IN THE NATIONAL COMPANY LAW TRIBUNAL, DIVISION BENCH - I, CHENNAT IBA/763/2019 filed under Section 7 of the ‘Insolvency and Bankruptcy Code, 2016 r/w Rule 4 of the Insolvency and Bankruptey (Application to Adjudicating ‘Authority) Rules, 2016 In the matte: of M/s. Vafram Spinning Mills Pvt. Ltd. UCO Bank Rep by its Chief Manager, Rajapalayam Branch, Zonal Office, Vijay Towers, 1" Floor, 22, Father Randy Street, R.S. Puram Coimbatore ~ 641 002 Financial Creditor tes M/s. Vaj Re 'No.135, Cotton Market, Rajapalayam, Tamil Nadu ~ 626 117 1m Spinning Mills Private ..Corporate Debtor Order Pronounced on 30" January 2020 CORAM : R. VARADHARAJAN, MEMBER (JUDICIAL) ANIL KUMAR B, MEMBER (TECHNICAL) For Financial Creditor : V. Suthaker, Counsel KS, Viswanathan, Counsel T. Hemalatha, Counsel For Corporate Debtor : None ~ appeared of 10& ORDER Per: R. VARADHARAJAN, MEMBER (JUDICIAL) 1. Under Adjudication is 1B/V767/2019 that has been filed by UCO Bank (hereinafter referred to as ‘Financial Creditor’) under Section 7 of the Insolvency & Bankruptcy Code 2016 (in short, ‘I&B Code, 2016’) r/w Rule 4 of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016 against M/s. Vajram Spinning Mills Private Limited (hereinafter referred to as ‘Corporate Debtor’). The prayer made Is to admit the Application, to initiate the Corporate Insolvency Resolution Process against the Corporate Debtor, declare moratorium and appoint Interim Resolution Professional (IRP) 2. Part I of the application, sets out the details of the Financial Creditor from which, It is evident that the Financial Creditor is body Corporate constituted under the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970 and the Registered office as per the Application Is stated to be at Vijay Tower, 1* Floor, 22, Father Randy Street, R.S. Puram, Coimbatore - 641 002. 3. As per Part II of the application, the Corporate Debtor is ‘a Private Limited Company with Corporate Identification 20f10Number U17121TN2008°TC068260 and registered office of the Corporate Debtor as per the Application is stated to be situated at No.135, Cotton Market, Rajpalayam, Tamilnadu ~ 626 117, As per Part III of the application, the Financial Creditor has proposed the name of one S. Muthuraj, Registration Number: _T8BI/IPA-002/1P-NO0009/2016- nal 17/1013 as the Interim Resolution Profes: 4. Part IV of the application signifies the amount of debt to the tune of Rs.9,44,55,508.38/-. Part V of the application describes the particulars of Financial Debt, documents, records and evidence of default as described below: i) Hypothecation of Goods to secure a Demand Cash Guarantee Agreement Il) Deed of Hypothecation of movable pant and machi ery to secure a term loan. iv) Agreement relating to term loan v) Acknowledgment of debts and liabilities (five loan accounts) vi) Equitable mortgage created by depositing title deeds belonging to M/s. Vajram Spinning Mills measuring an extent of 409 Cents situated at Survey No.61/1, 2A, 28, 2C, 3A, 3B, 7, 8 and 9, Madurai Road, Mamasapuram —_ Village, Idayankulam, Panchayat, Srivlliputhur Taluk. 3 of10vil) Equitable mortgage created by depositing the title deeds of the land and building belonging to N. Selvaraj, comprised in S.No.135/11, New Survey No.135/2, Door No.79C and 79D, Ward No.31, New Ward No.41, Town Survey No.6 and 7, Ward I, Block No.12, P.S. Kumarasamy Raja Nagar, Pudupalayamn, Pudupalayam town, Rajapalayam 5, The Learned Counsel for the Financial Creditor submitted ‘that the Financial Creditor has granted Cash Credit and Term Loan to the Corporate Debtor on various dates and the Corporate Debtor has committed default in the repayment of the said loan, The details of the loans granted by the Financial Creditor and the Outstanding Balance are reproduced below; Si. | Facility | Sanction] Outstanding Balance No. Limit | (without interest ) ‘as on 06.02.2016 i_ | Gash Gredt_| 3,50,00,000 3,27,10,608.69, [Term Loan | 3,60,00,000 1,67,69,499.36 3 | Termtoan | 50,00,000 48,06,582.41 4[_Term Loan | _51,70,000 46,76,088.58 5 | Term oan | 30,00,000 3,58,199.24 TOTAL | 41,70,000 5,93,20,988.28 6. Tt was submitted by the Learned Counsel for the Financial Creditor, the account of the Corporate Debtor was Classified as NPA on 06.02.2016 and the above table would show the outstanding amount of the Corporate Debtor without 40/10Interest as on the date of NPA. Upon a query reised by this Tribural to the Financial Creditor, that as to whether this petiticn has been filed within the period of limitation, because, it fs evident from the records that the date of NPA is 06.02.2016 and the present petition was filed on 28.05.2019, Which Is beyond the 3 years period of limitation for pre~ forming this Application, for which, the Learned Counsel for the Financial Creditor submitted that they have obtained acknowledgment of debt from the Corporate Debtor on 06.01.2018 and as per Section 18 of the Limitation Act, the sald acknowledgment was obtained within the 3 years period of limitation and as such the period of limitation is extended for @ further period of three years from 06.01.2018 and as @ result thereof, the present petition is saved by limitation. 7. Aperusal of the typed set filed by the Financial Creditor would show that the Financial Creditor has obtained acknowledgment of debt from the Corporate Debtor on 06.01.2018 with respect to 5 different accounts as mentioned above independently. 8, Further, the Financial Creditor has filed thelr Information utility Report dated 27.11.2019 in relation to tre Corporate Debtor on 10.12.2019 vide Diary No.6545 and a perusal of the Soft10same shows the Status of Authentication as “Deemed to be Authenticated”. 9. In relation to the Corporate Debtor, it may be noted from the record of proceedings that the Corporate Debtor has not preferred to enter appearence before this Tribunal despite notice being served from the Registry of this Trbunal and also by the Financial Creditor. The Financial Creditor has also filed ‘an affidavit of service vide diary No. 5845 dated 14.11.2019 ‘and the service against the Corporate Debtor is held sufficient ‘and in the circumstances, we ere constrained to proceed in the ‘absence of the Corporate Debtor. 10. Thus, we are also satisfied that there is a debt and default on the part of the Corporate Debtor and the Corporate Debtor Is unable to repay its dues to the Financial Creditor. Tt has also been consistently held by the Hon’ble Supreme Court both in Innoventive Industries Ltd. -Vs- ICICI Bank and another (2018) 1 SCC 407 a5 well as Mobilox Innovations Pvt. Ltd.. -Vs~ Kirusa Software Pvt. Ltd. (2018) 1 SCC 1353 after going through the Scheme of I&B Code, 2016 in depth in relation to an Application under Section 7 filed by @ Financial Creditor as compared to the one filed under Section 9 by an Operational Creditor, In relation to a Section 7 6910Application where there is an existence of a ‘financial debt” and its default in excess of Rs.1,00,000/-, this Tribunal Is bound to admit the Application and as a consequence triager the Corporate Insolvency Resolution Process (CIRF) and in relation to a Section 7 Application defence of set off or counter claim put forth by the Corporate Debtor cannot be considered 2s a dispute in relation to the Financial debt and default in relation to it. In the present case, it is clear that there Is a default on the part of the Corporate Debtor for a sum exceeding Rs.1 Lakh. 11, Thus taking Into consideration the facts and circumstances of the case as well as the position of Law, we are of the view that this Application as filed by the Applicant ~ Financial Creditor is required to be admitted under Section 7 (5) of the 1&B Code, 2016. 12, The Financial Creditor has proposed the name of one S. MUTHURAJ having Registration Number [IBBI/IPA- 002/1P-N00009/2016-2017/10013] (Email id: [email protected]) (Mob:~ +91-9994103021) as Interim Resolution Professional (IRP) and a writen communication in the format prescribed under Form 2 of the Insolvency and Bankruptcy Board of India (Application to 70f10