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Judgment
This is an application, filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC,2016), r/w Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, (Adjudicating Authority Rules), for initiating the Corporate Resolution Process (CIRP), declaring moratorium and for appointment of Interim Resolution Process (IRP), against the Corporate Debtor viz., WORLD'S WINDOW INFRASTRUCTURE & LOGISTICS PVT. LTD. (Corporate Debtor), for default in repayment of Rs. 14,75,64,891/-(Rupees Fourteen crore Seventy Five Lakhs Sixty four Thousand Eight Hundred Ninety-One only) as on 6th February, 2022 out of a total claim of Rs. 104,97,68,105/- (Rupees One Hundred Four Crore Ninty Seven Lakh Sixty Eight Thousand One Hundred Five Only).
On 21.01.2022, the matter was taken up for clarification on certain queries on the basis of reply filed by the Corporate Debtor. In response to that, the Petitioner has submitted an additional Affidavit stating that none of these objections have very legal basis and it appears to be misreading on the part of the Corporate Debtor. However, the objections having been raised we would like to refer to the same and give a ruling on the same as follows:
The First objection is in relation to details given in part IV of the application form-I. While it is a claim of the Petitioner/Financial Creditor that the total amount due from the Corporate Debtor as on 06.02.2020 is Rs. 104,97,68,105/- whereas on the said date i.e 06.02.2020, the Corporate Debtor has defaulted on repayment of a sum of Rs. 14,75,64,891/-. Therefore, there is no difference in the amount claimed in part IV.
The next query/objection was that the Petitioner is claiming against two different respondents. The fact that the Financial Creditor is claiming against the borrower and the co-borrower is not in dispute. It is pending before two different Benches of the NCLT. Be that as it may, referring to Common Loan Agreement at Annexure 8 page 122 of the Petition, the term Borrowers has been defined at the page 125 to mean the borrower and the co-borrower collectively, and the liability to pay the loan has been set out in para 2.10 by both the borrower and the co-borrower. Further, and Article VIII at page 190 clause 8.1.5 makes it clear that in event of failure or inability of the Borrowers to pay their debts as they mature, the Financial Creditor can take proceeding against the borrowers viz. borrower and co-borrower for dissolution, liquidation etc. and this document has been signed by the Borrower, Co-Borrower and Financial Creditor. Therefore, it is not correct to say that the Petitioner is claiming against two different persons but he is claiming in terms of the agreement. Therefore, this objection has no basis.
The consent of IRP filed along with the main Petition has already expired and a fresh Form 2 along with Form B has been filed of the prposed IRP. Therefore this objection also has no merits even otherwise it is technical and is a curable defect. The details of the IRP and registration certificate have already filed in the main petition. Unless there is a specific material to disprove the same, we are not inclined to accept this objection.
The next issue raised by the Corporate Debtor is that default occurred on 29.02.2020 and further claim is made on May, 2020. Therefore, it will be hit by provision under Section 10A. This contention does not appear to be correct because default notice email dated 29.02.2020 is a relevant date and it does not fall in the period exempted u/s 10A. The subsequent emails of May 2020 are only reminders to the Corporate Debtor that he has been avoiding payments. Therefore, the first claim in this case does not appear to be falling within the period covered under Section 10A.
The next issue raised by the Corporate Debtor is that the Corporate Debtor is a registered MSME and therefore interest charge is exorbitant and consequently there is a legal bar to file an application against MSME.
Para 22 of the reply of Corporate Debtor reads as follows:
"That the Respondent herein is registered MSME against which the Applicant herein has charged exorbitant and arbitrary interest rates which are ardently denied and disputed by the Respondent herein as evident from the emails of the Respondent. That the Applicant herein has left no stone unturned to coerce the Respondent for arbitrary and illegally enhanced demands. That the Applicant has concealed the facts related to the ongoing discussions in relation to the restructuring the facilities. That there is evidence where the Applicant has raised the rate of interest being charged on the lending to 19.5% from 15% approximately agreed at the time of lending citing the covid-19 affected reasons."
This contention however does not appear to be justified because the Corporate Debtor is governed by the terms of Annexure-8, loan- agreement and interest is covered by clause 2.7 and 2.8 of the Article-II of the loan-agreement. In any event, nothing has been shown to prove that any prior dispute has been raised by the Corporate Debtor on the interest or the revised rate of interest. Therefore, this plea after the filing of the Petition does not appear to be justified.
We are inclined to reject all the contentions raised.
The petition for initiating CIRP against the Corporate Debtor is ADMITTED.
The Petitioner has proposed the name of Insolvency Resolution Professional, Mr. Navjit Singh, having address: 218, First Floor, Shop No. 4, Rama Market, Pitampura, Delhi-110034, registration No: IBBI/IPA-001/IP-P00314/2017-18/10578, contact no. 9311162970/9999240273 and email: navjit92ca.ip@gmail.com. A written communication in terms of Rule 9(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, has also been placed on record. There is a declaration made by him that no disciplinary proceedings are pending against him in the Insolvency and Bankruptcy Board of India or ICAI. In addition, further necessary disclosures have been made by Mr. Navjit Singh, as per the requirement of the IBBI Regulations. Accordingly, he satisfies the requirement of Section 7 (3) (b) of the Code. Hence, we appoint Mr. Navjit Singh, the IRP of the Corporate Debtor.
In pursuance of Section 13 (2) of the Code, we direct that Interim Insolvency Resolution Professional to make public announcement immediately with regard to admission of this application under Section 7 of IBC. The expression 'immediately' means within three days as clarified by Explanation to Regulation 6 (1) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.
As a consequence of the application being admitted in terms of Section 7 of IBC, 2016 moratorium as envisaged under the provisions of Section 14(1) of IBC shall follow in relation to the Respondent prohibiting the Respondent as per sub clauses (a) to (d) of section 14(1) of the IBC. However, during the pendency of the moratorium period, terms of Section 14(2) to 14(3) of the IBC shall come in force.
We direct the Petitioner to deposit a sum of Rs. 2,00,000, with the Interim Resolution Professional Mr. Navjit Singh, to meet out the expenses to perform the functions assigned to him in accordance with Regulation 6 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Person) Regulations, 2016. The needful shall be done within three days from the date of receipt of this order by the Petitioner. The amount however, will be subject to adjustment by the Committee of Creditors as accounted for by Interim Resolution Professional and shall be paid back to the Petitioner.
The registry is directed to communicate a copy of the Order to the Petitioner, the Corporate Debtor, the Interim Resolution Professional and the Registrar of Companies, NCR, New Delhi, at the earliest, but not later than seven days from today. The Registrar of Companies shall update his website by updating the status of 'Corporate Debtor' and specific mention regarding admission of this petition must be notified.