TMI Blog2020 (8) TMI 910X X X X Extracts X X X X X X X X Extracts X X X X ..... will have to be considered harmonizing the charging section envisaged under Sec 33 34 of Maharashtra Stamp Act, which will have to be addressed to ensure revenue recoveries - This section cast an obligation on the Court, Adjudicating Authority, Judicial officer, Quasi judicial officer not to admit any document which is not duly stamped. In view of Sec 19 of Maharashtra Stamp Act 1958, the documents executed in Delhi and sought to be enforced in Mumbai are subject to pay the difference of duty. The Hon'ble Mumbai High Court in Antifriction Bearing Corporation Ltd. Vs, State Of Maharashtra [ 1998 (9) TMI 472 - HIGH COURT OF BOMBAY] , dealt with the similar question of law wherein the petitioner company held in properties in Gujarat and registered in the state of Gujarat, constituency issued debenture trust deed and these documents were also registered in the state of Gujarat - The court held that the petitioners are liable to pay stamp duty as directed by Superintendent of Stamp, Maharashtra. The above dictum would categorically demonstrate that documents received in the State of Maharashtra, if insufficiently stamped would be subject to levy of specific stamp duty under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med as whether the Debenture Trust Deed dated 1st March, 2014 and Redeemable Non-convertible Debenture Subscription Agreement dated 1st March, 2014, shall be impounded and be sent for payment of requisite stamp duty in accordance with the Maharashtra Stamp Act - The Registry is directed to immediately place the record before the Hon'ble President for constituting appropriate bench/3rd Member for his opinion, so that the order in MA is rendered in accordance with the opinion of majority. - MA No. 180/2020 and C.P. (IB) No. 1632/MB/2019 - - - Dated:- 3-8-2020 - Smt Suchitra Kanuparthi, Member (Judicial) and Shri V. Nallasenapathy, Member (Technical) For the Petitioner: Mr. Pradeep Sanchetti, Senior Counsel a/w. Mr. Vyom Shah, Ms. Pallavi Bali, Mr. Aziz Khan, Ms. Dimple Majithia, Mr. Anagh Pradhan and Mr. Gamanjit Singh Sethi, Advocates i/b. Divya Shah Associates For the Corporate Debtor: Mr. Gaurav Joshi, Senior Counsel a/w. Mr. Feroze Patel and Ms. Shaheen Moghul, Advocates i/b. Mulla Mulla and CBC ORDER Per: Suchitra Kanuparthi, Member (J) 1. This Company Petition is filed by Vistra ITCL (India) Limited (formerly known as IL FS Trust Company) (he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cuted the Secured Redeemable Non-Convertible Debenture Subscription Agreement dated 1st March 2014 (hereinafter referred to as the Debenture Subscription Agreement ) in favor of the Petitioner No. 2 3. Mr. Mayank Shah with Mrs. Shruti Mayank Shah, the Petitioner Nos. 2 and 3 herein, jointly subscribed to 5,400 Debentures and Mr. Shreyans Shah subscribed to 200 Debentures. The consideration of Rs. 56,00,00,000/- was paid by the Debenture Holders from time to time through different bank accounts held in the name of Mr. Mayank Shah and Mr. Shreyans Shah towards the 5,400 Debentures and 200 Debentures respectively. 5. The Debenture Amount was to be secured by first equitable mortgage over the leasehold rights in the Jodhpur Plot and Personal Guarantee of Mr. Praful Satra. Under the Debenture Subscription Agreement, the said Debentures were to be redeemed after the end of 12 months with interest in accordance with the Redemption Schedule annexed to the Debenture Subscription Agreement. The said Debentures were subscribed to by the Debenture Holders in installments and acknowledged by Allotment Intimation letters addressed by the Corporate Debtor between March and November 2014. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ursuant to its rights and obligations under the Debenture Trust Deed and the Petitioner Nos. 2 and 3 have been added as parties to the present Petition in their capacity of being the Debenture Holders/Financial Creditors. A personal guarantee was furnished by Mr. Praful Satra, Promoter of the Corporate Debtor, by executing a Personal Guarantee dated 15th March 2014 for the benefit of the Debenture Trustee and the Debenture Holders. 8. An Escrow Agreement was executed on 2nd December 2014 between the Corporate Debtor, the Debenture Holders, Debenture Trustee and Axis Bank Limited as the escrow agent wherein the receivables from the proposed Jodhpur Project were to be routed through/deposited in the escrow account. The Debenture Trustee was to operate the said escrow account on behalf of and for the benefit of the Debenture Holders. 9. As per the terms and conditions of the Debenture Subscription Agreement, the said Debentures were to be redeemed in four trenches of Rs. 38.50 crores along with interest accrued on 5th March 2015, Rs. 6.50 crores along with interest accrued on 5th April 2015, Rs. 5.50 crores along with interest accrued on 5th May 2015 and Rs. 5.50 crores along wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from date of subscription of the respective Debentures. It was stated that in respect of the outstanding 4330 Debentures aggregating to a value of Rs. 43.30 crores, redemption date was extended in the following manner:- Dates No. of NCD 2nd April 2019 2,780 2nd May 2019 500 1st June 2019 800 1st August 2019 100 2nd December 2019 150 12. The escrow account of the Corporate Debtor was frozen by the Maharashtra VAT authorities and on or around November 2017, they deposited monies into current account of Satra Properties India Limited. This was a breach of the Escrow Agreement between the parties and the Debenture Holders informed the Corporate Debtor and its Promoter accordingly. However, Mr. Praful Satra stated to the Debenture Holder/Petitioners that there were financial difficulties and the Jodhpur Project has almost come to a standstill. He sought further amounts from Petitioner No. 2 and 3 i.e. the Debenture Holders and assured that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ured that he would settle the matters and the outstanding debts before admission of the Petitions. He assured the Petitioner Nos. 2 and 3 that after settlement of these Petitions, there would be no impediment to the Corporate Debtor to obtain further funds from other sources and redeeming the outstanding Debentures as per the agreed schedule. Ultimately, none of these matters have been settled and proceedings against the Corporate Debtor are currently pending before this Hon'ble Tribunal. Petitioner Nos. 2 and 3 confirms that the Corporate Debtor and its promoter Mr. Praful Satra has also had several without prejudice settlement discussions with the Debenture Holders. However, there has been no positive result to these discussions and it is evident that the Corporate Debtor and Mr. Praful Satra are only suggesting settlement discussions to elongate the matter and to avoid redeeming the outstanding Debentures. 16. It is submitted that the Corporate Debtor is not able to fulfill its obligations and redeem the outstanding Debentures in view of their precarious financial condition. It has failed to redeem the 2,780 Debentures that were to be redeemed on 2nd April 2019. Various e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rejected its liability in toto to redeem any of the outstanding debentures. As a consequence of these actions, the Petitioner Nos. 2 and 3 directed the Debenture Trustee to call upon the Corporate Debtor and its Promoter to pay the entire debt of Debenture Amounts of Rs. 43.30 crores plus interest thereon. 21. The Petitioner Nos. 2 and 3 have finally in view of the consistent breaches committed by the Corporate Debtor under the terms and conditions of the Debenture Subscription Agreement dated 1st March 2014 addressed a letter dated 16th April 2019 to the Corporate Debtor and thereby called upon the Corporate Debtor to redeem the outstanding 4,330 Debentures for a principal amount of Rs. 43.30 13 crores plus interest thereon @ 9% per annum compounded every 9 completed calendar months from the date of subscription. The Petitioners therefore repeat and reiterate that all amounts payable towards the said Debentures are still outstanding and due and payable under the said Debenture Subscription Agreement and the said Debenture Trust Deed. 22. The petitioner submits that the Rs. 43,33,00,000/- being the amount disbursed towards the subscription of the secured redeemable non- conv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the parties pursuant to prolonged negotiations and the settlement apropos the various facets that were intrinsically connected and to be acted upon by the parties as a whole. The respondent therefore states that the present petition is not maintainable in the present form or otherwise, for various reasons that are more particularly elucidated upon hereinafter and on these grounds alone, the petition deserves to be dismissed in limine with costs. c. The Corporate Debtor submits that the petitioner in their petition for obvious reasons suppressed certain relevant and material facts which are necessary for the purpose of the present adjudication. The petitioners are guilty of suppression veri and suggestion falsi and on this ground alone this petition deserves to be dismissed. In view of the larger settlement between the parties, the liability of the Corporate Debtor stands discharged due to novation of contract. d. The petitioner No. 2 directly and indirectly owns, controls and manages various entities including companies and partnership firms, severally and/or jointly with his other family members including his wife Shruti Shah, (Petitioner No. 3) and his brother, Shreyans S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tlement of liabilities to the MJS Group to the extent of Rs. 200,00,00,000/-. It is significant to note that the subject matter of the present petition i.e. the amount of Rs. 43.30 crore, payable upon redemption of the 4,330 non-convertible debentures was included within and formed part of the aforesaid amount of Rs. 200,00,00,000/-. iv. Therefore, as of end January 2018, the said novated contract/agreement arrived at between the MJS Group and the Satra Group amongst IIFL Group was inter alia crystallized as; The Satra Group would not be liable towards the loans/finance availed by them from the IIFL Group (in full and final) as well as the MJS Group (to the extent of Rs. 200,00,00,000/-) which included the amount of Rs. 43.30 crores payable upon redemption of the 4,330 non- convertible debentures, being the subject matter of the present petition. The Ghatkopar project would be taken over by the MJS Group and the IIFL group. v. Meetings were also held during the period March 2018 and July 2018, between the Satra Group, MJS Group and IIFL Group. The Satra Group was informed that the MJS Group and IIFL Group inter se, decided that 49% of the shareholding in Satra Prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 51% shares of SPDPL. viii. It was therefore understood between MJS Group, the Satra group and the IIFL group that SPDPL is the identified SPV and for that purpose, the assets and the liabilities of SPDPL were to be demerged from SPDPL, and were to belong to the Satra Group. Initially, 49% of the shareholding of SPDPL would be transferred for Rs. 54,00,00,000/- and the balance 51% shareholding of SPDPL would as an interim arrangement be pledged in favour of the MJS group and/or it is nominees and subsequently transferred upon completion of all legal and statutory formalities and compliances against the payment of Rs. 56,00,00,000/-. Thus, pursuant to the aforesaid understanding and agreement, the liability of the Satra Group to the MJS group upto the extent of Rs. 200,00,00,000/- stood fully and finally settled. g. The Respondent states and submits that there was a valid and binding contract between the parties viz. the overall settlement and larger understanding as is embodied in the documents/correspondence, meetings and discussions forming part of the novated settlement. The novated contract/agreement was valid, subsisting and binding on IIFL Group, MJS group and Satra Gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Petitioner Nos. 2 and 3 conveniently ignored the aforesaid provision and proceeded to threaten to enforce the Respondent's securities without giving any notice of 30 days which is a mandatory requirement under the Agreement under which the Petitioners purports to have filed the present proceedings. 24. Rejoinder by Petitioners: a. At the outset, it is submitted that the Limited Reply dated 18th June 2019 filed by the Corporate Debtor is a frivolous and vexatious defense and unsupported by any record or documents whatsoever. The failure by the Corporate Debtor/Respondent to redeem the outstanding Secured Redeemable Non-Convertible Debentures (hereinafter referred to as NCDs ) as per their terms is a default of a financial debt owed by the Corporate Debtor/Respondent. b. The Petitioners also reiterate that the outstanding 4,330 fully redeemable non-convertible debentures issued by the Corporate Debtor/Respondent to the Petitioner Nos. 2 and 3 (hereinafter referred to as the outstanding NCDs ) are liable to be redeemed by the Corporate Debtor and amounts payable on redemption to be paid to the Petitioner Nos. 2 and 3 as per the terms set out in the Debenture Sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that despite non-payment of the financial debt and despite non-payment of the loans payable to the Shah Group under the alleged Ghatkopar settlement, the Corporate Debtor/Respondent is entitled to damages. g. Insofar as the allegations of Corporate Debtor/Respondent that its liability to redeem the said NCDs issued by the Corporate Debtor/Respondent was part of an alleged larger understanding/settlement and novated contract/agreement is concerned, as also all other allegations in relation thereto, the same are denied in toto. These allegations are evidently also contrary to the documents on record. h. In any event, there is no 'larger settlement' as alleged by the Corporate Debtor/Respondent. Moreover, India Infoline Finance Limited (hereinafter referred to as IIFL Group ) which is allegedly a party to this settlement, has also initiated proceedings before the Hon'ble National Company Law Tribunal, Mumbai against Corporate Debtor/Respondent and another Satra group company viz. Satra Property Developers Private Limited under Section 7 of the Insolvency and Bankruptcy Code, 2016. The Corporate Debtor/Respondent is trying to mislead this Hon'ble Tribunal by imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he M.A. a. The petitioners have filed CP No. 1632/2019 initiating corporate Insolvency resolution process against the Respondent under Sec. 7 of I B Code. b. The Petitioner No. 1 being the Debenture Trustee, at the behest of Petitioner No. 2 3 has filed this petition only to defraud the rights of the respondent. The respondent claimed that the documents relied upon by the petitioners have been novated by a larger understanding between the parties and therefore the liability of the Respondent stood discharged in view of the overall settlement. c. The Respondent thus sought impounding of secured redeemable non-convertible debenture subscription agreement dated 1st March, 2014, ii. a debenture trust deed 1st March, 2014 under the present MA. d. The respondent claimed that the debenture trust deed and debenture subscription agreement are inadequately stamped, unstamped as documents were executed/registered in Delhi and the petitioners are seeking to enforce these documents in Mumbai. The Maharashtra Stamp Act postulates the payment of stamp duty as follows: Chapter II- Stamp Duties (A) Of the Liability of Instruments to Duty Section 3 -Instrument chargeable with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... struments for copies thereof] liable to increased duty in [Maharashtra State] Where any instrument of the nature described in any article in Schedule I and relating to any property situate or to any matter or thing done or to be done in this State is executed out of the State and subsequently [such instrument or a copy of the instrument is] received in the State,- (a) the amount of duty chargeable on such instrument [or a copy of the instrument] shall be the amount of duty chargeable under Schedule I on a document of the like description executed in this State less the amount of duty, if any, already paid under any law in force in India excluding the State of Jammu and Kashmir on such instrument when it was executed; (b) and in addition to the stamps, if any, already affixed thereto such instrument [or a copy of the instrument] shall be stamped with the stamps necessary for the payment of the duty chargeable on it under clause (a) of this section, in the same manner and at the same time and by the same persons as though such instrument for a copy of the instrument] were an instrument received in this State for the first time at the time when it became chargeable with the h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... minal Procedure 1973;] (d) nothing herein contained shall prevent the admission of any instrument in any Court when such instrument has been executed by or on behalf of the government or where it bears the certificate of the Collector as provided by section 32 or any other provision of this Act; (e) nothing herein contained shall prevent the admission of a copy of any instrument or of an oral admission of the contents of any instrument, if the stamp duty or a deficient portion of the stamp duty and penalty as specified in clause (a) is paid.] f. In view of the above provisos of law, the respondent claimed that these documents which were sought to be enforced which are insufficiently stamped/unstamped and the same cannot be construed as a contract in the eyes of law and therefore seek to impound the document under section 33 of the MAHA Stamp Act, Section 33- Examination and impounding of instruments. 1) [Subject to the provisions of sections 32-A, every person] having by law or consent of parties authority to receive evidence and every person in charge of a public office, except an officer of police [or any other officer, empowered by law to investigate offences unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e or impound, if he does not think fit so to do, any instrument coming before him in the course of any proceeding other than a proceeding under Chapter XII or Chapter XXXVI of the Code of Criminal Procedure, 1898 (5 of 1898) (b) in the case of a Judge of a High Court, the duty of examining and impounding any instrument under this section may be delegated to such officer as the Court appoints in this behalf. (3) for the purpose of this section, in cases of doubt,- (a) the State Government may determine what offices shall be deemed to be public offices; and (b) the State Government may determine who shall be deemed to be persons in charge of public offices. 3. Reply of the Petitioner in MA 180/2020: a. The petitioners are enforcing Debentures issued by the respondent company and ought to be stamped by the respondent as per the provisions of the Indian Stamp Act, 1899. These instruments do not form part of the company petition. Without admitting even assuming that the said agreement are insufficiently stamped, the petitioner denied that the hearing of the company petition be stayed or deferred and/or kept in abeyance pending the hearing and final disposal of the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re issued by the company interims registered mortgaged deed. e. The Corporate Debtor has registered the mortgage in Jodhpur, the debenture trust deed were executed in Delhi and these agreement are being enforced in Mumbai and therefore short fall in stamp duty must be paid. f. The Corporate Debtor has falsely alleged that the redemption of 4330 debentures should extinguish by virtue of minutes of meeting 31.01.2018, the minutes of meeting were never meant to settle the Corporate Debtor debt to the effect of outstanding debentures and is not included in Rs. 200 crores debt considered in the minutes of meeting. These minutes does not acted upon the parties and further the minutes of the meeting dated 31.01.2018 is an unstamped document and cannot be relied upon. g. The other parties to the alleged settlement namely ILFS group have also independently filed insolvency petition vide C.P. No. 1725/2019, the Corporate Debtor has independently settled the matter. h. The petitioner No. 2 filed a suit before Bombay High Court vide commercial suit No. 859/2019 against the Corporate Debtor inter alia seeking 51% of shares in the subsidiary of the Corporate Debtor. The Corporate Deb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filing with the ROC of Nov 2019 admits that the Petitioners' charge on the Jodhpur plot as security for redemption of Debentures continues. 3) The Petitioners' security vide a registered mortgage deed continues to be registered with the ROC and till the outstanding 4330 Debentures are redeemed, the charge will remain operative. f. Therefore there is a debt and default under section 3(11) of I and B Code and Corporate Debtor has defaulted the payment of the above monies. 26. FINDING: ISSUES: A. Whether the Debenture Subscription Agreement and Debenture Trust deed executed and registered in Delhi are insufficiently stamped in the State of Maharashtra in accordance with Maharashtra Stamp Act 1958, where they are sought to be enforced? B. Whether these documents are liable to be impounded under Sec 33 34 of Maharashtra Stamp act 1958, in a summary proceedings under IBC? C. Whether there is novation of contract? D. Whether the petitioners are entitled to recover the outstanding sums due to be redeemed under the Debenture Subscription Agreement and Debenture Trust Deed? In the backdrop of factual matrix, the issue for consideration is whether the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... For the purpose of this section, in cases of doubt, - (c) the State Government may determine what offices shall be deemed to be public offices. (d) the State Government may determine who shall be deemed to be persons in charge of public offices. Similarly, Section 33 of the Indian Stamp Act, 1899 which is parimateria to the aforesaid Section 34 reads thus: Section 33- Examination and impounding of instruments- (1) Every person having by law or consent of parties authority to receive evidence, and every person in charge of a public office, except an officer of police, before whom any instrument, chargeable, in his opinion, with duty, is produced or comes in the performance of his functions, shall, if it appears to him that such instrument is not duly stamped, impound the same. (2) For that purpose very such person shall examine every instrument so chargeable and so produced or coming before him, in order to ascertain whether it is stamped with a stamp of the value and description required by the law in force in India when such instrument was executed: Provided that- (a) Nothing herein contained shall be deemed to require any Magistrate or Judge of Criminal Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 32 shall apply to such instrument [or a copy of such instrument] as if such were an instrument executed or first executed out of this State and first received in this State when it became chargeable to the higher duty aforesaid, but the provisions contained in clause (a) of the said proviso shall not apply thereto. Though the debenture trust deeds and agreements are not admitted or marked as evidence before the Adjudicating Authority, the very basis of admission of any claim is the contractual obligation between the parties and the very basic document is insufficiently stamped and necessarily has to comply with the fiscal measure of the state and in the interest of revenue. The Petitioners are enforcing their rights and obligations of the parties as entailed under the Debenture Subscription Agreement and debenture Trust deed. The Debentures were to be issued in dematerialized form through electronic records as maintained by the Respondent Company. These Debentures under Sec. 71 of Companies Act 2013 are mere certificate indicating the indebtedness of the company and the rights of enforcement are thus captured in the Debenture Subscription Agreement and debenture trust d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h instrument when it was executed. (Emphasis supplied) 7. These provisions operate when the Scheduled Instrument is registered in some other State, and in relation thereto some matter or things done or to be done in this State and subsequently received in the State. What is significant that these provisions take note of the duty already paid on the instrument in other State and seeks to recover only difference between duty chargeable in this State and duty already paid when registered in some other State. Doing something pursuant to the instrument in this State is a chargeable transaction and what is recoverable is additional duty payable according to rates prevailing in this State. Receipt of the copy could only be a chargeable event. It however, could not be construed that Section 7 attempts simplicter to levy a stamp duty on the copy of the instrument. The court held that the petitioners are liable to pay stamp duty as directed by Superintendent of Stamp, Maharashtra. The above dictum would categorically demonstrate that documents received in the State of Maharashtra, if insufficiently stamped would be subject to levy of specific stamp duty under sec. 19 of Maharashtr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent was invalid, the court will consider the said objection before proceeding to appoint an arbitrator. Even in an arbitration matter, the Supreme Court remitted the matter to Chief Justice, Guwahati, to decide the issue of stamp duty and then appoint the arbitrator. The petitioner also relied upon the judgment of the Hon'ble Supreme Court in Garware Wall Ropes Ltd. Vs. Coastal Marine Construction and Engineering Ltd. reported in: AIR 2019 SC 2053, the Hon'ble Supreme court in this matter held that an agreement is not enforceable by law as the documents which is sought to be acted upon has not been registered. The court also held at para 27, 28 29 as follows; Para 27: One reasonable way of harmonising the provisions contained in Sections 33 and 34 of the Maharashtra Stamp Act, which is a general statute insofar as it relates to safeguarding revenue, and Section 11(13) of the 1996 Act, which applies specifically to speedy resolution of disputes by appointment of an arbitrator expeditiously, is by declaring that while proceeding with the Section 11 application, the High Court must impound the instrument which has not borne stamp duty and hand it over to the aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8) Letter dated 8/04/2019 addressed by Petitioner's counsel to BSE. 9) Letter dated 16/04/2019 seeking redemption of NCD by Petitioner No. 2 3 to the Corporate Debtor. 28. I have no hesitation to take the view that there is no Novation of contract as the larger understanding was revoked by the petitioner vide letter dated 1/11/2018 and thus it clearly demonstrates that the so called larger understanding was not acted upon, and therefore the earlier liability of payment of the outstanding dues were never subsumed in the overall settlement as claimed by the Corporate Debtor/Respondent, hence the liability of the Corporate Debtor is not discharged. I therefore conclude that there was no consensus arrived between the parties and the settlement was revoked by the petitioners. Therefore, it can be said that all the rights accrued to the Petitioners No. 2 3 under the Debenture Trust Deed and Agreements are enforceable subject to the payment of difference of stamp duty. 29. The Corporate Debtor/respondent never disputed the execution of the above documents nor the liability arising there under. The entire endeavor to settle the claims between the parties was on the basi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . amounting to Rs. 20,22,371/-) to the petitioner No. 2 3. The petition is complete and deserves admission. The Adjudicating Authority in the light of Innoventive judgement while admitting a petition under Sec. 7 has to examine whether there is a debt and default. 34. The petition is admitted and the documents namely Debenture Trust Deed dated 1st March, 2014 and Redeemable Non-convertible Debenture Subscription Agreement dated 1 March, 2014, are impounded for adequate stamping are being sent to the Sub Registrar of Assurance, Mumbai. The Interim Resolution Professional shall consider the above documents upon payment of requisite stamp duty. 35. M.A. 180/2020 is partly allowed to the extent that the Debenture Trust Deed dated 1st March, 2014 and Redeemable Non-convertible Debenture Subscription Agreement dated 1 March, 2014, shall be impounded and be sent for payment of requisite stamp duty in accordance with the Maharashtra Stamp Act 1958. 36. This Bench having been satisfied with the application filed by the Petitioner which is in compliance of provisions of Section 7 of the Insolvency Bankruptcy Code admits this application declaring Moratorium with the directions a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall be impounded and be sent for payment of requisite stamp duty in accordance with the Maharashtra Stamp Act, before the Interim Resolution Professional considers the above documents for claim purpose, for the following reasons: a. Subsequent to the execution of the abovesaid deed and agreement, the Corporate Debtor issued debentures to the Petitioners and the same has been shown in the Balance Sheet of the Corporate Debtor for several years. Some of the debentures were redeemed by the Corporate Debtor. The claim in the Petition is based on the debentures which are remaining unredeemed. b. It is beneficial to refer Form-1 filed by the petitioner wherein apart from the above said deed and agreement the following documents are enclosed in proof of the debt: i) The copy of agreement for a deposit of the title deeds of the immovable property dated 3 March 2014. ii) Debenture allotment intimation by the corporate debtor to the Petitioner Nos. 2 and 3 dated 21/03/14, 19/04/14, 06/05/14, 18/07/14 and 12/11/14. c. One of the above debenture allotment intimation dated 12/11/14 is extracted below for ready reference. d. A copy of the standalone financial statements of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... having registered office at Bombay, filed Debenture Trust Deed (instrument) executed at Gujarat with Registrar of Companies, Mumbai under section 125 of the Companies Act, 1956 for obtaining a certificate under section 132 of the said Act, have to be stamped as provided under Maharashtra stamp Act, 1958. ii) SMS Tea estate Pvt. Ltd. Vs. Chandmari Tea Company Pvt. Ltd. (2011) 14 Supreme Court Cases 66, wherein it was held that the court before appointing an arbitrator under section 11 of the Arbitration and conciliation Act, 1996, on the basis of an unstamped arbitration agreement, which requires compulsory registration, has to impound the agreement as required under the provisions of Stamp Act, 1899 and ensure that stamp duty and penalty is paid before appointing an arbitrator. iii) Garware Wall Ropes Limited vs. Coastal Marine Constructions and Engineering Limited (2019) 9 Supreme Court Cases 209, wherein it was held that section 11(6-A), which has been introduced by way of the Arbitration and conciliation (Amendment) Act, 2015, has not removed the basis of the judgement in the case of SMS Tea estate Pvt. Ltd. Vs. Chandmari Tea Company Pvt. Ltd. and the unstamped arbitration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... htra and should have been stamped within three months after it has been first received in this State for which the Corporate Debtor relied upon the recent judgment of the Hon'ble Supreme Court of India in the matter of Garware Walls Ropes Ltd. v. Coastal Marine Constructions Engineering Ltd. was relied, wherein the Court reversed the judgment of the Bombay High Court and reiterated the principles laid down by it in the matter of SMS Tea v. Chandmari Tea Estate and held that an arbitration clause is an instrument, which is not stamped as per law, cannot be given effect if and until the instrument is duly stamped i.e. full stamp duty in respect of such instrument as provided by law has been paid. If an unstamped instrument is brought before a person authorised to receive evidence or holding a public office, such person is required to impound the instrument. Here, in this present matter, it is pertinent to note that the Deed of Guarantee was executed at New Delhi and sufficient stamp duty of Rs. 400/- has been paid on it as is also reflected on the said document. Also, the Deed of Guarantee is silent on whom the obligation lies to pay the stamp duty. Therefore, according to Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts that Section 62 of the Contract Act provides that if the parties to a contract agree to substitute a new contract for it, or to the rescind or alter it, the original contract need not be performed. It is submitted that the abovesaid MoM is a contract between the petitioner and the Corporate Debtor and accordingly, the parties have agreed to settle the dues in the manner decided in the MoM and hence, there is no liability as per the original contract. c. Per contra, the petitioner submits that the debenture liability of Rs. 43.33 crores is not included in the alleged settlement covered in the MoM as claimed by the Petitioner. The Petitioner further submits that the Corporate Debtor subsequent to the MoM requested for reduction of interest rate for debentures from 12% to 9%. When a settlement is arrived at, including these debentures, there is no occasion for the Corporate Debtor to request for reduction of interest rate. Even subsequent to the said MoM, this debenture liability is shown in the balance sheet of the Corporate Debtor for the year 2017-18 as well as for the year 2018-19 and hence the submission of the Petitioner that this debt is not covered by the MoM cannot be i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id the interest and the debentures were not redeemed even after the extension of time granted by the petitioners for redemption of debentures. All these things clearly proves the debt and default. The petitioners have complied with the provisions of Section 7 of the Code. Hence the petition deserves admission and accordingly the petition is admitted and the Corporate debtor is put under CIRP. 41. Project Insolvency: The Ld. Sr. Counsel appearing for the Corporate Debtor submitted that in case the petition is admitted, all the projects of the Corporate Debtor shall not be put under CIRP. Only the Jaipur project shall be put into CIRP. For this argument the judgement of Hon'ble NCLAT in the case of Flat Buyers Association vs. M/s. Umang Real Tech Pvt. Ltd. through IRP and Others MANU/NL/0077/2020, is relied on, wherein it was held as below: 21. In Corporate Insolvency Resolution Process against a real estate, if allottees (Financial Creditors) or Financial Institutions/Banks (Other Financial Creditors) or Operational Creditors of one project initiated Corporate Insolvency Resolution Process against the Corporate Debtor (real estate company), it is confined to the pa ..... 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