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TMI Blog2024 (3) TMI 1237X X X X Extracts X X X X X X X X Extracts X X X X ..... uptcy Code, 2016 (in short 'Code') was admitted and the Corporate Insolvency Resolution Process (in short 'CIRP') was initiated. 2. Mr. Amit Kumar Kolay is the Appellant herein who was the Designated Partner of Suryadeep Multipurpose Cold Storage LLP (in short 'Corporate Debtor') 3. Heard the Counsel for the Parties and perused the records made available including the cited judgements. 4. The undisputed fact of the case is that the around 2012, the Corporate Debtor requested for credit facilities including the terms loan, cash credit facility and bank guarantee for an overall limit of Rs. 8.01 Crores from the Respondents which was sanctioned on 26.09.2012. It has been brought out that this overall credit facilities limit was enhanced/ renewed/ modified from time to time, based on the request of the Corporate Debtor and finally overall limit was sanctioned on 26.09.2019 of Rs. 20.78 Crores comprising of Terms Loan - I, Term Loan - II, cash credit limit and bank guarantee. 5. The Appellant stated that while utilising the credit facilities, business of the Corporate Debtor suffered due to recession and poor market conditions and therefore, the Corporate Debtor could not meet its l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of default. 12. The Appellant argued that servicing of monthly interest was also covered under moratorium of 7 months so the same could arise only from December 2019 and not any time before, hence the Impugned Order is wrong and unlawful. 13. The Appellant stated that in interim period after restructuring approval on 30.03.2019, the Corporate Debtor made certain payments of interest on its own, reflecting the Corporate Debtor's good intentions which cannot be held against it presuming as acknowledgment of debts. 14. The another plea taken by the Appellant is regarding CIBIL Report which was enclosed by the Respondent along with the application filed under Section 7 of the Code before the Adjudicating Authority, whereas it can be found that loan account mentioned by the Respondent in the applications were standards till August 2019. 15. The Appellant argued that it would be travesty of justice if the accounts of the Corporate Debtor are declared as NPA one day after restructuring which will hit the Corporate Debtor, a MSME entity, adversely which is not intent of the Code. 16. The Appellant reiterated that considering the payment schedule mentioned in the restructuring san ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest amount towards the said term loans as well as the cash credit facilities, due to which the loan account of the Corporate Debtor were classified as NPA on 30.09.2019 in terms of RBI Prudential Norms. 26. The Respondent submitted that the Appellant is unnecessarily trying to mislead this Appellate Tribunal by incorrect and wrong interpretation of the terms and conditions of restructuring sanction letter dated 30.03.2019 qua the moratoriums servicing of interest. 27. The Respondent strongly pleading that sanction letter is absolutely clear with specific clauses which provided that "interest will be served on monthly basis as and when applied" which makes it certain and specific that there was no moratorium on interest payments and the interest was to be paid on monthly basis. 28. The Respondent submitted that the Appellant, although knew the exact terms and conditions and its meaning/implications, however, due to wrong intentions for not making payments, took shelter of so-called assumed misinterpretations of moratorium on interest portion. 29. The Respondent brought out that although the Corporate Debtor failed to meet terms and conditions as contained in the restructuring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account and default agreed on 20.04.2019. 36. The Respondent submitted that due to continued failure of the Corporate Debtor, the demand notice dated 04.02.2020 was sent to the Corporate Debtor calling him to pay Rs. 19,21,23,253/-. However, despite giving flexibility of 14 days for such repayment, the Corporate Debtor failed to make any payment and thereafter the Respondent was constrained to file Section 7 application before the Adjudicating Authority. 37. Concluding the arguments, the Respondent submitted that the Impugned Order has taken into account all the facts and legal position into consideration and there was no ambiguity regarding defaults or date of default and as such the defence of the Appellant are moon shine defence. 38. The Respondent requested this Appellate Tribunal to dismiss this Appeal with exemplary costs. Finding 39. We have already noted all the facts regarding the relationship between the Corporate Debtor and the Financial Creditor i.e., the Respondent as such, we would like to take these facts on record and not reiterate the same for the purpose of brevity. 40. It is undisputed fact that various credit facilities were granted by the Respondent to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring letter of the Respondent dated 30.03.2019 was in accordance with their policy letter. 46. From various documents noted above, we observe that the Corporate Debtor requested for restructuring benefit being MSME and the Respondent sanctioned the same vide sanction letter dated 30.03.2019 as per their guidelines dated 15.01.2019 applicable to all MSME including the Corporate Debtor. We have taken into consideration the pleadings of the parties and note that for restructured Funded Interest Terms Loan ( in short 'FITL') and Working Capital Term Loan ( in short 'WCTL'), moratorium was indeed allowed, however the said moratorium was only 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. 47. We have taken into account that the loan accounts of the Corporate Debtor were classified as NPA on 30.04.2018 due to defaults by the Corporate Debtor, however, these accounts were regularised as standard loan accounts after payment of overdue interest and the principal amount by the Corporate Debtor. 48. We have also see ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 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. 53. As regard the arguments of CIBIL Report, it has been clarified that the account was standard till August 2019 and irregularity happened in September, 2019 when the account became sub-standard and the same is dully reflected in CIBIL Report. 54. Therefore, we do not find any strength in the arguments of the Appellant regarding alleged wrong date of defaults which has been consciously elaborated in the Impugned Order. 55. As regard the issue of no default by the Corporate Debtor as claimed by the Appellant, we note from the restructuring sanction letter dated 30.03.2019 that for Term Loan-I and Term Loan-II, the instalments would start from December 2019 and end on March 2029 with the moratorium for 7 months and restructured FITL, WCTL-I and WCTL-II were to commence on May 2020 with 12 months moratorium. Significantly we have observed from the restructuring sanction letter dated 30.03.2019 as well as from the pleadings that the restructuring letter clearly stipulated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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