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TMI Blog2024 (10) TMI 574X X X X Extracts X X X X X X X X Extracts X X X X ..... No.1. The Impugned Order initiated the Corporate Insolvency Resolution Process (CIRP) of Vilson Roofing Product Pvt. Ltd. (hereinafter referred to as "the Corporate Debtor") and appointed Respondent No.2 as the Interim Resolution Professional (IRP). The Appellant is a suspended director of the Corporate Debtor. Grounds of Appeal 2.The Respondent No.1 claims to be the Assignee of Shamrao Vithal Co- operative Bank Ltd. (hereinafter referred to as "the said Bank"). The Corporate Debtor allegedly defaulted on a secured term loan and cash credit facility advanced by the said Bank. Respondent No.1 asserts that it was assigned the debt owed by the Corporate Debtor to the said Bank. 3.Respondent No.1's case before the Hon'ble NCLT was that the Corporate Debtor was in receipt of and defaulted on a secured term loan and cash-credit facility advanced by the Shamrao Vithal Cooperative Bank Ltd. The Corporate Debtor's account was classified as an NPA on 31.08.2018 by the bank. The date of default mentioned in part-IV of the Company Petition is 30.04.2018. The loan, along with underlying securities/rights, was assigned to Respondent No.1 via an Assignment Agreement dated 27.02.2020. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsion of the limitation period was incorrect. 4.5. Barred by Limitation: The claim of Respondent No.1 is barred by limitation. The purported date of default is 30th April 2018, but the Petition was filed on 15th December 2022, more than three years after the alleged date of default. The finding that the Petition was within the limitation period was erroneous. 4.6. Compliance with Circular: Respondent No.1, asan Asset Reconstruction Company, failed to comply with the Master Circular on Asset Reconstruction Companies dated 10.02.2022. 4.7. Clause 7 Interpretation: The reliance on Clause 7 of the Sanctioned Restructuring Plan for determining the date of default under Section 7 of the IBC was misplaced. 4.8. Lack of Evidence: Respondent No.1 did not place any document on record to substantiate the default date of 30.04.2018. 4.9. Service of Petition: Under Rule 4(3) of the Application to Adjudicating Authority Rules, 2016, every Petition must be served upon the Insolvency and Bankruptcy Board of India before filing with the NCLT. 4.10. Malicious Intent: The Petition was filed with malicious intent, given that the Corporate Debtor is a solvent company with over 137 employees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2, advising the Corporate Debtor to clear the overdue amount immediately and comply with the restructuring terms, failing which the Financial Creditor would take appropriate action as per the Sanctioned Restructuring Plan. 10.Continuous default by the Corporate Debtor led the Financial Creditor to issue a seven-day notice on 21.07.2022 to clear the overdue amount, failing which the restructuring plan would be cancelled. 11.On 26.07.2022, the Corporate Debtor requested additional time to clear outstanding dues and to avoid cancellation of the restructuring plan. 12.The Financial Creditor cancelled the Sanctioned Restructuring Plan on 26.08.2022. Consequently, the original liability as on the cutoff date plus accrued interest was reinstated, with adjustments for amounts already received against the total outstanding liability. 13.Post-cancellation, the Corporate Debtor made payments of Rs 10,00,000 on 30.08.2022 and Rs. 43,00,000 on 15.09.2022. 14.The Financial Creditor, by letter dated 16.09.2022, informed the Corporate Debtor that the Sanctioned Restructuring Plan had been cancelled, and payments made post-cancellation would be adjusted against dues without reviving the restru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25.In view of the admitted facts, the documentary evidence, and the justified findings of the Adjudicating Authority, the Financial Creditor submits that the present appeal is devoid of merit and should be dismissed in the interest of justice. Appraisal: 26.Heard the Learned Counsel for the Appellant and the Respondent, perused the documents, pleadings and reliance placed in support of their case. 27.Upon reviewing the submissions and documentary evidence, the Tribunal finds that Appellant has not disputed on Key Facts including the classification of the Corporate Debtor's account as NPA on 31.08.2018, the restructuring of the debt by Respondent No.1 on 27.03.2021, modified by a letter dated 30.03.2021, which included the admission of liability by the Corporate Debtor amounting to Rs. 30,33,02,248.17 plus further fees, charges, and interest. Date of Default and Limitation Period 28.The Petition was filed under Section 7 of the IBC, which requires establishing the existence of a default. The date of default is mentioned as 30.04.2018 in the Petition, whereas the NPA classification occurred on 31.08.2018. The primary contention of the Appellant is the incorrect date of def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nuation of the restructuring plan. Compliance with Circular and Other Grounds 31.The Appellant's contention regarding non-compliance with the Master Circular on Asset Reconstruction Companies dated 10.02.2022 is not substantiated with concrete evidence. Furthermore, the arguments about malicious intent and lack of evidence are unsubstantiated, given the documentary evidence presented by Respondent No.1. Interpretation of Clause 7 32.Clause 7 of the Sanctioned Restructuring Plan explicitly provides that in the event of default, the Financial Creditor has the legal right to revoke the sanctioned restructuring and restore the original liability as on the cutoff date. The Corporate Debtor's non-compliance with the restructuring terms justified the revocation. 33.Further the Appellant has relied on the judgement of the Hon'ble Apex Court in Vidharbha Industries Power Limited vs Axis Bank Limited Civil Appeal NO. 4633 OF 2021 wherein it was held that discretionary power vests with this Tribunal under Section 7 (5)(a). It was held that while discretion is conferred on the Adjudicating Authority, such discretionary power cannot be exercised arbitrarily or capriciously. However, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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