In the matter of Feedback Energy Distribution Company Ltd.

IndusInd Bank Limited. (for brevity, the “Applicant”) has filed the present application under Section 7 of the Insolvency and Bankruptcy Code, 2016 read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 with a prayer to initiate the Corporate Insolvency process against M/s Feedback Energy Distribution Co. Ltd. (for brevity, the “Respondent”).

2. The Respondent namely, M/s. Feedback Energy Distribution Company Limited is a Company incorporated on 29.10.2012 under the provisions of the Companies Act, 1956 with CIN U40300DL2012PLC244113 having its registered office at 311, 3rd Floor, Vardhaman Plaza, Pocket – 7, Plot No. 6, Sector 12, Dwarka, New Delhi - 110078, which is within the jurisdiction of this Tribunal. The Authorized Share Capital of the Respondent Company is Rs.34,00,00,000/-, and the Paid-up Share Capital is Rs.33,61,60,000/-, as per the master data annexed with the application.

3. In its application, it is averred by the Applicant that vide sanction letter No. IBL/CAD North/2018-19/5819, dated 30.03.2019, it had sanctioned credit facilities like Cash Credit, Term Loan, etc for an aggregate amount of Rs. 105 Crores ("Credit Facilities") to the Respondent. Subsequently, at the request of the Respondent, the Applicant granted an additional working capital term loan facility by way of Guaranteed Emergency Credit Line

IB-477/ND/2023 ("GECL") vide sanction letter No. IBL/CAD North/2020- 21/2636 dated 04.02.2021 for an amount of Rs. 18.75 crores ("GECL Facility").

4. The detailed particulars of the unpaid Financial Debt claimed including the total amount of default and the date of default as mentioned by the applicant in Part IV of the application reads thus:

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5. Thus, as per Part IV of the application reproduced above, the Applicant has claimed an outstanding “financial debt” of Rs. 124,79,99,510.77/- and relied on 10.10.2021 as the “date of default”. It has been added that the Account of the Respondent Company was classified as NPA on account of default on 08.01.2022. It is further submitted that on 31.01.2022, the Applicant Bank issued the Loan Recall Notice-cum-invocation of Guarantees, calling upon the CD and other obligors to pay the defaulted amount.

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6. Further, the breakup of the defaulted amount claimed in Part IV of the Application has been provided by the Applicant on Page 17 of the Application, which reads thus:

7. To buttress its plea, the Applicant has relied on the following documents:

(i) Copy of sanction letter dated 30.03.2019 (pages 36-51); (ii) Copy of Master General Terms Agreement (For Secured Facilities) dated 29.04.2019; (iii) Copy of Agreement for Cash Credit / Overdraft Facility dated 29.04.2019; IB-477/ND/2023 (iv) Copy of Term Loan Agreement dated 29.04.2019; (v) Loan Recall Notice dated 31.01.2022 (page 538); and (vi) Audited Balance sheet as of 31st March 2022;

8. Based on the facts described above and the documents, the Applicant has prayed for the initiation of CIRP against the Respondent.

9. On issuance of the notice, the Respondent has filed its reply and Written Submissions stating mainly the following:

9.1 There is no default on the part of the Respondent in terms of Section 3(12) of IBC 2016. Further, there is no debt due and payable within the meaning of Section 3(11) of IBC 2016 and the amount purportedly claimed in default by the Applicant warrants adjudication, which cannot be adjudicated in a summary proceeding.

9.2 The Statement of Accounts annexed by the Applicant is false and not maintained as per the standard practice of accounting. This is evident from the fact that the alleged outstanding dues as reflected in the statement of accounts, do not match with the record of default of the Information Utility.

9.3 The present debt is not crystalized and the Applicant has preferred an OA before the Debt Recovery Tribunal, Delhi seeking adjudication of the dispute between the parties about the alleged outstanding dues.

9.4 The Respondent itself, much before the Applicant Bank took any action, initiated engagement with the Applicant Bank and sought a Resolution in the light of RBI’s Framework dated 06.08.2020 being RBI/2020-21/16; DOR. No.

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BP. BC/3 /21.04.048/2020-21 titled Resolution Framework for COVID-19-related Stress vide its letter dated 31.08.2020.

9.5 The Respondent Company proposed a Comprehensive Debt Restructuring Proposal (‘CDRP’) in August 2021. In furtherance of the said CDRP, Joint Lenders Meetings were held on 06.09.2021, 15.09.2021, and 21.10.2021, which were followed by one-to-one meetings with lenders. However, the Applicant paid no heed to the Respondent’s request to opt for the one-time resolution/restructuring plan.

9.6 Emergency Guaranteed Credit Line Facility [“EGCL”] sanctioned by the Applicant Bank and inter-alia, for the alleged default of which the Applicant Bank has preferred the instant Petition, was granted to the Respondent under the Guaranteed Emergency Credit Line Scheme [“GECL"] released in the wake of the Covid-19. As per GECL, 100% guarantee coverage was provided by the National Credit Guarantee Trustee Company (NCGTC) on the outstanding amount for the credit facility. The EGCL facility so extended by the Applicant was secured by the government and therefore, there cannot be any default attributed to the Respondent in this regard.

9.7 Due to the chaos and havoc that was followed by the second wave of COVID-19, the recovery from many of the contractors of the Respondent got worse and settlements being offered by such contractors were meagre. As a result, the Respondent could not perform its work orders, and the same were either revised with limited scope of work or terminated forthwith.

9.8 The Respondent relies upon “Vidarbha Industries Power Limited V. Axis Bank Limited”, wherein the Hon’ble Apex Court was of the view that the IB-477/ND/2023 objective of the Code is not to penalize solvent companies. The Respondent has also relied upon the order of the NCLT, Indore Bench in the matter of State Bank of India v. M/s Krishidhan Seeds Pvt. Ltd. wherein, additional time was granted to the CD as its management was trying to take the company out of the debt.

10. We have heard the submissions of both parties and perused the pleadings on record, including the Written Submissions filed by both parties. The Respondent in its defence has contended that there is no debt subsisting of the Applicant and there is no default committed by it. Moreover, the documents annexed by the Applicant are fabricated and there is no crystalized debt since the DRT proceedings initiated by the Applicant Bank are still pending. Per Contra, the Applicant has annexed various documents to prove the existence of debt and default as mentioned in Para 7 of this order. During the hearing, in support of its contentions, the Ld. Counsel for the Applicant referred to the Applicant Banks sanction letter (pages 36-51), Loan Recall Notice-cum-invocation of Guarantees dated 31.01.2022 (page 538) issued on behalf of the Applicant Bank, and the Balance Sheet of the Respondent for the Financial Year 2021-22 (pages 370-533).

11. To examine the contention of the Respondent that (a) there is no debt subsisting of the Applicant, (b) there is no default committed by it and (c) the documents of the Applicant are false and fabricated, in the interest of justice, we refer to the document of the Respondent itself i.e., “Disclosure of notes on borrowings explanatory (Text Block)” in the Balance Sheet of the Respondent Company for the FY 2021-22 (Pages 488-491 of the application), which reads thus: IB-477/ND/2023

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On perusal of the Balance Sheet of the CD (ibid), it is observed that the Respondent itself has admitted the debt and default of the loans of various Banks including the Applicant Bank herein of more than Rs. one Crore.

12. The Applicant Bank has also placed on record the Form D (Record of Default) of NeSL to substantiate its claim regarding the Debt and Default.

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From the Form D (Record of Default) of NeSL, it is evident that the Corporate Debtor Company is in default to the Applicant Bank for a debt of more than Rs. one crore.

13. From the pleadings, we also notice that as part of the Comprehensive Debt Restructuring Proposal (‘CDRP’), the Respondent Company itself had proposed to the Applicant Bank for a one-time settlement of its dues, which in terms of the judgment of the Hon’ble Supreme Court in “Dena Bank (now Bank of Baroda) vs. C. Shivakumar Reddy and Anr.” is an acknowledgment of debt. The relevant para of the judgment dated 04.08.2021 reads thus:

“141. Section 18 of the Limitation Act cannot also be construed with pedantic rigidity in relation to proceedings under the IBC. This Court sees no reason why an offer of One Time Settlement of a live claim, made within the period of limitation, should not also be construed as an acknowledgment to attract Section 18 of the Limitation Act. In Gaurav Hargovindbhai Dave (supra) cited by Mr. Shivshankar, this Court had no occasion to consider any proposal for one time settlement. Be that as it may, the Balance Sheets and Financial Statements of the Corporate Debtor for 2016- 2017, as observed above, constitute acknowledgement of liability which extended the limitation by three years, apart from the fact that a Certificate of Recovery was issued in favour of the Appellant Bank in May 2017. The NCLT rightly admitted the application by its order dated 21st March, 2019”.

(Emphasis placed)

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14. As regards the grant of time to the Respondent to settle the matter, we find from the DMS record that the present application was preferred by the Applicant on 26.06.2023, and notice to the Respondent was issued on 21.08.2023. Even though as per the provision in Section 7(4) of IBC 2016, this Adjudicating Authority is required to admit or reject an application within 14 days, on the request of the Respondent and in the interest of justice, it had granted opportunities to the Respondent vide order dated 01.11.2023 and 08.11.2023. However, it failed to settle the matter.

15. To the reliance placed by the Respondent on the Judgement of the Hon’ble Supreme Court in the matter of “Vidarbha Industries Power Limited V. Axis Bank Limited” [CIVIL APPEAL NO. 4633 OF 2021], we are aware of the judgment passed by the Hon’ble Supreme Court in the “Review Petition of Vidarbha Industries Power Limited (Supra) (2023) 7 Supreme Court Cases 321” dated 22.09.2022, wherein the following was observed:

“6. The elucidation in para 90 and other paragraphs [of the judgment under review] were made in the context of the case at hand. It is well settled that judgments and observations in judgments are not to be read as provisions of statute. Judicial utterances and/or pronouncements are in the setting of the facts of a particular case.”

Since the factual position in the instant case is not the same, therefore, in our considered view, the observations in the “Vidarbha Industries Power Limited” do not apply to the present case.

16. In view of the abovementioned discussion, the debt and default of the Respondent have been established by the Applicant Bank beyond doubt.

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17. In the sequel to the above and the given facts and circumstances, the present Application being complete and the Applicant having established the default on the part of the Respondent in payment of the Financial Debt for an amount being above the minimum threshold limit, the present Application is admitted in terms of Section 7(5) of the IBC and accordingly, the Moratorium is declared in terms of Section 14 of the Code. As a necessary consequence of the Moratorium in terms of Section 14(1) (a), (b), (c) & (d), the following prohibitions are imposed, which must be followed:

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

(b) Transferring, encumbering, alienating or disposing of by the Respondent any of its assets or any legal right or beneficial interest therein;

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

(d) The recovery of any property by an owner or lessor, where such property is occupied by or in the possession of the Respondent.”

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18. As proposed by the Applicant, this Bench appoints Mr. Ankit Goel as IRP having Registration IBBI/IPA-001/IP- P02671/2022-2023/14088 Email ID: ankitgoel@aaainsolvency.com subject to the condition that no disciplinary proceedings is pending against the IRP so named and disclosures as required under IBBI Regulations, 2016 are made by him within a period of one week of this Order. This Adjudicating Authority further orders that:

Mr. Ankit Goel, as an IRP having Registration No. IBBI/IPA-001/IP- P02671/2022-2023/14088, Email ID: ankitgoel@aaainsolvency.com is directed to take charge of the CIRP of the Respondent with immediate effect. The IRP is further directed to take the steps as mandated under the IBC specifically under Sections 15, 17, 18, 20, and 21 of IBC, 2016.

19. The Applicant is directed to deposit Rs.5,00,000/- (Five Lakhs) only with the IRP to meet the immediate expenses. The amount, however, will be subject to adjustment by the Committee of Creditors as to be duly accounted for by IRP and shall be paid back to the Applicant

20. A copy of this Order shall immediately be communicated to the Applicant Bank, the Respondent Company, the IRP named above, and the Information Utility/NeSL by the Court Officer/Registry of this Tribunal.

21. In addition, a copy of the Order shall also be forwarded by the Court Officer/Registry to IBBI for their records.

Sd/- Sd/- (L. N. GUPTA) (ASHOK KUMAR BHARDWAJ) MEMBER (T) MEMBER (J)

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