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Judgment
[Per se: Mr. Chockalingam Thirunavukkarasu, Member (T)]
Shri. Viveka Nand, Assistant General Manager of State Bank of India, on behalf of the Petitioner/Financial Creditor has filed this Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 [hereinafter referred to as "the IB Code"] read with Rule 4 of the Insolvency and Bankruptcy Application to Adjudicating Authority Rules, 2016 (hereinafter referred to as "the Rules") for the purpose of initiating corporate insolvency resolution process [hereinafter referred to as “CIRP”] against M/s. Steelco Gujarat Limited, the Respondent company/Corporate Debtor.
The Petitioner’s Bank submitted that the other lending banks under this Consortium Lending State Bank of Mysore, State Bank of Hyderabad, State Bank of Travancore merged on 01.04.2017 with State Bank of India. The copy of Gazette of India dated 22.02.2017 on the said mergers is annexed and marked as “Annexure A” with the petition.
M/s. Steelco Gujarat Limited, the Respondent company incorporated on 09.01.1989, under the provisions of the Companies Act, 1956 having its Registered Office at Plot no. 2 GIDC Estate, Palej, Distt: Bharuch Gujarat-392220. The Respondent Company is engaged in the business of manufacturing of Cold Rolled Steel and Galvanised Steel.
For setting up/modernization/implementation of the Project and for other requirements for its operations, the Respondent Company availed the loan facility from State Bank of India along with other lending banks under this Consortium Lending State Bank of Mysore, State Bank of Hyderabad, State Bank of Travancore, Canara Bank and Federal Bank.
The Authorised Share Capital of the Respondent Company is Rs.150,00,00,000/- (Rupees One Hundred Fifty Crores only). The Paid-Up Share Capital of the Respondent Company is Rs. 78,86,80,220/- (Rupees Seventy-Eight Crore Eighty-Six Lakh Eighty Thousand Two Hundred Twenty Only). The Respondent is having its CIN: L27110GJ1989PLC011748.
As per Part IV of the application, the total amount of debt sanctioned by State Bank of India, the Financial Creditor in the form of term loans and cash credit facilities. It is further stated that the total amount of default as on 07.10.2020 amounted to Rs. 137,22,35,005.14/- along with interest.
It is submitted by the Petitioner that the account of Corporate Debtor become NPA on 23.10.2012, thereafter, time to time the Corporate Debtor Company executed Revival letter dated 19.02.2015, 30.03.2015, 24.11.2015 and 30.10.2017/07.11.2017 at Annexure G in favour of Financial Creditor. It is submitted that last revival letter issued by the Corporate Debtor in favour of Financial Creditor is on 30.10.2017/07.11.2017.
It is stated by the Petitioner Bank that aforesaid Credit Facilities were secured by Equitable mortgage of immovable property and the hypothecation of Movable Assets and Current Assets of the Corporate Debtor and attached the copy of documents in support of the same.
The Petitioner submitted the copy of following documents in support of his claim against the Corporate Debtor.
- Bank Account Statements. - Approval Letters dated 27.06.2012 - Sanction Letters dated 06.09.2012, 07.09.2012, 28.09.2012, 06.10.2012. - Account Statement as on 07.10.2020 - Board Resolution of Borrower dated 12.02.2015 - Revival Letter of Borrower dated 19.02.2015 and 30.03.2015. - Board Resolution of Corporate Guarantor dated 24.11.2015. - SBI Revival Letter of Borrower and Corporate Guarantor dated 24.11.2015. - Board Resolution of Borrower and Board Resolution of Corporate Guarantor dated 24.05.2017 and 07.11.2017. - Revival Letter of Borrower and Corporate Guarantor dated 30.10.2017/07.11.2017. - Notice under Section 13(2) of the SARFAESI Act, 2002. - Record of default with the information utility. - Certificate under Banker's Book of evidence, 1891. - Declaration in the matter of mortgage and hypothecation of movables. - Memorandum relating to deposit of title deeds for creation of further charge for overall credit where the initial charge is created by way of mortgage of deposit of title deeds.
- Letter of confirmation of extension of mortgage by deposit of title deeds covering enhanced limit and/or creation of mortgage on additional properties for securing the existing limits and/or enhanced limits and additional facilities. - Corporate Guarantee Agreement of SPICA business corp. PANAMA with board resolution of meeting dated 14.02.2013 (part of CDR).
The Respondent has not raised any objections regarding the outstanding dues claimed by the Petitioner. The Respondent has admitted the claim and submitted that they are not able to pay the debt as the Company is facing the financial crunch and the Corporate Debtor is having negative net-worth.
Gone through the application filed and documents submitted by the Petitioner Bank. As per Section 7 of IBC, in an application preferred by the Financial Creditor for initiation of Corporate Insolvency Resolution Process, the Adjudicating Authority is required to see the existence of financial debt and ascertain the existence of default. As per the documents submitted by the Petitioner that there is a financial debt in the form of loans availed by the Corporate Debtor. The date of default is on 30.10.2017. The application is filed on 16.10.2020, hence the application is filed within the period of limitation. The application is filed by Shri. Viveka Nand, Assistant General Manager of the Petitioner's Bank with authorization papers.
The Petitioner has proposed the name of Mr. Nirav Anupam Tarkas, CA, having Registration No. IBBI/IPA-002/IP-N00776/2018-19/12375 to act as IRP under Section 13(1)(b) of the IB Code and written communication in Form-2 of IBBI has been submitted by the proposed IRP.
From the documents placed on record, this Adjudicating Authority is satisfied that default has been committed by the Corporate Debtor in repayment of loan amount to the Bank. The petition is complete. As a consequence, the instant petition is admitted in terms of Section 7 of the IB Code and the moratorium as envisaged under the provisions of Section 14(1) of IB Code and extracted hereunder shall follow in relation to the Respondent Corporate Debtor.
(1)Subject to provisions of sub-Section (2) and (3), on the Insolvency Commencement date, the Adjudicating Authority herein declares moratorium for prohibiting all of the following viz;-
(i)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.
(ii)Transferring, encumbering, alienating or disposing of by the Corporate Debtor, any of its assets or any legal right or beneficial interest therein;
(iii)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);
(iv)the recovery of any property by an owner as lessor where such property is occupied by or in the possession of the Corporate Debtor.
(2)The supply of goods and essential services to the Corporate Debtor as may be specified shall not be terminated or suspended or interrupted during moratorium period.
(3)The provisions of sub-section (1) shall, however, not apply to such transaction as may be notified by the Central Government in consultation with any financial sector regulator.
(4)The order of moratorium shall have effect from the date of receipt of authenticated copy of this order 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.
This Adjudicating Authority hereby appoints Mr. Nirav Anupam Tarkas, CA, having Registration No. IBBI/IPA-002/IP-N00776/2018-19/12375 to act as “Interim Insolvency Resolution Professional” under Section 13(1)(b) of the IB Code.
The petition stand disposed of accordingly with no order as to costs.
Communicate a copy of this order to the Petitioner, Respondent and to the Interim Insolvency Resolution Professional.