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Insolvency Proceedings Initiated Against GVK Industries Ltd. At The Instance Of J&K Bank: NCLT, Hyderabad

Pallavi Mishra
27 April 2022 11:07 AM GMT
Insolvency Proceedings Initiated Against GVK Industries Ltd. At The Instance Of J&K Bank: NCLT, Hyderabad
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The National Company Law Tribunal ("NCLT"), Hyderabad Bench, comprising of Shri Bhaskara Pantula Mohan (Judicial Member) and Shri Veera Brahma Rao Arekapudi (Technical Member), while adjudicating a petition under Section 7 of the Insolvency and Bankruptcy Act, 2016 ("IBC") filed in M/s Jammu and Kashmir Bank Ltd. v GVK Industries Ltd. has initiated Corporate Insolvency...

The National Company Law Tribunal ("NCLT"), Hyderabad Bench, comprising of Shri Bhaskara Pantula Mohan (Judicial Member) and Shri Veera Brahma Rao Arekapudi (Technical Member), while adjudicating a petition under Section 7 of the Insolvency and Bankruptcy Act, 2016 ("IBC") filed in M/s Jammu and Kashmir Bank Ltd. v GVK Industries Ltd. has initiated Corporate Insolvency Resolution Process ("CIRP") against GVK Industries Ltd. ("Corporate Debtor") vide an order dated 21.04.2022. Mr. Mukesh Verma has been appointed as the Interim Resolution Professional.

Contentions Of The Financial Creditor

The Corporate Debtor had availed credit facilities from the Jammu and Kashmir Bank Ltd. ("Financial Creditor") under a Common Loan Agreement dated 20.11.2003. The loan accounts became irregular and consequently were declared Non Performing Asset (NPA) by the Financial Creditor on 31.07.2015. The Corporate Debtor had made its last payments to the Financial Creditor on 23.01.2017 and 10.08.2017, and had also submitted a One Time Settlement proposal dated 07.02.2018, wherein the debt was acknowledged. Thereafter, the Financial Creditor filed a petition under Section 7 of the IBC before the NCLT, Hyderabad Bench, seeking initiation of CIRP against the Corporate Debtor for a default of Rs. 42,02,36,113/- as on 28.02.2020.

Contentions Of The Corporate Debtor

The Corporate Debtor contended that the petition was not maintainable as it was time barred. Reliance was placed on the NCLAT judgment of Jagdish Prasad Sarada v Allahabad Bank, Company Appeal (AT) (Ins) No. 183 of 2020, wherein it was held that the date of default would be construed from the date of declaration of NPA, and any subsequent payments made after NPA would not be considered for calculation of limitation from date of default.

Decision Of The NCLT

The NCLT Bench placed reliance on the Supreme Court judgment of Innoventive Industries Ltd. v ICICI Bank & Anr., Civil Appeal No. 8337-8338 of 2017, wherein it was held that the Adjudicating Authority must admit an application when it is satisfied that default has occurred, unless such application is incomplete. The Bench observed that the petition is not barred by limitation as the Corporate Debtor had time and again acknowledged the debt. The petition was admitted as the Financial Creditor had fulfilled the requirements of the IBC and accordingly CIRP was initiated against the Corporate Debtor.

Case title: M/s Jammu and Kashmir Bank Ltd. v GVK Industries Ltd., CP (IB) No. 320/7/HDB/2020.

Counsel for Financial Creditor: Adv. L. Aravind Reddy

Counsel for Corporate Debtor: Adv. Rubaina Khatoon

Click Here To Read/Download Order

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