TMI Blog2021 (5) TMI 275X X X X Extracts X X X X X X X X Extracts X X X X ..... able to pay the Petitioner - the nature of Debt is a Financial Debt as defined under section 5 (8) of the Code. It has also been established that there is a Default as defined under section 3 (12) of the Code on the part of the Debtor. The two essential qualifications, i.e. existence of 'debt' and 'default', for admission of a petition under section 7 of the I B Code, have been met in this case. Besides, the Company Petition is well within the period of limitation. Petition admitted - moratorium declared. - CP No. 1390/IBC/NCLT/MB/MAH/2020 and IA 212/2021 in CP No. 1390/IBC/NCLT/MB/MAH/2020 - - - Dated:- 30-4-2021 - Suchitra Kanuparthi, Member (J) And Chandra Bhan Singh, Member (T) For the Appellant : Nirman Sharma, Amogh Joshi, Sneha Jaisingh and Aastha Kaushal, Advocates For the Respondents : Vibhav Krishna, Devang Lakhotia, Tahir Prande and Anmol Bartaria, Advocates i/b Juris Consillis ORDER Chandra Bhan Singh, Member (T) 1. The Petitioners/Applicants viz. 'Beacon Trusteeship Limited' (hereinafter as Petitioner) has furnished Form No. 1 under Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quarterly. 8. Under Clause 6 of Annexure 2 of the DTD, the Debentures were to be redeemed in four installments each quarter, commencing the 5th quarter, i.e. 12.02.2020. 9. Under Clause 8 of Annexure 2 of the DTD, interest @1% p.m., compounded annually was payable in the event of default of the Coupon Rates or the Redemption Amount. 10. In terms of Clause 11.1.4 failure to pay the Debenture Payments constitutes an Event of Default, upon which a Default Notice must be issued to the Issuer Company. Upon receipt of the Default Notice, if the Issuer Company fails to cure such default within 30 days, an Event of Default is deemed to have occurred. 11. While the Corporate Debtor serviced the Coupon Rates for the first three quarters though belatedly, the Corporate Debtor failed to make payment of the Coupon Rate for the quarters ending 12.11.2019. Consequently, on 09.01.2020, a Default Notice was issued by the Petitioner. Since then, not only has the Corporate Debtor failed to cure the default towards the Coupon Rate payable on 12.11.2019 but has also defaulted in payment of the Coupon Rate for the quarters ending 12.02.2020, 12.05.2020, 12.08.2020 and 12.11.2020 amountin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d is not entitled to initiate this application. 16. Radius Estate and developers Pvt. Ltd., the Corporate Debtor is engaged in the business of construction and development of real estate including construction of residential and commercial properties. The Corporate Debtor has development rights in the immoveable property on the MHADA leasehold land admeasuring 20,149.40 sq. mtrs. bearing CTS Nos. 649(pt) and 649/1 to 649/48 on the Gandhinagar Layout of MHADA, Bandra (east), Mumbai - 400 051 in Municipal 'H (east)'Ward, Mumbai Suburban District and is in the process of constructing and developing the project TEN BKC , Bandra (east), Mumbai. 17. On 23.10.2018 the Petitioner is appointed as Debenture Trustee by Consent letter. 18. Thereafter on 06.11.2018 the Corporate Debtor issued Private placement offer letter for 6500 secured, unlisted, unrated, redeemable, NCD's of ₹ 1,00,000/- each aggregating ₹ 65,00,00,000/- for a maximum period of 24 months. 19. On 31.01.2019 Debenture Trustee Deed executed between the Corporate Debtor, Sanjay Chhabria, Ritu Chhabria and the Petitioner. 20. The Corporate Debtor made payment of Coupon Rates on 12.02.2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid finishing the construction of the project Ten BKC and the first tranche disbursement in expected on 30-60 days and intimation that the time lines shall be payments in 180 days by new investor and by external mezzanine funds to fully refinance the retail investors who have subscribed NCD's. FINDINGS 32. The Bench notes that the Financial Creditor (Debenture Trustees), the Corporate Debtor and the Promoters of the Corporate Debtor entered into a Debenture Trust Deed for issuance of 6,500 secure Non-Convertible debentures for an amount of ₹ 1,00,000/- each aggregating to ₹ 65 crores. The debentures as per the submission made in the Petition were issued on 13.11.2018. 33. The Bench notes that as per the Petition the interest was payable from 1st quarter onwards till the 8th quarter, however, the principal amount was repayable from 5th quarter to 8th quarter as per the terms and conditions of the Debenture Trust Deed, a copy of which is attached with the Petition. 34. The Bench notes that the Corporate Debtor has to pay a quarterly interest at 16.01% per annum on the redemption amount into the Corporate Debtor's escrow account from the expiry of ea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .1 -- --- --- 11.1.4 Payment Default Default is committed by the Company in payment of the Debenture Payments in respect of the Debentures under the Transaction Documents 11.1.5 Failure to Redeem Debentures Default is committed by the Company in Redemption of Debentures on the Redemption Date 40. It is very clear from the above provision of the DTD that default has been committed by the Corporate Debtor, when it failed to pay the coupon rate in terms of section 11.1.4 and again when it failed to redeem debentures on the first installment. The Corporate Debtor also defaulted to meet the payment obligation in terms of section 11.2.2, reproduced below:- 11.2 Cure Period 11.2.1 --- --- --- 11.2.2 Upon it coming to the knowledge of the Debenture Trustee that any of the Event of Default as stated in ARTICLES 11.1.4, 11.1.5, 11.1.6, 11.1.7, 11.1.8, 11.1.9, 11.1.0 and 11.1.20 has occurred, the Event of Default shall deemed to have been occurred without the Debenture Trustee providing any cure period to the Company to rectify such Event of Default and the Consequences of Event of Default as mentioned in ARTICLE 11.3 shall follow immediately from the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to merely see the records of the Information Utility and other evidence produced to satisfy itself that a default has occurred. 43. The above facts clearly reveal that the Corporate Debtor who has defaulted in making the payment to the Petitioner is liable to pay the Petitioner. 44. Considering the above facts, we come to conclusion that the nature of Debt is a Financial Debt as defined under section 5 (8) of the Code. It has also been established that there is a Default as defined under section 3 (12) of the Code on the part of the Debtor. The two essential qualifications, i.e. existence of 'debt' and 'default', for admission of a petition under section 7 of the I B Code, have been met in this case. Besides, the Company Petition is well within the period of limitation. 45. As a consequence, keeping therefore said facts in mind, it is found that the Petitioner has not received the outstanding Debt from the Respondent and that the formalities as prescribed under the Code have been completed by the Petitioner, we are of the conscientious view that this Petition deserves 'Admission'. 46. Further that, we have also perused the Form - 2 i.e. writ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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