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TMI Blog2025 (1) TMI 685X X X X Extracts X X X X X X X X Extracts X X X X ..... nning two Hotels - (i) JW Marriott (five- star Hotel) situated at Bengaluru; (ii) Crown Plaza Hotel, situated at Pune. 2. Company Appeal (AT) (Ins.) No. 165 of 2024 has been filed by Suspended Director of the Corporate Debtor - GSTAAD Hotels Pvt. Ltd.; and Company Appeal (AT) (Ins.) No. 212 of 2024 has been filed by Shareholder and Suspended Director of the Corporate Debtor - Neo Capricorn Plaza Pvt. Ltd., a subsidiary of M/s GSTAAD Hotels Pvt. Ltd. Lenders of both the Corporate Debtors being common and lending commenced by a common Loan Agreement dated 26.12.2017 and both the Appeal(s) involving common issues of facts and law, have been heard together and are being decided by this common judgment 3. Brief facts of the case giving rise to these Appeal(s) are: Company Appeal (AT) (Ins.) No.165 of 2024 (i) Piramal Capital Housing Finance Ltd. ("Piramal") entered into a Loan Agreement dated 26.12.2017 with Corporate Debtor ("CD") - M/s GSTAAD Hotels Pvt. Ltd. ("GSTAAD Hotels") and Neo Capricorn Plaza Pvt. Ltd. ("Neo Capricorn"), agreeing to extend Term Loan Facility of Rs. 600 crores, wherein GSTAAD was granted loan of Rs. 450 crores, Rs. 50 crores as revolving facility and Neo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to close the loan account and repay the balance amount. The Lenders continued to receive sums as per Cash Management Agreement. (ix) Reply to Section 7 Application was filed by the CD. The Adjudicating Authority vide order dated 09.01.2024 admitted Section 7 Application. Company Appeal (AT) (Ins.) No.212 of 2024 (i) On 26.12.2017, Corporate Debtor - Neo Capricorn Plaza Pvt. Ltd. along with GSTAAD Hotels entered into a Loan Agreement for a loan of Rs. 600 crores, out of which Corporate Debtor - Neo Capricorn was to be given loan of Rs. 100 crores loan. On 26.12.2017, a Security Trustee Agreement was entered into between the Lender - Piramal, the Corporate Debtor and M/s. IDBI Trusteeship Services Ltd. (ii) On 29.12.2020, the Lender entered into a Loan Agreement with the Corporate Debtor - Neo Capricorn Plaza Pvt. Ltd. for a sum of Rs. 19.5 crores under the ECLGS Scheme. (iii) On 04.03.2021, IDBI Trusteeship Ltd. issued a notice of default, calling on GSTAAD Hotels and the CD - Neo Capricorn to repay Rs. 13 crores to the Lender. On 26.05.2021, the IDBI Trusteeship Ltd. issued a notice of default to the GSTAAD Hotels and Neo Capricorn to repay the entire loan of Rs. 600 crore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.26 crores. The learned Counsel for the Appellant referring to the details of revenue earned by the Hotel, in Company Appeal (AT) (Ins.) Nos.165 and 212 of 2024, referred to in paragraphs 7.5 and 7.6 submits that subsequent to Covid-19, the Hotel has substantial earnings and has been making substantial payments to the Lenders. The learned Counsel for the Appellant referring to Cash Management Agreement ("CMA") submits that as per the CMA 34% of daily gross revenue from the revenue account was to be transferred in the retention account, which Agreement provided reconciliation of accounts on monthly basis, whereby, only the amounts equivalent to the Corporate Debtor's profit share from the Hotel were to be utilized by the Lender to service its loan and in event an amount in excess of the Corporate Debtor's profit entitlement from a particular month, the Lender was obliged to transfer back the excess amount to the Expense Account within 10 days. In paragraph 7.10, the details of amount repaid to the Lenders from 2017-18 to 11.01.2024 are mentioned, which is about Rs. 418 crores for GSTAAD and Rs. 78.92 crores for New Capricorn. Learned Counsel for the Appellant submits that accounts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fault of threshold amount, to enable the Adjudicating Authority to admit Section 7 Application. 7. It is submitted that Adjudicating Authority in paragraph-11 has held that the Applicant (Financial Creditor) has denied the existence of CMA and no CMA having been filed, the CMA is not proved, which finding is erroneous. The CMA was entered between Lenders and GSTAAD Hotels, which was given effect to by maintaining Expense Account and Retention Account and the amount being regularly transferred from retention amount by the Lenders for returning any finding of default on the loan account, the accounts maintained under the CMA were required to be looked into by the Adjudicating Authority. The observation of the Adjudicating Authority in paragraph 8 of the impugned order that existence of loan amount and Corporate Debtors' default on such loan amount, is undisputed fact, is without any basis. The Corporate Debtors never admitted any default. The Appellant has brought on record Report of the Statement of Accounts shared by Respondent, which indicate that there are corrections in certain parts in Statement of Accounts, shared by the Respondent on 06.05.2024 and those, which were brought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lication was filed by IDBI Trusteeship Ltd. on default, which was committed in April and May 2021. It is submitted that principle of res-judicata or issue of estoppel has no applicability in Section 7 Application filed by Omkara. 10. With regard to ECLGS-1 and ECLGS-2, it is submitted that as per sanctions on 30.12.2020 and 11.03.2022, the Corporate Debtors were liable to make payment towards interest. The Corporate Debtors having committed default in repayment of the interest and principal as per ECLGS-1, as per repayment schedule, the default was committed by the Corporate Debtors. With regard to ECLGS-1, Corporate Debtor was to make a monthly principal repayment of Rs. 2,04,16,667/- from 15.12.2021 till 15.11.2025. The monthly interest rate of 13% was to be paid under ECLGS-2 from April 2022 to April 2028. Default was committed by the Corporate Debtor with regard to ECLGS-1 and ECLGS-2 leading the Financial Creditor to issue a legal notice dated 15.02.2023, calling upon the Corporate Debtors to pay the outstanding amount of Rs. 666,53,26,968/-. The Corporate Debtors failed to perform its obligation in accordance with the terms agreed and Statement of Account. The Statement of A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the event the funds lying in the Retention Account are not sufficient for repaying the loan or any part thereof, the Corporate Debtor shall ensure that the loan and every part thereof is repaid through such other funds as may be necessary for this purpose and acceptable to Lenders. Hence, when 34% of the collections fell short of repayment of facility, it fell upon the Corporate Debtor to make good the "default". The finding of the NCLT that there is debt and default is based on materials on record. There being default of more than Rs. 1 crore, no exception can be taken to the admission of CIRP Against the Corporate Debtor. There existed the clear debt and default under the terms of Loan Agreement under ECLGS-1 and ECLGS-2. Both the Appeal(s) filed by the Appellant deserve to be dismissed. 13. We have considered the submission of learned Counsel for the parties and have perused the record. 14. From the submissions of learned Counsel for the parties and the materials placed on record, following issues fell for consideration in these Appeal(s): (1) Whether Assignment dated 27.12.2022 made in favour of Omkara Assets Reconstruction Pvt. Ltd. by the Lenders was not in accordance w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Whether the Financial Creditors have been able to prove default under the Loan Agreement dated 26.12.2017 and the ECLGS-II sanctioned on 21.03.2022? (11) To what relief, if any, the Appellant(s) are entitled in these Appeal(s)? Question No.(1) 15. The Assignment dated 27.12.2022 made by the Lenders in favour of Omkara was challenged by GSTAAD before the High Court of Karnataka at Bengaluru in Writ Petition No.6037 of 2023. The High Court vide its judgment and order dated 28.02.2024 has dismissed the Writ Petition. Copy of which order has been brought on record by the Appellant in its rejoinder affidavit. The challenge before the High Court of Karnataka of the Assignment by the Appellant was basically on the ground that accounts of CD having not been declared as NPA or SMA, the Lenders could not have assigned the debt in favour of Omkara. Violation of Circulars issued by Reserve Bank of India was relied before the High Court. The High Court by judgment dated 28.02.2024 held that assignment is not violative of Master Circular issued by the Reserve Bank of India. It was held that there is no statutory aberration and dispute between private parties for enforcement of a private agr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t its guideline 18 (xiv) imposes an obligation on the lender bank to secure its interest by taking all reasonable measures. The same reads: "The payment of guarantee claim by the Trustee Company to the lending institution does not in any way take away the responsibility of the lending institution to recover the entire outstanding amount of the credit from the borrower. The lending institution shall exercise all the necessary precautions and maintain its recourse to the borrower for entire amount of credit facility owed by it and initiate all necessary actions for recovery of the outstanding amount, including such action as may be advised by the Trustee Company." When the lender Banks in given facts & circumstances of the case take a decision as dictated by the prudence, for abruptly recalling the credit facilities, it is not for the courts to sit in appeal over their wisdom. Writ Courts neither have means nor the expertise to re-evaluate the "prudential decisions" of the Banks that are made in the ordinary course of their commercial transactions with accumulated wisdom in the trade. (ii) After all, the scope of judicial review of 'Bankers Decisions' is too restrict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which has been pressed by the Appellant is that on account of withdrawal of earlier Section 7 Application filed by IDBI Trusteeship Ltd. on 13.12.2022 and 22.12.2022, present Application is barred by principles of res-judicata. The earlier Section 7 Applications being CP(IB)No.1292 of 2021 and CP(IB) No.1287 of 2021 were filed by IDBI Trusteeship Ltd. on behalf of the Lenders alleging default on 15.04.2021 and 15.05.2021. The default in the aforesaid proceedings was default of Loan Agreement dated 27.12.2017. Section 7 Application, which has given rise to present Appeal has been filed alleging default of ECLGS-1 and ECLGS-2. In the earlier Section 7 Application initiated by IDBI Trusteeship Ltd., the ECLGS Facilities were not subject of consideration, nor the Applications were founded on any default under ECLGS Facility. Hence, we are of the view that the Applications - CP(IB) No.291/MB/2023 and CP(IB)No.290/MB/2023, cannot be held to be barred by the principle of res-judicata. We, thus, do not find any substance in the submission of the Appellant that proceedings under Section 7 initiated by Omkara is barred by principle of res-judicata. 18. Even though, we have found that Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 024, the Appellant has pleaded about the current financial status of JW Marriott Hotel as well as Crown Plaza Hotel. In paragraph 7.12 of the Appeal, payments made by Borrower to the Lenders from April 2017 to 11.01.2024 has been tabulated. GSTAAD has made payment of Rs. 418.06 crores during this period and Neo Capricorn has made payment of Rs. 78.92 crores. Paragraph 7.12 of the Appeal is as follows: "7.12 The Borrowers have repaid sums to the Lenders in the following manner: GSTAAD HOTELS PRIVATE LTD. Sl. No. Financial Year Amount in INR (Crores) 1. April 2017- March 2018 10.28 2. April 2018- March 2019 54.33 3. April 2019- March 2020 60.27 4. April 2020- March 2021 55.73 5. April 2021- March 2022 78.34 6. April 2022 - March 2023 96.19 7. April 2023 - 11th January 2024 42.04 to Piramal and 20.89 towards the Respondent 8. TOTAL 418.06 NEO CAPRICORN PLAZA PRIVATE LTD. Sl. No. Financial Year Amount in INR (Crores) 1. April 2017- March 2018 2.12 2. April 2018- March 2019 10.10 3. April 2019- March 2020 12.27 4. April 2020- March 2021 11.43 5. April 2021- March 2022 16.60 6. April 2022 - March 2023 17.06 7. April 2023 - 11th Janu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue Account to Expense Account, 66% for Borrower for operating capital needs of the Hotel and 34% was to be transferred to designated account titled as Retention Account, on a daily basis, which would be used by the Lender towards servicing of loan financed to the Corporate Debtors. The relevant pleadings regarding CMA have been referred to in paragraph 7.10 of the Appeal. Paragraph 7.10 of the Appeal is as follows: "7.10 The Trustee on behalf of the Lender would transfer from the Revenue Account as per the CMA as follows-- 7.10.1. 66% of the daily gross revenue from the Revenue Account to a designated account bearing number 002284000002912 at YES Bank and 57500000439879 at HDFC Bank titled as Expense Account' also on a daily basis, which would be utilized by the Hotel Operator for working/operating capital needs of the Hotel, and: 7.10.2. 34% of the daily gross revenue from the Revenue Account to another designated account titled as 'Retention Account' bearing number at 045881300000023 at YES Bank and 50200046058626 at HDFC Bank also on a daily basis, which would be utilized by the Lender towards servicing of the loan advanced to the Corporate Debtor. 7.10.3 Tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Renaissance. Services B.V. (as RSBV), Marriott International Licensing Company B.V. (as Marriott) and the Lender (as Financier) which sets out the cash management arrangement between the parties thereto in relation to the JW Marriott Hotel together with the non-disturbance agreement executed between the parties thereto." 27. The CMA was entered between the parties and the amounts were regularly transferred into Retention Account, which Retention Account was operated by the IDBI Trusteeship Ltd. on behalf of the Lenders. Denial of Omkara before the Adjudicating Authority was wholly incorrect and against the record. The CMA was a mechanism for repayment of financial Facilities advanced to the Corporate Debtor and that was a key agreement between the parties for repayment of the loan and without adverting to the CMA and its various clauses, no findings could have been returned by the Adjudicating Authority on default by the Corporate Debtor. In the reply, which has been filed in Company Appeal (AT) (Ins.) No.165 of 2024, Omkara has not denied the existence of CMA, rather it is pleaded that CMA is merely a repayment mechanism to ensure that portion of the revenue of JW Marriott Hotel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18 was specifically pleaded. Paragraphs 9 and 10 of the reply are as follows: "9. That the Respondent, PCHFL and the Hotel Operator had a Cash Management Agreement dated 17.01.2018 ("CMA") whereby the entire gross revenue collections of the Hotel were to be deposited by the Hotel Operator into a designated bank account on a daily basis, which was titled and styled as the Revenue Account. Thereafter, PCHFL would transfer: (a) 66% of the doily gross revenue from the Revenue Account to another designated account titled as Expense Account also on a daily basis, which would be utilized by the Hotel Operator for working/operating capital needs of the Hotel, and; (b) 34% of the daily gross revenue from the Revenue Account to another designated account titled as Retention Account also on a daily basis, which would be utilized by PCHFL towards servicing of the loan advanced to the Respondent. 10. It was agreed between the Parties, that a reconciliation of accounts would be done on a monthly basis, so as to ascertain that only the amounts equivalent to the Respondent's profit shore from the Hotel were utilized by the PCHFL for servicing its loan. That is to soy, if upon the month ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perating Agreement, until there is a Cash Management Default, the Hotel's Gross Revenues in relation to each Accounting Period shall be deposited and utilized in the following manner: (i) Operator will deposit all Hotel's Gross Revenues (Including tax or similar charges collected by the Hotel from patrons or guests, "Taxes") on a daily basis into an account established by Owner with Financier as revenue account (ii) On a daily basis, through an automatic transfer via standing instruction: (a) Financier will transfer 66% of the Gross Revenues (including Taxes) from the Revenue Account into a designated account at YES Bank (Account number: 02284000002912) which will be an expense account ("Expense Account"). Operator will use the funds in the Expense Account to pay for the operating expenses of tile Hotel and Taxes; and (b) Financier will transfer the remaining amount of the 34% of the Gross Revenue in the Revenue Account (after transfer of the amount referred to in section 1.B(ii)(a) above) into an account established by Owner with Financier as retention account ("Retention Account"). Financier will use the funds in the Retention Account to service the debt under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me to time require pursuant to section 7.01 of the Operating Agreement. Ow net' wit\ provide such funds to the Expense Account upon Operator's request. H. The current split of 66% /34% ratio to allocate Hotel Gross Revenue into the Expense Account and Retention Account on a daily basis pursuant to Section 1.A(ii) is determined: (i) On the basis that the amount of Taxes collected by the Hotel will on average constitute approximately 23.5% of the Gross Revenue collected by the Hotel. If the relevant percentage of Taxes increases (e.g. due to a change in tax laws or regulations), the split ratio will be adjusted to increase the percentage of Gross Revenue to be deposited in the Expense Account on a daily basis; and (ii) Based on the percentage of Owner Profit (including contribution to the Rep[airs and Equipment Reserve) to Gross Revenue in the budget of the Hotel for year 2018. If there is significant change of such percentage in the future budget which may result in the daily allocation to the Expense Account becoming insufficient for the operation of the Hotel, Financier and Operator will adjust the daily split ratio in writing to ensure there is sufficient funds for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the DRSA was to be replenished by CD. The copy of the Loan Agreement has been brought on record by the Appellant as part of Annexure-2. Clause 9 of the Agreement dated 26.12.2017, dealt with 'Debt Service Reserve Amount'. Clause 9 of the Agreement is as follows: "9. DEBT SERVICE RESERVE AMOUNT 9.1 The Borrowers agree that the Lender shall reserve the Minimum DSRA Balance as an undisbursed amount under the Loan, which shall be a reserve ("DSRA") 9.2 The DSRA shall be maintained and operated in accordance with this Agreement and the other Finance Documents. Any shortfall in interest payments will forthwith be fulfilled from the DSRA. 9.3 In the event that any amount has been utilised out of the DSRA, the same shall be deemed to be a Disbursement under the Loan and the Borrowers shall, within 7 (seven) days of such Disbursement Date, deposit such amounts of money into the Retention Account such that the undisbursed portion of the DSRA together with such monies deposited into the Escrow Accounts aggregate the Minimum DSRA Balance. In the event the DSRA is disbursed to service any Interest/ Principal Repayment, then the same will have to be replenished by the Borrowers withi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reement are as follows: "ELEVENTH SCHEDULE (PURPOSE) 1. The GHPL Loan shall be utilized for the following purpose: (i) Up to Rs. 365,00,00,000 (Rupees Three Hundred and Sixty Five Crores) for the repayment of GHPL Existing Dues; (ii) Upto Rs. 77,00,00,000 (Rupees Seventy Seven Crores) towards top up against receivables of the JW Marriott Hotel; and (iii) The balance amount of Rs. 8,00,00,000 (Rupees Eight Crores) towards undisbursed DSRA. 2. The NCPPL Loan shall be utilized for the following purpose: (i) Up to Rs. 98,00,00,000 (Rupees Ninety Bight Crores) for the repayment of NOPPL Existing Dues; and (ii) The balance amount of Rs. 2,00,00,000 (Rupees Two Crores) towards undisbursed DSRA. 39. The above clearly indicate that out of the amount sanctioned, Rs. 8 crores was towards undisbursed for GSTAAD Hotels and Rs. 2 crores for Neo Capricorn. We do not find any substance in the submission of the Respondent that no DSRA was provided for by the Lenders. The submission made by the Respondent that there was no DSRA is to be rejected in face of the clear stipulation in the Loan Agreement itself and the Clauses 1 and 2 of 11th Schedule as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be accepted that default by the CD is undisputed fact. Question No.(8) 44. The submission which has been pressed by learned Counsel for the Appellant before this Tribunal is that under ECLGS-1, amount of Rs. 98 crores was sanctioned and under ECLGS-2, amount of Rs. 65 crores was sanctioned, totaling to Rs. 163 crores. The Appellant's submission is that out of the above Rs. 163 crores, the Lenders have utilized about Rs. 140 crores towards servicing of its debts and dues, which is contrary to the Agreement dated 30.12.2020 under which ECLGS-1 was sanctioned. The above submission was also advanced before the Adjudicating Authority, questioning the utilization of Rs. 140 crores from the ECLGS Facilities granted to the CD for servicing the loan account of the Lenders. In paragraph 7.17 of the Appeal, following has been pleaded by the Appellant: "7.17 Out of the sums advanced under the ECLGS scheme i.e., an amount of INR 163,00,00,000/-, the Lenders used the same to an extent of INR 1,39,89,91,301/- to evergreen the loan. On many occasions it was on the same day of disbursal as per Exhibit R - 15 and the Bank Statements produced at Exhibit 2 to the Sur-Rejoinder filed by the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cility was towards the working capital. The Appellant has pleaded that the said amount was utilized by the Lender for meeting their loan. When the Financial Creditor is alleging default of ECLGS-1 and ECLGS-2, the above submission made by the Appellant becomes necessary to be considered to find out as to whether in essence there was any default committed by the CD in repayment. The Adjudicating Authority has relied on the end use Certificate, which was required to be furnished by the Corporate Debtor, as per the Agreement dated 30.12.2020. It is true that end use Certificate was submitted by the CD as per the Agreement. The Appellant has referred to the Bank statements to show that amounts after receipt of the loan under the ECLGS Facility, was directly transferred from Retention Account to the Loan Account on the same day. Even though no end use Certificate was given by the CD, but when categorical submission before the Adjudicating Authority was raised that amount out of Rs. 163 crores, which has been received by the CD under ECLGS-1 and ECLGS-2 and amount of about Rs. 140 crores have been utilized for servicing the debt by the Lenders, the question was required to be considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... graph 17(vii) that after pandemic situation became better, the CD has made the payment and excess payment was made as compared to the share of profit. It was pleaded that Piramal was obliged to refund the excess back to the Expense Account and hence, there was multiple breaches by the Lenders. The CMA has been alleged and it was pleaded that there was excess overdrawn amount of Rs. 13.94 crores. It is useful to extract paragraph 17(vii) of the reply filed by the CD before the Adjudicating Authority, which is as follows: "17(vii) That when the pandemic situation became better and the various lockdowns were lifted, business of the Respondent gradually started picking up and the Hotel Operator continued to transfer the gross revenue collections into the Revenue account on a daily basis. Subsequently, Piramal transferred 66% to the Expense Account and 34% to the Retention account on a daily basis. Since the revenues had substantially reduced in the wake of the COVID 19 Pandemic, the Respondent's share of profit was less than the amounts transferred to the Retention Account. In view thereof, coupled with the provisions of the CMA, the Lender i.e., Piramal was obliged to refund the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30.24 DSRA Disbursed (Refer Note-2) 7.00 - - - Amount Lent 574.48 52.31 182.50 802.29 Repaid Amount Repaid 309.12 26.06 43.72 378.89 Interest Interest Charged to accounts net of TDS (Refer Note-3 271.79 26.3 20.70 318.72 Payments towards interest (Refer Note-4) 271.79 26.06 20.27 318.72 Due - 0.17 0.43 0.60 For the month of November 5.86 0.58 1.77 8.21 Due for the month of November - 0.17 0.43 0.60 Overdue - - - - Interest Adjustment towards Principal (Refer Note-4) Principal Payable (Refer Note-5) 37.33 - 23.45 60.87 30.33 - 29.38 59.38 Due/ (Excess Paid) -7.33 - 5.93 -1.40 For the month of November - - 2.45 2.45 Overdue -7.33 - 3.48 -3.85 Total Overdue/ (Excess Paid) -7.33 - 3.48 -3.85 Overdue/(Excess Payment) Inter-loan adjustment in case of Excess paid - - - - Net Overdue/ (Excess Paid) -7.33 - 3.48 -3.85 - - 2.45 2.45 Overdue -7.33 - 3.48 -3.85 Refer to Annexure-7 to this report for detailed loan account-wise bifurcation Conclusion: * From the above table, there has been an excess payment towards ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fic pleadings have been made with regard to ECLGS-1 and ECLGS-2 and in Part-IV in paragraph 24, it has been pleaded that Corporate Debtor has defaulted in relation to ECLGS-1 on November 15, 2022. Paragraph 24 of Part-IV is as follows: "24. The Corporate Debtor defaulted in relation to the ECLGS Facility-! on November 15, 2022. This qualified as an Event of Default under clause 18 of the ECLGS Facility- 1 Agreement." 56. Similarly, in paragraph 32, it was pleaded that Corporate Debtor has defaulted in relation ECLGS-2 on November 15, 2022. Paragraph 22 of Part-IV is as follows: "32. The Corporate Debtor defaulted in relation to the ECLGS Facility-2 on November 15, 2022. This qualified as an Event of Default under clause 18 of the ECLGS Facility- 2 Agreement." 57. There are no specific pleadings with regard to default under the Loan Agreement dated 26.12.2017. However, in paragraph 34, it is pleaded that owing to the defaults committed by the Corporate Debtor under the Loan Agreement, ECLGS-I and ECLGS-2, the Financial Creditors issued a Recall Notice dated February 15, 2023. In Part-IV, Item No.2, "Amount claimed to be in default and the date on which the default occurred", t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indicates that with regard to ECLGS-2, repayment has to take place from 05.04.2024. In paragraph 16, the Adjudicating Authority has not returned any finding that there is a default with regard to ECLGS-2. Thus, the finding of the Adjudicating Authority is only with regard to ECLGS-1, which we have already dealt above. We, thus, are of the view the default with regard to ECLGS Facility could not have been pronounced by the Adjudicating Authority, without considering the CMA and amounts transmitted to Retention Account. 60. As noted above, in Part-IV, except statement that default is committed towards loan account, no details of default have been given and 15.11.2022 has been mentioned as the date of default. Nothing in respect of what was the outstanding amount under the Loan Agreement payable by the CD has been mentioned. We, thus, are of the view that Adjudicating Authority is required to consider the default under the loan account afresh. There being no finding of default regarding ECLGS-2 by the Adjudicating Authority, no further consideration is required with regard to ECLGS-2. Question No.(11) 61. Now we come to the question of relief, to which the Appellant(s) are entitle ..... X X X X Extracts X X X X X X X X Extracts X X X X
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