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2025 Supreme(Online)(NCLT) 4511
NATIONAL COMPANY LAW TRIBUNAL
Shammi Khan, Sanjeev Kumar Sharma, JJ
Bank of Baroda – Appellant
Versus
Xyron Technologies Ltd – Respondent
CP(IB)/17(MP)2024 | IA/99(MP)2025
For the Applicant/FC: Mr. Madhav Lahoti
For the Respondent/CD: Mr. Rohit Dubey
The court ruled that the admission of an insolvency application requires clear evidence of debt and default, with procedural adherence for notice substantiating creditor’s claims.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 7 - Application for initiation of Corporate Insolvency Resolution Process - Financial Creditor filed application against Corporate Debtor for defaulting on payment of dues amounting to Rs.9,57,38,347/- - Petition is admitted as the Corporate Debtor failed to adhere to repayment terms and the documentation substantiated the creditor's claim. (Paras 1, 21, 22)
(B) Limitation Act, 1963 - Section 18 - Acknowledgment of debt in balance sheets extends limitation period by three years - Entries in Corporate Debtor's balance sheets were considered valid acknowledgment, countering defense of time-barred application. (Paras 18 19)
(C) Procedural Issues - Claim of improper notice by Corporate Debtor was rejected based on evidence of service - Proper service of notice allows proceeding on default claims under IBC framework. (Paras 8, 12, 14, 17)
Facts of the case:
The Financial Creditor initiated proceedings under Section 7 of the IBC against the Corporate Debtor due to failure to fulfill repayment obligations for a term loan of Rs.4.97 Crore which was sanctioned on 29.09.2015, leading to default classification as NPA on 31.03.2017.
Findings of Court:
The Tribunal verified compliance with documentation and service requirements, conclusive regarding the existence of a debt/data on the records. The Corporate Debtor was in significant default, affirming admission of the application.
Issues: Did the Corporate Debtor indeed default on the financial debt, and were proper procedures followed for notice of the default?
Ratio Decidendi: The Tribunal emphasized the responsibility of the Adjudicating Authority to confirm the presence of a debt and default, leading to an admission of the petition when substantiated sufficiently. Service of notice was adequately documented.
Result: The Respondent/Corporate Debtor Xyron Technologies Limited is admitted in Corporate Insolvency Resolution Process under Section 7 of the IBC, 2016.
| Table of Content |
|---|
| 1. filing of insolvency application and identification of parties. (Para 1 , 2 , 3) |
| 2. financial background and obligations of corporate debtor. (Para 4 , 5 , 6 , 7) |
| 3. procedural adherence and recognition of defaults. (Para 8 , 12) |
| 4. court’s rationale in confirming debt and default. (Para 18 , 19) |
| 5. final order of admission in insolvency. (Para 22) |
ORDER
(Hybrid Mode)
The case is fixed for pronouncement of the order.
The order is pronounced in open Court vide separate sheet.
ORDER
1. The present Petition is filed on 20.02.2024 through e-mode by the Applicant-Bank of Baroda (hereinafter referred to as “Financial Creditor”) against the Respondent- Xyron Technologies Limited. (hereinafter referred to as “Corporate Debtor”) under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “IBC, 2016”) read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (hereinafter referred to as “IB (AAA) Rules, 2016”) for initiation of Corporate Insolvency Resolution Process (CIRP), to appoint Interim Resolution Professional (hereinafter referred to as “IRP”) and declare the moratorium for having defaulted payment of its outstanding dues of Rs.9,57,38,347/- including interest as on 30.12.2023.
2. On perusal of Part-I of the Form-1 reveals this Petition has been filed by the Financial Creditor i.e. Applicant Bank which is a body corporate constituted under the Banking Companies (Acquisition & Transfer of Undertakings) Act of 1970, though its Chief Manager by Mr. A.K. Sahu being authorized by Power of Attorney dated 12.10.2012 which is annexed at Annexure-A.
3. On perusal of Part-II of the Form-1 reveals that the Respondent/Corporate Debtor is one Xyron Technologies Limited having CIN No. U51109MP1996PLC011205. The Respondent/Corporate Debtor was incorporated on 12.09.1996 and having registered office at Extol Tower, Jahangirabad, Bhopal, Madhya Pradesh, Pin – 462008.
4. On perusal of Part-III of the Form-1 reveals that the Financial Creditor has named Ms. Teena Saraswat Pandey having Registration No. IBBI/IPA--001/IP-P00652/2017- 2018/11126, having address: 387F, 114 Scheme Part-1, Behind Diksha Boys Hostel, Sant Nagar, Indore, Madhya Pradesh, 452010 (e-mail: teenasaraswat@yahoo.co.in) under section 13 (1)(c) of the Code to act as Interim Resolution Professional (IRP). She has filed her written communication annexed with the Petition as Annexure-B as per the requirement of Rule 9(l) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. Her AFA is valid from 01.01.2025 to 31.12.2025 as per data available on the official website of the IBBI ibbi.gov.in.
5. Part-IV of the Form-1 reveals that total dues as claimed by the Financial Creditor is Rs.9,57,38,347/- consisting of Rs.4,97,46,397/- being principle and amount of Rs.4,51,09,030/- as interest up-to 30.12.2023 as per the Statement Showing total amounts of debt granted & amount outstanding as on 30.12.2023 as well as A/c Statement annexed with the Petition as Annexure-D and G Colly. The date of default is stated to be as 31.03.2017.
6. The Financial Creditor has placed the facts through this Petition along-with supporting documents in the following manner: -
(i) The Corporate Debtor through its Directors approached the Financial Creditor for a grant of financial assistance in the shape of a Term Loan of Rs.4.97 Crore for the installation of Wind Power Turbine and submitted loan application. Financial Creditor, after considering the loan application on 29.09.2015 sanctioned a Term Loan of Rs.4.97 Crore for a total period of 92 months against primary security of hypothecation of Plant & Machinery and other fixed assets, personal guarantees of the Directors, Corporate Guarantees of Extol Winds Limited & Extol Financial Services Pvt. Ltd. and collateral security by way of equitable mortgage of immovable properties in favour of Financial Creditor which is annexed with the Petition as Annexure-C
