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Judgment
Per: V Nallasenapathy, Member (Technical)
This Company Petition is filed by Punjab National Bank (hereinafter called "Petitioner") seeking to set in motion the Corporate Insolvency Resolution Process (CIRP) against Zicom Saas Private Limited (hereinafter called "Corporate Debtor") alleging that Corporate Debtor committed default on 30.09.2016 in making payment to the extent of Rs. 15,76,76,634.18 as on 15.01.2019, under Section 7 of Insolvency and Bankruptcy Code, 2016 (hereafter called the 'Code') read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016.
The petitioner is a financial institution incorporated under Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 bearing Company Identification Number AAACP0165G and has filed this petition through its authorized person Shri. Binod Kumar Sharma, Chief Manager, against the Corporate Debtor who is a Company incorporated on 23.02.2011 bearing Company identification number: U74120MH2011PTC213916.
The Petitioner has filed General Power of Attorney dated 02.06.1986 wherein Shri Binod Kumar Sharma, Chief Manager, is authorized to institute suits, to file appeal, revisions, all legal proceedings and applications etc.
The brief facts of the case are that the Petitioner Bank sanctioned Term Loan to the extent of Rs.15 Crores vide sanction letter dated 17.10.2013. Subsequently again on the request of the Corporate Debtor, the Petitioner Bank sanctioned another Term Loan to the extent of Rs.25.00 Crores vide sanction letter dated 09.04.2014. To secure the aforesaid credit facilities, the Corporate Debtor executed various loan and security documents, the details of which provided as below:
Term Loan Agreement dated 19.12.2013 and 06.05.2014.
Deed of Hypothecation dated 19.12.2013 and 06.05.2014.
Balance and Confirmation Letter dated 03.09.2016.
The Petitioner further submits that the Corporate Debtor availed the aforesaid Term Loans but failed to repay the same as a result of which the accounts of the Corporate Debtor became Non-Performing Assets on 30.09.2016 as per Reserve Bank of India Prudential Norms.
Since the Corporate Debtor failed to repay the outstanding dues, the Corporate Debtor issued recall notice dated 08.11.2016 recalling the outstanding dues. Despite receipt of said recall notice, the Corporate Debtor failed to repay the dues.
The Petitioner enclosed the computation of particulars of the aforesaid credit facilities, the details are provided as under:
| Particulars | Rupees |
|---|---|
| A/c 125300IC00008539 Balance as on 30.09.2016 Plus Compound Interest @14.50% from 01.10.2016 to 30.11.2018 Plus: Penal Interest @2% (Simple) Plus: Other Debits Less: Less Recovery/Other Credit | 11,58,75,738/- 4,29,53,139.71 59,24,570.99 |
| Total Dues | 1,26,41,197.31 15,15,40,355.96 |
| A/c 125300IC00008566 Balance as on 30.09.2016 Plus Compound Interest @14.50% from 01.10.2016 to 30.11.2018 Plus: Penal Interest @2% (Simple) Plus: Other Debits Less: Less Recovery/Other Credit | 6,15,99,192.00 91,12,458.41 12,56,890.81 |
| Total Dues | 6,58,32,263.00 61,36,278.22 |
| TOTAL CLAIM | 15,76,76,634.18 |
The Petition also reveals that the Petitioner has filed Original Application before the Debts Recovery Tribunal-I.
The Petitioner has enclosed the Statement of Account for the aforesaid credit facilities granted to the Corporate Debtor which shows that the amount claimed in the Petition is in consonance with the Statement of Account. The Petitioner has also enclosed the CRILC report, NPA Certificate, Certificate under the Banker Book Evidence Act, 1891.
REPLY BY THE CORPORATE DEBTOR
The Corporate Debtor in its reply vehemently denied all the averments made by the Petitioner and also submits that the present petition is liable to be dismissed for the following reasons:-
a. The Petitioner has not passed any special or ordinary Board Resolution in respect of filing of present Petition. It is also submitted that the Power of Attorney is not sufficient to file present application and relied on the ruling of the Hon'ble NCLAT in the matter of Palogix Infrastructure Limited Vs. ICICI Bank.
b. The Petitioner itself is indebted to the Corporate Debtor to the tune of Rs.9,57,21,233/- comprising of principal amount of Rs.7,12,59,998/- along with interest of Rs.2,44,61,235/- for the services & facilities provided by the Corporate Debtor.
c. The Petitioner Bank has not followed the due procedure prescribed under the SARFAESI Act and directly approached this Tribunal.
d. The Corporate Debtor further alleged that the Petitioner bank malafidely declared the Respondent Account as Non-Performing Assets. The Petitioner still enjoying the services from the Corporate Debtor and initiated CIRP proceedings to realize the dues which is absolutely misconceived.
We have carefully gone through the pleadings on record and pursued the submissions made by the counsels for both the sides. The contentions of the Corporate Debtor cannot be taken into account while considering the Petition for admission under section 7 of the code, in view of the decision of the Hon'ble Supreme Court of India in the case "Innoventive Industries Ltd. Vs. ICICI Bank and Ors. - (2018) 1 SCC 407' wherein it was observed as below:
'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 sub-section (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."
On perusal of the documents of both the sides, it is evident from the fact that the Petitioner had sanctioned Term Loan facilities to the extent of Rs. 25 Crores to the Corporate Debtor and there was a default in repayment of the said dues. Considering the above facts, we opine that the nature of debt is a "Financial Debt" as defined under section 5 (8) of the Code. It has also been established that admittedly there is a "Default" as defined under section 3 (12) of the Code on the part of the Debtor.
The Adjudicating Authority, on perusal of the documents filed by the Creditor, is of the view that the Corporate Debtor defaulted in repaying the loans availed and also placed the name of the Insolvency Resolution Professional to act as Interim Resolution Professional and there being no disciplinary proceedings pending against the proposed resolution professional, therefore the Application under sub-section (2) of Section 7 is taken as complete, accordingly this Bench hereby admits this Petition prohibiting all of the following of item-I, namely:
(a) 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 (SARFAESI Act);
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 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 this date 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, as the case may be.
That the public announcement of the corporate insolvency resolution process shall be made immediately as specified under section 13 of the Code.
That this Bench hereby appoints Ms. Santanu T Ray, 1343, Regus, Level 13, Platinum Techno Park, Plot No. 17 & 18, Sector 30 A, Vashi, Navi Mumbai- 4000705, having Registration No. IBBI-/IPA-002/IP-N00360/2017-18/11055, as interim resolution professional to carry the functions as mentioned under the Insolvency & Bankruptcy Code.
The Registry is hereby directed to communicate this order to both the parties as well as IRP immediately.