TMI Blog2020 (7) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... Clause 1.3 speaks in unambiguous terms that the 'Inter-Creditor Agreement' would not in any manner alter, modify or impair any of the rights vesting in the Rupee Lenders against the Borrower under the Finance Documents. This leaves no room for the 'Corporate Debtor' to contend that these financing documents do in any manner enure to the benefit of the 'Corporate Debtor' who has absolutely no locus to raise an issue in this regard. The Financing Documents do not in any manner curtail or limit the rights of the 'Financial Creditor'- 'Bank of India' in its individual capacity to enforce its rights against the 'Corporate Debtor' in regard to the financial debt which is payable in law and in fact and in respect whereof default as alleged is not disputed - Appeal dismissed. - Company Appeal (AT) (Insolvency) No. 1392 of 2019 - - - Dated:- 22-5-2020 - Bansi Lal Bhat And Venugopal M., Judicial Member, V.P. Singh, Technical Member For the Appellant : Krishnendu Datta, Nikhil Chawla, Aditya Panda and Jaydeep Krol, Advs. For the Respondent : Anant A. Pavgi, Siddhartha Nagpal, Abhishek Singh, J. Amal Anand, I.P.S. Oberoi, D. Lali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Debtor' with other lenders as members of consortium advancing different amounts. According to 'Bank of India', the 'Corporate Debtor' failed to clear the outstanding liability of ₹ 21,68,44,477/-, in respect whereof a Demand Notice was issued on 12th November, 2018 specifying that the date of classifying the account as Non-Performing Asset as 29th October, 2018. It appears that the factum of default was not disputed by the 'Corporate Debtor' before the Adjudicating Authority as emerges from paragraph 8 of the impugned order. However, the 'Corporate Debtor' raised the contention before the Adjudicating Authority that since it had faced difficulties in implementing the project and was entitled to restructure the loan, it had proposed a 'Resolution Plan' to the lenders who appointed 'Ernst and Young Merchant Banking Service' to evaluate the same, but before the 'Resolution Plan' could be discussed, the 'Financial Creditor'- 'Bank of India' filed an application under section 7. It was contended that the consortium members have entered into an 'Inter-Creditor Agreement' in pursuance whereof no memb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... financing documents i.e., 'Common Rupee Loan Agreement (CLA)', 'Security Trustee Agreement (STA)', 'Inter-Creditor Agreement (ICA)'. It is submitted that the share of loan amount advanced by the 'Bank of India' constituted only 7.75% of the consortium. It is further submitted that the CLA clearly specified that no enforcement action will be taken without complying with the procedure laid down therein and since said procedure has not been complied with, 'Bank of India' could not take enforcement action against the 'Corporate Debtor'. 5. Learned counsel for the Appellant further submits that in view of the aforesaid, the debt was not due and payable in law or in fact. It is further submitted that the 'Corporate Debtor' is a confirming party to the ICA and as CLA and ICA were entered into on the same day, these form part of the same transaction. Thus, the 'Corporate Debtor' has a locus standi under ICA. As regards the overriding effect of Section 238 of the 'I B Code', it is submitted that the ICA only lays down a procedure to be followed before an application can be made by lender against the 'Corporate D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Insolvency Resolution Process' is payable both in law as also in fact. The 'Corporate Debtor' is merely banking upon the Financing Documents including CLA, STA and ICA to assail the impugned order notwithstanding the fact that neither the claim is barred by law nor do such Financing Documents clothe the 'Corporate Debtor' with a right to disentitle the 'Financial Creditor' from enforcing its claim, in its individual capacity, despite being a member of the consortium of lenders. It is queer that the 'Corporate Debtor' is making a vain bid to get out of the rigours of its liability in terms of loan documents sanctioning the loan and giving rise to contractual liability as against it on the basis of an 'Inter-Creditor Agreement', to which admittedly it is not a party. It would be a travesty of justice to raise a plea that since the Creditors has an inter se agreement in regard to enforcement of the liability of the debtor qua the Creditor, an individual Creditor should not be permitted to enforce its right arising under a contract in regard to discharge of liability for loan advanced by the Creditor which is otherwise payable in law and no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this Agreement is intended or meant to alter, modify or impair any of the rights of any of the Rupee Lenders against the Borrower under the Finance Documents. The aforesaid clause 1.3 speaks in unambiguous terms that the 'Inter-Creditor Agreement' would not in any manner alter, modify or impair any of the rights vesting in the Rupee Lenders against the Borrower under the Finance Documents. This leaves no room for the 'Corporate Debtor' to contend that these financing documents do in any manner enure to the benefit of the 'Corporate Debtor' who has absolutely no locus to raise an issue in this regard. 12. In view of the foregoing discussion, we are of the considered opinion that the issue raised in this appeal is devoid of merit. The Financing Documents do not in any manner curtail or limit the rights of the 'Financial Creditor'- 'Bank of India' in its individual capacity to enforce its rights against the 'Corporate Debtor' in regard to the financial debt which is payable in law and in fact and in respect whereof default as alleged is not disputed. The appeal is dismissed as being frivolous. However, in the circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X
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