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TMI Blog2020 (11) TMI 982X X X X Extracts X X X X X X X X Extracts X X X X ..... haruch District in the State of Gujarat (hereinafter referred to as "Project Land") approached the Financial Creditor for financial assistance for an amount of Rs. 100 crores (Rupees One Hundred Crores Only) (hereinafter referred to as "Loan Amount"). ii. The Financial Creditor duly considered the said request and vide its letter dated No. SIFL/PF/GHPSL/2011/01/001 dated 03.01 .201 1 agreed to sanction the said Loan Amount to the Corporate Debtor. Pursuant to the enabling resolutions passed by the Board of Directors of the Corporate Debtor on 03.01.2011 and acting through its Authorized signatory, the Corporate Debtor entered into a Rupee Loan Agreement dated 05.01 .201 1 (hereinafter referred to as "Loan Agreement") with the Financial Creditor. The Loan Agreement duly stipulated the terms and conditions for the sanction of the Loan. Pursuant to the execution of the Loan Agreement and furnishing of the stipulated securities, the Corporate Debtor requested the Financial Creditor for a drawdown of Rs. 100 Crores i.e. the entire amount of the Loan Amount. 3. The following are the terms of the Loan Agreement dated 05.01.2011 : A. Interest The Corporate Debtor was required to pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l its movable assets, both present and future and all its bank accounts, including but not limited to the Trust and Retention Account Agreement that was opened pursuant to the Financing Documents. Designated Account Agreement dated 28.12.201 1 executed between the Corporate Debtor, Financial Creditor and Bank of Baroda. 2. First and exclusive charge by way of mortgage on all immovable assets of Corporate Debtor (including equipment's);. 3. First and exclusive charge on all the Corporate Debtor's bank account, including but not limited to the Trust and Retention Account (hereinafter referred to as "TRA") opened with the mutually acceptable bank, where all cash flows shall be deposited and all proceeds shall be utilized in manner and priority to be decided by the Financial Creditor; First and exclusive charge by way of hypothecation of all- movable assets of the Corporate Debtor. 4. Pledge of 51% of the total shareholding by holding company [Assam CompanyIndia Limited , Agreement of Pledge dated 05.01.2011 executed by Assam Company (India) Limited. 5. Pledge of one crore shares of Assam Company (India) Limited held by Link Holdings Private Limited. Agreement of pledge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both issued letters dated 24.09.2012 requesting the Financial Creditor to not dispose of the shares and that the Corporate Debtor was transferring an amount of Rs. 1.31 Crores to the towards the interest amounts due for the period of 15.02.2012 to 14.03.2012. In view of the facts that the said amount was paid by the corporate debtor to the Financial Creditor, the Financial Creditor refrained from disposing of the said shares and also issued a letter dated 20.1 1.2012 withdrawing the invocation of the said pledge by Link Holdings Private Limited on the condition that the Corporate Debtor would regularize all the outstanding dues to be repaid by the Corporate Debtor. 7. The Corporate Debtor again failed to regularize the outstanding dues under the Loan Agreement and therefore, the Financial Creditor was constrained to revoke the concession granted by the Financial Creditor to the Corporate Debtor (Ref. Letter dated 20.11.2012) vide its letter dated 14.12.2012. Accordingly, the shares of Assam Company (India) Limited held by Link Holdings Private Limited were invoked by the Financial Creditor and the sale proceeds received through sale of the aforesaid shares ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal 1 Kolkata for the recovery of the unpaid dues amounting to Rs. 121 ,41,39,819/- due as on 15.12.2012, which is still pending before the Ld. Tribunal. The proceedings before the Ld. DRT are still pending. Since over the period interests kept on accruing on the principal amount disbursed by the Financial Creditor. Therefore, a sum of Rs. 1,428,84,56,867/-(Rupees One thousand four hundred Twenty-Eight Crores Eighty-Four Lakhs Fifty-Six Thousand Eight Hundred Sixty-Seven Only) as on 31.01.2020 remains due and payable by the Corporate Debtor to the Financial Creditor towards the repayment of the Loan Amount and the payment of interest and other monies under the Loan Agreement as per the following particulars: Particulars Amount Principal Rs. 100,00,00,000/- Interest Overdue Rs. 650,27,32,508/- Delay Payment Interest Rs. 678,57,24,359/- Total Dues Rs. 1,248,84,56,867/- 12. In the premises, the Financial Creditor prayed the following: l. To admit the application under consideration and pass an order for initiating Corporate Insolvency Resolution Process under section 7 of the Code. ll. To appoint an Interim Resolution Professional in terms of Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mber, 2017 and Interim Resolution Professional (IRP) was appointed. 16. It was submitted that the Financial Creditor filed its claim to the IRP for an amount of Rs. 648.81 Crores towards its dues recoverable from the Corporate Debtor for the said loan amount provided to the Corporate Debtor. However, the IRP only admitted an amount of Rs. 357.29 Crores towards the claim of the Applicant and thereafter, upon collation of all claims constituted a committee of Creditors comprising of the Financial Creditors including the Applicant, who was allocated 27.06% of voting powers in the COC meetings based upon the claim as lodged by the Applicant. The Applicant actively participated in all the meetings of the COC held (during the Corporate Insolvency Resolution Process and even voted for resolution proposed by the RP. 17. It is further submitted that when the IRP was replaced by Resolution Professional (RP), he rectified/corrected the claim amount of the Applicant and admitted only an amount of Rs. 241.27 Crores as dues. Aggrieved by the decision of the RP, the Applicant filed an interlocutory application before the Hon'ble NCLT, Guwahati challenging the amount as corrected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r consideration is nothing but an abuse of process and therefore ought to be nipped in a bud and/or dismissed at the threshold. Moreover, application under consideration is not in proper form and barred by the limitation, hence, ought to be rejected by this Hon'ble Tribunal. Rejoinder on Behalf of Financial Creditor 21. The Applicant/Financial Creditor, at the outset denied all allegations, averments, submissions and proposition of law contained in the reply save and except expressly admitted hereinafter. All the defenses/averments raised by the Corporate Debtor are bald, baseless and hold no merit. 22. The applicant/FinanciaI Creditor submitted that the application under consideration is within limitation as the Loan was recalled by the applicant on 15.12.2012, after that the application under section 7 of IBC, 2016 against the ACIL was admitted by the Guwahati Bench on 26.10.2017. The applicant recovered an amount of Rs. 38,85,60,743/- in pursuance of the approved resolution plan of Corporate Guarantor on 19 December 2018. Therefore, the applicant has filed the present proceedings for recovery of the balance amounts which stand due and payable only after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Court's judgment titled, State Bank of India V. Ramakrishnan & Ors (Civil Appeal No. 3595/2018). In this judgment Hon'ble Supreme Court set aside the impugned judgment of Hon'ble NCLAT dated 28.02.2018 and relied heavenly upon the Insolvency Law Committee proceedings that made it amply clear that the CIRP and more particularly, moratorium undersectionM4 of the IBC does not extend to the guarantor as the object of the IBC was not to a//ow such guarantors to escape from an independent and co-extensive liability to pay off the entire outstanding debt, which is why section 14 of the IBC is not applicable to them. Furthermore, the applicant also quoted the judgment of Hon'ble NCLAT passed in the matter of Vishnu Kumar Agarwal Vs Piramal Enterprises Limited (Company Appeal (AT) (Insolvency) No. 346 of 2018). It was held that the creditor can initiate C/RP against the principal borrower and one or more simultaneously until the CIRP is admitted against any one of them, in which case, the proceedings cannot be proceeded against the remaining. That however, even in such a case, the liability of the remaining sureties is not absolved but is simply suspended till ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... averments of the Corporate Debtor that all claims of the Applicant are settled are completely false and the Applicant is not stopped from proceeding against the Corporate Debtor for recovering its outstanding dues, which are due and payable under the Loan Agreement. 26. At the end, prayed for the initiation of Corporate Insolvency resolution process against the Corporate Debtor as soon as possible as the time is the essence IBC. Otherwise, the genesis of the IBC shall be defeated and the rights and interest of the Applicant/Financial Creditor shall be totally defeated. 27. ISSUES: i. Whether the Application filed under section 7 of IBC by Applicant/Financial Creditor is maintainable against the Corporate Debtor? ii. Whether the Application is filed within Limitation? Arguments of Applicant/FinanciaI Creditor: Issue No.i Amount received from the Resolution Plan of the corporate guarantor (ACIL) does not act as full and final settlement of outstanding due and claims with respect to the remainder amount of the Debt against the Corporate Debtor: * Under Clause 12.3 and Clause 13.3 of the Resolution Plan of ACIL (Pg 250 and 253 of the Reply), all claims against ACIL we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom approval of a resolution plan where the FC is a member of the COC, does not mean that the right of the financial creditor to recover the balance amount from the guarantor of the corporate debtor is impaired. (Para 14, 25, 26). * In the matter of IDBI Bank Limited Vs. M/S. Neueon Towers Limited (2020 SCC OnLine NCLT 535), the NCLT Hyderabad has held that after exhausting the remedy before the RP appointed for the Principal Borrower and if any balance was remaining to be paid to the creditor, the creditor can make claim for the balance before the RP appointed for Corporate Guarantor. (Para 14-15) * In the matter of Committee of Creditors of Essar Steel India Limited vs Satish Kumar Gupta [2019 SCC OnLine SC 1478], the Hon'ble Supreme Court allowed the financial creditor to go after the guarantors for debt that has not been settled under the Resolution Plan. (Para 84-87) Issue No.ii The present Application filed by the Financial Creditor is held to be within the period of Limitation on the grounds as follows: * The present application is within period of limitation. The reason is that although the loan was defaulted for the very first time on 15.04.2012, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion Act, 1963. Acceptance of debts by the Debtor not only protects the limitation period but also provides for the continuous cause of action to the Creditor to submit its claim. Pertinently, the Appellant in the said matter had sought to argue that the date of default cannot be extended relying on the judgment of Jignesh Shah & Ors. Vs I-JOI (2019) SCC Online SC 1254 and Gaurav Hargovind Bhai Dave vs ARC (India) Limited & Ors. (2019) SCC Online SC 1239, which was not applicable to the facts of the case. * All of the above judgments are expressly applicable to the facts in the present case as in the present case, there is express and unequivocal acknowledgement. * In addition, the Financial Creditor was seeking its remedies and claims against the Corporate Guarantor, however it had to take a massive haircut in the amount recovered from such proceedings. The Financial Creditor accordingly is pursuing the available remedy against the CD for its balance claims. The time spent in pursuing remedies against the Corporate Guarantor is also to be excluded for the purposes of computation of the period of limitations 28. Addl. Points on Behalf of Applicant/F.C Creditor * ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the part of the Corporate Debtor. The Financial Creditor has fulfilled all the requirements of law and proposed the name of the Resolution Professional for appointment as the IRP. Hence, the Application stands admitted and the commencement of the Corporate Insolvency Resolution Process is initiated. 30. Mr. Rakesh Kumar Aganval is hereby appointed as IRP as has been proposed by the Financial Creditor. There is no disciplinary proceeding pending against the IRP as reflects from Form-2. The IRP is directed to take charge of the Respondent Corporate Debtor's management immediately. He is also directed to cause public announcement as prescribed under Section 15 of the IBC, 2016, within three days from the date the copy of this order is received, and call for submissions of claim in the manner as prescribed. 31. The moratorium is declared which shall have effect from the date of this Order till the completion of CIRP, for the purposes referred to in Section 14 of the IBC, 2016. It is ordered to prohibit all of the following, namely: (a) The institution of suits or continuation of pending suits or proceedings against the Corporate Debtor including execution of any judgment, decr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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