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TMI Blog2022 (4) TMI 1450X X X X Extracts X X X X X X X X Extracts X X X X ..... cant as a financial creditor and reconstitute the Committee of Creditors ("COC") of the Corporate Debtor by inducting the Applicant as a member. 2. The Applicant, i.e. Piramal Capital & Housing Finance Limited was previously known as Dewan Housing Finance Corporation Limited ("DHFL") Pursuant to the order dated 3 December 2019, this Hon'ble Tribunal initiated a corporate insolvency resolution process ("CIRP") against DHFL. Thereafter, by an order 7 June 2021, this Hon'ble Tribunal approved the resolution plan submitted by the Piramal Capital & Housing Finance Limited, in terms of which Piramal Capital & Housing Finance Limited merged into DHFL and the name of the merged entity has been changed to Piramal Capital & Housing Finance Limited with effect from 3rd November 2021. Loan availed by the Corporate Debtor from the Applicant and payment default: 3. The Corporate Debtor is engaged in the business of construction and development of residential houses and apartments. One of the projects that the Corporate Debtor was developing was a residential building named 'Royal Accord' on the land situated at Survey No. 429, Hissa No. 1/3, New CTS No. 1069A/2A/1 and Survey N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts ("EMIs") commencing after 36 months from the date of first disbursement. Sometime in August 2018 the Corporate Debtor began defaulting in the payment of the EMIs as per the Sanction Letter and the Loan Agreement and accordingly the loan account of the Corporate Debtor was classified as a non-performing asset in the books of the Applicant on 1 November 2018. In view of the defaults, the Applicant issued a Recall Notice dated 8 November 2019 to the Corporate Debtor and the guarantors/mortgagors, calling upon them to make payment of the outstanding amount of INR 37,97,56,230/- (Rupees Thirty Seven Crore, Ninety Seven Lakhs, Fifty Six Thousand, Two Hundred and Thirty only) as on 8 November 2019 together with accrued interests, costs, charges and expenses within 7 days of the notice. Thereafter, the Applicant issued a notice under Section 13(2) of the Securitization and Reconstruction of the Financial Assets and Enforcement of Security Interest Act, 2002 ("SARFAESI Act") bearing number PF/2020-21/SARFESI/ANURADHA dated 5 August 2020 ("13(2) Notice") calling upon the Corporate Debtor to make payment of INR 41,78,22,974 as on 31 July 2020 along with further interest, non-compliance cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtaining to the Claim. One of the issues regarding which the clarification was sought was the status and details of certain proceedings purportedly initiated by the Corporate Debtor against the Applicant before the Hon'ble Debt Recovery Tribunal ("DRT") allegedly in respect of the payment of the outstanding amounts under the Loan having been made by a corporate guarantor on behalf of the Corporate Debtor. 11. The Applicant vide its letter dated 9 December 2021 duly provided all additional information/clarification sought in the Respondent's email dated 7 December 2021. Specifically with respect to the clarification pertaining to the payments allegedly made by a corporate guarantor on behalf of the Corporate Debtor, it was clarified that RDPL is not only a corporate guarantor for the loan availed by the Corporate Debtor from DHFL, but also a borrower of DHFL having availed a separate loan backed by mortgage being loan account No. 0034776 from the Applicant. It was further clarified that the payment of INR 38,51,98,790 by RDPL to the Applicant on 19 November 2018 was towards part repayment of the aforesaid loan availed by RDPL from DHFL under loan account No. 0034776, and no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n reiterated the inordinate delay that has occurred in the admission of its Claim despite all additional information/clarification sought by the Respondent having been provided. The Applicant also highlighted the grave prejudice being caused to the Applicant as a result of non-verification of the claim, and called upon the Respondent to conclude the verification of Claim within 7 (seven) days thereof and reconstitute the CoC. 16. In response to the Applicant's letter dated 31 December 2021, the Respondent vide his letter dated 6 January 2022 has inter alia once again stated that the Claim continues to be under verification, and that the opinion of a retired Judge is being obtained on the issue. It is pertinent to note that even vide the email dated 22 December 2021, the Respondent had informed that the Applicant that he is seeking appropriate professional advice on the matter. Yet two weeks later, the Respondent is yet to conclude the process and the Applicant's Claim remains un-admitted and under verification. Reply 17. The Respondent pointed out that the applicant herein cannot be deemed as a Financial Creditor under section 5(7) of the Code, as Financial Creditor any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. 20. It is also established that the claim of the Applicant in its entirety stands extinguished and thus the Applicant has no claim whatsoever against the Corporate Debtor, much less a financial claim against the Corporate Debtor. 21. It is pertinent to note that the amount of loan given to the Corporate Debtor cannot be differentiated with the loan/credit with respect to RDPL for the following reasons: "A. Same Management The promoters/directors of both the companies were common when the said transactions came to be entered into which also demonstrates that the control and management of the corporate debtor was same as that of RDPL. B. Transaction in contravention to RBI Guidelines and established Fair Practice required to be followed by all financial institutions. It is further stated that upon perusal of the accounts of the Corporate Debtor, even though the account is claimed to be classified as a Non-Performing Asset (hereinafter referred to as "NPA") in November, 2018, further disbursements were made in April, 2019 to the tune of Rs. 9.50 Crores which was allowed to be transferred to the accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Miscellaneous Application No. 1448 of 2019 in C.P.I.B. No. 4258/MB/2019 filed by the Administrator of Dewan Housing Finance Corporation Limited vs. Kapil Wadhawan and Ors. under Section 45, 60(5) and 66 of the Code, 2016, the principal amount outstanding and recoverable from RDPL is Rs. 758.52 crores as per the loan sanctioned by the Applicant. However, if the Applicant is claiming that the amount disbursed by RDPL was in furtherance of the loan granted to RDPL and not in furtherance of relieving the debt of the Corporate Debtor, then the recoverable amount in the said Application by DHFL would be approximately Rs. 719.88 crores and not Rs. 758.40 crores. It is pertinent to mention that the abovementioned Interlocutory Application has been filed against the erstwhile suspended management of DHFL alleging financial fraud committed in relation to the fraudulent disbursement of loans and equally fraudulent cover-up by purportedly providing securities for impaired loan accounts categorized under 'Other Large Project Loans'. It is pertinent to mention that the claim could not be admitted by the Respondent herein pending adjudication and fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aised of the pending proceedings against the Applicant at the Learned DRT, Mumbai in respect of the outstanding amount of loan having made by RDPL on behalf of the Corporate Debtor. 15.11.2021 The respondent sought an opinion of Retired Hon'ble Justice K. A. Puj. for treatment to the said claim. 29.11.2021 In light of the discrepancies with respect to the amount of claim, the Respondent herein sought legal opinion of Retd. Hon'ble Justice K.A. Puj in which the Respondent was advised to seek further clarifications with respect to the claim and pending proceedings from the Applicant in light of the pending DRT proceedings. The Respondent begs to annex a copy of the legal opinion dated 29.11.2021 as Annexure-R8 to the present affidavit. 03.12.2021 The Respondent herein received email from the Applicant seeking admittance of their claim to which the Respondent stated that the process of verification is ongoing and intimated about a discussion over Zoom call in respect of their claim. The Respondent begs to annex copies of email dated 03.12.2021 as Annexure-R9 to the present affidavit. 07.12.2021 The Zoom call took place on 07.12.2021 and in furtherance of the same, certain addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FL and the Rite Group of Companies stating that RDPL had provided assistance in repaying the loan of the Corporate Debtor. The Respondent was also provided with the supporting documents stating that the alleged claim of Applicant had been dispensed with by RDPL along with the details of the transactions. The Respondent begs to annex Copies of Letter and supporting documents as Annexure-R12 to the present affidavit. 31.12.2021 The Applicant vide letter insisted on admitting their claim and reconstitution of the Committee of Creditors. The Respondent replied to the said letter on 06.01.2022 by reinstating that all necessary steps and evaluation process is being undertaken to ensure that the CIRP is carried out in an effective manner. 08.01.2022 The Resolution Professional finalized and provided the information memorandum. It is pertinent to mention that the claim of the applicant is reflected in the Information Memorandum. A copy of the relevant extract of the Information memorandum is annexed as Annexure R-13 to the present affidavit. 13.01.2022 Legal opinion of Retd. Hon'ble Justice K. Puj was received wherein the Applicant was advised to approach the Adjudicating Authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out that instead of collating the claim and verifying the claim of the Applicant, the Respondent has entered in to the rowing enquiry and sought to adjudicate the entire claim. The fact that the Corporate Debtor, the RDPL under the common management does not in any manner affect the Applicant's claim or reduce the Corporate Debtors admitted liability towards the Applicant. On the contrary, as stated above, the misstatement of RDPL has allegedly repaid the Corporate Debtor, the letters of exchange between the RDPL and the Corporate Debtor immediately prior to the commencement of the Corporate Debtor's insolvency and the change in stance with respect to the loan availed from the applicant in the draft balance sheet of the Corporate Debtor for the financial year ended 31st March, 2021, all show that the debt has been repaid by the RDPL is nothing but a pre-mediated and malafied attempt by a suspended management of the Corporate Debtor/RDPL to evade their liability as applicant. I.A. 308 of 2022 26. The present Application is filed under Section 60(5) of the Insolvency and Bankruptcy code, 2016 read with Regulations 13 and 14 of the IBBI (CIRP) Regulations, 2016 and rule 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ancials and clarifications/information/details/documents sought from the Suspended Management of the Corporate Debtor as per Regulation 13 of the IBBI (CIRP) Regulations, 2016, the Applicant found that the claim was not being reflected in the books of account and financial records of the Corporate Debtor as provided by the erstwhile management of the Corporate Debtor. 32. The Applicant further states that the Applicant was appraised of the pending proceedings of the Respondent before the Hon'ble Debt Recovery Tribunal (DRT), Mumbai in respect of the payment of the outstanding amounts of the Loan having been made by a corporate guarantor, Rite Developers Private Limited (RDPL) on behalf of the Corporate Debtor. 33. The Applicant states that on account of the discrepancies with respect to the claim and the pending proceedings of the Respondent before the Debt Recovery Tribunal, Mumbai, the Applicant sought legal opinion from Retd. Hon'ble Justice K.A. Puj with regards to admitting the claim of the Respondent when the provisional financials of the Corporate Debtor show the repayment by the Corporate Guarantor to the Respondent and the continuance of the CIRP process pending ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tates that the information was provided to the Applicant vide emails dated 20.12.2021. 38. The Applicant further submits that Respondent vide letter dated 15.12.2021 informed the Applicant that the copy of Securitisation Application filed by the Corporate Debtor before the Hon'ble DRT had not been served to the Respondents and further informed that the admission of the claim as a financial creditor is not dependent on the Application filed against the Respondent before the Hon'ble DRT. Grounds 39. The Applicant submits that as per the order of the Hon'ble Tribunal dated 11.08.2021, the Corporate Insolvency Resolution Process of the Corporate Debtor was initiated and the Applicant herein was appointed as the Interim Resolution Professional and directed to discharge its duties as the Interim Resolution Professional as under Section 15 and 18 of the Code, pursuant to which the public announcement dated 28.10.2021 was made inviting claims from creditors. 40. The Applicant submits that additionally a corrigendum to the public notice dated 28.08.22021 was published on 22.09.2021 and pursuant to the same, Ms. Mona Vora was appointed as the Authorised Representative for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntor in the loan sanctioned by DHFL to Corporate Debtor and the process was carried out. 46. The Applicant states that as per the definition of "financial creditor" under Section 5A(7) of the Code which states that "financial creditor means any person to whom a financial debt is owed and includes a person to whom such debt has been legally assigned or transferred", it is not within the authority of the Applicant to declare the Respondent as a financial creditor and admit its claim owing to the discrepancies arising from the books of record, pending adjudication before the Hon'ble DRT and the justification given by the Respondent. 47. The Applicant states that in view of the above stated facts and circumstances, upon perusing and pursuing all the relevant statutory provisions of law, seeking legal opinions, appointing professionals and seeking clarifications from all concerned individuals, the Applicant has filed the present application to request this Hon'ble Tribunal to adjudicate upon the claim of the Respondent. Finding 48. Heard the counsel for the Applicant in I.A. 182 of 2022 and the applicant in the cross I.A. 308 of 2022 and perused the records. 49. The legal q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omplete loan amount, the Corporate Debtor has decided to repay the said loan back to the DHFL and therefore, the Corporate Debtor wrote letter to its sister concern RDPL seeking the assistance in the matter on 27.07.2020. On 18.02.2021, RDPL informed Corporate Debtor that an amount of Rs. 38,51,98,790/- was lying as credit in the account of DHFL. Thereafter, the RDPL has suggested that that above amounts was lying in the DHFL could be used by Corporate Debtor to settle its dues to DHFL. The relevant part of the opinion is reproduced below: 55. It is pertinent to refer to the letter dated 27.07.2020 by Corporate Debtor to RDPL, which states that the Corporate Debtor had got a sanction of Rs. 100 crores loan from DHFL. However, even after several reminder the DHFL has only disbursed an amount of Rs. 32,50,00,000/- and hence, they decided to peruse other means of obtaining financial aid and further sought a assistance of RDPL to close the transactions with the DHFL. On 18th February, 2021 Rite Developers Private Limited have offered the financial assistance and categorically stated that the amount of Rs. 38,51,98,790 lying in the accounts of DHFL, can be unconditionally adjusted towa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oor only. On what basis the mortgage till 38th floor was done when the building can be maximum of 9th floor only. The increase in the floor is directly related to the width of the road. The architect in its report has confirmed that still the width of the road is less than 9 meters and hence even today the height of the building cannot be more than 32 meters. The loan was sanction ignoring this main aspect of the project and the mortgage was done till 38th floor whereas the given current conditions the construction cannot be more than 9th floor. Dispute in the matter of the repayment of the Loan of Anuradha Real Estate Developers Private Limited * As stated earlier in the report, the loan which was sanctioned to the Corporate Debtor ARDEPL was repaid by Rites Developers Private Limited (Source: Books of Accounts of Anuradha Real Estate Developers Private Limited). The said accounting entry was passed in the Books of Accounts of Corporate Debtor on dated 31/03/2021). * The Lender DHFL has denied to loan repayment of AREDPL and have informed that RDPL is not only a Corporate Guarantor for the loan availed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Sanction letter are followed in true spirit. Opening of Escrow Account as per the Sanction letter was one of the critical requirements for the loan transactions in case of the company involved in the real estate development projects. Non opening of the escrow account is itself a red flag transaction. It is very surprising indeed DHFL being a financial institution have ignored this and have not forced for the opening of Escrow Account. 3) Disbursement of the Loan after the Account was classified as NPA: It has been observed that the account of Corporate Debtor was classified as NPA in November 2018 itself. The first loan disbursement was made on 11/06/2018 and the last disbursement was made on 10/04/2019 after the account was classified as NPA. Total of Rs. 9.50 Crores have been disbursed after the account was classified as NPA by the DHFL. As per the information provided by the Resolution Professional, this amount of Rs. 8.00 Crores was transferred from the Corporate Debtor account to Samir Dadia and from Samir Dadia the same was transferred to Mr. Bulchandani as Mr. Bulchandani has filed case against the Company R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... records two entries on the same day namely disbursement by RTGS by Dewan Housing Finance Corporation Limited and a reverse entry of the same amount by RDPL, however, the counsel for the Applicant Piramal Capital & Housing Finance Limited disputed the claim that the monies were repaid by the RDPL. The internal communication marked between the Corporate Debtor and the RDPL was not marked to the applicant herein. Therefore, he claimed that in the books of accounts of Piramal Capital & Housing Finance Limited the liability of repayment of loan is still outstanding and hence has filed the present claim. 59. This bench notes that the Resolution Professional under section 18 of the Code is not empowered to adjudicate the claim of the Applicant herein and is bound to collate the claims on the basis of the available documents. The internal correspondence between the Corporate Debtor and the RDPL demonstrate that the outstanding loan of DHFL has been repaid by RDPL and consequently, it can be seen that the balance sheet for the year 31.03.2021 does not record the outstanding liability of DHFL. 60. Be that as it may, the series of correspondence and exchange of letters between the Corporat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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