency resolution process begins. Default is defined in Section 3(12) in very wide terms as meaning non-payment of a debt once it becomes due and payable, which includes non-payment of even part thereof or an instalment amount. For the meaning of "debt", we have to go to Section 3(11), which in turn tells us that a debt means a liability of obligation in respect of a "claim" and for the meaning of "claim", we have to go back to Section 3(6) which defines "claim" to mean a right to payment even if it is disputed. The Code gets triggered the moment default is of rupees one lakh or more (Section 4). The corporate insolvency resolution process may be triggered by the corporate debtor itself or a financial creditor or operational creditor. A distinction is made by the Code between debts owed to financial creditors and operational creditors. A financial creditor has been defined under Section 5(7) as a person to whom a financial debt is owed and a financial debt is defined in Section 5(8) to mean a debt which is disbursed against consideration for the time value of money. As opposed to this, an operational creditor means a person to whom an operational debt is owed and an operational debt under Section 5 (21) means a claim in respect of provision of goods or services.
28.When it comes to a financial creditor triggering the process, Section 7 becomes relevant. Under the explanation to Section 7(1), a default is in respect of a financial debt owed to any financial creditor of the corporate debtor – it need not be a debt owed to the applicant financial creditor. Under Section 7(2), an application is to be made under sub-section (1) in such form and manner as is prescribed, which takes us to the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. Under Rule 4, the application is made by a financial creditor in Form 1 accompanied by documents and records required therein. Form 1 is a detailed form in 5 parts, which requires particulars of the applicant in Part I, particulars of the corporate debtor in Part II, particulars of the proposed interim resolution professional in part III, particulars of the financial debt in part IV and documents, records and evidence of default in part V. Under Rule 4(3), the applicant is to dispatch a copy of the application filed with the adjudicating authority by registered post or speed post to the registered office of the corporate debtor. The speed, within which the adjudicating authority is to ascertain the existence of a default from the records of the information utility or on the basis of evidence furnished by the financial creditor, is important. This it must do within 14 days of the receipt of the application. It is at the stage of Section 7(5), where the adjudicating authority is to be satisfied that a default has occurred, that the corporate debtor is entitled to point out that a default has not occurred in the sense that the "debt", which may also include a disputed claim, is not due. A debt may not be due if it is not payable in law or in fact. The moment the adjudicating authority is satisfied that a default has occurred, the application must be admitted unless it is incomplete, in which case it may give notice to the applicant to rectify the defect within 7 days of receipt of a notice from the adjudicating authority. Under subsection (7), the adjudicating authority shall then communicate the order passed to the financial creditor and corporate debtor within 7 days of admission or rejection of such application, as the case may be".
By following the above stated judicial precedent and having heard the submission of Mr. Monaal J. Davawala, Advocate for the Petitioner/Financial Creditor and Ms. Natasha Dhruman Shah, Advocate, for the Respondent/Corporate Debtor Company, we are of the view that the present IB Petition is found complete and deserves for admission. Hence, this Adjudicating Authority hereby admit the petition under Section 7 of the I & B Code, with certain consequential order/directions stated as under;
- (i) This Adjudicating Authority hereby appoint Ms. Anjali Nirav Choksi, as "Interim Resolution Professional (IRP)", having address at 4th Floor, Galaxy line, Behind Samartheshwar Mahadev Temple, Law Garden, Ahmedabad-380 006, and having Registration No.IBBI/IPA-001/IP-P00820/2017-2018/11382 under Section 13 (1) (c) of the Code. - (ii) That the order of Moratorium under Section 14 of the Code shall have effect from 12.07.2019 till the completion of 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 as, the case may be.
That the Bench hereby prohibits the institution of suits or continuation of pending suit 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 SARFAESI Act, 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.
That the supply of essential goods or services to corporate debtor, if continuing, shall not be terminated or suspended or interrupted during the Moratorium period. The Corporate Debtor to provide effective assistance to the IRP as and when he takes charge of the Corporate Debtor.
That the provisions of Section 14 sub-section (1) shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator.
The IRP so appointed shall make public announcement of Corporate Insolvency Resolution Process be made immediately as specified under Section 13 of the Code and by calling for submissions of claim under Section 15 of the Code.
The Interim Resolution Professional shall perform all his functions strictly which are contemplated, inter alia, by Sections 17,18,20, 21 of the Code. It is further made clear that all the personnel connected with Corporate Debtor, its promoter or any other person associated with Management of the Corporate Debtor are under legal obligation under Section 19 of the Code extend every assistance and co-operation to the Interim Resolution Professional. Where any personnel of the corporate debtor, its promoter or any other person required to assist or co-operate with IRP, does not assist or co-operate, IRP would be at liberty to make appropriate application to this Tribunal with a prayer for passing an appropriate order.
The IRP shall be under duty to protect and preserve the value of the property of the 'Corporate Debtor company' and manage the operations of the Corporate Debtor company as a going concern as a part of its obligation imposed by Section 20 of I & B Code, 2016.
The Financial Creditor is directed to communicate a copy of this order to the Interim Resolution Professional, the Respondent Corporate Debtor and the Registrar of Companies, Gujarat.
The Registry is directed to communicate a copy of this order to the Applicant Financial Creditor, Respondent Corporate Debtor and to the Interim Resolution Professional and the concerned Registrar of Companies, after the completion of necessary formalities.
The Corporate Insolvency Resolution Process is commenced from the date of this order.