In this case, we will cover and give an overview of the case Corporate Bank Vs Firestar International Limited and it will give you a brief yet precise outline regarding all the major facts and issues involved in this particular case which basically revolves around claiming and repayment of dues.
- The judgement is based on whether the Corporate Debtor is liable for refunding of entire amount paid by the petitioner along with adjusting amount or not.
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JUDGEMENT DIGEST ON CORPORATE BANK VS FIRESTAR INTERNATIONAL LIMITED
- FACTS OF THE CASE:
Court name: IN THE NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH
Petitioner
Corporation Bank,
Overseas Branch, CI, West Core Tower No.3, Bharat Diamond Bourse Complex, G Block, BKC Off. Bandra Kurla Link Road, Bandra (East), Mumbai-400051
Corporate Debtor
Firestar International Limited
2001 & 2002, 20th Floor, Peninsula Business Park, Tower-B, Ganpatrao Kadam Marg, Lower Parel, Mumbai, Mumbai City, MH-400013
Order Pronounced on: 18.11.2019
Order delivered on : 17.03.2020
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TIMELINE OF EVENTS
19.12.2012, 12.02.2013, 26.03.2013,
08.02.2014, 16.06.2015 and 31.03.2017:- The petitioner has enclosed sanction letters.
25.06.2013 & 03.11.2014:- Copy of Inter-se Agreement.
25.06.2013 &03.11.2014:- Security Trustee Appointment Agreement.
29.06.2013 & 11.11.2014:- Deed of Hypothecation.
03.11.2014 & 11.11.2014:- Working Capital Facilities Agreement.
12.09.2016:- Copy of Revival Letter.
31.12.2017:- The account of corporate debtor has classified as Non-Performing Asset.
16.07.2019:- Bench directed the Petitioner Bank to go for substituted service by way of publication.
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The facts of this case are that Corporate Debtor failed to repay the outstanding dues, the Petitioner had issued several letters and reminders demanding for repayment of outstanding dues. Despite receipt of aforesaid notices and reminders, Corporate Debtor failed to repay the dues as a result of which the account of corporate debtor has classified as Non-Performing Asset on 31.12.2017 as per Reserve Bank of India Prudential Norms.
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, Certificate under the Banker Book Evidence Act, 1891.
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The Petitioner submits that the Petition was served on the Corporate Debtor and notice was served intimating the date of hearing. On 16.07.2019, this Bench directed the Petitioner Bank to go for substituted service by way of publication. The Petitioner complied with the directions of this Bench and filed affidavit of service to that effect. Despite publication of notice, the corporate Debtor neither appeared nor filed reply in rebuttal. There is therefore, no reason to disbelieve the contentions of the Petitioner bank.
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.
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- 4. ISSUES OF THE CASE
- Corporate Debtor failed to repay the outstanding dues, the Petitioner had issued several letters and reminders demanding for repayment of outstanding dues.
- Whether the debt amount is subject for an insolvency resolution?.
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- 5. FINDING OF COURT
Accordingly to this Bench hereby admits this Petition prohibiting all of the following of item-I, namely:
(I)
(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 any of its 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 Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act);
(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.
(II) 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.
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(III) 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.
(IV) That the order of moratorium shall have effect from 18.11.2019 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.
(V) That the public announcement of the corporate insolvency resolution process shall be made immediately as specified under section 13 of the Code.
- VI) That this Bench hereby appoints Mr. Ram Ratan Kanoongo,
M/s Headway Resolution and Insolvency Services Private Limited,
1006, Raheja Center, 10th Floor, Nariman Point, Mumbai-400021 email-id [email protected], having Registration No. IBBI-/IPA- 001/IP-P00070/2017-18/10156, 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.
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- 6. CONCLUSION
It could be concluded 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. And 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. Also the public announcement of the corporate insolvency resolution process shall be made immediately as specified under section 13 of the Code. Hence, the Tribunal appointed Mr. Ram Ratan Kanoongo, as interim resolution professional to carry the functions as mentioned under the Insolvency & Bankruptcy Code.
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