TMI Blog2020 (6) TMI 793X X X X Extracts X X X X X X X X Extracts X X X X ..... olkata Bench. So admittedly the CD has defaulted in repayment of ₹ 7,54,68,438/- out of the term loan admittedly availed by it. ₹ 19,04,12,812.21p evidently not due from the CD as the borrower but found due from the five third parties referred that they were also committed default in repayment to OBC. In Anuj Jain case, the IRP had rejected the claims to be recognized as financial creditors of the Corporate Debtor JIL on account of the securities provided by Jaypee Infratech Limited (JIL) for the facilities granted to Jaiprakash Associates Limited (JAL). The NCLT rejected the applications filed against the decision of the IRP while concluding that on the strength of the mortgages created by the corporate debtor JIL, as collateral security of the debts of its holding company JAL, the applicants cannot be treated as financial creditors of the corporate debtor JIL - In the present case the debt due to the OBC appears to me falls under the definition of financial debt and the lender is therefore a financial creditor. Because the lender/OBC had invoked the corporate guarantee even before the CIRP (i.e. on 26.09.2018). The concepts of financial debt as discussed in the abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bank of Commerce. Mr. Ajay Kumar Agarwal who was appointed as the Resolution Professional (in short, RP) continued the CIRP after the formation of Committee of Creditors (CoC). 2. The applicant herein on the strength of an arbitral award submitted its claim to the RP. Although, its claim was firstly rejected by the RP, its claim was later admitted by him as a secured Financial Creditor and was allowed to attend the 3rd CoC meeting onwards held on 04/02/2020. 3. In the meanwhile the applicant learned that the claim of Oriental Bank of Commerce and IndiaBulls Housing Finance Limited(R-3) to the extent of the amount admitted towards Corporate Guarantee given by the Corporate Debtor towards third party s debt seen admitted by the RP illegally and contrary to the proposition laid down in Anju jain s case. At the 4th CoC meeting held on 18/03/2020, the applicant raised objection with regard to the claim of the Financial Creditor in respect of the Corporate Guarantee, admitted as financial debt by R-1/RP. In the said CoC meeting it was specifically decided by the members of the CoC that they would not vote on any of the resolutions until the voting percentage is finalised. (Annexur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 4. Notices have been served upon the respondents through e-mail. The urgency set out in the application being found satisfactory the case was listed for hearing on today through video conference (VC). The applicant, the financial creditor, Corporate debtor, as well as respondents No.1, the Resolution Professional, R-3, and R-4, appears in person as well as through their respective counsel. R3 has filed brief written submissions of defence and none others filed any written submissions even if directed to submit brief written defence. 5. Heard both sides. Perused the records. 6. The Ld.Counsel Mr. Mainak Bose, for the applicant submits that inclusion of the claims of R3 and that part of the claim of the Oriental Bank of Commerce (In short OBC), to the extent of corporate guarantee furnished by the corporate debtor for third party debts, is illegal, as their claims not falls under the definition of the financial debt and contrary to the proposition laid down by the Hon ble Supreme Court of India in the case of Anuj Jain IRP for JP Infratech Limited vs- Axis Bank Limited (in Civil Appeal No. 8512-8527), wherein it was, inter alia, held that security extended by the Corporat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Code and is very much entitled to be a member of the CoC. So, the said judgement of Hon ble Supreme Court is not applicable to the facts and circumstances to R-3 and OBC. He reiterated. 10. Ld. Counsel Mr. Arik Banerjee for the OBC submits that the application is not maintainable as against the Oriental Bank of Commerce as it has been merged with Punjab National Bank w.e.f. 01/04/2020. So according to him the application in present form is not maintainable without the name of the bank to be changed as Punjab National Bank. One other submission regarding maintainability is that the applicant I.e Ascot Realty Pvt. Ltd. is a related party of the CD and as per an arbitration award awarded in favour of the applicant, the claim was lodged and has been admitted by RP and has become a member of CoC. Both these submissions are found not worthwhile, for the questions I am liable to be answered in the instant case. Even if the OBC is merged with the Punjab National Bank the disputed guarantee was executed by the CD in favour of the OBC and therefore, the submission that for want of change of name this application is not maintainable is devoid of any merit. So also whether the applicant is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nancial debt u/s. 5(8) of the Code. The term Loan agreement has been provided to RP and it is on the strength of it the RP admitted its claim and therefore inclusion of R3 as a member to the CoC is perfectly legal and proper. Argued by him. 13. Ld. Counsel Mr. Shakeel Mohammed Akhter, for the directors of the suspended board of CD supporting the contentions on the side of the applicant submits that invocation of Corporate Guarantee is not factually correct. According to him ₹ 7.54 crores and odd is for default in payment of term loan and ₹ 19.04 Crores and odd relates to corporate guarantee in respect of 5 companies was not at all invoked when the application was filed by the OBC. He disputed the authenticity of the letter shown by the Ld.counsel for the OBC during the hearing. He said that the proposition laid down in Anuj jain is squierly applicable in the case in hand because, 19.04 crores claimed by the OBC was not disbursed to the CD, but to the said five companies and that only because of creating security interest, its claim limiting to 19.04 is to be excluded for ascertaining the voting right of the OBC. He argued. The submission of the ld.Counsel regarding i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion has submitted that the amount of ₹ 7,54,68,438/- (Rupees Seven Crore Fifty Four Lacs Sixty Eight Thousand Four Hundred Thirty Eight Only) was due as on 30th September, 2018 and the account of the Corporate Debtor had been classified as a Non Performing Asset as on 15th December, 2012 when the amount of ₹ 5,31,14,402/- was due. The Financial Creditor has further submitted that the Corporate Debtor had stood guarantee for M/s. Bahubali Commercial Pvt. Ltd. a sum of ₹ 3,03,17,328/- inclusive of interest till 27.03.2014, (2) M/s. Safal Dealers Pvt. Ltd. a sum of ₹ 3,84,05,667.60 P. inclusive of interest till 27.03.2014, (3) M/s. Gandhyanya Properties Pvt. Ltd. a sum of ₹ 94,26,284.23p. inclusive of interest till 30.04.2012, (4) M/s. Purushotam Trade Promotion Pvt. Ltd. a sum of ₹ 89,05,156.85 p. inclusive of interest till 30.04.2012, and (5) M/s. Rameshwaram Trexim Pvt. Ltd. a sum of ₹ 2,78,89,937.53 p. till 30.04.2012, the outstanding total comes to ₹ 19,04,12,812.21p. (Rupees Nineteen Crore Four Lacs Twelve Thousand Eight Hundred Twelve and Paise Twenty One Only). In support of the claim the Financial Creditor has filed a copy of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present case the debt due to the OBC appears to me falls under the definition of financial debt and the lender is therefore a financial creditor. Because the lender/OBC had invoked the corporate guarantee even before the CIRP (i.e. on 26.09.2018). The concepts of financial debt as discussed in the above cited judgment is different from the debt claimed by the OBC in the case in hand. In this regards it appears to me that once a guarantee is invoked against the Guarantor, the Guarantor steps into the shoes of the principal borrower, the debt that originally is a financial debt under section 5(8) towards the principal borrower becomes a financial debt towards the guarantor and the same could be enforced as if it were being enforced against the principal borrower. The above said view also seems to have strengthened from the very same judgment cited by the applicant. The Hon ble SC has discussed at length sections 127 and 128 of the Contract Act and referred to a judgment of the High Court in State Bank of India vs. Kusum Vallabhdas Thakkar, 1994CivilCC89. It is good to read para 10 of the decision in Smt.Kusum: It read as follows: 10. As regards consideration, it is true that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laim of the financial creditor/ Oriental Bank of Commerce, by the RP is not illegal, as their claims falls under the definition of the financial debt 5(8) (i) and not contrary to the proposition laid down by the Hon ble Supreme Court of India in the case of Anuj Jain. 20. The next question is whether the inclusion of the entire claim of the financial creditor/ IndiaBulls Housing Finance Ltd./R3 by the RP is illegal, and contrary to the proposition laid down by the Hon ble Supreme Court of India in the case of Anuj Jain as alleged?. From the written submissions on the side of the R3 it is understood that the Corporate Debtor, along with other borrowers has availed a Loan for a sum of ₹ 2,50,37,300/-and R-3 sanctioned the loan facility of the aforesaid amount and a Loan agreement dated 31.03.2016 was executed under the Loan Account No. HLAPKLM00268034 for an amount of ₹ 2,50,37,300/-. Borrower/s is defined in the loan agreement and as per clause (c) of Article-1 of the loan agreement, Borrower/s means the persons named in the schedule of the loan agreement. The Corporate Debtor herein, with an intention to create security interest /charge to secure the loan facility ..... X X X X Extracts X X X X X X X X Extracts X X X X
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