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2021 (5) TMI 572 - NATIONAL COMPANY LAW TRIBUNAL , MUMBAI BENCHMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - Corporate Debtor is a party to the Debenture Trust Deed - accrued interest was not paid when it became due and payable - existence of debt and dispute or not - HELD THAT:- The Corporate Debtor is a party to the Debenture Trust Deed in its capacity as a security provider/co-obligor and surety to that. Along with the Issuer Company, i.e., LDR, the Corporate Debtor is jointly and severally liable to repay all outstanding amounts under the NCDs. Under the terms of the Debenture Trust Deed, the Corporate Debtor agreed to make payments to the debenture holders by way of issue of an unconditional, irrevocable Corporate Guarantee. The Bench notes that as per Clause 2 of the Corporate Guarantee dated 06.10.2016, the Corporate Debtor is not only liable as a surety but also as a primary obligor. As per Clause 2 of the Deed of Guarantee, the obligation on part of the Corporate Debtor is unconditional and irrevocable. Further, the Corporate Debtor is liable as if it is the Principal Debtor under the Debenture Trust Deed as per Clause 16 of the Deed of Guarantee. The Bench notes that the Debenture Trustee is duly registered with the RoC and certification of charge has been annexed in the Petition. A Bank statement reflecting disbursal of monies has also been annexed in the Petition. We note that Corporate Debtor has not denied the execution of the trust deed or the deed of guarantee. It is also not disputed by the Corporate Debtor regarding the monies disbursed and the quantum of debt due and computation of interest. The default and its consequences clearly provide that nonpayment of interest towards outstanding NCDs is an 'event of default' and the Debenture Trust Deed recognizes that in case there is an 'event of default', the Petitioners/Debenture Holders are entitled to recover the money paid towards the NCDs. Therefore, the Bench notes that in this case an 'event of default' has occurred in terms of Clause 8.8 of the Debenture Trust Deed when accrued interest was not paid when it became due and payable and therefore the Corporate Debtor was entitled to redeem the NCDs. The existence of debt and default is reasonably established by the Petitioner as a major constituent for admission of a Petition under Section 7 of the Code. Therefore, the Petition under sub-section (2) of Section 7 is taken as complete - Application admitted - moratorium declared.
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