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2023 (7) TMI 208 - AT - Insolvency and BankruptcyInitiation of CIRP u/s 7 of IBC - NCLT admitted the application - basic requisites of Debt and Default, that are required to be examined and proven, prior to the admission of Petition, seeking to initiate Insolvency Process, was not established - Non-application of mind by Adjudicating Authority - HELD THAT:- In the instant case, there is no dispute, in regard to the sanction of Loans, amounting to Rs.355.40 Crores, by the 1st Respondent / Bank, to and in favor of the Corporate Debtor, beginning from the Year 2010. Furthermore, more than Rs.3,000 Crores, were advanced by the 12 Financial Institutions, together with the 1st Respondent / Bank, amounting to over and above Rs.3,000 Crores, in part financing the costs for setting up of 540 MW Coal Fired Thermal Power Plant, in Taran Tarn, Punjab, and for ease of convenience, the Lenders, has referred to supra or termed as Senior Lenders. Admittedly, a Loan Recall Notice, dated 17.12.2019, was issued by the 1st Respondent / Bank / Petitioner / Financial Creditor, because of the Default, committed by the Corporate Debtor, in making payments, as per Master Amendment Agreement dated 21.07.2017. In reality, the Corporate Debtor / GVK Power (Goindwal Sahib) Ltd., had availed the Credit Facilities, but, failed and neglected to operate the same, in accordance with the agreed Terms and Conditions. The Account, was classified, as Non Performing Asset, from 29.11.2017. It is pointed out that from the Information Utility i.e., National E-governance Services Limited, a record of Default, was produced, before the Adjudicating Authority, on behalf of the 1st Respondent / Bank / Financial Creditor - Be it noted that, the Inter Creditor Agreement, was executed by some Consortium Lenders of the Corporate Debtor (including the 1st Respondent / Bank / Financial Creditor), pursuant to the Reserve Bank of India’s Directions 2019. In reality, the Inter Creditor Agreement, dated 06.07.2019, was executed to afford a scaffold, for a possible Resolution. No wonder, there is no Fetter in Law, much less in the Reserve Bank of India’s Directions 2019, for the Lenders, to resort to the Summary I & B Code Proceedings. The Right of the 1st Respondent / Bank, especially, under the I & B Code, 2016, cannot be taken away or overridden, by any Reserve Bank of India’s Rule, etc. It is to be remembered that the Corporate Debtor, cannot seek an umbrage, under the Inter Creditor Agreement, with a view to avoid, evade, circumvent and supplant its obligation(s), in terms of the ‘Loan Facility Agreement’. Continuing further, the I & B Code, 2016 (vide Section 238 of the I & B Code, 2016), will have an overriding effect, in regard to anything inconsistent therewith contained in any other Law, for the time being in force. In the present case, the Corporate Debtor has not furnished any material evidence to suggest that, it will be in a position to repay the amounts, owed to the Lenders. It cannot be forgotten that no endeavour was made to accomplish a Resolution Plan, although many deliberations and meetings, had taken place. Besides these, the Corporate Debtor, inspite of request made by the Lenders, had not opted to Improve and Revise, the One Time Proposal, which is an unfavourable circumstance, as opined by this Tribunal. Keeping in mind of the fact that the Defaults, had taken place in the year 2017, the huge Public Monies, are entangled, and the main Company Petition, was preferred, before the Adjudicating Authority / Tribunal, on 20.12.2019, with a view to prevent, diminishing Value of the Assets of the Corporate Debtor, to protect the Creditors’ interests, and considering the totality of the integral facts and circumstances of the case on hand, in a conspectus manner, comes to a resultant conclusion that the view, arrived at by the Adjudicating Authority / Tribunal, by exercising its Judicial Discretion, ofcourse, in admitting the Section 7 Application, does not suffer from any Material Irregularity, or Patent Illegality, in the eye of Law. Accordingly, the Appeal fails - Appeal dismissed.
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