2021 (5) TMI 900 - Tri - Insolvency and Bankruptcy

Seeking possession of an asset of the corporate debtor held by India Infoline Finance Ltd. through SARFAESI proceedings - HELD THAT - The Applicant has filed the financial contract disclosing that the Suspended Director Mr. Vinay Jain executing a loan agreement in favour of the Applicant herein, the Applicant disbursing the loan amount to the ESCROW Account, thereafter appropriating the said amount towards the earlier loan accounts which became irregular and also documents reflecting sale of the property mortgaged by Best View Properties Limited. Moreover, the Suspended Directors of the Corporate Debtor have not denied anywhere about taking amounts through three loan accounts prior to availing this loan by the Suspended Director of the Corporate Debtor and depositing this loan amount of ₹ 85 Crore in the ESCROW Account, thereafter adjusting the same against the previous three loan accounts. All these transactions having remained apparent on record, we wonder how this RP has ignored all this material establishing financial contract, disbursal of the amount, thereafter signing memo of deposit of title deeds for creation of equitable mortgage. With regard to obligation of guarantee, there is a separate guarantee deed the corporate debtor taking obligation upon itself to pay the loan amount of ₹ 85 Crores along with the interest in the event Vinay Jain defaulted in repaying the loan amount. In addition to it, the corporate debtor has also given its property as security by deposit of title deeds. These are two separate agreements binding the corporate debtor. To proceed against the corporate debtor to place claim upon it as financial debt, IIFL need not rely upon the mortgage charge because section 5 (8)(i) of the Code says that when any guarantee is given over the money borrowed by the borrower with a promise that he would repay the money borrowed along with interest, such obligation of guarantee will fall within the ambit of the clause (i) of section 5 (8) of the Code. For the present claim will fit into clause (i) of definition of financial debt, to admit the claim, the RP need not look into as to whether any charge created and whether such charge has been properly recorded. Of course, all documentary proof is evident on record to prove that money is availed, security is given towards the consideration received. Application disposed off.

Summary

Issues Involved:
1. Possession of an asset of the corporate debtor held by India Infoline Finance Ltd. (IIFL) through SARFAESI proceedings.
2. Admission of IIFL's claim of ?134,15,62,129 by the Resolution Professional (RP).
3. Direction against the RP and the Committee of Creditors (CoC) not to proceed with the Corporate Insolvency Resolution Process (CIRP) pending disposal of IA 161/2020.

Issue-Wise Detailed Analysis:

1. Possession of an Asset of the Corporate Debtor:
The RP sought possession of Tower-B belonging to the Corporate Debtor, which was held by IIFL through SARFAESI proceedings. IIFL conceded to hand over the possession, acknowledging that IBC proceedings prevail over SARFAESI proceedings. Consequently, the tribunal directed IIFL to hand over the possession of the asset to the Corporate Debtor within 15 days from the date of the order.

2. Admission of IIFL's Claim of ?134,15,62,129:
IIFL filed a claim for ?134,15,62,129, which was initially rejected by the RP. The RP's rejection was based on the inability to verify the claim from the Corporate Debtor's records and an FIR filed by Vinay Jain, a director of the Corporate Debtor, alleging forgery and fraud in relation to the loan agreement.

Upon detailed examination, the tribunal found that:
- The Corporate Debtor had availed three term loans totaling ?123 crores.
- To regularize these loans, an additional ?85 crores loan was sanctioned to Vinay Jain, backed by a corporate guarantee and mortgage of the Corporate Debtor's property.
- The ?85 crores were disbursed to the Corporate Debtor's escrow account and used to clear the existing loans.
- The FIR filed by Vinay Jain was not acted upon, and the tribunal noted that the RP should have considered the detailed financial contracts, transaction records, and the guarantee deed provided by IIFL.
- The tribunal emphasized that the RP should not rely solely on the Corporate Debtor's records but also consider the claimant's records to ascertain the rightful claim.

The tribunal concluded that the RP erred in rejecting IIFL's claim and directed the RP to admit the claim of ?134,15,62,129 as "financial debt" and treat IIFL as a CoC member according to its voting share.

3. Direction Against the RP and CoC Not to Proceed with CIRP:
IIFL sought directions against the RP and CoC not to proceed with the CIRP until the disposal of IA 161/2020. Given the tribunal's decision to admit IIFL's claim, this issue was rendered moot, and the tribunal did not provide a separate ruling on this matter.

Conclusion:
The tribunal disposed of CA 1261/2020, IA-2205/2020, and IA 3125/2020 by directing the RP to admit IIFL's claim amount as "financial debt" within 15 days from the date of the order.