TMI Blog2021 (11) TMI 464X X X X Extracts X X X X X X X X Extracts X X X X ..... and reprobate at the same time. Thus, in case the interest element is to be excluded in computation of the claim amount of unsecured financial creditors, the same needs to be excluded from the claim amount of secured financial creditors as well. It may not out of place to mention that though secured financial creditors, on the basis of agreement include substantial amount of interest in their claims in spite of making provision for NPA and not claiming interest income in their books of account and their voting percentage is worked out accordingly and they control CIRP but in the end accept substantial haircuts and fraction of their outstanding amount and on the other hand, they do not wish to get claims of Unsecured Financial Creditors admitted in the same manner. This approach results into unfair advantage to secured financial creditors, i.e. Banks - the amount of claim of unsecured financial creditors has been correctly ascertained by the RP. Unsecured financial creditors, being a related party of the Corporate Debtor - HELD THAT:- The contention of the RP that the applicant has relied on Report of 2016 and in such report relevant provisions of IBC have not been dealt wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt additional time to the new resolution professional for completion of verification of the claims of the creditors and constitute a new committee of creditors. Attached herewith and marked hereto as Annexure-J is the consent form issued by Mr. Subrata Monindranath Maity. (d) Pending hearing and final disposal of this application, this Tribunal may direct that the first and second meeting of the CoC be held to be null and void and therefore all the decisions taken therein should be held null and void. (e) Pending hearing and final disposal of this Application, this Tribunal may direct that no CoC meeting be conducted pending final disposal of the present Application. 2. These applications belong to different companies but the issues involved are common, hence, both the IAs were heard together and are being disposed of by this common order. For the sake of convenience, we shall deal with IA 296 of 2020 in detail as arguments were made in respect of this IA. Brief Facts 3. The relevant facts are that the applicant is a Financial Creditor of the Corporate Debtor and one of the members of the Committee of Creditors (CoC) along with other Financial Creditors who are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... creditors who are not financial institutions. Arguments on behalf of the Applicant 4. In this background, Ld. Counsel for the applicant appeared and submitted that (1) The RP has admitted the claims without verifying the same and assigned voting rights on the basis of unverified amounts. (2) That as against the principal amount of ₹ 249.5 crores claim amount of ₹ 1587 crores has been admitted which mainly comprises of amount of interest and that too when no provision has been made in the financial statement for such interest. (3) That as against secured financial creditors such unsecured financial creditors are not in the business of providing financial credit. (4) It is also claimed that by doing so the RP has failed to discharge its duties as RP in an independent and neutral manner for the reason that RP has allowed related parties of Corporate Debtor in CoC meetings and assigned voting rights to them on the basis of inflated claims. 5. The Ld. Counsel, thereafter, contended that the net worth and the amount given by such unsecured financial creditors do not match proportionately. Hence, the capacity to advance such loans cannot be said to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave not been shared with the RP. It is also claimed that the RP has meticulously complied with all the provisions and regulations of IBC 2016. Thereafter, issue of maintainability of this IA was raised. It is claimed that for change of RP specific provisions under Section 27 of IBC, 2016 have been made and which is not being followed. Hence, claim made by the secured financial creditors in this IA to this effect is de-horse illegal. As regard to validity of first and second meeting of CoC, it is claimed by the applicant that such meetings be declared null and void and CoC be dissolved, however, such pleas deserves to be dismissed in limine as unsecured financial creditors have not made been parties to the present application. On merit, it is claimed that claims received from the secured and unsecured financial creditors were examined, scrutinised, modified and admitted by RP strictly in accordance with the provisions and regulations 8, 13 and 14 of CIRP Regulations, 2016. Hence, allegation of wrong admission of claim is uncalled for. It is also vehemently argued that the applicant has failed to produce any document/record to show the admitted claims are in respect of related partie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t further emphasised on the fact that in the due diligence report obtained by the RP as regard to the ascertainment of the fact that whether such unsecured financial creditors could be treated as a related party of the Corporate Debtor, categorical findings were given this report that such parties could not be treated as the related party of the Corporate Debtor and provisions of Section 5(24) and 5(24A) were elaborately examined and dealt with whereas in the unsigned draft report relied by the applicant only vague and indecisive claims were made, hence, the report obtained by the RP had to be considered. As regard to the issue raised by the secured financial creditor that the Corporate Debtor was treated as willful defaulter and declared as fraud, no documents/evidence has been provided by the applicant on such issue. As regard to certain actions/issues relating to purported group companies, it is submitted that the Corporate Debtor is an independent entity which is run by the directors/professionals with no interference of any other person/group and, therefore, no linkages with any other group companies as attempted by the applicant. As regard to use of unsecured financial loans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial creditors. Our Conclusion 10. We have considered the submissions made by both sides also perused the material on record. Two issues are involved herein. The first issue pertains to amount of claim which is liable to be admitted. As regard to this aspect, we consider it proper to reproduce Clause No. 9 of Notes to Accounts as appearing in Financial Statement for Financial Year 2018-19. 9. Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connect with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs. The Company had taken unsecured Loans since FY 2009 for its expansion project and/or to meet its working capital requirements. The said loans were for a tenure of 5-7 years and required to be repaid along with interest at cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g provision for NPA and not claiming interest income in their books of account and their voting percentage is worked out accordingly and they control CIRP but in the end accept substantial haircuts and fraction of their outstanding amount and on the other hand, they do not wish to get claims of Unsecured Financial Creditors admitted in the same manner. This approach results into unfair advantage to secured financial creditors, i.e. Banks. Hence, considering the above legal position and facts of the case, we hold that the amount of claim of unsecured financial creditors has been correctly ascertained by the RP. 12. As regard to the issue of such unsecured financial creditors, being a related party of the Corporate Debtor, we have perused the report submitted by both the parties. In this regard, we agree with the contention of the RP that the applicant has relied on Report of 2016 and in such report relevant provisions of IBC have not been dealt with specifically. Hence, such report cannot be relied upon. Further in the due diligence report of SDMA dated 12.02.2020 for which they were appointed on 08.02.2020, the reliance has been made on the basis of Data available on MCA portal. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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