RELIANCE COMMERCIAL FINANCE LIMITED Vs. VED CELLULOSE LIMITED

JUDGEMENT

(1.) Reliance Commercial Finance Limited has approached this Tribunal with a prayer for initiation of Corporate Insolvency Resolution Process against Ved Cellulose Limited by invoking the provisions of Section 7 of the Insolvency and Bankruptcy Code 2016 (for brevity the 'Code'). The petitioner-'Financial Creditor become entitled to realize the default amount from the 'Corporate Debtor' having been duly transferred to it within the meaning of Section 5 (7) of the Code. The debt was originally payable tc Reliance Capital Finance Limited by virtue of an order dated 09.12.2016 passed by Hon'ble Bombay High Court (Annexure-I) duly sanctioning a scheme of arrangement between Reliance Capital Ltd. and Reliance Commercial Finance Limited under the provisions of Section 391-394 of the Companies Act, 1956. As a result of the approval of the scheme by Hon'ble Bombay High Court the loan amount stands transferred to and vested in the petitioner-'Financial Creditor', together with the securities and/or benefits, rights and obligations. Accordingly, the petitioner has acquired the status of 'Financial Creditor' in terms of Section 5 (7) of the Code It has made adequate disclosure being the transferee of the financial contract by placing on record a copy of the order datec 09.12.2016 passed by Hon'ble Bombay High Court. Thus, it has fulfilled the requirement of Rule 4 (2) of the Insolvency anc Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (for brevity 'Adjudicating Authority Rules').

(2.) The 'Financial Creditor' was incorporated on 17.08.2000 as is evident from a copy of the Company Master Data obtained from the website of Ministry of Corporate Affairs (Annexure-III). All other necessary disclosures have been made. The 'Corporate Debtor' was incorporated on 08.03.1995 with authorized and paid up share capital of Rs. 9,00,00,000/- which is evident from the Master Data of the 'Corporate Debtor' obtained from the website of Ministry of Corporate Affairs (Annexure-IV). The registered office of the 'Corporate Debtor' is 29, Gujarat Vihar, Vikas Marg, Delhi.

(3.) The 'Financial Creditor' granted a loan of Rs. 1,92,38,526.00 (Rupees One Crore Ninety Two Lakhs Thirty Eight Thousand Five Hundred Twenty Six only) to the 'Corporate Debtor'on 28.03.2014. The loan was to be repaid alongwith interest @ 16% per annum in 60 EMIS of Rs. 467844/- each. The loan was disbursed on 29.03.2014. The 'Financial Creditor' has submitted that the 'Corporate Debtor' failed to make payment of the EMIs as per the schedule of repayment and thus the 'Financial Creditor'was forced to recall the loan facility. As on 31.05.2017 a total sum of Rs. 2,01,26,510/- (Rupees Two Crores One Lakh Twenty Six Thousand Five Hundred Ten Only) is recoverable. A copy of the statement of working computation has been placed on record (Annexure-V). The 'Corporate Debtor' was required to make the payment of EMI starting from 05.05.2014 upto 05.04.2019 on the 5th day of every calendar month. The arrangements made by the 'Corporate Debtor' got dishonoured and thus it defaulted in making the. payments of EMI as per repayment schedule although some payments of EMIs were made by the 'Corporate Debtor' on belated dates. The detailed list is provided in part-IV of Form 1 prescribed by rule 4 of the Adjudicatory Authority Rules. After 31.03.2016 no instalment has been received as per the loan repayment schedule.