The court held that an application for Corporate Insolvency Resolution Process is admissible if it proves default beyond the minimum threshold, irrespective of disputes over debt amounts.

ORDER

1. This Company Petition has been filed by Punjab National Bank (“Financial Creditor”), seeking to initiate Corporate Insolvency Resolution Process (CIRP) against M/s Shree Uttam Food Products Private Limited (“Corporate Debtor”) under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 for having committed a default in payment of its outstanding debts amounting Rs.23,91,36,802/- as on 31st January, 2024 and penal interest.

The date of default is stated to be 04.01.2020.

2. Perusal of Part-I of the Form-1 indicates that the Financial Creditor is a Bank/ Financial Institution. The Head office of the Financial Creditor is situated at Plot No. 4, Sector 10, Dwarka, New Delhi-110075. This petition has been filed through Chief Manager Shri Rajesh Kumar Thakur, who has been authorised by Power of Attorney dated 27.12.2011(Annexure-A3).

3. Perusal of Part-II of the Form-1 indicates that the Corporate Debtor is one M/s Shree Uttam Food Products (India) Private Limited having CIN No. U15400MP2012PTC029466. The registered office of the Corporate Debtor is situated at Flat No. 1 Bansi Plaza 581 MG Road, Indore, Madhya Pradesh – 462001.

4. Perusal of Part-III of the Form-1 indicates that the applicant has nominated Mr. Kuldeep Tank, Insolvency Professional, having Registration No. IBBI/IPA-001/IP 02776/2022-2023/14255 to act as Interim Resolution Professional (“IRP”). The proposed IRP has given written communication Form-2 dated 24.01.2024 as per the requirement of Rule 9(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules,2016 (Annexure-A2) being AFA valid up to 06.02.2024. On perusal of IBBI website it was found that the AFA of the proposed IRP is valid up to 30.06.2026.

5. Perusal of Part-IV and Part-V of the Form-1 revealed that the Financial Creditor has placed the facts through this petition in the following manner:-

i. The Corporate Debtor is a corporate entity engaged in the operation of integrated cold chain facilities cum fruits and vegetables processing unit for value addition and natural preservation of fruits and vegetables and manufacturing/ processing of frozen, freeze dried and mechanically dried fruits and vegetables.

ii. It is stated that the respondent has submitted loan application form dated 15.12.2013 for financial assistance to the Applicant/Financial Creditor for the purpose of financing the Corporate Debtor’s project for implementation of integrated cold chain facilities cum F&V processing unit at village Bamniya, Tehsil Petlawad, District Jhabhua at Madhya Pradesh.

iii. The Applicant/ Financial Creditor sanctioned Term Loan of Rs. 1500 Lakhs and CC Limits to the tune of Rs. 500 Lakhs, vide Sanction letter dated 29.01.2014(Annexure-V).

iv. The Applicant/ Corporate Debtor and its guarantors have executed following documents to secure the said credit limits:

 Letter of Acceptance dated 30.01.2014 (Annexure-A6).

 The Board Resolution Regulation dated 30.01.2014 (Annexure-A7) along with the Letter of Undertaking dated 30.01.2014(Annexure-A8).

 Agreement for Term Loan dated 04.03.2014 (Annexure- A9) for the repayment of Rs. 1500 Lakhs with interest 12%p.a.

 Agreement of Hypothecation of goods and book debts to secure cash credit dated 04.03.2014 (Annexure-A10) for repayment of Rs. 500 Lakhs with interest at rate of 1.25% over/ below prevailing base rate.

 Hypothecation of goods to secure a demand cash credit/ working capital dated 04.03.2014 (Annexure-A11) for repayment of Rs. 500 Lakhs with interest at rate of 2% over/ below prevailing base rate.

 Hy