In the matter of Pelican Grand Motels Pvt. Ltd.

1. This is an application, filed by Punjab National Bank (Financial Creditor/Applicant), represented by Sh. Nand Kishore Barnwal, Chief Manager of the Punjab National Bank, Zonal Sastra Centre, SCO 60-61, Ground Floor, Sector 17-B, Chandigarh-160017 under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC,2016), r/w Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, (Adjudicating Authority Rules), for initiating the Corporate Insolvency Resolution Process (CIRP), declaring moratorium and for appointment of Interim Resolution Professional (IRP), against the Corporate Debtor (CD) viz., M/s Pelican Grand Motels Pvt. Ltd, for a total default in repayment of Rs. 34,89,40,821.30 (Rupees Thiry-Four Crore Eighty-Nine lakh Forty thousand Eight hundred Twenty-one and thirty paise Only). 2. The Corporate Debtor was Incorporated on 07/12/2010, having CIN:U55101DL2010PTC211161, under the Companies Act, 1956, with the purpose of doing business in hotels, camping sites and other provision of short stay accommodations. The registered office is at 117, Anand Vihar Pitampura, New Delhi- 110034, India.

Therefore, this Bench has jurisdiction to deal with this application. A copy of the master data of the Corporate Debtor as accessed from the MCA website is annexed at Annexure I/B. 3. The present application was filed on 12.09.2022 before this Adjudicating Authority on the ground that the Corporate Debtor has defaulted to make the re-payment of Rs. 34,89,40,821.30 (Rupees Thiry-Four Crore Eighty-Nine lakh Forty thousand Eight hundred Twenty-one and thirty Paise Only) as on 01.07.2022. A copy of the workings for computation of amount and days of default in a tabular form is annexed at Part- IV of Application. 4. It is submitted that in the month of November 2012, the Financial Creditor had sanctioned a loan of Rs 19.60 Crore and Fund Based Working Capital (FBWC) of Rs 0.30 crore vide sanction letter dated 10.11.2012 to the Corporate Debtor. Pursuant to this, loan and security documents were executed by the Corporate Debtor in favour of Financial Creditor to secure the above said credit facilities. 5. It is submitted that vide sanction letter dated 27.05.2015, the Financial Creditor has sanctioned an additional term loan of Rs. 9 Crore and reviewed an existing term loan of Rs. 19.60 crore and also renewed Cash Credit limit of Rs. 30 lakhs.

6. It is submitted that the Financial Creditor also sanctioned the OD limit against the tangible security of Rs 1.30 Crore, reduction of existing cash credit limit to nil and review of existing term loan of Rs 28.63 Crore as on 17.11.2015 in its favour on 14.12.2015. 7. It is submitted that vide sanction letter dated 27.12.2017, the Financial Creditor renewed/reviewed/sanctioned the following existing credit facility in favour of Corporate Debtor and also the Corporate Debtor had executed loan and security documents in favour of Financial Creditor: - The existing term loan of Rs. 19.60 Crore having a balance outstanding of Rs. 18.65 Crore was renewed as on 01.12.2017

- Existing term loan of Rs. 9.00 Crore having an outstanding balance of Rs. 8.43 Crore as on 01.12.2017 - OD limit against tangible security of Rs 1.3 Crores. 8. It is submitted that Corporate Debtor has executed/signed balance and security on 12.03.2018 for the Account Number of the Corporate Debtor No- 118300IB00004192, 118300IB00004147 and 1183009300021622 whereby the balance confirmation was done by the Corporate Debtor for Rs 8,68,90,846, Rs 18,18,16,384 and Rs 1,21,26,517.13 and executed respectively. 9. It is submitted that the since the Financial Creditor failed to maintain the financial discipline and was irregular in servicing the said debt, the account of Corporate Debtor was declared as Non-Performing Asset (NPA) on 01.11.2019 wherein the outstanding balance as on that date was Rs 25,51,55,184 (Rupees twenty-five crores fifty-one lakhs fifty-five thousand one hundred and eighty-four only) 10. It is submitted that on 02.11.2019 the Financial Creditor issued a recall notice under Section 13(2) of the SARFAESI Act, 2002 to the Corporate Debtor to discharge its liability. 11. It is submitted that the total amount claimed to be in default as on 1.07.2022 is as follows:

Account No. PNB118300IB00004147 [Term Loan] Particulars As on 01.11.2019 On 1.07.2022

Due Rs. 15,81,75,000.00 Rs. 15,81,75,000.00

Recorded Rs.72,12,280.63 Rs.6,87,40,553.42 Interest Total Rs.16,53,87,280.63 Rs.22,69,15,553.00 Outstanding

Days past due 90 Days 973 Days

Account No. PNB118300IB00004192 [Term Loan] Particulars As on 01.11.2019 On 1.07.2022

Due Rs.7,26,75,000.00 Rs.7,26,75,000.00

Recorded Interest Rs.32,51,354.51 Rs.3,16,31,010.51

Total Rs.7,59,26,354.51 Rs.10,43,06,010.51 Outstanding

Days past due 90 days 973 days

Account No. PNB1183009300021622 [ODIP] Particulars As on 01.11.2019 On 1.07.2022

Due Rs.1,28,46,328.24 Rs.1,28,46,328.24

Recorded Interest Rs.3,56,578.00 Rs.48,72,929.13

Total Outstanding Rs.1,32,02,906.24 Rs.1,77,19,257.37

Days past due 90 days 973 days

TOTAL AMOUNT DUE AS ON 01.07.2022

Particulars Amount (Rs)

Principal 24,36,96,328.24

Interest 10,52,44,493.06

Total 34,89,40,821.30

12. The Financial Creditor has placed the following Documents on record: i. True Copy of the Agreements of Loan/CC/OD, Overdraft and Term Loan at Annexure I/H. ii. Statement of Accounts along with certificate under Section 2A of the Banker’s Book of Evidence Act 1891 at Annexure I/I. iii. True Copy of Recall Notice under Section 13(2) of SARFAESI Act, 2002 dated 02.11.2019 along with the objections under Section 13A and its counter reply at Annexure I/J. iv. Record of Default registered with the Information Utility at Annexure I/G. v. True Copy of Notice Under Section 13(4) of SARFAESI Act, 2002 dated 27.07.2020 at Annexure I/K. vi. True Copy of Balance & Security Confirmation Letter dated 12.03.2018.

13. Submissions made by Ld. Counsel for the Respondent: i. It is submitted that the Bank has filed the present application on the premise that the Borrower Company is in default of payment of amount due under the terms of contract i.e sanction letter dated 10.11.2012. The perusal of the sanction letter reveals that before disbursement of the sanctioned loan amount, land on which the hotel was to be constructed was to be entered into a registered lease deed for 30 years in favour of the Borrower-Company, and as such it constituted a pre-condition for entering into the contract between Bank and the Borrower, which has not been complied with by the bank. In view of this non-compliance of the pre-requisite condition which was essential for forming a valid contract. The Contract-cum-sanction letter dated 10.11.2012 is void-ab-initio, not only on the ground of non-compliance of the pre-requisite condition, but also on account of fraud committed by the bank, which is subject matter of the Civil Suit No. 1942 of 2022, filed by the Borrower Company before Civil Court, JMIC, Karnal (Haryana). ii. It is submitted that the Bank is conscious of the fact that the outcome of the suit is likely to go against the Bank and therefore the Bank in order to avoid any adverse orders or decree against it, and in order to circumvent the suit proceedings has filed the present proceedings. The application of the Bank is therefore liable to be dismissed forthwith. iii. It is submitted that the Borrower Company is an MSME, and the Borrower Company had applied for additional loan in March-2018, and the application was appraised and recommended by the Bank after conducting Techno-

Economic Viability (TEV) Study. However, the Applicant- Bank did not sanction release of additional facilities, ignoring all statutory binding notifications issued by the RBI for release of loan applicable on all MSME units. Such a conduct of the Applicant Bank caused huge loss to the Borrower Company for which they are liable to compensate the Borrower Company for the damages so caused. Though the bank has filed OA no.1293 of 2020 before DRT-II, Chandigarh and the counter claim could have been filed by the Borrower Company in the said proceedings before DRT, but the Borrower has filed the above suit for damages before JMIC, Karnal. iv. It is submitted that though the Applicant Bank conducted TEV study on 19.1O.2019, as per which the Bank officials found that the MSME unit of the defendant is technically fit and economic viable, however the Bank instead of conducting restructuring activities, initiated the default notice which is not in accordance with the law. It is pertinent to mention here that the Borrower Company has filed a Civil Writ Petition CWP/27968/2019 before the Hon’ble High Court of Punjab & Haryana.

The Bank has concealed before this Hon'ble Tribunal the factum of the above writ petition with oblique intentions and motives, and the Bank is escaping to file its reply/ counter affidavit in the said writ petition before the Court even after a lapse of more than 2 years. v. It is submitted that the Bank has filed the application under Section 7 of the Code against the borrower company supported by affidavit of one Shri Nand Kishore Barnwal, Chief Manager of the Bank and Shri Nand Kishore Barnwal in para 1 of his affidavit has stated that “deponent is authorized officer of FC i.e. PNB and authorized to represent the FC in the accompanying application. A perusal of the affidavit dated 24.08.2022 of Shri Nand Kishore Barnwal, Chief Manager filed along with application under Section 7 of IBC with so called authorization letter dated 21.06.2022 clearly shows that there is no authorization of the Board, much less in the form of any Board resolution, in favour of Shri Nand Kishore Barnwal, Chief Manager. Further the Board Resolution dated 04.12.2020 is also not placed on record before this Tribunal in support of the authorization of Shri Nand Kishore Barnwal.

The so called authorization letter dated 21.06.2022 states that Board had authorized Shri SK Raizada, but fact remains on record that the present application has not been filed by Shri SK Raizada. vi. It is submitted that the application in the present case has been filed on 12.09.2022 and the Authorization for Assignment (AFA) of the Resolution Professional is apparently valid w.e.f 04.10.2022. Further the consent to act by the RP has been obtained on 21.06.2022, the date on which the proposed RP was not eligible to undertake any assignment. Thus filing of name of such RP who is not eligible makes the application defective and is in violation of law. 14. Submissions made by the Ld. Counsel for the Financial Creditor to Counter the Submissions made by Ld. Counsel for the CD i. It is submitted that the first allegation levelled by the CD is the Financial Creditor has filed an application without any authorization ignoring the fact that the petition has been filed by a duly authorized officer of the Bank vide

Authority letter dated 21.06.2022 which has also been annexed as Annexure No. I/A in the petition. Further, second allegation levelled is that the authorization for verification is not by a competent person which is a glib excuse as the entire petition is verified by the competent person authorized by the Bank. Further, the Corporate Debtor is not aware of the procedural requirements which mandated the service to the IBBI before filing the application before the NCLT, and other documents are the IRP documents- Authorization and Certificate of Registration which was fulfilled as per the objection/requirement of the Section 7 petition under I&B Code, 2016. ii. The third allegation levelled is in regard to the consent of the IRP which has to be obtained from the IRP as per the requirements of the Act accompanied with the valid certificate confirming the eligibility for appointment. The final petition after removing all objections and complying with all the requirements was filed on 06.10.2023 (sic, should be 06.10.2022) with a valid authorization for assignment of IRP valid from 04.10.2022 to 03.10.2023. Moreover, the AFA keeps on renewing and it doesn’t in any way hold a valid ground for dismissal of the CP where the prerequisite for debt and default is established. iii. The next allegation levelled is that the provisions of the Banker’s Book Evidence Act is not complied with, which is wrong. The certificate under Banker’s Book Evidence Act is annexed with the application. The date has been inadvertently skipped which does not in any case bar the Section 7 petition to get admitted considering all the pre-requisites have been fulfilled. Further, the debt is also recorded with the Information Utility. iv. It is submitted that the CD is trying to buy time by raising various baseless, frivolous disputes on one or the other pretext. 15. Orders Passed by Hon’ble Delhi High Court and Hon’ble NCLAT It is to be noted that this particular petition was admitted by this Adjudicating Authority on 28.02.2023 and thereafter the following orders were passed by Hon’ble Delhi High Court and Hon’ble NCLAT and the matter has been remanded back.

16. IA-3522/2023 and IA-1512/2023 IA-3522/2023 and IA-1512/2023 has been filed by the Pelican Grand Motels Private Limited (Corporate Debtor) for seeking the following releif: IA-3522/2023

IA-1512/2023

IA-1492/2023 IA-1492/2023 has been filed by Mr. Pawan K Goel, Insolvency Professional (IRP appointed by order dated 28.02.2023) for seeking the following relief:

17. Analysis and Findings i. We have heard the Ld. Counsel for the petitioner and respondents and perused the documents submitted. We have noted the reply dated 19.06.2023. Ld. Counsel for the CD made the following submissions based on the reply filed to the Section 7 petition. The first issue raised by the Ld. Counsel was that there was no proper authorization issued in favour of the officer who signed the Section 7 petition filed before this Tribunal. To this the Ld. Counsel for the applicant Bank submitted various documents like Board Resolution and consequent authorization letter which makes it clear that the application was filed by a duly authorized officer. We have no hesitation to reject this contention raised by the CD. ii. The second contention which is raised by the Ld. Counsel for the CD is that the Bank committed fraud since it did not comply with the pre-requisite conditions of the contract cum sanction letter for which he had filed a Civil Suit bearing CS No. 1942 of 2022, before the Civil Judge, JMIC, Karnal (Haryana) marked as annexure R-1. The next issue raised is that the CD is an MSME Company.

It had applied for additional loan in March, 2018. A TEV study was made, however the Bank did not sanction additional loan despite RBI guidelines which is to the benefit of MSME units. The Bank, however, has been harassing the CD by filing of OA No. 1293 of 2020 before DRT-II, Chandigarh. In view of the above factor, the proceedings under Section 7 ought not to have been initiated as it is for recovery. iii. The next contention is that the Bank having conducted TEV Study on 19.10.2019 and since CD is an MSME, the Applicant failed to restructure the loan and vindictively initiated default notice proceedings which forced the CD to file Civil Writ petition CWP/27968/2019 before the High court of Punjab and Haryana seeking various reliefs in the nature of mandamus for additional term loans. The next contention is that there is a mis-representation by the Bank in relation to the property owned by the CD claimed to be on equitable mortgage to the Bank (paragraph 14 of the reply). In this regard CD relied upon the Civil Suit CS/735/2022 before JMIC, Karnal against the Bank. Despite all these proceedings, the Applicant has proceeded to initiate the Section 7 application knowing fully well that the CD has been fighting against the applicant Bank in various forums as mentioned above.

On this ground, it is pleaded by the Ld. Counsel for CD that the initiation of proceedings under Section 7, IBC is malafide and unlawful. iv. We have considered the various issues raised by the CD in the reply and argued as above in detail. We notice that in all the proceedings referred to by the Ld. Counsel for the CD there is no restraint against the Applicant of any kind. We find that these proceedings are initiated by the CD after having taken the loan and not having paid the same in terms of the loan agreement. In any event the nature of loan and the conduct of CD and Applicant in the admitted loan is in multiple proceedings which has no bearing in the Section 7 petition. In the present case, there is no whisper or denial by the CD that there is no debt or there is no default. The allegations are based on other related proceedings in which no relief has been granted to the CD. v. Ld. Counsel for the CD was called upon to bring to our attention any order of the Court holding that the loan extended by the Bank is not realizable and not payable by the CD at any point of time. On the contrary we find that these proceedings are more in the nature of distracting the Bank in one way or the other having not honored the terms and conditions of the loan extended by the Bank. vi.

We find that these objections raised by the CD are perfunctory and superficial. The debt and default as we have already observed is clear and present. The objections raised by the Ld. Counsel for the respondent is not tenable both in law and facts. We are not inclined to accept the same. Further, the plea that RP did not have a valid authorization is totally misconceived because on the day the matter was listed and heard by us there was a valid authorization. This contention is also rejected. vii. We find that default has occurred in repayment of financial debt by the Corporate Debtor and the same is duly recorded with the Information Utility and petitioner has also attached NESL certificate indicating the default at page 100-141 of the application. viii. A certificate under Section 2-A of the Banker’s Book Evidence Act, 1891 has been filed by the Financial Creditor showing the total dues along with the account statements of the three loan accounts. The said certificate further discloses sufficient compliance with the provisions of the Banker’s Book Evidence Act of 1891and the same has been taken on record.

Therefore, the applicant’s plea of debt and default is evident enabling us to proceed as per the code. ix. Further, we are supported by the judgment of the Hon'ble Supreme Court in the Innoventive Industries Ltd. Vs. ICICI Bank and Anr. (2018) 1 SC 407, which clearly held that:

“The moment the adjudicating authority is satisfied that a default has occurred, the application must be admitted unless it is incomplete, in which case it may give notice to the application to rectify the defect within 7 days receipt of a notice from the adjudicating authority. 30. On the other hand, as we have seen, in the case of a Corporate Debtor who commits a default of financial debt, the adjudicating authority has merely to see the records of the information utility, or other evidence produced by the Financial Creditor to satisfy itself that a default has occurred. It is of no matter that the debt is disputed so, long as the debt is "due" i.e., payable unless interdicted by some law, or has not yet become due in the sense that it is payable at some future date. It is only when this is proved to the satisfaction of the adjudicating authority it may reject an application and not otherwise”

x. Besides the above plea no other issue was urged by the Ld. Counsel for CD at the time of arguments. Therefore, in the facts of the present case, we find that the financial debt is due and there is a default in payment of debt.

In view of the above, we are inclined to allow this Petition

ORDER In light of the above facts and circumstances, it is, hereby ordered as follows: - i. The Application bearing C.P. (IB) – 734 (PB)/2022 filed by the PUNJAB NATIONAL BANK, the Applicant/(FC), under section 7 of the Code read with rule 4(1) of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016 for initiating CIRP against PELICAN GRAND MOTELS PRIVATE LIMITED, the Respondent/(CD), is hereby admitted.

ii. As a consequence of the Application being admitted in terms of Section 7 of the Code, moratorium as envisaged under the provisions of Section 14(1) of the Code, shall follow in relation to the Respondent/(CD) as per clauses (a) to (d) of Section 14(1) of the Code. However, during the pendency of the moratorium period, terms of Section 14(2) to 14(3) of the Code shall come into force.

iii. The Applicant/(FC) has proposed the name of PAWAN K GOEL as the IRP. However, we observe that much time has elapsed since the nomination by FC and the case had travelled upto Hon’ble High Court and Hon’ble NCLAT, in this period of time the AFA of the proposed IRP has expired, the same is evident from the extracted details from IBBI website:

iv. Therefore, we deem it appropriate to appoint Mr. Binod Kumar Singh as IRP of the CD from the available list of panel of Resolution Professionals as maintained with the IBBI.

v. His email id is binod.adv@gmail.com. His registration number is IBBI/IPA-001/IP-P-02688/2022-2023/14108. As per the details available on IBBI website, the IRP is holding a valid AFA. Therefore, the IRP shall file his written consent in Form-2 and Registration Certificate within 3 days of the pronouncement of this order.

vi. In pursuance of Section 13 (2) of the Code, we direct the IRP to make a public announcement immediately with regard to the admission of this application under Section 7 of the Code. The expression immediately' means within three days as clarified by Explanation to Regulation 6 (1) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

vii. During the CIRP period, the management of the CD shall vest in the IRP or the RP, as the case may be, in terms of Section 17 of the IBC. The officers and managers of the CD shall provide all documents in their possession and furnish every information in their knowledge to the IRP within one week from the date of receipt of this Order, in default of which coercive steps will follow. There shall be no future opportunities in this regard.

viii. The IRP is expected to take full charge of the CD’s assets, and documents without any delay whatsoever. He is also free to take police assistance in this regard, and this Court hereby directs the Police Authorities to render all assistance as may be required by the IRP in this regard.

ix. The IRP or the RP, as the case may be shall submit to this Adjudicating Authority periodical report with regard to the progress of the CIRP in respect of the Corporate Debtor.

x. The FC shall deposit a sum of Rs. 7,50,000/- (Rupees Seven Lakhs and Fifty Thousand only) with the IRP to meet the expenses arising out of issuing public notice and inviting claims. These expenses are subject to the approval of the Committee of Creditors (CoC).

xi. In terms of Section 7(7) of the Code, the Registry is hereby directed to communicate a copy of the order to the FC, the CD, the IRP and the Registrar of Companies, NCR, New Delhi, by Speed Post and by email, at the earliest but not later than seven days from today. The Registrar of Companies shall update his website by updating the status of the CD and specific mention regarding admission of this petition must be notified.

xii. In view of the order passed in CP (IB)- 734(PB)/2022, the relief sought in IA-1492/2023, IA-3522/2023 and IA-1512/2023 has become infructous. Accordingly, IA-1492/2023, IA-3522/2023 and IA-1512/2023 are dismissed as having become infructuous.

xiii. The Registry is further directed to send a copy of this order to the Insolvency and Bankruptcy Board of India for their record.

18. A certified copy of this order may be issued, if applied for, upon compliance with all requisite formalities.

Sd/- RAMALINGAM SUDHAKAR (PRESIDENT) Sd/- AVINASH K. SRIVASTAVA MEMBER (TECHNICAL)