Manorama Kumari, Member - (1.) Punjab National Bank, the 'Financial Creditor herein, filed this Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 ["Code" for short] read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, ("Rules" for short) with a request to initiate Corporate Insolvency Resolution Process against Jaihind Infratech Projects Private Limited, treating it as 'Corporate Debtor'. 1.1. The Deputy Circle Head of the Petitioner Bank has, vide letter dated 11.9.2017 authorized Mr. Sita Ram Badeja, its Chief Manager to file the Application and make submissions on behalf of the Bank.
(2.) The Petitioner is a Bank constituted under the provisions of Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, having its Registered Office in New Delhi. The Respondent is a Private Company incorporated under the Companies Act, 1956 having its Registered Office in Vejalpur, Ahmedabad, Gujarat State. The Authorised Share Capital of the Respondent Company is Rs. 7,00,00,000. The Issued, Subscribed and Paid-up Share Capital of the Company is Rs. 6,80,00,000/-.
(3.) The Petitioner Bank has submitted that the Respondent Corporate Debtor had approached the Bank in the year 2011 for grant of various credit facilities. 3.1. The Petitioner Bank, vide its Sanction Letter dated 11/12 February, 2011 sanctioned the following Credit Facilities to the Respondent Company aggregating to Rs. 34 Crores as per the terms and conditions set out therein; (a) Cash Credit (Hypothecation) Limit of Rs. 10.00 Crores. (b) Inland Letter of Guarantee Limit of Rs. 17.50 Crores. (c) Letter of Credit of Rs. 6.50 Crores. The terms and conditions were agreed and accepted by the Respondent Company. The Respondent Company is a Principal Borrower which is a subsidiary of its parent Company, which is a Public Limited Company, namely M/s. Jaihind Project Limited. The parent Company has given Corporate Guarantee to secure the financial assistance sanctioned and granted as stated above and the Directors of both the parent Company and its subsidiary Respondent Company are jointly and/or severally liable for the amount claimed in the Application along with costs, interest and other charges. 3.2. The above mentioned credit facilities are secured by an exclusive charge, by way of hypothecation of entire current assets F (present and future) including stocks, consumables, spares etc., of the Company and also receivables arising out of the general trade transactions which are redundant. The facility of the Inland Letter of Guarantee was secured by an indemnity from the borrower and also securities available in cash credit hypothecation and non-fund based limit. The facilities as per Letter of Credit are secured by equitable mortgage of the immovable property as well as personal guarantee of the Directors of the Respondent Company and M/s. Jaihind Project Limited. 3.3. The Respondent Company by way of security has executed the following documents in favour of the Petitioner Bank; 1. Hypothecation of Goods and Book-debts dated 28th February, 2011. 2. Hypothecation of movable assets forming part of fixed/block assets dated 28.2.2011. 3. Agreement of Guarantee by Directors, viz. (i) Guarav Hinduja, (ii) Nita P. Hinduja, (iii) Prakash Hinduja and (iv) Harish Chandwani. 4. Agreement of Guarantee by M/s. Jaihind Project Limited dated 28th February, 2011. 5. General Counter Indemnity by Respondent Company dated 28th February, 2011. 6. Master Agreement for Inland Documentary Credit dated 28th February, 2011. 7. Undertaking by the Respondent Company dated 28th February, 2011. 8. The letter confirming deposit of title deeds. 9. Declaration.;