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TMI Blog2023 (5) TMI 1083X X X X Extracts X X X X X X X X Extracts X X X X ..... on Process (in short "CIRP") has been initiated against the corporate debtor M/s La Trendz Fabrica Private Limited. 2. In brief, the facts of the case are that two Credit Facilities were granted to the corporate debtor by the financial creditor Punjab National Bank (International) Ltd. for two term loans, namely one loan of US $ 3.47 Million and the second loan of US $ 1.20 Million vide letters dated 25.10.2011 and 13.08.2014 respectively. Subsequently, two Loan Facility Agreements dated 19.11.2011 and 27.09.2014 were executed between the corporate debtor and the financial creditor. Later, an Amended Facility Agreement dated 08.02.2017 was executed between the corporate debtor and the financial creditor, by which the original facility agreements in respect of both the term loans given by the financial creditor to the corporate debtor were amended. 3. The Appellant has further stated that the two loan Facility Agreements signed by the corporate debtor and the financial creditor contained conditions that the agreement will be governed by the English Law and the Court of England shall have the jurisdiction to settle any dispute arising out of or in connection with both the Loan Faci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... repayment of the outstanding loan amount. The Learned Counsel for Respondent has further argued that the corporate debtor has admitted to the debt and default as is included in para 8 and 9 of the impugned order: 9. The Learned Counsel for Respondent has further argued that the Clause 35 on Loan Facility Agreement very clearly lays down the method of enforcement, and as per Clause 35.1(c), the lender can take proceedings relating to a dispute in any other courts, apart from courts in England, with jurisdiction to the extent allowed by law and the lender bank is also allowed to take concurrent proceedings in any number of jurisdictions. He has also referred to sub-section (1) of section 60 of the "IBC" to clarify that, in relation to insolvency resolution and liquidation of the corporate debtor, the NCLT, as Adjudicating Authority, has territorial jurisdiction over the place where the registered office of the corporate person is located. He has added that in the present matter, the corporate office of the corporate debtor is located in Mumbai as is clear from the address of the corporate debtor mentioned in the loan sanction letters dated 25.10.2011 and 13.08.2014, which are part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect to its assets, any such immunity being irrevocably waived. The Borrower irrevocably agrees that it and its assets are, and shall be, subject to such proceedings; attachment or execution in respect of its obligations under the Finance Documents." 11. A similar provision regarding law and jurisdiction appears in the Loan Facility Agreement dated 27.09.2014 with regard to term loan-II (attached at pp 91 - 143 of the appeal paper book) wherein Clause 17.7 states as hereunder: 17.7 Law and Jurisdiction (1) This Agreement shall be governed by and construed in accordance with English law. (2) The Borrower irrevocably agrees for the exclusive benefit of the Bank that the courts of England shall have jurisdiction to hear and determine any suit action or proceeding, and to settle any disputes, which may arise out of or in connection with this Agreement and for such purposes hereby irrevocably submits to the non-exclusive jurisdiction of such courts of England. (3) Nothing contained in this Clause shall limit the right of the Bank to take proceedings against the Borrower in any other court of competent jurisdiction, nor shall the taking of any such proceedings in one or more ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egistered office is located in Andheri East, Mumbai. 14. Thus, on the issue of jurisdiction it is unambiguously clear that Punjab National Bank (International) Limited as financial creditor is fully entitled and authorised to take action in respect of section 7 application against the corporate debtor under the IBC before the NCLT, Mumbai which shall be the Adjudicating Authority to adjudicate the section 7 application. 15. We further note that the loan recall notice was sent by the financial creditor on 04.05.2021 demanding repayment of the outstanding loan amount and the section 7 application was filed on 02.02.2022 i.e. within one year of the sending of the demand notice to the corporate debtor. The corporate debtor has not denied the issue or receipt of demand notice but has only claimed that it was unable to due repayment amount because of the severe financial and commercial stress experienced by the corporate debtor as a result of the Covid-19 pandemic. 16. We also find that the impugned order in paragraphs 8 and 9 notes that the corporate debtor has submitted that its liability with regard to the loan amounts due and payable is neither disputed nor denied. We also note th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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