UCO Bank vs M/s Narendra Solvex Private Limited

Per: Suchitra Kanuparthi, Member (Judicial)

This is a Company Petition filed under section 7 of the Insolvency & Bankruptcy Code, 2016 (IBC) by UCO Bank ("the Financial Creditor"), seeking to initiate Corporate Insolvency Resolution Process (CIRP) against M/s Narendra Solvex Private Limited ("the Corporate Debtor/Corporate Guarantor"). The Financial Creditor claiming a sum of Rs.47,44,31,660.68 (Rupees Fourty Seven, Fourty Four Lakhs, Thirty-One Thousand, Six Hundred Sixty and Sixty-Eight Paisa Only) which is said to amount in default as on 30.09.2014which is said to be the date of default.

The Petitioner has granted various credit facilities to the Corporate Debtor which are provided as under:

The Petitioner has provided details of security such as hypothecated assets and fixed assets along with the Petitioner created in favour of the Financial Creditor as follows :-

The Petitioner has also filed recovery proceedings before Debts Recovery Tribunal vide O.A. 196 of 2015, the Recovery Certificate was passed in favour of the Petitioner Bank on 12^th February 2019.

The Petitioner has included the details of amendment and financial contract executed between the parties from the year 2005 till the year 2015. The Petitioner has initiated proceedings under the SARFAESI Act, 2002 against the Corporate Debtor and issued notice under Section 13(2) on 27^th January 2015. The Petitioner also issued recall notice on 27^th August, 2018, thereby recalling the outstanding dues from the Corporate Debtor.

The total amount of default as claimed by the Petitioner as on date of default i.e. 30^thSeptember 2014 is amounting to Rs.47,44,31,630.68. The account was declared NPA on 30^th December 2014.

Initially the Reply was filed by the shareholder of the Corporate Debtor collectively holding 21.72% shares in the Corporate Debtor, but however the promoter submitted that it is filed at the behest of the promoter of the Corporate Debtor, who has revoked the authority to file the reply. Further this Bench records the brief facts of the reply. Evidently there is reply filed by the promoters of the Corporate Debtor in view of the fact that the Directors namely Shri Naval Kumar Bhoot, Shri Santosh Kumar Bhoot and Shri Narendra Kumar Bhoot, out of these three directors, two directors have been disqualified u/s 164(2) r/w Section 167(1)of the Companies Act, 2013 namely Mr. Narendra Kumar Bhoot and Santosh Kumar Bhoot. The reply filed by the shareholders of the so-called Corporate Debtor is not taken into consideration as they have no locus to appear in the matter and defend insolvency petition u/s 7 of the Code.

The Counsel appearing for the Corporate Debtor has taken several adjournments on the ground that the senior Mr. S.K. Jain, is unwell and sought time to argue the matter. The Counsel also misrepresented that he had been authorised by the Corporate Debtor but however, the reply filed on record shows that he is representing 21.72% of shareholding of the Corporate Debtor. Therefore, at the threshold the reply is not taken into consideration. Upon verification of the MCA Data that the so called three Directors have not disqualified and shown active on the MCA website. The present status of the companies Director is as follows:

Admittedly the sanction of the said loan of the financial facilities to the Corporate Debtor was granted on 22^nd June 2005 followed by sanction letters in the year 2006, 2007 and 2013. The date of default as recorded in the Petition is 30^th September 2014. The account was declared as NPA on 30^th December 2014. The Petitioner have claimed an amount of Rs. 47,44,31,630.68 as on 30^th December 2014. The Petitioner has also given the list of hypothecations of assets and mortgage and have mention that they have obtained a Recovery Certificate/Decree dated 12^th February, 2019 in O.A. 196 of 2015 from Debts Recovery Tribunal, Nagpur against the Corporate Debtor. The Petitioner have evidently issued a SARFAESI Notice u/s 13 (2) on 27^th August 2018. There is no evidential proof filed for seeking an extension of limitation by way of acknowledgement by the corporate debtor file. The date of Decree/Recovery Certificate is to be reckoned as a fresh period of limitation for filing petition u/s 7 of the IB Code.

There was no representation on behalf of the Corporate Debtor. However, the shareholders have filed the reply falsely stating that the reply has been filed on behalf of the Corporate Debtor. However, the contents of the reply further demonstrate that the reply is filed by the shareholders of the Corporate Debtor holding 21.72% percent of shares in the Corporate Debtor. This reply filed by the shareholders of the corporate debtor is rejected in limine.

The Ld. Counsel My. Yahya Batatawala has sought for several adjournments on the ground that his senior Mr. S.K. Jain, is unwell and unable to represent the corporate debtor. This bench takes serious note on the fact that there has been a false representation and oral submissions that they are representing the Corporate Debtor. However, they have conceded that they represent only the shareholders of the Corporate Debtor who have no authority to represent the Corporate Debtor and to file reply before the Hon’ble Tribunal.

In view of the judgement of Hon’ble Supreme Court in Dena Bank(now Bank of Baroda) v. C Shivkumar Reddy and Anr on 4.08.2021, held at para 143 that a Judgement/decree in favour of the Financial Creditor or any Recovery certificate by the Debt Recovery Tribunal, would give rise to a fresh cause of action for the Financial Creditor, to initiate proceedings under sec.7 of IBC for initiation of CIRP, within three years from the date of the judgement and/decree or within three years from the date of issuance of certificate of recovery, if the dues of the Corporate Debtor to the Financial Creditor, under the judgement and/or decree and/or in terms of certificate of recovery, or any part thereof remained unpaid.

The petitioner has obtained the have obtained a Recovery Certificate/Decree dated 12^th February, 2019 in O.A. 196 of 2015 from Debts Recovery Tribunal, Nagpur against the Corporate Debtor. Hence a new period of limitation starts from 12.02.2019 to 11.02.2022. In view of the judgement of Hon’ble Supreme and ratio laid down therein, the debt of Financial Creditor is crystallised in a Recovery Certificate against the Corporate Debtor and there is a default of non-payment of outstanding dues. The petition is admitted.

This Bench having been satisfied with the Application filed by the Financial Creditor which is in compliance of provisions of section 7 of the Insolvency and Bankruptcy Code admits this Application declaring Moratorium with the directions as mentioned below:

The Registry is hereby directed to communicate this order to both the parties as well as IRP immediately.