9911796707
TMI Blog2019 (8) TMI 1710X X X X Extracts X X X X X X X X Extracts X X X X ..... ate' and alleged to have been utilised against the payment of dues made by the 'Corporate Debtor' in favour of the 'ICICI Bank Limited' pursuant to 'Letter of Credit (LoC) issued by the 'ICICI Bank'. The said application having allowed by impugned order dated 12th March, 2019 the Appellant has challenged the same. 2. The present proceeding relates to transactions dated 8th December, 2017; 11th December, 2017 and 14th December, 2017 which were the transactions undertaken by the Appellant pursuant to the 'Working Capital Consortium Agreement' dated 15th May, 2013 entered into between the Appellant and the 'Corporate Debtor' and the 'Renewal Credit Arrangement' dated 20th June, 2017 executed between the Appellant and the 'Corporate Debtor' providing overall limit of 'Letter of Credit' facility for the period ending 15th December, 2017. 3. The main plea taken by the Appellant - ICICI Bank is that the 'Resolution Professional' before filing an application under Section 43(1) of the I&B Code formed no opinion independently nor afforded an opportunity to the Appellant to explain about the transactions in question. 4. It was submitted that three transactions aforesaid were not 'preferen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are to be considered : a) The 'Corporate Debtor' makes a transfer in respect of an existing 'financial debt' or other liability; b) As a result of the payment made by the 'Corporate Debtor' the person to whom the payment is able to recover than he would have in the waterfall provided under Section 43 of the I&B Code' c) The transfer or payment has been made in the relevant period i.e. 2 years in case of related parties and one year otherwise and d) However, if the transfer is made in the ordinary course of business of the 'Corporate Debtor', it would not be treated as a preferential transaction. 9. It was submitted that the 'Corporate Debtor', 'ICICI Bank' and 20 other Banks had entered into a 'Working Capital Consortium Agreement' on 15th May, 2013. In terms of said agreement, each bank sanctioned a limit for the 'Corporate Debtor' to draw on for working capital requirements including issuance of 'Letters of Credit' to make various purchases of raw material required by the 'Corporate Debtor'. Vide a sanction letter dated 20th June, 2017, the 'Letter of Credit' limit was renewed and extended to Rs. 563 Crores by the 'ICICI Bank'. The Appellant's Bank agreed to provide 'L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or a guarantor for or on account of an antecedent financial debt or operational debt or other liabilities owed by the corporate debtor; and (b) the transfer under clause (a) has the effect of putting such creditor or a surety or a guarantor in a beneficial position than it would have been in the event of a distribution of assets being made in accordance with section 53. (3) For the purposes of sub-section (2), a preference shall not include the following transfers- (a) transfer made in the ordinary course of the business or financial affairs of the corporate debtor or the transferee; (b) any transfer creating a security interest in property acquired by the corporate debtor to the extent that- (i) such security interest secures new value and was given at the time of or after the signing of a security agreement that contains a description of such property as security interest and was used by corporate debtor to acquire such property; and (ii) such transfer was registered with an information utility on or before thirty days after the corporate debtor receives possession of such property: Provided that any transfer made in pursuance of the order of a court shall not, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or' to purchase goods allowing the Bank to debit the amount from the account of the 'Corporate Debtor'. 16. From the aforesaid fact, it is evident that all the transactions made on 8th December, 2017; 11th December, 2017 and 14th December, 2017 were so made in the ordinary course of business of the Bank as per request of the 'Corporate Debtor'. 17. From the record, we find that the application under Section 7 was admitted on 8th December, 2017 and the 'Resolution Professional' was appointed on the said date. The order was passed on 8th December, 2017 and was pronounced on 15th December, 2017, and uploaded in the website. Though Code of Civil Procedure, 1908 (CPC) is not applicable, Order XX Rule 1 relates to pronouncement of judgment. As per proviso to Rule 1 (3) therein, where a judgment is pronounced by dictation in open Court than transcript of the judgment so pronounced after making necessary corrections and if signed by the Judge, in such case it will date back to the date when it was originally pronounced in the open court, which is 8th December, 2017 in the present case. 18. Section 5(12) defines 'insolvency commencement date' means 'the date of admission of application' ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
