TMI Blog2024 (2) TMI 202X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 26.02.2020, it is not open for the Appellant to contend that default occurred only on 25.08.2020, hence, the Application is barred by Section 10A. It is well settled that when default by Corporate Debtor has occurred prior to 10A period, Application shall not be barred. The fact that letter dated 13.01.2022 has not been brought on the record in the Appeal by the Corporate Debtor also supports the submission of the Financial Creditor that letter dated 13.01.2022, records the state of affairs as it existed at the relevant time - the Adjudicating Authority did not commit any error in accepting the date of default as 15.12.2021 as pleaded in Section 7 Application. The Adjudicating Authority has returned a finding that Agreement dated 15.02.2016 was not a joint venture Agreement and further the amount of Rs.34.55 Crores was disbursed. The Corporate Debtor as noted above, on one hand is pleading that Agreement dated 15.02.2016 was entered and on other hand submits that the said Agreement was not to be implemented or acted upon - The endeavour of the Corporate Debtor is to somehow relieve itself from the liabilities, which could not be discharged in pursuance of the Loan Agreeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Agreement, old Loan Agreement dated 15.02.2016 was also referred to. The Agreement contemplated payment of entire amount within six months. (iv) The case of Financial Creditor is that in pursuance of Loan Agreement dated 26.02.2020, no payment was made and on request of the Corporate Debtor, time for payment was extended till 15.12.2021. After expiry of 15.12.2021, when no payment was made, a letter dated 13.01.2022 was issued by the Financial Creditor to the Corporate Debtor stating that time extended for repayment upto 15.12.2021 has expired and no payment has been made by the Corporate Debtor. The Corporate Debtor was called upon to make payment of Rs.82,61,90,657/- along with interest @ 15% per annum from 16.12.2021 within seven days. (v) No payment having been made, the Financial Creditor filed an Application under Section 7, claiming total amount of Rs.91,74,27,304/-, which included principal and interest. The Application under Section 7 was filed on 30.11.2022. An affidavit of reply was filed on 23.02.2022 by the Corporate Debtor, signed by the Appellant himself. Rejoinder to the reply was also filed by the Financial Creditor. (vi) By the impugned order dated 09. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l 15.12.2021. After 15.12.2021, when no payment came, letter dated 13.01.2022 was issued by the Financial Creditor, which clearly mentioned about extension of time for repayment till 15.12.2021. The said letter was not replied by the Corporate Debtor. In the Application filed under Section 7, letter dated 13.01.2022 was very much included, but in this Appeal filed by the Suspended Director of the Corporate Debtor, the said letter has been deliberately not brought on the record. It is submitted that Appellant has taken contradictory and false plea before the Adjudicating Authority and the Appellant has not come with clean hands in this Appeal. It is further submitted that there being acknowledgement of debt of Rs.64,04,90,697/- and Agreement dated 26.02.2020 was entered and default having been committed and acknowledged by the Corporate Debtor, it is not open to the Appellant to contend that the Application is barred by Section 10A. 6. We have considered the submissions of learned Counsel for the parties and have perused the record. 7. The Agreement dated 15.02.2016, the one filed along with Section 7 Application has been brought on the record, which contemplated payment of Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f execution of this Agreement (hereinafter referred to as the REPAYMENT DATE) and time for repayment is and shall always be treated as the essence of the contract. 9. In the Definitions Clause of the Agreement, Loan Agreement dated 15.02.2016 has also been referred in part (vii) and indebtedness is also captured in part (viii), which are as follows: vii) EMAMI LOAN AGREEMENT shall mean the Agreement dated 15th February 2016 whereby the Lender had agreed to lend and advance various amounts to the Borrower in terms of the said Emami Loan Agreement. viii) TOTAL INDEBTEDNESS shall mean a sum of Rs.64,04,90,697/- (Rupees sixty four crores four lacs ninety thousand six hundred and ninety seven only) payable by the Borrower to the Lender calculated upto 19th February 2020 and shall include any further interest which may become payable until such time the said total indebtedness is fully paid. 10. Further, under paragraph-3 with the heading Acknowledgement by the Borrower and Kathotia Group , in paragraphs 3.1 and 3.2, following has been noted: 3.1 At or before the execution of this Agreement the accounts in respect of the said Loan have been gone into and sett ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... place as well as details of letter dated 13.01.2022. It is useful to extract relevant statement in Part-V Item-2, which is as follows: 2 Under the said agreement dated 26th February, 2020 the Corporate Debtor had agreed to re-pay the sum of Rs.64,04,90,697/- (Rupees Sixty four Crores Four Lacs Ninety Thousand Six Hundred Ninety Seven only) along withinterest @15% p.a. to the Financial Creditor within a period of 6 months. It is stated that after the expiry of the period of 6 months, the Corporate Debtor had sought time till 15th December, 2021 to repay the said loan. The Financial Creditor upon such request agreed to extend the time to repay the loan till 15th December, 2021. However, despite the assurances and promises to repay the loan, no payment was made by the Corporate Debtor to the Financial Creditor. The course of conduct between the parties and as evident from the letter dated 13th January, 2022, that the aforesaid loan in terms of the agreement dated 26th February, 2020 became repayable on demand by the Financial Creditor on and from 15th December, 2021. Therefore, in terms of the agreement dated 26th Febru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reement dated 26th February, 2020 was never acted upon and was not be acted upon and implemented between the parties. 19. It is respectfully submitted that the agreement 20th February, 2020 though signed was never acted upon between the parties. Inasmuch as further discussions and draft agreements continued to be prepared between the parties. It is denied and disputed that after expiry of period of six months, the Corporate Debtor sought time till 15th December, 2021 to repay the said loan, as alleged or at all. 20. There is no such document wherefrom it would be evident that the Corporate Debtor had acknowledged its liability in terms of the agreement dated 26th February, 2020 or that the time to repay the period of loan was extended till 15th December, 2021. The statement as given in annexure G is contradictory to the list of dates as given at page 4 and it contradictory to the amount claimed in Column II of Part-I as specified in particulars of financial debt. The statement of account is absolutely false and bogus and was never accepted by the corporate debtor. It is emphatically denied and disputed that the date of default is 15th December, 2021. 23. The agr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the intent of the legislature is to bar the institution of any application for the commencement of the CIRP in respect of a default which has occurred on or after 25-3-2020 for a period of six months, extendable up to one year as notified. The Explanation which has been introduced to remove doubts places the matter beyond doubt by clarifying that the statutory provision shall not apply to any default before 25-3-2020. 15. There can be no dispute to the proposition laid down by the Hon ble Supreme Court that no Application can be filed for default committed during 10A period. To counter the submission of the Appellant on 10A, the learned Senior Counsel for the Respondent has advanced two submissions. Firstly, it is submitted that the Corporate Debtor having pleaded in the reply that Agreement dated 26.02.2020 was never implemented although signed between the parties, hence, it is not open for the Appellant now to contend that default under the Agreement dated 26.02.2020 occurred on 25.08.2020. It is submitted that due to the above pleading in the reply by the Corporate Debtor, no submission was advanced on 10A since the submission on 10A would have been contradictory to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as mere entries entered between Emami Realty Limited and Emami Capital Market Limited through Fort Projects Private Limited, the Corporate Debtor. 18. Along with Section 7 Application, the Financial Creditor has filed correspondence between the parties, which clearly finds mention in Annexure-J, which correspondence includes various acknowledgement given by the Corporate Debtor accepting the liability to make the payment. Furthermore, in the Agreement, which was entered between the parties on 26.02.2020, there is clear acknowledgement on behalf of the Corporate Debtor that an amount of Rs.64,04,90,697/- is due as on 19.02.2020. the amount of Rs.64,04,90,697/- was due in pursuance of sanction and disbursement of loan amount of Rs.34.55 Crores by the Financial Creditor to the Corporate Debtor. The Loan Agreement also finds mention in the Agreement dated 26.02.2020 in Clause-1 (vii) as extracted above. There is clear acknowledgement by the Corporate Debtor that Rs.64,04,90,697/- is amount due as on 19.02.2020, i.e., the prior to commencement of 10A period. Section 10A period begun on 25.03.2020 and when default has been committed by the Corporate Debtor prior to 10A period, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced by the agreement dated 26th February, 2020 entered into between yourselves and ourselves and Sri Vivek Kathotia and Sri Varun kathotia as guarantors as well as several other companies who all stood as guarantors and gave their certain properties towards security against such loan. It was recorded in the said Agreement that a sum of Rs.64,04,90,697/- as on 19th February, 2020 was due and payable by you to us which would be repaid by you within a period of six months thereby acknowledging such liability with promise to pay. By the said Agreement it has been inter alia further agreed and acknowledged by you that the said sum of Rs.64,04,90,697/- would carry interest @15% per annum and that the said interest would be payable on a quarterly basis and that in case of default of payment of interest the unpaid interest amount would be added to the principal and shall form part of the principal sum. On your requests for extension of time to repay the said loan, we had agreed to extend the time from repayment of such loan till 15th December, 2021. We state that inspite of your promise and assurance to repay the said loan, you have failed to pay the same. We state that y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pleaded that Agreement dated 15.02.2016 was a joint venture Agreement. In this regard, we may notice averments made in the reply affidavit filed by the Appellant in Section 7 Application, where the Corporate Debtor has pleaded that Agreement dated 15.02.2016 was a joint venture Agreement and further it was the paper transaction. In paragraph 7, (p) and (q), following have been pleaded: (p) Thus, the said agreement dated 15.02.2016 was not acted upon and/or implemented at the behest of the financial creditor. In this context, the corporate debtor craves leave to refer and rely upon various emails exchanged between the parties, copies whereof are collectively annexed hereto and marked with letter R2 . (q) From the tenor and nature of the said agreement, it would be crystal clear that the said agreement dated 15th February, 2016 is a joint venture agreement for development of said land but because of non-cooperation on the part of the financial creditor that the property could not be developed. 22. The Adjudicating Authority has returned a finding that Agreement dated 15.02.2016 was not a joint venture Agreement and further the amount of Rs.34.55 Crores was disbursed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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