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TMI Blog2021 (11) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... nety-Four Thousand Seven Hundred Forty-Two and Sixty-Nine Cents only) SUBMISSIONS OF THE OPERATIONAL CREDITOR 2. The Corporate Debtor availed of an External Commercial Borrowing, from the Financial Creditor by way of a Facility Agreement dated 22.05.2013 (Facility Agreement) executed between the Corporate Debtor (as the borrower), Financial Creditor (as the lender) and Standard Chartered Bank, Delhi Branch (as the Security Agent) for upto USD 49,000,000/-. Therefore, vide an Amendment & Supplemental Agreement dated August 19, 2013 to the Facility Agreement the Facility was revised for and amount upto USD 45,000,000/-. It may be noted that only an amount of USD 15,000,000/- was disbursed to the Corporate Debtor in three tranches of USD 5,000,000/- (United States Dollars Five Million only) each on August 30, 2013, October 31, 2013 and December 31, 2013. Therefore, certain part payments were made by the Corporate Debtor towards the interest due, in each tranches, until May 27, 2015 after which no payment have been received from the Corporate Debtor either towards the principal or interest till date. 3. The Financial Creditor submitted that the facility is secured by mortgage over t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re this Tribunal. SUBMISSIONS OF THE CORPROATE DEBTOR 8. The Corporate Debtor by way of its reply to the petition challenges the jurisdiction of this Tribunal and the very maintainability of the petition filed by the applicant Bank, principally on the following grounds: (a) That the claim underlying Insolvency Application is barred by limitation; (b) That the Insolvency Application filed by the Applicant bank before this Tribunal is incomplete; (c) That all contractual instruments which the applicant Bank seeks to rely upon to assert its claim in the Insolvency Application including the Facility Agreement and the Supplemental Agreement are insufficiently stamped and therefore cannot be acted upon by this Tribunal. (d) That the interest and other charges levied by the Applicant Bank are unfair and usurious; and (e) There is no valid authority in law, which permits the applicant Bank to maintain the Insolvency Application. 9. The Corporate Debtor submits that the issues raised in the present Reply challenge the very maintainability of the petition and the jurisdiction of this Tribunal and submits that the aforementioned questions ought to be decided prior to this Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of default, the Insolvency Application is barred by limitation. The fact that the Applicant Bank received permission from the RBI to accelerate the facility on 07.12.2016 and that it accelerated the facility on 05.01.2016 is of no consequence and has no bearing on the issue of limitation. That time cannot be excluded in computing the period of limitation. The claim underlying the Insolvency Application is barred by limitation: 14. Admittedly, the first default in repayment of interest took place on 30.06.2015. As per the Limitation Act, 1963, the period of limitation commenced on 30.06.2015 and ended 3 years from that date. The Insolvency Application is filed beyond the stipulated period of 3 years and, it is ex-facie apparent that the underlying purported claim is not legally enforceable and the petition is barred by limitation. 15. The Corporate Debtor submits that the intervening correspondence between the Applicant Bank and the Reserve Bank of India seeking permission to accelerate the facility between 24.11.2015 and 07.12.2016 or the subsequent acceleration notice dated 05.01.2017 or even the subsequent default notices ending with the notice dated 19.11.2018 have no bearin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in three tranches of USD 5 Million each on 30th August 2013, 31st October 2013 and 31st December 2013, respectfully. 20. Thereafter, on 29 January 2014, the Corporate Debtor sent a letter to the Applicant Bank in respect of amendment of timelines regarding commencement of commercial operational from April 2014 to October 2014 (by 6 months only). 21. Subsequently, the loan was suspended by the Applicant Bank on 12.02.2014 i.e. within a period of less than 6 months of the disbursement of the first trance, on account of not completing the Hospital's infrastructure and facilities and not applying for various permissions and licenses for commissioning the Hospital by January 31st 2014. 22. Despite the suspension of facility by the Applicant Bank in February 2014, the Applicant Bank continued to charge commitment charges, hedging charges on the entire facility of USD 45 Million although only USD 15 million was disbursed. The Applicant Bank also continued to charge interest on the disbursed amount. Pertinently, the Corporate Debtor has paid an aggregate of Rs. INR 26,43,54,173/-. 23. In view of the foregoing, the Corporate Debtor submits that the interest and other charges in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l applicable stamp duty is paid thereon. Until then, no relief whatsoever can be granted by this Tribunal and this is because, it if does so, it would be in effect, acting upon insufficiently stamped instruments and there being a bar of law which prohibits such action under the provisions of the Maharashtra Stamp Act, 1958. The Corporate Debtor further submits that the only proper course available to this Tribunal would be to impound all such instruments and not proceed further in the matter until and unless, applicable stamp duty is paid on all such instruments. 28. Hence, the Corporate Debtor prays that in the interest of justice and equity that this Tribunal may kindly be pleased to dismiss the petition. FINDINGS 29. This Petition has been filed by Standard Chartered Bank, London through its Registered Office in India, u/s. 7 of the Insolvency & Bankruptcy Code, 2016 against Khubchandani Hospitals Pvt. Ltd. for a total debt of USD 18,194,742.69/- as an External Commercial Borrowing (ECB) from the Financial Creditor. This converts into Rs. 1,34,64,10,959.06/- based on an exchange rate of Rs. 74/- This financial debt has arisen by way of an Agreement of May 22, 2013 (Facility A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cility Agreement and other security documents are insufficiently stamped; iii) That the Application has been filed without any valid authority; The M.A. 613/2019 and the Reply filed by the Corporate Debtor are similar. 33. The Bench in the following paragraphs has, one by one looked into these issues and based on the submissions made by the parties has tried to come to a conclusion. The observation of the Bench on each of the points are as under:- 33.1. The Contention of the Corporate Debtor is that the Limitation in the present case would begin to run from 30.06.2015, the date when the Corporate Debtor first defaulted on the interest payment. Therefore, as a result, the Corporate Debtor is of the view that the entire claim of the Financial Creditor is time barred. In this regard the Bench would like to revisit the definition of default as set out in Section 3(12) of the Code which mentions that: "(12) "default" means non-payment of debt when whole or any part or instalment of the amount of debt has become due and payable and is not paid by the debtor or the corporate debtor, as the case may be;". The Bench notes that an event of default contemplates either of the three: (i) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an instalment on its due date. The relevant portion of the Kotak Mahindra Bank Limited vs. Anuj Kumar Tyagi case is as under:- "12.2 ... ... ...Quite clearly, the period of limitation, would, relate back to last defaulted EMI as, vide the aforementioned notice the appellant gave a final opportunity to the respondent to repay the amount, which was due and payable on the date of notice. The right to sue would occur, in my opinion, each time when, there is a default in payment of an EMI on its due date... ... ..." 34. Another defence put up by the Corporate Debtor is that the Facility Agreement and other security documents have not been sufficiently stamped. The Bench notes that it is a settled law that any Petition under Section 7 of the IBC cannot be stalled due to any curable defects which includes documents being insufficiently stamped. In this regard the Bench places reliance on NCLT Judgment in the case of Manglam Vanjiya Pvt. Ltd. v. Reward Business Solutions Pvt. Ltd. (Order dated 18th February 2021, CP No. 1168/IBC/NCLT/MB/MAH/2020). In that case, this Hon'ble Tribunal was pleased to conclude: "However, the Bench also opines that admission of the said petition under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l, arbitration panel or other authority; transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein; any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the Corporate Debtor. e. That the supply of essential goods or services to the Corporate Debtor, if continuing, shall not be terminated or suspended or interrupted during moratorium period. f. That the provisions of sub-section (1) of Section 14 shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator. g. That the order of moratorium shall have effect from the date of pronouncement of this order till the completion of the corporate insolvency resolution process or until this Bench approves the resolution plan under sub-section (1) of section 31 or passes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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