In the matter of Shreebhav Polyweaves Pvt. Ltd.

In the matter of: State Bank of India, Corporate Centre, Madam Cama Road -2"~..r!"$'!.~~-,..-.-.;s...~- .- y_t::.:..... , .-.-..!l'lt?fl~!"tl-•..,.,. IJl. ~~ --~ . • ••.•••-"4QQf"-l:l£: :J•.t li~~ •. __ . __. '!!!!!••~~ Nariman Point, Mumbai-400031 and one of the branches at and known as Stressed Assets Management Branch, 2nd Floor, Paramsiddhi Complex, Nr. Mahakant Building, Opp. V.S. Hospital, Ellisbridge, Ahmedabad-380006 .... Financial Creditor

Versus

Shreebhav Polyweaves Pvt. Ltd. 238-240, Unity Estate, Next to Batliboi Ltd., Bhestan, Surat, Gujarat-395023. ...Corporate Debtor

Order Reserved on 16.08.2021 Order delivered on 31.08.2021 Coram: MADAN B. GOSAVI, MEMBER (J) VIRENDRA KUMAR GUPTA, MEMBER (T)

Appearance...

e_ C.P.(IB) 385/NCLT/AHM/2020

For the Respondent : Advocate, Mr. Mohit Gupta.

ORDER [ Per : VIRENDRA KUMAR GUPTA, MEMBER (T) ]

1) This application has been filed by Financial Creditor, namely, State Bank of India under Section 7 of Insolvency & Bankruptcy Code, 2016 (hereinafter referred to as "IBC,

Process (hereinafter referred to as "CIRP") against the Corporate Debtor, namely, Shreebhav Polyweaves Pvt. Ltd. The amount of default has been stated as Rs. 25,21,71,006.79/- and date of default has been stated as 08.12.2018 being' 90 days prior to declaration of account of. . the Corporate Debtor as NPA on 09.03.2019.

2) The learned counsel for the Applicant/Financial Creditor appeared and submitted that various loans were granted from time to time. Necessary documentation was done as regard to such facilities. It isalso pleaded that last sanctioned letter for grant/continuation of facilities was executed on 10:.········· 2]Page

C.P.(IB} 385/NCLT/AHMi2020 •

24.07.2018. It was also pleaded that the Application has been within filed on 02.12.2020, hence, limitation.

3) The learned counsel for the Respondent appeared and submitted that the person who filed the application was not authorised to file the application and for this proposition, the learned counsel has referred to Regulation 76, 77 and 79 of State·Bank of India General Regulations, 1955 and based upon its interpretation such regulations do not authorise to file application under Section 7 of IBC, 2016. It has also been. . . pleaded that there is a breach of Rule 4(3) of (Application to Adjudicating Authority) Rules, 2016 to serve the same both on Corporate Debtor as well as IBBI and which has not been done. Hence, the prescribed manner has not been followed which ought to have been. Thus, making this application not maintainable. For this proposition, the learned counsel has placed reliance on the decision of the Hon'ble Supreme Court in the case of Deepak Babaria V. State of Gujarat, (2014) 3 $CC 502.

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C.P.(IB) 385/NCLT/AHM/2020

4) In the rejoinder, the learned counsel for .the Financial Creditor has pointed out that in terms of Gazette notification dated 02.05.1987, the said executive had every authority to sign the present application and accordingly the same has been filed and an affidavit to that effect has also been enclosed.

5)As regard to service of copy of thApplication to' the e@wot9triowk+Ng.vu.in-A]AMeii#t«9tedleM,"+tu,".slite0rsi.ah9esetaibg-emtitl,lsu'.eiy$44ptear"·i-#'o' r _»is'ht{'ii@a"$tiifilN,ita'i'd"iM'liii Corporate Debtor, it was contended that said fact had not been disputed, however, the only plea which has been made is that the copy of the same was not served on IBBI, which is aprocedural requirement and does not affect the rights ofthe Corporate Debtor in any manner, hence, the same being of directory nature, cannot make this application as not maintainable.

6) We have considered the submissions made by both the sides and material on record.

7) As far as amount of disbursement of loan is concerned that is not in dispute. Further, it is also not in dispute that / )' l1/ [\ . .. --- 41 Page

·'2j±sir;ii r. C.P.(IB) 385/NCLT/AHM/2020 on 09.03.2019. The aspect of limitation has also not been disputed. Thus, there is a debt which is due, both in law and in fact and the applicant is complete in all respects except two points raised on behalfof Corporate Debtor. As far as first ground ofvalidity of authorization is concerned, we have gone through the said regulations which are wide enough to grant such power to the person who has signed the application on is also not in dispute that the said person is an officer of the. . . Financial Creditor. Further, it is not the case ofthe Corporate Debtor that such Financial Creditor did not want to proceed with this application or application had been filed in violation of norms of the Bank.

The 8) Respondent has not reproduced the Regulation 79 ofsaid Regulations which by itself goes to show that it is just technical plea to avoid its liability and which is in our view without any substance, particularly when there is an enforcement of rights of a Financial Creditor under economic law. Even otherwise, banking business cannot be interpreted. . . -- a .....AM.p.--»·.· in a narrow manner as contended by thea Respondent as 5]Page

C.P.(IB) 385/NCLT/AHM/2020 business of banking includes not only granting of loans but recovery thereof as well. Thus, this plea of the Corporate Debtor is rejected.

9) As far as second plea of non-service of copy of application to the IBBI is concerned, we are unable to comprehend as to how it affects the maintainability of this application, as the .-...@mshasadmittedlybn servedoithepCoar ote. Drebtor...---.. As far as non-compliance of Rule 4 towards IBBI is concerned, the proper forum to be approached is IBBI who can take appropriate action against Financial Creditor. We may also point out that NCLT, being Adjudicating Authority, carries out its function under Section 424 of the Companies Act, 2013 and is governed by principles of natural justice. Hence, technical compliances, in strict sense, may not vitiate any proceeding unless it is so fundamental that makes the initiation of CIRP either malicious, fraudulent or totally without jurisdiction. This is not the case here. The name of the name of the IRP has already been proposed whose consent along with declaration as per prescribed procedure

C.P.(IB) 385/NCLT/AHM/2020 "' brought on record to show that any disciplinary proceeding is pending against proposed IRP or said person is otherwise not eligible to become IRP.

10) Accordingly, we admit this application and order as under:

ORDER

.- e.......l..' Corporate.Debtor M/s Shreebhav Polyweaves Private Limited, is admitted in Corporate Insolvency Resolution Process under Section 7 of Insolvency and Bankruptcy Code, 2016.

2. We appoint Mr. Nirav Anupam Tarkas, registration no. IBBI/IPA-02/IP-N-00776/2018-2019/12375, having address 201-209 B.N Chambers, Respondent Company Dutt Road, Opposite Welcom Hotel, Vadodara-390007, j Guarat, under section 13(1) (c) of the IB Code as IRP. I i 3. That the Moratorium under Section 14 ofthe Code shall come to effect from 31.08.2021 till the completion of. . Corporate Insolvency Resolution Process or until this BenchapprovestheResolutionPlanunder Sub-Section /4. Er«- .. -·j\. /

C.P.(1B) 385/NCLT/AHM/2020 (1) of Section 31 or passes an order for-1iquidation of Corporate Debtor under Section 33, as the case may be.

4. That the Bench hereby prohibits the institution of suits or continuation of pending suit or proceedings against the Corporate Debtor including execution of any judgment, decree or order in any Court oflaw. Tribunal, Arbitration· Panel or other Authority(s), transferring, gt,""""Itlll'Shu,oilfib].,lata"lliill ..t"A-gie9fetere«et«told4tt.94j,'ts0.N+oa.t,3elbe9klsat#ls.istdt, ty_9#ea»ptgaept«too#iNA.s, eto##et p9yet encumbering, alienating or disposing of by the Corporate Debtor any of its assets or any legal right or beneficial interest therein; any action to foreclose, recover or enforce any security interest created by the Corporate Debtor in respect ofits property including any action under the SARFAESI Act, 2002 the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the Corporate Debtor.

5. Further, litigation or any application, if any, is pending before any competent Court of law under the provisions Act_and. RDB Act,prior to. ././. ----------··_{)'._ -····" \a C.P.(iB) 385/NCLT/AHM/2020

·pronouncement of this order. such proceedings are expected to be dealt with in accordance with law r.w. Section 14 and Section 238 of the Insolvency & Bankruptcy Code, 2016.

6. That the supply of essential goods or services to Corporate Debtor, ifcontinuing, shall not be terminated or·suspended or interrupted during the Moratorium, period. The Corporate Debtor to provide effective assistance to the IRP as and when he. takes charge of -the Corporate Debtor.

7. The IRP so appointed shall make Public announcement of Corpo;rate Insolvency Resolution Process (CIRP) be made immediately as specified under Section- 13 of the Code and by calling for submissions of claim under 1 1. Section 15 of the Code. I I

8. The IRP shall perform all his functions as contemplated, inter-alia, by Sections 17,18,20 & 21 of the Code. It is further made clear that all personnel connected with Debtor, its Promoter or any other person

9]Page e' C.P.(IB) 385/NCLT/AHM/2020 associated with management of the Corporate Debtor are under legal obligation under Section 19 of the Code extend every assistance and co-operation to the Interim. . . Resolution Professional. Where any personnel of the Corporate Debtor, its Promoter or any other. person required to assist or co-operate with IRP, do not assist or Co-operate, IRP is at liberty to make appropriate wina application to thisAdjudicating Authority prayer " for passing an appropriate order.

9. The IRP shall be under duty to protect and preserve the value of the property of the 'Corporate Debtor Company' and manage the operations of the Corporate Debtor Company as a going concern as a part of obligation imposed by Section 20 of the Insolvency & Bankruptcy Code, 2016.

10. We direct the Financial Creditor/ Applicant to pay the IRP a sum of Rs. 2,00,000/- (Rs. Two lakh) as fees & expenses till the COC decides about his fees / expenses.

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~ C.P.(IB) 385/NCLT/AHM/2020

11. The Registry is directed to communicate a copy of this order· to the Petitioner-Financial Creditor, Corporate Debtor and to the Interim Resolution Professional and the concerned Registrar of Companies, after completion of necessary formalities, within three working days and upload the same on website immediately after pronouncement of the order.

12. The commencement of Corporate Insolvency Resolution Process (CIRP) shall be effective from the date of this order.

13. CP(IB) No. 385/7/NCLT/AHM/2020 1s allowed and stands disposed of.

(VIRENDRA KUMAR GUPTA) MEMBER (TECHNICAL) ME ...............-,.,AJ )

Abhishek rs. Certified tobeTrue Copyofthe Original sonil6char NCLT, Ahmedabad Bench Ahmedabad

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