TMI Blog2022 (6) TMI 544X X X X Extracts X X X X X X X X Extracts X X X X ..... mortgage for Rs. 20.80 Crore - It is also evident from the pleadings that the Corporate Debtor/Guarantor has executed a Corporate Guarantee Agreement , in lieu of the said loans apart from offering its property in mortgage. It is also observed that the R1/Bank also issued demand notice on 29.12.2016 under the provisions of SARFAESI Act, 2002 to the Appellant demanding further Rs. 14 Crore from the Appellant being the Corporate Guarantor. It is also observed from the pleadings that the Appellant has given reply of the said demand notice as per provisions laid in SARFAESI Act, 2002 vide their letter dated 13.02.2017 denying and disputing the said demand notice and the quantum. It has also been mentioned in the pleadings that the borrower was continuously making payment inspite of receiving demand notice under the relevant provisions of SARFAESI Act, 2002. As per the pleadings, it is also mentioned that the original borrower has paid an amount of Rs. 92 lakhs during the time of pendency of the said application. It is a settled law that the practice of Forum Shopping be condemned as it is an abuse of law. This case is beyond doubt falls under the category of Forum Shop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said loans apart from offering its properties in mortgage. Out of the three borrowers, two of them are Trusts as incorporated under the Indian Trust Act, 1961 namely Multiple Educational and Manpower Development Trust and Camellia Educare Trust while the other borrower is a company incorporated as per the provisions as laid down in the Companies Act, 1956. It is pertinent to mention that all the three borrowers were engaged in the field of education and for the reason of enhancing the same and to spread their goods cause among the various parts of West Bengal, they have approached the Respondent for the financial facilities which was duly sanctioned on agreed mutual terms and conditions as contained in the Loan agreement. The above said loan facilities were payable in equated monthly installments, carrying an interest rate of 25% p.a., payable every 6 months. Bifurcating, the first component of the loan was payable within a time period of 18 months, ending 2014, while the other component was payable within 60 months. The borrowers were regular in making payments, the Respondent failed to provide them with a statement of accounts and started disputing on the order of satisfaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Respondent shall be communicated to the Appellant s company prior to such effect. The borrower visited the head office of the Respondent to settle the issue and also made representation by providing an OTS to the Respondent vide letter dated 14.01.2019 with Demand Draft as an ad-hoc upfront amount but the same was refused by the Respondent without any reasoning vide its letter dated 08.02.2019 5. The Appellant has also stated that the Respondent did not comply with the same solemn order and without any prior notice had issued a notice under SARFAESI Act. The Appellant has stated that challenging such action, the Appellant s company further filed an Interim Application in the said SARFAESI Application whereby the ld court without any prayer and / or pleadings of either parties has appointed a Joint Receiver vide its order dated 08.08.2019 and the same was challenged before the Hon ble High at Calcutta, whereby the Hon ble High Court was pleased to set aside the same vide its order dated 06.09.2019. In the meantime, the Respondent has also filed an O.A No. 189 of 2019 under Section 19 of the Recovery of Debts and Bankruptcy Act, 1993 for the issuance of Certificate of Recov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 27.08.2019, despite of recording that the said matter shall appear next on 01.10.2019. It is pertinent to mention that the said matter was listed as Ex parte vide order dated 27.08.2019 without any knowledge or intimation upon the Appellant neither to the Advocate. It is further stated that the Adjudicating Authority has failed to appreciate that the supporting document/ annexures in connection to the said application placed before the Adjudicating Authority by the Respondent is already under challenged before the appropriate forum and as such fixing the matter as ex parte on an earlier date would render the CD helpless. That though, its present advocate as mentioned in the erstwhile paragraph made an appearance on 01.10.2019, whereby the Appellant came to know the fact that the same has been moved and/or kept in Ex parte and such has been kept reserved for judgment without considering the issue and objection raised by the advocates of the Appellant s company in regard to the same. The matter stood thus, the impugned order was passed on 04.10.2019, by initiating the Insolvency Resolution Process and by appointing Shri Jitendra Mohan Lohia, as the IRP alongwith declaration of Mora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere making payment to the Respondent Bank. It is also stated that although the borrowers were regularly making payment to the Respondent Bank, the Respondent Bank in all its malafide declared those amounts as NPA and issued notice under Section 13(2) of the SARFAESI Act, 2002 vide their letter dated 29.12.2016. The Respondent bank has also suppressed the fact that the borrower has immediately replied to the said notice for recalling of the same as the said notice was issued based on gross misrepresentations and irregularities as committed by the Respondent Bank in declaring the accounts as NPA. It is stated that accounts could at the most be declared as substandard accounts but not NPA and as such the same was also challenged before the DRT, Kolkata which is still pending adjudicating and both the parties are contesting the same. Under such circumstances, the Respondent Bank could not have filed the application under Section 7 of the Code against the Appellant company which is one of the corporate guarantors and more so when the factum of interest over interest and the component of the outstanding amount is under challenge. 8. It is also stated by the Appellant that the Responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leaped to Rs. 21,60,18,331/- although a hefty amount of Rs. 5.5 Crores has been paid to the Respondent bank post the issuance of notice under Section 13(2) of the said Act, 2002. More shockingly, the R1 bank did not disclose the amount received by them during the period from 2016 to 2018 from the borrowers and/or guarantors far less any adjustment thereof, if at all so under which head. It is stated that the R1 bank entirely suppressed before this Tribunal that the R1 bank has preferred a SLP (C) No. 26419 of 2019 before the Hon ble Apex Court in the self-serving cause of action and that the same is subjudice. The Respondent therein has entered appearance and the matter is being contested by both the parties. It is further stated that the Appellant herein had already sent a fresh proposal for settlement in pursuance of solemn order dated 04.12.2019 showing its bonafide intention to make payment towards the outstanding dues minus the penal interest and the same would be evident from the directions as contained in the said order dated 04.12.2019. It is stated that the submissions of the Appellant on 04.12.2019 before this Tribunal and it is subsequent fresh proposals for settlement d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so failed to observe and perform other terms and conditions of the said agreement, the Applicant as per guideline of RBI declared loan accounts of the CD as NPA, as (i) CESL on 29.09.2015, (ii) MEMDT on 28.09.2015 and (iii) CET on 28.09.2015. Therefore, the Appellant had issued a Recall Notice dated 27.02.2018 to the said Borrowers, Mortgagors and also the CD (being Corporate Guarantor). An Insolvency Proceedings was initiated against the CD by the Applicant bank and was filed before the Adjudicating Authority bearing no. CP(IB) 204(KB)/2019, and title as Kotak Mahindra Bank Limited Vs. Multiple Hotels Pvt. Ltd. Vide hearing dated 11.02.2019, the Adjudicating Authority was issued notice to the CD, returnable on 13.03.2019. Thereafter, on 13.03.2019, the CD made appearance through counsel and sought time to file Vakalathnama and Affidavit in Reply. The Adjudicating Authority was granted that and re-notified the matter to 08.05.2019. On 08.05.2019, the Adjudicating Authority had noted and recorded in the order that the Vakalathnama and Affidavit in Reply has not been filed. However, the Adjudicating Authority was again granted another opportunity to the CD to file the same within two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r I.As, thereby challenging the action initiated by the R1 Bank from DRT, Kolkata. It is submitted that the R1 bank has and is exercising the legal remedies available in the law, in order to recover the outstanding dues, which is the public money. The order dated 16.08.2018 and 03.12.2018 are based upon the technical requirement for take over the management of trust of the borrower. The said proceedings have no relevance to the present matter in hand. That action was against borrower trusts and the present matter is against the Corporate Guarantor Company. The List of date of Dates has depicted below: 12. The Adjudicating Authority while passing the impugned order dated 04.10.2019 has observed the followings: 13. We have carefully gone through the pleadings of the parties and further submissions made by the Ld counsel for the Respondent bank and extant provisions of the Code and we are having the following observations: a. It is undisputed fact that the impugned order of Adjudicating Authority dated 04.10.2019 was passed ex parte. b. This Tribunal has observed that loan facility has been granted to the Trust which is engaged in Educational Service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id demand notice and the quantum. It has also been mentioned in the pleadings that the borrower was continuously making payment inspite of receiving demand notice under the relevant provisions of SARFAESI Act, 2002. As per the pleadings, it is also mentioned that the original borrower has paid an amount of Rs. 92 lakhs during the time of pendency of the said application. The pleadings also confirms that the DRT, Kolkata vide its order dated 14.12.2018 (appearing at page 9 of the Appeal paper book) directed the borrowers to visit head office of the Respondent and to meet decision making officer to resolve through OTS. The Borrower visited the head office of the Respondent to settle the issue and also made representation for OTS vide its letter 14.01.2019 with demand draft as an ad hoc upfront amount but the same was refused by the Bank/R1 without assigning any reason vide its letter dated 08.02.2019 (appearing at page 10 of the Appeal Paper Book). The bank/R1 has even approached under Section 19 of the Recovery of Debts and Bankruptcy Act, 1993 for the issuance of certificate of recovery against Borrowers and Guarantors. c. All this suggests that the Bank/R1 is involved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e compulsive pressure of circumstances . The audi alteram partem rule is not cast in a rigid mould and judicial decisions establish that it may suffer situational modifications. The core of it must, however, remain, namely, that the person affected must have a reasonable opportunity of being heard and the hearing must be a genuine hearing and not an empty public relations exercise. That is why Tucker, L.J., emphasized in Russel v. Duke of Norfolk (1949) 1 ALL ER 109 that whatever standard of natural justice is adopted, one essential is that the person concerned should have a reasonable opportunity of presenting his case . g. Considering all the above aspects, we thought it fit and proper to remand back the matter to the Adjudicating Authority to give a patience hearing also to the Appellant and the Respondents including the RP and then to decide the matter considering the fact of the case as well as the provisions of applicable laws on the issue and then to finally pass appropriate order in accordance with law. h. Hence, we are setting aside the order of the Adjudicating Authority and remanding back the matter to the Adjudicating Authority as stated above. i. Accordingly, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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