DENA BANK Vs. PEACE INFRASTRUCTURE PVT LTD

JUDGEMENT

(1.) Dena Bank styling itself as financial creditor filed this application under section 7 of LB Code r/w Regulation 4 of Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (hereinafter referred to as "the Rules") requesting this authority to commence Corporate Insolvency Resolution Process in respect of Peace Infrastructure Pvt. Ltd. styling it as Corporate Debtor.

(2.) Petitioner is a Bank constituted under the provisions of the Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970 having its registered office at Dena Corporate Centre, Bandra, Mumbai.

(3.) Respondent is a company incorporated under the Companies Act, 1956 having its registered office in Naranpura, Ahmedabad. Respondent company is principal borrower and is in the business of construction. Petitioner bank sanctioned a term loan of 5.00 crores vide sanction letter dated 04.06.2013 to the respondent company for development of two projects in the name of "Shantinagar and Shanti Upavan". Out of total 201 units (147 of Shantinagar and 54 of Shanti Upavan) 157 units have been considered as prime security and they were proposed to be mortgaged with the petitioner on a condition that NOC will be issued after payment of Rs. 3.50 lacs per unit. Respondent company executed loan agreement, deed of hypothecation, deed of guarantee and general undertaking in favour of the petitioner bank on 03.08.2013. It is stated by the petitioner that respondent company is principal borrower and its guarantors failed to honour the terms and conditions of the credit facility granted by the petitioner and hence the petitioner Bank classified the account of the respondent company as Non-Performing Assets (NPA) on 30.06.2015. After declaring it as NPA, respondent company paid Rs. 43.91 lacs from 05.10.2015 to 14.09.2017. Petitioner bank issued notice under Section 13 (2) of the SARFAESI Act on 02.07.2015 demanding the amount outstanding with interest Rs. 3,32,73,258/- as on 10.06.2015. Petitioner Bank took symbolic possession of the mortgaged properties under section 13 (4) of the SARFAESI Act on 18.09.2015. Learned CMM, Ahmedabad in Criminal Miscellaneous Application No. 351 of 2015 passed order under section 14 of the SARFAESI Act on 20.08.2016 to obtain physical possession of the properties situated in Gandhinagar. The guarantor/co-mortgagor R.L. Joshi filed S.A. No. 109 of 2016 before the Hon'ble DRT-1, Ahmedabad and challenged symbolic possession taken by the Bank and Learned DRT vide order dated 29.07.2016 ordered to maintain status-quo. S.A. 109 of 2016 is pending for final hearing. Petitioner Bank filed criminal complaint No. 4898 of 2015 under Section 138 of Negotiable Instrument Act on 26.08.2015 for dishonoured cheque of Rs. 165.00 lacs. Petitioner declared the respondent company and its Directors as wilful defaulters.