9911796707
TMI Blog2022 (3) TMI 701X X X X Extracts X X X X X X X X Extracts X X X X ..... cial Creditor). The Appellant, Suspended Director of the Corporate Debtor- 'RKW Developers Private Limited' (Respondent No.2), aggrieved by the impugned order has come up in this Appeal. The brief facts of the case and sequence of events necessary to be noted for deciding this Appeal are: (i) 'Belief Realtors Pvt. Ltd.' (Principal Borrower) approached the 'Yes Bank Limited' (hereinafter referred to as "Bank") for disbursement of a term loan of Rs. 1,700 crores for development of a part of the property situated at Bandra (West) Mumbai. The loan to be given by the Bank was split into two tranches, 1st tranche of Rs. 750 crores to be issued to the 'Belief Realtors Pvt. Ltd.' (Principal Borrower) and the 2nd tranche of Rs. 950 crores to be issued to 'RKW Project Management Pvt. Ltd.'. (ii) By facility letter dated 28.06.2018, disbursement of 1st tranche of the loan of Rs. 750 crores to Principal Borrower by the Bank was sanctioned. The facility letter recorded the Facility Fee for the loan as Rs. 118 crores (Rs. 100 crores facility fees + Rs. 18 crores GST). The loan was secured by a registered mortgage of the development rights over the project land. (iii) On 27.09.2018, a corpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ault claimed on the part of the borrower was 01.08.2019. (x) On 18.11.2019, Bank issued a recall notice to the borrower and the Corporate Debtor. On 28.11.2019, a letter was addressed by Principal Borrower and the Corporate Debtor to the Bank in response to the recall notice requesting the Bank not to take any action until they respond. (xi) On 17.12.2019, a letter was sent on behalf of the Borrower to the Bank asking them to adhere to the understanding between the parties and to adjust the interest instalments against the balance facility fees due and payable to the borrower. (xii) In July, 2020, the Bank filed an Original Application before the Debt Recovery Tribunal seeking to recover the loan from the borrower as well as the Corporate Debtor. (xiii) In January, 2021, the Bank filed an Application under Section 7 of the Insolvency and Bankruptcy Code, 2016 claiming an amount of Rs. 839,59,87,999/- alongwith interest from the Corporate Debtor. The Corporate Debtor on 12.03.2021 filed an I.A No. 589 of 2021 challenging the maintainability of the Company Petition. The borrower pleaded in the Application that in fact there was no default by the Principal Borrower on the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... letter cancelling the facility of Rs. 950 crores. After cancellation of facility of Rs. 950 Crores, the Bank was obliged to reverse the facility fee for loan of Rs. 950 Crores for which the Bank was persuaded by the principal borrower. A letter dated 29.07.2019 was written by the principal borrower to the Bank for refund of proportionate facility fee to the extent of Rs. 55.88 crores for the second tranche of the loan which was cancelled. The Bank did not submit any reply to letter dated 29.07.2019 but Internal Credit Memorandum of the Bank dated 23.09.2019 clearly noted that there was understanding between the Bank and the borrower that facility fees of Rs. 100 Crores was agreed on the credit facility of Rs. 1700 Crores. The Internal Credit Memorandum further decided to reverse Rs. 10 crores towards the facility fee pending negotiation with the borrower. On 24.09.2019 and 25.09.2019, Rs. 10 crores was refunded towards facility fee regarding second tranche. The amount of Rs. 45.88 crores which was due to be refunded or adjusted by the Bank was illegally retained and only Rs. 10 crore was given in September, 2019. Hence, no default was committed by the borrower on 01.08.2019. The i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the Corporate Debtor and the said amount was disbursed for payment to the contractors and other claimants. The case of the Appellant at best is, dispute regarding reversal of proportionate facility fee which need to be pursued by the Appellant before the Competent Court and the said issue could not have gone into in the proceeding of Section 7. The Bank has not committed any wrong. The Appeal filed by the Appellant lacks merit and is filed on unsubstantiated grounds. The borrower/ Corporate Debtor cannot go away from the payment obligation under the loan agreement. Interest payment was made only till June 2019 and admittedly, no payments were made by the borrower despite being contractually liable to make monthly interest payment. Borrower has defaulted since 01.08.2019. 5. When this Appeal was first heard on 26.11.2021, pointed query was made to Shri Ritin Rai, Learned Senior Counsel for the Bank regarding guidelines, office memorandums and circulars of the Bank for charging of facility fee on the borrowing. This Appellate Tribunal asked the Learned Counsel for the Respondent to bring on record any relevant guidelines of the Yes Bank or any other material regarding charging ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charged by the Bank was Rs. 100 Crore on the entire loan of Rs. 1700 Crores. However, the facility fee of Rs. 100 Crores with GST of Rs. 18 Crores was deducted after disbursement of 1st tranche on 27.09.2018 itself. Subsequently, when 2nd tranche was cancelled on 13.12.2018 by the Bank on the request made by the Corporate Debtor, the proportionate facility fee was not reversed. The proportionate fee for Rs. 950 Crore which loan was never disbursed was Rs. 55.88 Crores. Further, as per the loan agreement, there was Moratorium of 36 months i.e. repayment of the principal amount was to restart on 26.09.2021 and only interest amount per month was to be serviced by the borrower. The Appellant's case is that the interest upto June, 2019 was paid by the Appellant and had the Bank reversed the facility fee which was taken at the disbursement of 1st tranche or had adjusted in the interest there was no default. The amount of facility fee which was to be reversed was sufficient to take care of the interest instalment till February, 2020. The default is claimed by the Bank as 01.08.2019 and partial reversal of the facility fee of Rs. 10 Crore was made on 24.09.2019 and 25.09.2019. Thus, if the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it appears to be exorbitant and unreasonable. Learned Senior Counsel for the Appellant, however, has very fairly submitted that since the Appellant has accepted the loan on the payment of facility fee of Rs. 100 Crore, they cannot raise any grievance about the extent of facility fee. 15. One of the reasons for our enquiring from the Bank regarding parameters of the facility fee was also to adjudge as to whether as per norms facility fee of Rs. 100 Crores, as charged, can be proved to be charge on Rs. 1700 Crores loan or only on the 1st tranche of Rs. 750 Crores as is the case of the Bank but no guidelines, parameters having been filed, we have to consider the question on the materials which are available on the record and were before the Adjudicating Authority. 16. Before proceeding further, we may notice the credit facility of Rs. 750 Crores was sanctioned by letter dated 28.06.2018. Facility details as contained in the letter dated 28.06.2018 are to the following effect:- "YBL/MUM/CF/FL/0130/2018-2019 June 28, 2018 Belief Realtors Private Limited HDIL Towers, 4th Floor, Anant Kanekar Marg, Bandra East, Mumbai- 400051 Dear Sirs, Re: Credit Facilities. We (th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, Mumbai- 400051 Dear Sirs, Re: Credit Facilities. We (the "Lender") have pleasure in offering you RKW Project Management Pvt. Ltd. (the "Borrower") the following facilities (the "Facilities") on the terms and conditions set out below: S. No. Facility Description Interest/ Commission Security 1. Facility: Term Loan 1 (TL 1) Amount: INR 9500,000,000/- (INR Nine Thousand Five Hundred Million) Nature: Non Revolving PMC projects: SRA Residential projects to be developed under DCR 33(10) Purpose: Towards Rehab construction, relocation, property Affairs/ Liasioning Cost, approval cost and allied cost(s) including placement of refundable deposits as part of "PMC Agreement(s)" to be entered by the borrower with "PMC Counterpart(ies)" Tenor & Repayment: 84 Months Door to door tenor of 84 months including a moratorium of 36 months from first disbursement and followed by structured quarterly instalments as per below schedule. Installments shall be due on last day of respective quarter. (Schedule as per clause 2.1.2) Prepayment penalty: Nil Availability: 36 months from date of first disbursement Pricing: Spread of 0.95% p.a over 1 year YBL MCLR &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cable on the entire loan. Pursuant thereto, while your bank has disbursed the first loan amount of Rs. 750 Crores in favour of Belief Realtors Pvt. Ltd., your bank was scheduled to disburse the balance loan of Rs. 950 Crores sanctioned in favour of RKW Project Management Pvt. Ltd. in due course which sanction was subsequently withdrawn. However, your bank has collected the entire processing fee of Rs. 100 Crores applicable on the aforesaid loan amount of Rs. 1700 Crores. We therefore request you to refund us the proportionate amount of Rs. 55:89 Crores which will enable us to make the overdue interest payment to your bank. For Belief Realtors Pvt. Ltd. -sd/- Authorized Signatory" 19. No reply was given to the letter dated 29.07.2019 by the Bank. However, Bank officials internally examined and an O.M dated 23.09.2019 was issued by the Bank in the above context. The said O.M is part of the Application which was filed by the Appellant in Company Petition No. 30 of 2020 seeking dismissal of the Company Petition. The subject of the O.M "Subject:- Reversal of partial fee paid by the Company to YBL towards facility set-up fee for sanction of Term Loan Facility of INR 7,500 MM". ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies." 21. The O.M recommends refund of INR 10 Crores. The said O.M was implemented by the Bank immediately, on 24.09.2019 and 25.09.2019 the Bank aggregate reversed the facility fee amounting to Rs. 10 Crore. The Bank statement of the account of the principal borrower has been brought on the record from 02.07.2018 to 02.12.2019 where bank entries of 24.09.2019 and 25.09.2019 is to the following effect:- TXN DATE VALUE DATE DESCRIPTION REFERENCE DEBITS CREDITS BALANCE 24-SEP-2019 24-SEP-2015 4022123132570002- FACILITY FEES REVERSED -BANDRA (E) 000000000000 0.00 76,778,101.00 76,778,101.00 25-SEP-2019 25-SEP-2019 4022114192680002- FACILITY FEES REVERSED -BANDRA (E) 000000000000 0.00 23,224,899.00 23,224,899.00 22. The Office Memorandum dated 23.09.2019 of the Bank as well as the Bank entries of 24.09.2019 and 25.09.2019 as above clearly indicate that what was reversed in the account of the principal borrower was reversal of facility fee although it was only Rs. 10 Crores on the aforesaid date. The Office Memorandum dated 23.09.2019 which has been relied by the Appellant has not been disputed by the Bank either before the Adjudicating Authority or before t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat facility fee of Rs. 100 Crores was chargeable on both the loan i.e. loan of Rs. 750 Crores and Rs. 950 Crores. However, the entire facility fee to be deducted from the disbursal of first loan. When Bank charges facility fee on borrowing, it cannot be accepted that on a loan of Rs. 1700 Crores facility fee shall be charged on the first tranche of Rs. 750 Crores and no facility fee was chargeable on 2nd tranche of Rs. 950 Crores. The payment of facility fee was received by the Bank on disbursement of 1st tranche which was facility fee for both the tranches and when 2nd tranche of Rs. 950 Crores stood cancelled, the Bank was obliged to refund the proportionate facility fee. The action of Bank in not refunding/ adjusting the proportionate facility fee is unjust enrichment by the Bank at the cost of borrower. The relationship between a banker and borrower is of trust. The purpose of all financing is for the purpose of promotion and completion of project by different borrowers. Bank is supposed to extend a helping hand and to act as a facilitator in carrying out the project. 25. In the present case, we find that Bank has not acted fairly and even after cancellation of 2nd tranche of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on which had already been deducted in regard to Rs. 950 crores facility will be duly refunded/adjusted towards the dues of the borrower. The proportionate processing fee charges and GST amounts to Rs. 55.88 lakhs. However, no action was taken by the Petitioner on refund of proportionate processing fee. A partial reimbursement of processing amount aggregating to Rs. 10 crores was made on 24.09.2019. 13. The Corporate Debtor pointed out that the borrower paid interest up to June 30th, 2019 amounting to Rs. 61.95 crores which includes penal interest of Rs. 91,10,700.37/- which was levied by the Petitioner despite having excess amount that were to be refunded to the borrower. The Corporate Debtor further claimed that an amount of Rs. 44.84 crores are lying to the credit of the borrower and has not adjusted the same towards dues and facility and have declared the account as NPA on 30.10.2019. the Petitioner have recalled the loan and invoked the corporate guarantee as on 18.11.2019." 27. It was pleaded by the Corporate Debtor that there was no default on 01.08.2019 on the part of the Appellant when credit is given of Rs. 45.88 Crores to the Appellant which Appellant was entitled to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it the Application. The Bank cannot be allowed to take benefit of its own wrong by withholding of an amount of Rs. 45.88 Crores which was liable to be reversed after 13th December, 2018, default is not proved on the part of the Appellant rather it was omission and commission on the part of the Bank in unfairly denying to reverse/adjust the aforesaid amount. 29. Learned Counsel for the Respondent has laid much emphasis on the fact that default has been reflected in the record of the information utility in whose record, the default is recorded. Learned Counsel for the Appellant has relied on the record of National E-Governance Services Limited. Learned Counsel for the Appellant submits that in the record dated 31.12.2019, date of default in the information utility was 01.08.2019 and further in the information utility record, the date of default was clearly mentioned and the information utility before recording the default issued notices as contemplated in the Regulations i.e. 'The Insolvency and Bankruptcy Board of India (Information Utilities) Regulations, 2017' and when no reply was received by the borrower, the record of default was deemed approved. 30. With regard to the afores ..... X X X X Extracts X X X X X X X X Extracts X X X X
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