Rajeswara Rao Vittanala, Member - (1.) The Present Company petition bearing CP No. IB/41/7/HDB/2017 is filed by Canara Bank (hereinafter referred to as Financial Creditor) under Section 7 of Insolvency and Bankruptcy Code, 2016 (IBC, 2016) read with Rule 4 of Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, by inter alia, seeking the Tribunal to initiate Corporate Insolvency Resolution Process in the matter of M/s. Deccan Chronicle Holdings Limited by appointing Interim Resolution Professional etc.
(2.) The brief facts and contentions raised by Mr. Deepak Bhattacharjee, the learned Senior counsel for the Financial Creditor are as follows: a) The petitioner is a Financial Creditor showing an outstanding debt to be liquidated by the Corporate debtor as Rs. 723,75,09,963/- as on 20.02.2017. It is contended that petition is numbered by the office only after complying with all objections raised by it, and thus it is deemed to complete in all respects. As per rules, Interim Resolution Professional, who is free from any disciplinary proceedings, is to be nominated for consideration of this Tribunal. The default committed by the Corporate debtor is also established through the following documentary evidence adduced by the Financial Creditor before this Tribunal. b) The balance sheet or the annual report of the Corporate debtor's Company for the year 2011-2012, which is at page No. 681-728 of Volume-III filed by the Financial Creditor. In the balance sheet, the Corporate debtor in page 715 has admitted to have availed the term loan and other financial limits from various creditors amounting to Rs. 445,34,66,021/-, which includes the loan availed from this Financial Creditor i.e. Canara Bank. c) The demand notice issued under section 13(2) of the SARFAESI Act 2002 on 31.12.2012 at page No. 451 of Volume-II, wherein the demand was made for a sum of Rs. 347,40,52,551.29/- plus interest thereon. It is specifically mentioned in the demand notice that the account of the Corporate debtor was classified as Non-Performing Asset (NPA) on 08.09.2012. d) Possession notice was also published in all newspapers including Indian Express on 16.03.2013, wherein the total liability as per the demand notice amounting to Rs. 347,40,52,551.29/- is referred to. The possession notice was published in Indian Express and Saakshi newspapers, which are filed at page No. 457 and 458 of Volume-II. Both the papers have wide circulation. e) Notice under Section 13(4) of the SARFAESI Act 2002 was separately sent to the Corporate debtor, which is filed at page No. 459 of Volume-II. f) The Statement of Account duly certified as true extract under Section 4 of the Bankers Book of Evidence Act showing the total outstanding liability is in consonance with the demand notice issued under SARFAESI Act 2002 and also the amount as claimed in the application. The Statement of Account duly certified under the Bankers Book of Evidence Act is filed at Page No. 464 to 466 and 475 to 495. g) It is contented that the above statements of account are in consonance with the present petition under section 7 of the code, which are filed at page No. 654 to 660 of Volume-III. h) The Corporate debtor (Applicant) has filed Civil Appeal No. 1230 of 215 (Arising out of SLP (Civil) No. 2230 of 214) questioning the order of the Hon'ble Madras High Court in respect of classifying the account as Non-Performing Asset and the Hon'ble Supreme Court not only dismissed the appeal confirming the order of the Hon'ble Division Bench of Hon'ble Madras High Court but also imposed cost calculated at the rate of 1% of the total amount outstanding as on the date of notice of demand under Section 13(2) of the SARFAESI Act 2002 in each of the case. The Hon'ble Supreme Court, therefore, confirmed that the demand notice issued under Section 13(2) of the SARFAESI Act 2002 was legal and the amount has to be paid by the Corporate debtor in terms of the demand. i) It is stated that the Hon'ble High Court of Judicature at Hyderabad in WP No. 14694/2014 vide its order dated 25.07.2014 categorically observed that the liability of the Corporate debtor to pay to the Financial Creditor is not in dispute and recording the same, the interim order initially granted was not extended. j) It is stated that the Hon'ble Debts Recovery Tribunal (DRT) in SA No. 27/2013 vide its order dated 26.09.2013 discussed about the entire loan transaction and dismissed the application. The recital in Para 3.1, 3.2, 3.3, 4.1, 4.2, 5, 6, 6.1, 6.2, 6.3, 6.6, 6.8, 6.17 and 6.19 overwhelmingly manifest that the default was committed in repayment of the loan by the Corporate Debtor herein. k) It is stated that Corporate Debtor has filed CA Nos. 347 and 346 of 2013, by seeking sanction of Composite Scheme of Demerger and Arrangement between M/s. Deccan Chronicle Holdings Limited and M/s. Land Interactive Media Limited. In the said application which is filed before the Hon'ble High Court, (enclosed at Page No. 868) the Corporate debtor has admitted total liability with the Financial Creditor i.e. Canara Bank was Rs. 334,35,32,645/- as on the date of filing of the application. The admission of debt is at page No. 868, 875 and 884 of the scheme annexed to the application. The company application and the scheme are filed at Page No. 802 to 875 of Volume-IV filed by the Financial Creditor. l) It is further stated that Financial Creditor has filed OA No. 817/2012 before the Hon'ble Debts Recovery Tribunal at Hyderabad seeking issuance of Recovery Certificate for Rs. 347,40,52,551.29/- together with interest at the rate of 19.50% with monthly rests from 01.12.2012 till realization. And the same is pending, and it shows event of default committed by the Corporate debtor. m) It is stated that cheques issued towards repayment of the installment by the Corporate debtor were dishonoured forcing Financial Creditor to initiate appropriate proceedings under Section 138 read with Section 142 of N.I. Act. The following documents are filed to show that Corporate debtor is at fault: (a) Copy of the complaint in CC No. 29/2013 evidencing the default is at page No. 915 to 921 of Volume-IV (b) Copy of the complaint in CC No. 1759/2012 evidencing the default is at page No. 922 to 928 of Volume-IV (c) Copy of the complaint in CC No. 100/2013 evidencing the default is at page No. 929 to 935 of Volume-IV (d) Copy of the complaint in CC No. 1653/2012 evidencing the default is at page No. 936 to 942 of Volume-IV (e) Copy of the complaint in CC No. 315/2013 evidencing the default is at page No. 943 to 950 of Volume-IV. n) It is further stated that Corporate debtor had also made a reference to BIFR, under the provisions of Sick Industrial Companies (Special Provisions) Act, 1985 and in the reference made before the Board, the outstanding liability with the Canara Bank i.e. Financial Creditor was admitted. The reference Application is at page No. 951 to 967 of Volume-IV and the admission of Debt is at page No. 966 and 967 which forms part of the application for reference before the BIFR admitting the debt with the Financial Creditor. o) It is further contented that there is a non obstante clause in the Insolvency and Bankruptcy Code, 2016, which has an overriding affect over any other statute or statutes in force. Section 238 of the Insolvency and Bankruptcy Code, 2016 reads as follows: - 238. Provisions of this Code to override other laws - The provisions of this Code shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law Therefore, it is contended that Insolvency and Bankruptcy Code, 2016 is a special enactment which has come into force with effect from 01.12.2016 only. The Hon'ble Supreme Court in Allahabad Bank Vs. Canara Bank, 2000 4 SCC 406 at Para No. 38 and 39 has laid down a clear ratio which states that the Companies Act is a general law and shall not prevail over the Recovery of Debts Due to Banks and Financial Institutes Act which is a special statute. A clear ratio was also laid down to state that when there are two special statutes, the latter will normally prevail over the former. Similarly, the ratio is laid down in Mardia Chemicals Limited and others Vs. Union of India and others, 2004 4 SCC 311 by the Hon'ble Supreme Court at Para 42, 43 and 44 holding that the special law having non obstante clause shall override any other general law. In the instant case, it was held that the provisions of SARFAESI Act 2002 shall override the provisions of the Transfer of Property Act. The same ratio is applied in the instant case. In view of the non obstante clause i.e. Section 238 of the Code, 2016 shall prevail over the general law i.e. Companies Act 1956 and Companies Act 2013. The non obstante clause i.e. Section 238 of the Code, 2016 is also highlighted and appreciated in its true perspective by the Hon'ble National Company Appellate Law Tribunal in Company Appeal (AT) (Insolvency) No. 1 and 2 of 2017 in Para 70 and 71. In view of the clear ratio laid down by the Hon'ble Supreme Court and the Hon'ble National Company Law Appellate Tribunal as referred above, it cannot be said that two parallel proceedings i.e. under the Companies Act 2013 and Insolvency and Bankruptcy Code 2016 cannot be continued to subsist. The proceedings initiated under Section 7 of the Insolvency and Bankruptcy Code 2016 is an independent proceedings and it has overriding affect over Section 434 and 391 of the Companies Act. The pendency of the winding up petition before the Hon'ble High Court or pendency of the scheme of arrangement before the Hon'ble Tribunal under Section 391 of the Companies Act 1956 shall not take way the right of the Financial Creditor to initiate appropriate proceedings. p) The Learned senior counsel further asserted that it is settled position of law that admission is an issue between a court and petitioner i.e. in the instant case; it is a matter between the Financial Creditor and the Tribunal. And the Corporate Debtor have no right to oppose the admission especially in the light of fulfilling all three ingredients for admission with regard to occurrence of default, application is complete in all respect and nomination of Competent IRP q) Therefore, Shri Mr. Deepak Bhattacharjee, Learned Senior Counsel for the Financial Creditor, has strongly urged the Tribunal to admit and also pass consequential orders in terms of Sub-Section 5 of Section 7 of the Insolvency and Bankruptcy Code 2016.
(3.) We have ordered notice on the respondents, duly following principles of natural justice, in view of a long history of the case to ascertain factual background of the case and admitting case would have wide ramifications on parties. Accordingly, the Respondent have filed their replies by raising several objections by disputing each and every averments made in the petition filed by Financial Creditor to make admission as a final hearing. The Respondent has also filed CA No. 105 of 2017 by seeking to dismiss the present petition as not maintainable for the grounds mentioned therein.;