Alchemist Asset Reconstruction Company Limited vs M/s Vinesh Traders Private Limited

Bachu Venkat Balaram Das, Member (Judicial)

This is an application filed by the Financial Creditor namely, Alchemist Asset  Reconstruction  Company  Limited  against the corporate debtor namely, Vinesh Traders Pvt. Ltd. under section 7 of the IBC, 2016 read with   4 of the Insolvency and   Bankruptcy (Application   to   Adjudicating   Authority)  s,  2016  for initiating Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor

The    transaction    leading   to    filing    of   application    under consideration is as follows:

a. The Corporate Debtor approached the Bank of India for availing long term loan facility and on the above request of the Corporate Debtor, the Bank disbursed the loan to the  Respondent  through  its  bank  account  of Rs. 1000 Lakhs, which was later enhanced at the request of CD to Rs. 1475     Lakhs.     The    Corporate    Debtor    and    Bank executed   Demand   Promissory   Note   dated 03.06.2008, Agreement of Hypothecation of Plant 86 Machinery, Stock 86  Book  debts  dated 03.06.2008,   Cash   Credit  Facility Agreement dated 03.06.2008  and  Stamped  Undertaking dated 03.06.2008 were executed in favour of the Bank by the CD. The CD  started making default in repaying the loan    amount,    thereafter   the   bank   initiated   recovery proceedings   by   filing   OA  before   Ld.   DRT,   New  Delhi claiming  an  amount  of  Rs.16,97,71,991/-  along  with interest @   4%   over   base   rate   presently 14.25%   perannum with monthly rest and penal interest @ 2% per annum with effect from 23.09.2013 till actual realization. The bank had assigned the debt of the CD in favour of the Applicant in terms of section 5 of the SARFAESI Act through deed of assignment dated 30.12.2013.

b.   It is submitted that on 08.08.2017 OA was decreed for   an  amount  of  Rs.16,97,71.991/-  together  with  further interest thereon at the rate of 13.00% p.a. simple interest from 09.09.2013 till the date of payment in full with costs in  favour  of  the  Applicant  herein.   Thereafter,  The  CD submitted the settlement proposal for Rs.  10 Crores and proposed to pay the said amount over a period of 1 (one) year from the  date of acceptance of offer.     The  amount was proposed to be paid through sale of assets mortgaged with  the Applicant,  with  its  prior  approval.  It is  stated that the  said  settlement proposal was  approved  by the Applicant on  16.07.2019. As per the settlement proposal and the sanction letter, the CD was supposed to pay off Rs. 10  Crores by  15.07.2020, which  admittedly the  CD failed  to   do   in  terms   of  the   Settlement  Proposal  and Sanction     Letter    and    had    defaulted.     Thereafter,     the Applicant  herein  had  issued  a  letter  for  revocation  on 20.03.2021.

C.  It  is  further  submitted  that  the  corporate  debtor  has  failed  to  repay  the  amount  of Rs. 32,99,06,580/-  (Rs. 16,97,71,991     Principal    Amount +     Rs. 16,93,67,329 Interest  +  Rs. 17,67,260  other  cost)  outstanding as  on 25.05.2021  and accordingly proceeding under Section 7 of IBC is sought to be initiated.

The   Counsel   has   appeared   on   behalf  of  the   Corporate  Debtor and submitted that there is no need to file reply to the present petition as the default is already admitted by the Corporate Debtor in its balance sheet.

This Adjudicating Authority has  perused  the  petition  and oral  submission  advanced by the counsels.     The  evidence placed by the financial creditor is sufficient to ascertain the existence of a default on the part of the Corporate Debtor and same is admitted by the counsel of the corporate debtor during oral submission.   The Financial Creditor has fulfilled all the requirements of law.  Accordingly, this Adjudicating Authority is inclined to admit this application and initiate the process of CIRP of the Corporate Debtor. The financial Creditor   has   also   proposed   the   name   of  the   Resolution Professional for appointment of IRP.

Mr. Sapan Mohan Garg having Regn. No.- IBBI/IPA-002/IP- N00315/2017-18/10903  (Email ID -  sapan10@yahoo.com) is  hereby appointed  as  IRP  as  has  been  proposed  by the Financial   Creditor.   There   is   no   disciplinary   proceeding pending against the IRP as evident from the Form-2 dated 07.01.2020.   The   IRP   is   directed   to   take   charge   of  the Respondent  Corporate  Debtor's  management  immediately. He  is  also  directed  to  cause  public  announcement  under section  15 of the IBC, 2016, within three days from date of receiving the copy of this order and call for submissions of claim in the manner as prescribed.

The moratorium is declared which shall have effect from the  date   of  this   order   till   the   completion   of  CIRP,   for   the purposes referred to  in  section  14  of the  IBC,  2016.  It is ordered to prohibit all of the following, 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;

b. Transferring,  encumbering,  alienating  or  disposing of by the Corporate Debtor's assets or any legal right or beneficial interest therein;

c. 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  Securitisation  and  Reconstruction  of Financial Assets  and  Enforcement  of  Security  Interest  Act, 2002 (54 of 2002);

d. 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 of the Corporate  Debtor  shall not be  terminated,  suspended  or interrupted during moratorium period. The provisions of sub-section (1) of   section 14    of   IBC, 2016    shall   not   apply   to    such transactions, as notified by the Central Government,

The  IRP shall comply with the provisions of Sections  13(2), 15, 17  and  18  of the  code.  The  Directors of the  Corporate Debtor,   its  promoters   or  any  person  associated  with  the management    of   the    Corporate    Debtor    shall    extend    all assistance  and  cooperation  to  the  IRP  as  stipulated  under section  19 for discharging his function under section 20 of the IBC, 2016.

The  financial  Creditor  is  directed  to  send  the  copy  of this order to the IRP with immediate effect, so that he could take charge   of  the   Corporate   Debtor's   assets   etc.,   and   make compliance  with  this  order  as  per  the  provisions  of  IBC, 2016.

The financial Creditor is directed to communicate this Order to the IRP and the Corporate Debtor with immediate effect.

The Registry is directed to send a copy of this order to the  Registrar of Companies concerned for updating the status of Corporate Debtor on the MCA-21 site of Ministry of Corporate Affairs for information of all concerned.

The  order  is  pronounced  by  this  Adjudicating  Authority  through Virtual Hearing .