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TMI Blog2017 (11) TMI 1339X X X X Extracts X X X X X X X X Extracts X X X X ..... bordinate to the claim of the Bank. The Bank agreement corroborating this is on record. Though it is admitted by the Ld. Counsel for the Financial Creditor that this unsecured loan would be subordinate to the claim made by the Canara Bank, it appears that notwithstanding his agreement not to seek recovery of his unsecured loan till the liability of Canara Bank stands extinguished or his undertaking not to participate in Insolvency proceedings, it is his wish and desire that the Resolution Process be initiated and the entire project be dumped before it comes into operation, irrespective of whether he can realise any proceeds or not in the watershed for repayment should the assets of the Corporate Debtor be liquidated. It is being noted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Board till 2015. The Financial Creditor is also a shareholder and holds. 07% equity in the Respondent company. The grievance of the Financial Creditor is that despite seeking return of his loan, on demand, along with interest @ 18% per annum, no payment has been made forthwith. The said amount given by the Financial Creditor is duly reflected in financial statements of the Corporate Debtor for the years ending 31.3.2014 and 2015, thereby acknowledging the outstanding liability towards him. 3. It is stated by the Financial Creditor that as the Corporate Debtor failed to take any steps to liquidate or reduce the liability qua him despite various reminders, he was constrained to issue notice under Section 433 and 434 of the Companies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ach. The Financial Creditor holds 5,000 shares. All six shareholders have contributed to a total of ₹ 16,42,00,000/- in the form of equity and unsecured loans. The Corporate Debtor, with an intention of setting up a project for the manufacture of Flexible Packaging Material under Co-extension Process at an estimated cost of ₹ 30,62,00,000/-, had approached Canara Bank for financial assistance. While the said bank sanctioned a term loan of ₹ 14.2 crores for construction of the building and purchase of plant and machinery, the promoters were required to meet the condition of investing the Margin Money. Accordingly, all six promoters, including the Financial Creditor, had given interest free unsecured loans to the Respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions:- i. That the unsecured creditors had extended or continued to extend interest free unsecured loan on the express understanding that all their claims against the Respondent Company would be subject to the claims of Canara Bank. ii. That all the claims of the unsecured creditors against the Respondent Company would at all times be subordinate and be subject to any claims of Canara Bank. iii. The unsecured creditors agree not to sue the Respondent Company for recovering any money tendered to the Respondent Company as unsecured loan until all the claims of Canara Bank get settled. iv. That the unsecured creditors agree not to join in any bankruptcy or any assignment. The Respondents have annexed the Subordination Agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y proceedings, it is his wish and desire that the Resolution Process be initiated and the entire project be dumped before it comes into operation, irrespective of whether he can realise any proceeds or not in the watershed for repayment should the assets of the Corporate Debtor be liquidated. It is being noted that Canara Bank is not an aggrieved party. 10. The said attitude of the Financial Creditor is irreprehensible as the principal money lender i.e. Canara Bank has not made any claim. Insolvency Resolution Process of a corporate entity cannot be initiated on such grounds which reek of personal vendetta. The Financial Creditor seeks to scuttle the project even before it get into operation. Such arm twisting tactics cannot be the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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