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2021 (6) TMI 186 - Tri - Insolvency and BankruptcyMaintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - Financial Creditors - HELD THAT - It is a fact that the Business Loan Agreement (BLA) was entered into between the parties i.e., Zydus Healthcare Limited/Financial Creditor with Genesys Biologies Private Limited/Corporate Debtor on 28.09.2018 whereby the Financial Creditor advanced a loan of ₹ 10.00 crores to the Corporate Debtor on the basis of the terms conditions of the BLA. Further, a Deed of Corporate Guarantee was executed in favour of the Financial Creditor by Amicus Formulation (India) Pvt. Ltd./Corporate Guarantor and a separate Deed of Personal Guarantee was also signed by five persons, who are also directors of the Corporate Debtor, namely - 1. Mr. Rajendra Rao Juwadi; 2. Mr. Vamshider Rao Joganpally; 3. Mr. Venkat Reddy Yelma, 4. Mr. Venkata Krishna Rao Dasari; and 5. Mr. Tulsi Ramu Chatadi. It is also a fact that the Corporate Debtor has committed default of repayment of loan amount on 30.09.2019. The Financial Creditor was assured during the month of October and November, 2019 by the Corporate Debtor for repayment of the outstanding along with interest - the Corporate Debtor did not make any repayment of principal and interest amount towards the discharge of financial debt of ₹ 12,41,50,950.96 claimed by the Financial Creditor till the date of the application. Hence, this application was filed. There is a Business Loan Agreement entered into between both the parties and whereby the Financial Creditor advanced a loan of ₹ 10 crores on the basis of the terms and conditions of BLA. The BLA was amended several times in view of the governing circumstances and finally by way of final amendment dated 01.06.2019, the date of repayment of the loan amount was extended upto 30.09.2019 by mutually agreed terms by both the parties. However, the Corporate Debtor committed default in repayment of loan amount on 30.09.2019 under the provisions of Clause 7 of BLA - the contention raised by the Corporate Debtor regarding the insufficient stamp duty and raising a contention that this is an investment not as a loan is not tenable in the light of the BLA entered into between both the parties as regards the amount given to the Corporate Debtor. There is a financial debt which was given by the Financial Creditor and the Corporate Debtor has defaulted in making repayment as per the BLA amended several times in this regard - Application admitted - moratorium declared.
Issues Involved:
1. Default in repayment of loan. 2. Validity and enforceability of the Business Loan Agreement (BLA). 3. Allegations of misrepresentation and suppression of facts. 4. Locus standi of the petitioner. 5. Maintainability of the petition. 6. Alleged parallel proceedings. 7. Alleged malicious intent in filing the petition. 8. Applicability of Section 10A of the Insolvency and Bankruptcy Code. Detailed Analysis: 1. Default in Repayment of Loan: The petition was filed by M/s. Zydus Healthcare Limited, alleging that M/s. Genesys Biologies Private Limited defaulted in repaying a sum of ?12,41,50,950.96, which includes a principal loan amount of ?10,00,00,000 and compound interest calculated at 12% per annum from 03.10.2018 to 20.08.2020. The Tribunal confirmed that the Corporate Debtor committed default on 30.09.2019 and did not make any repayment of the principal and interest amount till the date of the application. 2. Validity and Enforceability of the Business Loan Agreement (BLA): The BLA was entered into on 28.09.2018 and amended on three occasions, extending the repayment date to 30.09.2019. The Tribunal observed that the BLA and subsequent amendments were valid and enforceable. The Corporate Debtor’s contention that the BLA was insufficiently stamped and intended as an investment rather than a loan was dismissed. 3. Allegations of Misrepresentation and Suppression of Facts: The Corporate Debtor alleged that the petition was filed by misrepresenting and suppressing facts. The Tribunal found that the Financial Creditor had provided all necessary documents and evidence, including the BLA and amendments, to support their claim. The Tribunal did not find any merit in the allegations of misrepresentation and suppression of facts. 4. Locus Standi of the Petitioner: The Corporate Debtor argued that the petition was filed by an unrelated corporate entity with a different CIN. The Tribunal clarified that M/s. Zydus Healthcare Limited, represented by its Managing Director and Company Secretary, was the rightful petitioner. The Tribunal dismissed the contention regarding the locus standi of the petitioner. 5. Maintainability of the Petition: The Corporate Debtor contended that the petition was incomplete and not maintainable under law. The Tribunal found that the petition was filed in compliance with the Insolvency and Bankruptcy Code, 2016, and the Insolvency & Bankruptcy (Application to the Adjudicating Authority) Rules, 2016. The petition was deemed maintainable. 6. Alleged Parallel Proceedings: The Corporate Debtor argued that parallel proceedings were initiated against the Corporate Guarantor, M/s. Amicus Formulations India Private Limited, which was pending before NCLT, Hyderabad Bench-II. The Tribunal held that simultaneous proceedings against the Corporate Debtor and the Corporate Guarantor were permissible under Section 60(2) and 60(3) of the Insolvency and Bankruptcy Code, 2016. 7. Alleged Malicious Intent in Filing the Petition: The Corporate Debtor alleged that the petition was filed with malicious intent rather than as a genuine case of insolvency resolution. The Tribunal found no evidence of malicious intent and held that the petition was filed to recover the financial debt owed by the Corporate Debtor. 8. Applicability of Section 10A of the Insolvency and Bankruptcy Code: The Corporate Debtor contended that the application was barred under Section 10A of the Insolvency and Bankruptcy Code (Amendment) Ordinance (No. 9 of 2020) dated 5 June 2020. The Tribunal observed that the default occurred on 30.09.2019, prior to the applicability of Section 10A, and therefore, the petition was not barred. Conclusion: The Tribunal admitted the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, declaring a moratorium and appointing an Interim Resolution Professional. The Tribunal directed the Corporate Debtor to repay the financial debt of ?12,41,50,950.96, including the principal loan amount and compound interest. The petition was deemed maintainable, and the allegations raised by the Corporate Debtor were dismissed.
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