TMI Blog2022 (8) TMI 654X X X X Extracts X X X X X X X X Extracts X X X X ..... tion between the parties. At the same time, it was acknowledged that basis the loan agreement dated 20.06.2015 a loan facility was availed to the tune of Rs.260,00,00,000/- - In the present case the application is filed by the Financial Creditor and the amount was disbursed against time value of money. Moreover, we hold that the facts of the present case are distinguishable on the ground that the settlement agreement on record ratifies that fact the Respondent was under a continuing obligation to repay the outstanding amount of Rs.260,00,00,000/- pursuant to loan agreement dated 20.06.2015. The acknowledgment meets all the essential ingredients of Section 18 of the Limitation Act,1963. Therefore, the debt is within the period of limitation. The application made by the Financial Creditor is complete in all respects as required by law. It clearly shows that the Corporate Debtor is in default of a debt due and payable, and the default is in excess of minimum amount stipulated under section 4(1) of the IBC. Therefore, the debt and default stands established and there is no reason to deny the admission of the Petition. In view of this, this Adjudicating Authority admits this Petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Agreement dated 20.06.2015 is marked as Exhibit H at page 48-52 and Exhibit I at page 52-61 respectively. 7. Moreover, on 30.12.2015 the Petitioner sanctioned an additional amount of Rs.35,00,00,000/- vide sanction letter dated 30.12.2015. Accordingly, the term loan amount was raised to Rs.260,00,00,000/- (Exhibit -J at page 62-65). Pursuant thereto, a total amount of Rs.228,75,00,000/- was disbursed to the Respondent under the terms of the Loan Agreement. The following table details particulars of the said disbursal Date of Disbursal Amount (Rs.) 22.07.2015 115,00,00,000 27.07.2015 600,00,000 16.09.2015 22,65,00,000 18.09.2015 630,00,000 23.11.2015 15,80,00,000 30.12.2015 63,00,00,000 Total 228,75,00,000 8. The Petitioner has furnished statement of accounts of the Respondent to evidence disbursals. [Exhibit- F (c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he alleged fraud, multiple litigation proceedings ensued between parties which culminated into a suit before the Hon ble Bombay High Court Eleos Finvestia Acquisition Trust and Ors. vs Religare Finvest Ltd. Ors. COMSL/254/2017 (hereinafter referred to as the Eloes Suit ). In the above suit a settlement was arrived at and hence, Settlement Agreement dated 01.07.2017 was entered into and enforced. 15. The Ld. Counsel for the Respondent at the time of hearing invited our attention to the following clauses of the Settlement Agreement CERTAIN ACTIONS AND DELIVERABLES 2.1 Within a period of 15 (fifteen) days from the Execution Date, the Principal Parities shall cause and/or procure the fulfilment of the following conditions (to the satisfaction of the Second Party): i. termination of the Collection and Services Agreement; ii. simultaneously with (i) above, execution of the Escrow Agreement and opening of the Escrow Account in accordance with the terms of the Escrow Agreement; and iii. notify each of the Borrowers in writing, inter alia, irrevocably directing them to deposit the receivables/amounts payable by them to the Principal Parties under their res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ters, shareholders, associates, affiliates and any members, employees, agents, directors, officers, etc. of the foregoing and/or RHC Holding Private Limited), Mr. Malvinder Mohan Singh, Mr. Shivinder Mohan Singh, Religare Enterprises Limited, Mr. Sunil Godhwani and/or Radha Soami Satsang Beas with respect to matters as contained in Other Parties Litigations or otherwise whatsoever. Without prejudice to the foregoing, the Principal Parties and/or the Suit Parties would not be restricted from pursuing any claims or actions against Prime Securities Limited, Primesec Investments Limited, ABG International Private Limited ABG Cement Holdco Private Limited, Vadraj Cement, Limited, ABG Energy (Gujarat) Limited, ABG Shipyard Limited, Mr. Rishi Agarwal and/or Mr. Jay Kumar, outside of and independent of the Other Parties Litigations, which have been agreed to be unconditionally withdrawn by the Principal Parties and the Suit Parties. 3.3 The Principal Parties shall act in good faith and take effective steps to procure repayment/recovery of all amount dues by/from the Borrowers. The Principal Parties shall further ensure and procure that all amounts repaid by or realized and/or recover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... directors, officers, etc. of the foregoing and/or RHC Holding Private Limited), Mr. Malvinder Mohan Singh, Mr. Shivinder Mohan Singh, Religare Enterprises Limited, Mr. Sunil Godhwani and/or Radha Soami Satsang Beas. The Parties further agree that the various actions to be undertaken by them in pursuance of Clause 3.1 and Clause 5.1, as the case may be, are merely procedural and consequential to the settlement arrived at amongst them. 9.2 With respect to the rights and obligations arising by virtue of this settlement other than the procedural compliance as contemplated in Clause 3.1 and Clause 5.1, the parties hereto shall stand released and discharged from their respective obligations upon the due fulfillment performance of the obligations assumed by each of them in pursuance of the relevant provisions of this Agreement. 16. The Respondent submits when the Settlement Agreement was entered into the Petitioner accepted and reduced the repayment of the obligations of the Respondent on a best effort basis 3.4 The Principal parties further undertake to procure on best effort basis, that amounts aggregating to at least Rs.400,00,00,000/- (Rupees Four Hundred Crore On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent. v. Directing the rendition of accounts, the Petitioner has made from their conduct including that from the preferential issue. 20. Reliance is placed by the Respondent on Phoenix Arc Private Limited vs. Spade Financial Service Limited, 2021 (3) SCC 475 wherein it is held that 51. The IBC recognizes the real nature of the transaction has to be unearthed in order to prevent any person from taking undue benefit of its provisions to the detriment of its rights of legitimate creditors. 21. The Respondent has raised the following four defenses: (a) It is the contention of the Respondent that the Petitioner is not Financial or Operational creditor under the Code. The agreements entered into between the parties was superseded by the Settlement Agreement, which in turn can be terminated after following due process of law. The Settlement Agreement was entered into pursuant to consent terms and final order from the Hon ble High Court of Bombay. Further, the Respondent states that debt arising of a Settlement Agreement cannot be treated as a financial debt under the Code. (b) The Respondent is not a Corporate Debtor under section 3(7) of the Code. (c) The tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the two choices available. 32. In Innoventive Industries (supra), a two-judge Bench of this Court has explained the ambit of Section 7 of the IBC, and held that the Adjudicating Authority only has to determine whether a default has occurred, i.e., whether the debt (which may still be disputed) was due and remained unpaid. If the Adjudicating Authority is of the opinion that a default has occurred, it has to admit the application unless it is incomplete. Speaking through Justice Rohinton F Nariman, the Court has observed: 28. When it comes to a financial creditor triggering the process, Section 7 becomes relevant. Under the Explanation to Section 7(1), a default is in respect of a financial debt owed to any financial creditor of the corporate debtor - it need not be a debt owed to the applicant financial creditor. Under Section 7(2), an application is to be made under sub-section (1) in such form and manner as is prescribed, which takes us to the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. Under Rule 4, the application is made by a financial creditor in Form 1 accompanied by documents and records required therein. Form 1 is a det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lause 9.2 and schedule C, the obligation of the Respondent to pay was continuing. The Respondent has not discharged its liability under the loan agreement. Findings 25. Heard the Ld. Counsel for the parties and perused the records. 26. The Respondent in its reply alleged that the Petitioner had unconditionally and irrevocably sold, transferred and assigned the loans granted to certain borrowers, to the Respondent and SCCPL. Further, the Respondent submits that the loans sold turned out to be related party transactions and funds siphoning scheme adopted by the Petitioner which led to filing of multiple suits which ultimately resulted in Settlement and accordingly parties entered into Settlement Agreement. 27. The Respondent is not disputing the fact that the outstanding amount is due and payable to the Petitioner. Further, infact vide Settlement Agreement dated 01.07.2017 to which the Respondent is a signatory party acknowledged the debt of Rs.260,00,00,000/- (Rupees Two Hundred and Sixty Crore Only) in Recital B at pages 70 of the Petition. 28. The Respondent contented that the subject debt is disputed and pending before Saket District Court for adjudication. We o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igations to Second Party until the entire Second Party Dues are paid in full, including by way of collections in the Escrow Account, and/or by disposal of collaterals listed in Schedule C as contemplated in Clause 7.1(iv). Therefore, the Respondent is under a continuing obligation to pay the dues to the Petitioner. 33. The application made by the Financial Creditor is complete in all respects as required by law. It clearly shows that the Corporate Debtor is in default of a debt due and payable, and the default is in excess of minimum amount stipulated under section 4(1) of the IBC. Therefore, the debt and default stands established and there is no reason to deny the admission of the Petition. In view of this, this Adjudicating Authority admits this Petition and orders initiation of CIRP against the Corporate Debtor. 34. The Financial Creditor has not proposed the name of Insolvency Resolution Professional, therefore this bench appoints Mr. Suresh Baburao Shingte, having Registration No. IBBI/IPA-001/IPP00428/ 2017-18/10751, having registered email id susneha_57@yahoo.com as the Interim Resolution Professional of the Corporate Debtor. 35. It is, accordingly, hereby or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IBBI/IPA-001/IP-P00428/2017-18/10751,having registered email id susneha_57@yahoo.com is hereby appointed as Interim Resolution Professional (IRP) of the Corporate Debtor to carry out the functions as per the IBC. The fee payable to IRP or, as the case may be, the RP shall be compliant with such Regulations, Circulars and Directions issued/as may be issued by the Insolvency Bankruptcy Board of India (IBBI). The IRP shall carry out his functions as contemplated by sections 15, 17, 18, 19, 20 and 21 of the IBC. (g) During the CIRP Period, the management of the Corporate Debtor shall vest in the IRP or, as the case may be, the RP in terms of section 17 of the IBC. The officers and managers of the Corporate Debtor shall provide all documents in their possession and furnish every information in their knowledge to the IRP within a period of one week from the date of receipt of this Order, in default of which coercive steps will follow. (h) The Financial Creditor shall deposit a sum of Rs.5,00,000/- (Rupees Five Lakhs only) with the IRP to meet the expenses arising out of issuing public notice and inviting claims. These expenses are subject to approval by the Committee of Creditor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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