In the matter of Cineline Exports Private Limited

1. This is a Company Petition filed under section 7 of the Insolvency & Bankruptcy Code, 2016 (IBC) by Satra Properties (India) Limited (“Financial Creditor”) through Resolution Professional Ms. Vaishali Arun Patrikar, seeking initiation of Corporate Insolvency Resolution Process (CIRP) in the matter of Cineline Exports Private Limited., the Corporate Debtor.

1.1 The petition is filed on 08.12.2022 and the total outstanding amount of debt granted is Rs. 4,60,02,495/- in default alongwith interest of Rs. 1,13,30,732 @ 12 % thereon till 30.10.2022. The date of default as Specified in Part IV of the petition is 31.03.2022.

Submissions of the Financial Creditor:

2. The Corporate Insolvency Resolution Process ("CIRP") was initiated against M/s. Satra Properties (India) Limited (hereinafter referred to as the "Corporate Debtor") by virtue of order dated 03.08.2020 as passed by this Tribunal and Mr. Devarajan Raman was appointed as the Interim Resolution Professional of the Corporate Debtor. Further, by virtue of order dated 22.09.2022 as passed by this tribunal, Ms. Vaishali Arun Patrikar was appointed as the Resolution Professional of the Corporate Debtor.

2.1 The Inter Corporate Deposit was originally given by M/s. OM Housing Private Limited and after amalgamation of OM Housing Private Limited with M/s. Satra Properties (India) Limited in the year 2007, all the loans and advance were transferred to Satra Properties (India) Limited.

MUMBAI BENCH-IV CP (IB) No.219/MB-IV/2023 2.2 In the year 2021, on perusal of the books of accounts and records of the Corporate Debtor, Financial Creditor have noticed that Inter Corporate Deposit amounting to Rs. 3,46,71,763/- along with interest is due and payable by the Corporate Debtor.

2.3 In view of the failure on part of Corporate Debtor to make payments even after email correspondences dated 17.12.2020, 05.05.2021 and 11.04.2022 sent by the Financial Creditor to the Corporate Debtor of the outstanding dues, the Financial Creditor was constrained to issue legal notices dated 01.11.2022 (issued by the RP through email demanding the repayment) 05.11.2022 (issued by the Legal Representative of the RP demanding the repayment) demanding outstanding payment. However, the Corporate Debtor has not filed any reply to the said notices.

3. An Additional Affidavit has been also filed by the Financial Creditor on 17.10.2023 to bring on record Financial Statements for the Financial Year 2021- 2022, balance confirmation received by the Corporate Debtor, terms of agreement of the Financial Debt as set out in the letter dated 01.04.2015, Form No. 16A of TDS dated 18.05.2016 and Ledger statement of the Financial Creditor for the period from 01.04.2015 to 31.05.2022.

Submissions of the Corporate Debtor:

4. The Corporate Debtor vide its Affidavit in reply dated 17.10.2023 stating that, the Petitioner is not a Financial Creditor as the transaction which is the subject matter of the present petition is not of a Financial Debt.

MUMBAI BENCH-IV CP (IB) No.219/MB-IV/2023 4.1 The Petitioner has failed to establish any financial contract which can be taken as proof of a financial debt between parties. The Petitioner failed to produce any agreement/contract between the parties which specify terms of repayment, agreed rate of interest and/or terms of default. 4.2 The Petitioner has failed to even make out the most basic ingredients i.e. ‘debt’ and ‘default’. The Corporate Debtor has neither any liability nor any obligation towards the Financial Creditor with respect to any purported claim as alleged by the Financial Creditor. Consequently, in the absence of existence of debt there is no question of default by the Corporate Debtor as a default is committed only when there is a debt due and payable by the Corporate Debtor. 4.3 Further the Financial Creditor has failed to prove the existence of debt let alone a financial debt being owed by the Corporate Debtor. There is no document produced by the Financial Creditor on record in support of the alleged default nor has it made a case in support of being a Financial Creditor. 4.4 The Ledger statements provided by the Financial Creditor has no merit as has not been acknowledged or signed by the Corporate Debtor. 4.5 The Financial Creditor has stated the date of default as 31.03.2022 but has failed to show how such date has arrived. The Financial Creditor is using the present petition as a tool for recovery of its time barred debt. Findings:

5. This bench has gone through the documents and pleadings available on record and considered the arguments.

5.1. The date of default as specified under Part IV of the petition is 31.03.2022, the present petition is filed on 08.12.2022 is within limitation period.

MUMBAI BENCH-IV CP (IB) No.219/MB-IV/2023 Therefore, this Tribunal has jurisdiction to adjudicate the Company Petition filed by the Financial Creditor.

5.2. As per the material on record, this bench finds that the Corporate Debtor has admitted and acknowledged the liability towards the outstanding loan amount of Rs. 2,07,62,378/- alongwith 12 % interest vide letter dated 01.04.2015. Further the said letter is duly signed by the Corporate Debtor.

5.3. Based on the documents placed on record it is clearly evident, that the Corporate Debtor has acknowledged its liability in respect of dues payable to the Financial Creditor by way of entries in the Balance Sheet for year ending on 31.03.2022. This is settled proposition of law that the entries made in the balance sheet amounts to acknowledgement of the debt by the Corporate Debtor. Section 18 of the Limitation Act, 1963, clearly states that if the debtor acknowledges the debt in writing within the limitation period then a fresh period of limitation computes from the date of such acknowledgement. The provision of Section 18 of the Limitation Act, 1963 is reproduced herein: - 18. Effect of acknowledgment in writing: - (1) Where, before the expiration of the prescribed period for a suit of application in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by any person through whom he derives his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed.

MUMBAI BENCH-IV CP (IB) No.219/MB-IV/2023 5.4. The Tribunal, while adjudicating upon an application for admission into Resolution Process filed by a Financial Creditor, is mandated to ascertain the existence of the debt, and any default in payment of such debt. Further in the facts and circumstances as set out, it is clear that the Corporate Debtor is unable to pay off its debts arising in the usual and ordinary course of its business and is in default of the amount claimed in the petition.

6. Considering the facts placed before us and the fact that, the Corporate Debtor owes the Financial Debt in excess of Rs.1 Crore, which is in default, this bench is of the view that in such circumstances, it is imperative that the Corporate Insolvency process to be initiated in the matter of the Corporate Debtor. The petition is complete in all aspect. Since, the debt and default exist, this bench is of the view, that the present case deserves to be admitted under Section 7 of the Insolvency and Bankruptcy Code, 2016.

ORDER 6. The Petition bearing CP (IB) No.219/MB-IV/2023 filed by Satra Properties (India) Limited (“Financial Creditor”) through Resolution Professional Ms. Vaishali Arun Patrikar, seeking initiation of Corporate Insolvency Resolution Process (CIRP) in the matter of Cineline Exports Private Limited., the Corporate Debtoris Admitted.

a) There shall be a moratorium under section 14 of the IBC, in regard to the following:

(i) The institution of suits or continuation of pending suits or proceedings against the Corporate Debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority;

MUMBAI BENCH-IV CP (IB) No.219/MB-IV/2023 (ii) Transferring, encumbering, alienating or disposing of by the Corporate Debtor any of its assets or any legal right or beneficial interest therein;

(iii) Any action to foreclose, recover or enforce any security interest created by the Corporate Debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002;

(iv) The recovery of any property by an owner or lessor where such property is occupied by or in possession of the Corporate Debtor.

(c) Notwithstanding the above, during the period of moratorium, - (v) The supply of essential goods or services to the corporate debtor, if continuing, shall not be terminated or suspended or interrupted during the moratorium period;

(vi) That the provisions of sub-section (1) of section 14 of the IBC shall not apply to such transactions as may be notified by the Central Government in consultation with any sectoral regulator;

(d) The moratorium shall have effect from the date of this order till the completion of the CIRP or until this Tribunal approves the resolution plan under sub-section (1) of section 31 of the IBC or passes an order for liquidation of Corporate Debtor under section 33 of the IBC, as the case may be.

(e) Public announcement of the CIRP shall be made immediately as specified under section 13 of the IBC read with regulation 6 of the MUMBAI BENCH-IV CP (IB) No.219/MB-IV/2023 Insolvency & Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

(f) The bench hereby appoints Mr. NEEHAL MAHAMULAL PATHAN, an Insolvency Professional registered with Indian Institute of Insolvency Professionals of ICAI having registration number IBBI/IPA-001/IP-P- 01561/2018-2019/12406 and email-ca.neehal@gmail.com. He is appointed as IRP for conducting CIRP of the Corporate Debtor and to carry the functions as mentioned under IBC, the fee payable to IRP/RP shall comply with the IBBI Regulations/Circulars/Directions issued in this regard. The IRP shall carry out functions as contemplated by Sections 15,17,18,19,20,21 of the IBC.

(g) During the CIRP Period, the management of the Corporate Debtor shall vest in the IRP or, as the case may be, the RP in terms of section 17 of the IBC. The officers and managers of the Corporate Debtor shall provide all documents in their possession and furnish every information in their knowledge to the IRP within a period of one week from the date of receipt of this Order, in default of which coercive steps will follow.

(h) The Financial Creditor shall deposit a sum of Rs.5,00,000/- (Rupees Five lakh only) with the IRP to meet the initial CIRP cost, if demanded by the IRP to fund initial expenses on issuing public notice and inviting claims. The amount so deposited shall be interim finance and paid back to the applicant on priority upon the funds available with IRP/RP. The expenses, incurred by IRP out of this fund, are subject to approval by the Committee of Creditors (CoC).

MUMBAI BENCH-IV CP (IB) No.219/MB-IV/2023 (i) In view of the submission of the financial creditor that there are no assets left with the Corporate Debtor, the IRP is directed to satisfy himself about this assertion and proceed to take appropriate steps accordingly.

(j) The Registry is directed to communicate this Order to the Operational Creditor, the Corporate Debtor and the IRP by Speed Post and email immediately, and in any case, not later than two days from the date of this Order.

(k) A copy of this Order be sent to the Registrar of Companies, Maharashtra, Mumbai, for updating the Master Data of the Corporate Debtor. The said Registrar of Companies shall send a compliance report in this regard to the Registry of this Court within seven days from the date of receipt of a copy of this order.

Sd/- Sd/- ANU JAGMOHAN SINGH KISHORE VEMULAPALLI MEMBER (TECHNICAL) MEMBER (JUDICIAL) 24.11.2023.