TMI Blog2022 (11) TMI 1095X X X X Extracts X X X X X X X X Extracts X X X X ..... provision of Section 185 of the Act prevailing as on that date (pre -07.05.2018 amendment to the Act) is concerned, it is very much clear that this is the provision which the company has to comply internally and if they fail to comply the necessary punishment is available in the same section i.e. Section 185, both monetary penalty and /or imprisonment. As far as bank is concerned, they have been provided time to time the Board Resolution showing the approval of the Board. Hence, if there is any irregularity then for that the Members of the Board are responsible. If the official of the bank have committed some irregularity, then it is the Bank who has to prosecute these officers against the provisions laid down under the law applicable to them. There are no inconformity in the impugned order and constraint to uphold the impugned order - appeal disposed off. - Company Appeal (AT) (Ins) No.1003 of 2020 Company Appeal (AT) (Ins) No.1104 of 2022 & IA No. 3276, 3250 of 2022 - - - Dated:- 23-11-2022 - [Justice Ashok Bhushan] Chairperson , [Dr. Ashok Kumar Mishra] Member (Technical) And [Dr. Alok Srivastava] Member (Technical) For the Appellant : Mr. Aditya Dewan Advocate for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y document relating to the loan transaction are legally valid and enforceable and further the mortgage was created validly in favour of the lender by the subsidiary of the Principal Borrower. It was also mentioned that the claim of the Bank as a secured financial creditor on the basis of corporate guarantee dated 06th May, 2017 is untenable on the ground that it has not complied with the provisions of Section 185 186 of the Companies Act, 2013 (the Act) though then prevailing in 2017. The Ld. Counsel also submitted that the constitutional courts have held that if there is a clear breach of a provision of a statute then the Doctrine of Indoor Management under the Act or any other Act cannot be enforced. He also disputed the issue of guarantee created in 2013 and 2017 and was very much enforceable that only corporate guarantee dated 06.05.2017 is in existence and hence the claim is not enforceable in respect of previous guarantee. 6. Mr. Salva, Ld. Sr. Counsel for the Appellant took us through the impugned order and tried to persuade the Bench that the Appellant Bank is a secured financial creditor. He also submitted that the Bank has submitted the claim alongwith proof of clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ney was stated to be owed to the Respondent Bank by virtue of the Corporate Debtor acting as a Corporate Guarantor for credit limits sanctioned to its Holding Company. d. It is also not in dispute that Committee of Creditor was duly constituted by RP on 14.03.2020 with the claim of Syndicate Bank being provisionally admitted at that time. e. It is also not in dispute that the RP and Respondent Bank exchanged several emails regarding admission of the claim/substantiation of the claim filed by the Respondent Bank as a secured financial creditor. f. It is also not in dispute that the RP rejected the claim of the Respondent Bank on the ground that the Corporate Debtor has not complied with the provision of Section 185 (1) of the Act (pre-2018 amendment) and thereby the Respondent bank approached the Adjudicating Authority under Section 60(5) of the Code in August, 2020. g. It is also not in dispute that the Corporate Debtor has gone into liquidation. h. Both the Ld. Sr. Counsels/Ld counsel took us through the provisions of Section 185 of the Act and through the letter of Corporation bank dated 14.10.2016 regarding regularization of overdues and pending reply to the audit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trolled by any such director, or by two or more such directors, together; or (e) Anybody corporate, the Board of Directors, Managing Director or manager, whereof is accustomed to act in accordance with the directions or instructions of the Board, or of any director or directors, of the lending company. (2) if any loan is advanced or a guarantee or security is given or provided in contravention of the provisions of sub-section (1), the company shall be punishable with fine which shall not be less than five lakh rupees but which may extend to 25 lakh Rupees, and the director or the other person to whom any loan is advanced or guarantee or security is given or provided in connection with any loan taken by him or the other person, shall be punishable with imprisonment which may extend to six months or with fine which shall not be less than five lakh rupees but which may extend to twenty-five lakh rupees, or with both. i. It is very much clear that the fresh guarantee executed on 06.05.2017 between the Bank and the Corporate Debtor of Rs.3007.85 lakh is still existing and Corporate Debtor is liable to that extent to repay the same together with interest as stipulated in the lo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
