TMI Blog2024 (3) TMI 1237X X X X Extracts X X X X X X X X Extracts X X X X ..... ly for principal amounts and not for interests whereas the Appellant has taken the plea that the moratorium was blanket for both principal amount as well as for the interest component and therefore, the moratorium was absolute. As regard, the different date of default as alleged by the Appellant, both the parties during the pleadings, brought out that the Adjudicating Authority had asked the Respondent to file a supplemental affidavit which was filed on 16.04.2019 where the Respondent elaborated that the Corporate Debtor committed first default in 2018 the loan accounts of the Corporate Debtor were classified as NPA on 30.04.2018, however, on payment of over due amount the account of the Corporate Debtor were upgraded to the standard category. The Corporate Debtor, having not deposited the interest from time to time, defaulted and outstanding balance remained continuously in excess of sanction limit, entitling the Respondent bank to classify the loan accounts of the Corporate Debtor as NPA - there are no strength in the arguments of the Appellant regarding alleged wrong date of defaults which has been consciously elaborated in the Impugned Order. Thus, the grounds of the Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onditions and therefore, the Corporate Debtor could not meet its liability towards the Respondents. 6. The Appellant also mentioned that the Corporate Debtor is MSME entity and is entitled to get benefit of restructuring of its loan accounts in terms of RBI Circular dated 17.03.2016 and according to the Corporate Debtor approached the Respondent for restructuring. 7. It is the case of the Appellant that after restructuring, the debt was not due on alleged default dates claimed by the Respondent, as such the admission of Section 7 application by the Adjudicating Authority was illegal and perverse. 8. It is also the case of the Appellant that the date of default has not been correctly reflected in the application filed under Section 7 of the Code by the Respondents and therefore, the application should have been summarily rejected. 9. The Appellant also stated that the letter of restructuring dated 30.03.2019 clearly indicated that the repayment schedule was to commence from December 2019 and was to end in march 2029 with moratorium period of 7 months and the interest was to be served on monthly basis as and when applied with regard to FITL, WCTL-I and WCTL-II facility, the repayment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e payment schedule mentioned in the restructuring sanction letter as well as supplemental term loan agreements, the payment could have commenced from December, 2019 and at best alleged the default could have been taken place only after 30 days from 01.12.2019, thus the date of default as claimed by the Respondent could not have been before January, 2020 and NPA therefore, could not have taken place before April 2020. 17. The Appellant assailed the Impugned Order which failed to appreciate that in view of moratorium having been imposed by the letter of restructuring dated 30.03.2019 which was subsisting in September 2019 therefore the question of any default having occurred in September 2019 cannot and does not arise. 18. Concluding his argument, the Appellant stated that the Appeal should be allowed and the Impugned Order should be set aside since there was no debt and the alleged date of defaults are misleading and incorrect. 19. Per Contra, the Respondent refuted all the averments made by the Appellant treating these to be as misleading, mischievous, frivolous and without any substantial basis. 20. The Respondent gave the sequence of various events of credit facilities granted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons as contained in the restructuring sanctioned letter dated 30.03.2019 but the Corporate Debtor in fact approached the Respondent again in 2020 vide its letter dated 19.10.2020 i.e., during pendency of the said company petition bearing CP/IB/623/KB/2020 and admitted to the default on its part as well as classification of account as NPA on 30.09.2019 and requested for further restructuring of credit facilities which demonstrate that the objections raised by the Appellant in the present Appeal are sham argument and only afterthought. 30. The Respondent submitted that the Corporate Debtor defaulted in repayment of outstanding dues resulting in classification of its accounts as NPA on 30.04.2018, however, on payment of over due amount by the Corporate Debtor, the said loan accounts were upgraded to standard category. 31. The Respondent also submitted that the Corporate Debtor again failed to maintain its financial discipline and defaulted from June 2018 onwards resulting in classification of its account again on 30.09.2018 as NPA, however, on payment of the over due amount by the Corporate Debtor, the said accounts of the Corporate Debtor were again regularised as standard accounts. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Respondent to the Corporate Debtor from time to time including the restructuring of loans and supplemental loan agreements were signed by the Corporate Debtor. Thus, the amount of debt is undisputed, therefore, we shall not go into these aspects. 41. The defence has been taken by the Appellant as the Designated Partner of Suryadeep Multipurpose Cold Storage LLP, the Corporate Debtor, is two fold, namely, (i) there was no default as debt was not due to be paid by the Corporate Debtor and (ii) there was unclear and uncertain dates of default for which the application was filed by the Respondent under Section 7 of the Code hence the Section 7 application should not have been the admitted. 42. We have through the letter of the Corporate Debtor dated 19.10.2020 written to the Respondent, where the Corporate Debtor again requested the Respondent to help them by restructuring of unpaid interest and loan for next ten years. In this letter, the Corporate Debtor admitted its default in repayment of principal amount interest and acknowledged the fact of its NPA as on 30.09.2019. From this letter, it is quite clear that the Corporate Debtor had no doubt about the debt due on account of bot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the documents placed before us that the Corporate Debtor had acknowledged the credit facilities in their financial statements for the financial year 2018-19 and also issued the confirmation letter to the Respondent thereby admitting the debt. 49. As regard, the different date of default as alleged by the Appellant, both the parties during the pleadings before us, brought out that the Adjudicating Authority had asked the Respondent to file a supplemental affidavit which was filed on 16.04.2019 where the Respondent elaborated that the Corporate Debtor committed first default in 2018 the loan accounts of the Corporate Debtor were classified as NPA on 30.04.2018, however, on payment of over due amount the account of the Corporate Debtor were upgraded to the standard category. We also take into account that the Corporate Debtor again defaulted and accounts of the Corporate Debtor were classified as NPA which were regularised after part payment of over due amount. Similarly, the Corporate Debtor once again defaulted and his loan accounts were classified as SMA-I on 28.08.2019 and subsequently loan accounts were restructured on 30.03.2019. In the supplementary affidavit, the Respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest will be served monthly basis as and when applied which is quite clear that there was no concept of moratorium for interest and the moratorium was applicable only on principal amount. 56. We have already taken into consideration the supplemental loan agreements of the Corporate Debtor where the following has been mentioned. The borrower doth hereby agree and undertake to repay to the Bank the balance of Rs. 2,28,86,696.99 outstanding in the Term Loan Account with the Bank by the instalments and non the days mentioned in the schedule hereunder written together with interest from 01.03.2019 at the agreed rate of 11.15% p.a with monthly rests 57. Thus, the grounds of the Appellant that there was no default whatsoever is not found to be true in view of various loans agreements, restructuring approvals letters, supplemental terms loan agreements, various statement of accounts provided by the banks w.r.t to the Corporate Debtor. There was clear default on the part of the Corporate Debtor to the Respondent Bank. 58. We do not find any error in the Impugned Order which has gone into details of all the facts and came to the clear conclusion that there has been default on the part of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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