Oriental Bank of Commerce vs M/s. Bansal Alumex Private Limited

Per Shri M.B. Gosavi, Member (J):

Oriental Bank of Commerce, the Financial Creditor filed this application under Section 7 of Insolvency and Bankruptcy Code, 2016 against M/s Bansal Alumex Pvt. Ltd. (Corporate Debtor) to start Corporate Insolvency Resolution Process (in short "CIRP") of the Corporate Debtor on the ground that the Corporate Debtor being guarantor of original debtor M/s. Krishna Alex (P) Ltd. committed default in paying Financial debt of Rs. 11,45,39,903/- (Rupees Eleven Crore Forty Five Lakh Thirty Nine Thousand Nine Hundred and Three Only).

The Financial Creditor states that on 20.05.2005, the Bank granted and disbursed term loan and cash credit facilities to the principal debtor M/s. Krishna Alex (P) Ltd. to the extent of Rs. 10 Crore. The Corporate Debtor is the guarantor to the said loan amount. The term loan and credit facility was extended and enhanced from time to time and lastly it was extended on 30.07.2015. The Corporate Debtor has executed deed of guarantee in favour of the Bank taking liability to pay the debt in case principle borrower fails to repay the debt. On 29.11.2017, the Principal debtor and even the Corporate Debtor acknowledged and admitted the debt but did not pay the same. Its loan account was declared NPA on 18.12.2017. Thereafter, the Bank sent recall notice under Section 13(2) of SURFAESI Act, 2002 dated 10.04.2018 to the Corporate Debtor. But in spite of receipt of notice, the Corporate Debtor failed and neglected to pay the debt. Hence, this application is filed to start CIRP of the Corporate Debtor because the Corporate Debtor committed default in paying the debt on Rs. 11,45,39,903/- (Rupees Eleven Crore Forty-Five Lakh Thirty-Nine Thousand Nine Hundred and Three Only).

The Corporate Debtor was served with the notice of this application. It appeared though one Mr. Sumit Agarwal, one of the directors of the Corporate Debtor. He filed affidavit in reply. We have gone though the reply. Although, the Corporate Debtor denied the liability but it appears to us that its denial was only for sake of denial. The Corporate Debtor did not deny that it stood guarantor to the principal debtor and the principal debtor as well as the Corporate Debtor did not pay the financial debt till today. The main principal borrower is already admitted in CIRP. We find that no contentious defense is raised by the Corporate Debtor in this Petition.

Evidence on record clearly establish that the Corporate Debtor is liable to pay the financial debt of Rs. 11,45,39,903/- (Rupees Eleven Crore Forty-Five Lakh Thirty-Nine Thousand Nine Hundred and Three Only) and it has committed default in paying the same. The application to start CIRP is filed within time. It is defect free. Financial Creditor suggested name of one Ms. Rachna Jhunjhunwala having registration no. IBBI/IPA-001/IP-P00389/2017-18/10707 for appointment as the Interim Resolution Professional against whom no disciplinary proceeding is pending. Hence, we admit the Corporate Debtor in CIRP by following orders: -

The application filed by the Financial Creditor under section 7 of the Insolvency & Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process against the Corporate Debtor, M/s Bansal Alumex Private Limited is hereby admitted. ii) We declare a moratorium and public announcement in accordance with Sections 13 and 15 of the IBC, 2016. iii) Moratorium is declared for the purposes referred to in Section 14 of the Insolvency & Bankruptcy Code, 2016. The IRP shall cause a public announcement of the initiation of Corporate Insolvency Resolution Process and call for the submission of claims under Section 15. The public announcement referred to in clause (b) of sub-section (1) of Section 15 of Insolvency & Bankruptcy Code, 2016 shall be made immediately. iv) Moratorium under Section 14 of the Insolvency & Bankruptcy Code, 2016 prohibits the following:

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 the 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 the possession of the corporate debtor.

The supply of essential goods or services to the corporate debtor as may be specified shall not be terminated, suspended, or interrupted during moratorium period. vi) The provisions of sub-section (1) shall not apply to such transactions as may be notified by the Central Government in consultation with any Financial sector regulator. vii) The order of moratorium shall have effect from the date of admission till the completion of the corporate insolvency resolution process. viii) Provided that where at any time during the corporate insolvency resolution process period, if the Adjudicating Authority approves the resolution plan under sub-section (1) of Section 31 or passes an order for liquidation of corporate debtor under Section 33, the moratorium shall cease to have effect from the date of such approval or liquidation order, as the case may be. ix) Necessary public announcement as per Section 15 of the IBC, 2016 may be made.

Ms. Rachna Jhunjhunwala, having registration no. IBBI/IPA-001/IP-P00389/2017-18/10707 of Siddha Western, 9, Western Street Room No. 134, Kolkata-700013, email id. [email protected], is appointed as Interim Resolution Professional for ascertaining the particulars of creditors and convening a Committee of Creditors for evolving a resolution plan.

xi) The Financial Creditor to pay sum of Rs. 1,00,000/- (Rupees One Lakh Only) to IRP as advance fees as per Regulation 33(2) of IBBI (Insolvency Resolution Process for Corporate Persons) Regulation 2016 which shall be adjusted from final bill.

xii) The Resolution Professional shall conduct CIRP in time bound manner as per Regulation 40A of IBBI (Insolvency Resolution Process for Corporate Persons) Regulation, 2016.

xiii) Registry is hereby directed under section 9(5) of the I.B. Code, 2016 to communicate the order to the Financial Creditor, the Corporate Debtor and to the I.R.P. by Speed Post as well as through e-mail.

List the matter on 15.04.2020 for the filing of the progress report.

Certified copy of the order may be issued to all the concerned parties, if applied for, upon compliance with all requisite formalities.