TMI Blog2020 (7) TMI 744X X X X Extracts X X X X X X X X Extracts X X X X ..... k, Advocate, ORDER Chandra Bhan Singh, 1. The Petitioner/Applicant viz. Bank of India (hereinafter as Petitioner) has furnished Form No. 1 under Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (hereinafter as Rules) in the capacity of Petitioner on 30.08.2018 by invoking the provisions of Section 7 of the Insolvency and Bankruptcy Code (hereinafter as Code) against Katare Spinning Mills Limited (hereinafter as Corporate Debtor ). 2. In the requisite Form, under the head Particulars of Financial Debt the total amount of Debt granted is stated to be ₹ 15,00,00,000/-, and the amount claimed to be in default is ₹ 23,90,64,696.69/- as on 28.08.2018. The date of default is stated to be 30.06.2015. BRIEF HISTORY OF THE CASE 3. The Petitioner is a schedule bank and is a body corporate constituted under the provisions of the Banking Companies (Acquisition and Transfer of undertakings) Act, 1970. And the Corporate Debtor is a company registered under the Companies Act, 1956. 4. The Petition reveals that the Petitioner Bank sanctioned term loan facility of ₹ 9,00,00,000/- and a cash credit faci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner approved the OTS scheme for an amount of ₹ 12.30 crore. 9. The said offer was subject to unconditional acceptance of the all terms and conditions which are mentioned in letter dated 29.06.2019 in entirety by the Corporate Debtor along with its Board Resolution for acceptance of OTS terms and conditions and authorizing the Director to execute necessary documents. 10. It is further mentioned by the Petitioner that the Corporate Debtor has not complied with the terms and conditions of the fresh OTS scheme and the same also stood revoked. 11. On 15.10.2019 the authorized officer of the Petitioner has communicated to the Corporate Debtor vide letter bearing no. SOL/SK/KSML/2019-20/06, that the OTS under reference stands permanently revoked and no further communication in this regard will be entertained. REPLY OF THE CORPORATE DEBTOR 12. The Corporate Debtor filed reply to the petition not denying the liability but raising the following contentions: i. The revised OTS was processed and an upfront amount of ₹ 1.15 crore and an amount of ₹ 8 lakhs totalling to ₹ 1.23 crore has been deposited with the Petitioner. While it is pertinent to note th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons made by the Learned Counsel for the both the sides and on perusing the documents produced on record the Bench is of the view that, this Petition subsequent to its filing 30.08.2018, about 14 hearings have been taken place starting from 13.11.2018 to 06.01.2020 when it was Reserved for Orders. As far as ₹ 23.90 crore in total consisting of term loan and cash credit with applicable rate of interest as per the sanction letter is concerned, there is no dispute and there also does not have an of iota of doubt regarding its pay-ability by the Corporate Debtor. 14. The account of the Corporate Debtor had become irregular and was declared as NPA on 31.03.2015. The total amount of Debt of ₹ 23.90 crores including interest and other charges has been calculated up to 28.08.2018. The Bench also takes note of the fact that the financial debt of the Corporate Debtor stands duly acknowledged vide debit balance confirmation of 31.08.2015. This has also been duly acknowledged in the Balance sheet for the financial year 2015-16. 15. The bench also notes that CIBIL report confirming debt amount has been attached with the Petition. Therefore, it has been proved beyond doubt that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... going on between the Corporate Debtor and Financial Creditor for settling the debt. This is evident from the daily order dated 27.05.2019, relevant portions of it reproduced below: 1. Both sides are present. 2. On one hand the bank has filed this Petition u/s 7 and on the other hand negotiating with the Corporate Debtor by accepting an amount of ₹1.23 crores. Since the Bank/Petitioner is negotiating with the Debtor Company and the Debtor Company had again offered OTS in 5 equal instalments vide letter dated 24.05.2019, therefore, a query has been raised that how this Petition is maintainable u/s 7 of the IBC. Query is to be answered by 24.06.2019. 3. Matter is now listed on 24.06.2019. 20. It was brought up before the Bench through additional affidavit by the Petitioner that another OTS scheme, OTS-2019, has been intimated to the Corporate Debtor with a tentative amount of ₹ 11.17 crore, clearly mentioning that this amount may vary. 21. Subsequently on 26.09.2019, the Bank intimated the Corporate Debtor about the approval of OTS-19 at a total amount of ₹ 12.3 crore (as the OTS amount, the Bank mentions, cannot be less than previous OTS amount) with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... money within 30 days from the date of conveying of your approval (i.e. 5/7/2019). In this connection, we will deposit balance payment amount of ₹ 8 Lacs against 10% OTS amount after adjusting application money deposited at the time of application before 4/8/2019. We once again thank you for your kind co-operation for the same. Thanking you, Yours Faithfully, Katare Spinning Mills Limited The above letter of 18.07.2019 sent by the Corporate Debtor to the Financial Creditor as (attached) clearly brings out this fact. 24. The contention of the corporate debtor that the Hotel property (Hotel Tripur Sundari) in possession of the Petitioner as collateral security be handed over to them is not a tenable proposition in the consideration of this Bench. This Hotel property has been mortgaged as a collateral security to the Financial creditor. The Financial creditor after the loan account became NPA was constrained to approach SARFAESI and through valid Possession notice issued under 13(4) of the SARFAESI Act, 2002 took symbolic possession of the mortgaged properties including the hotel. The Bench finds that the Financial Creditor acted in a legal manner and right ..... X X X X Extracts X X X X X X X X Extracts X X X X
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