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TMI Blog2018 (9) TMI 1297X X X X Extracts X X X X X X X X Extracts X X X X ..... whose debt has not been matured cannot file claim. The ‘Financial Creditors’ or ‘Operational Creditors’ or ‘secured or unsecured creditors’ all are entitled to file claim. Therefore, we hold that maturity of claim or default of claim or invocation of guarantee for claiming the amount has no nexus with filing of claim pursuant to public announcement made under Section 13(1)(b) r/w Section 15(1)(c) or for collating the claim under Section 18(1)(b) or for updating claim under Section 25(2)(e). For the purpose of collating information relating to assets, finances and operations of Corporate Debtor or financial position of the Corporate Debtor, including the liabilities as on the date of initiation of the Resolution Process as per Section 18(1), it is the duty of the Resolution Professional to collate all the claims and to verify the same from the records of assets and liabilities maintained by the Corporate Debtor. EXIM Bank Matter - Held that:- Admittedly, JEKPL has given the ‘Counter-Indemnity Obligation’ by way of Guarantee (Counter Guarantee) and thereby it falls within clause (h) of Section 5(8). Such ‘Counter-Indemnity Obligation’ in respect of Counter Guarantee has been g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this common judgment. EXIM Bank Vs. Resolution Professional, JEKPL Private Limited: 2. The JEKPL Pvt. Ltd. filed an application under Section 10 of Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as I B Code ) for initiation of Corporate Insolvency Resolution Process against itself. It was admitted by the Adjudicating Authority (National Company Law Tribunal), Allahabad Bench and one Mr. Mukesh Mohan was appointed as Resolution Professional replacing one Mr. Dinkar T. Venkatasubramanian. 3. Pursuant to the advertisement, the creditors including Financial Creditors and Operational Creditors filed their respective claim including EXIM Bank. However, the EXIM Bank was not treated to be the Financial Creditor . 4. EXIM Bank filed an application under Section 60 (5), before the Adjudicating Authority for direction to the Resolution Professional to treat its claim as Financial Debt and to include the EXIM Bank in the Committee of Creditors with voting share proportionate to its amount of claim. It was alleged that the Resolution Professional through its email communicated decision dated 04.08.2017 rejecting claim of EXIM Bank as a Financial Credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was granted to Jubilant Energy N.V., Netherlands (JENV). There is inter-relationship between Jubilant Energy N.V., Netherlands (JENV) with Jubilant Energy (Holding) B.V. (JEHBV), Jubilant Enpro Private Limited (JEPL), Jubilant Energy (Kharsang) Private Limited (JEKPL) and Jubilant Offshore Drilling Private Limited (JODPL) who are members of group entities and overall corporate structure of the said Jubilant Group. According to the learned senior counsel, in terms of the agreements dated 01.08.2011, the Counter Guarantee granted in favour of EXIM Bank on behalf of Principal Borrower jointly and severally by the Corporate Guarantor and Courter Corporate Guarantor, the EXIM Bank comes within the meaning of Financial Creditor as defined in Section 5(7) r/w Section 5(8)(h) of I B Code. Stand of Successful Resolution Applicant:- 11. According to learned senior counsel for the Resolution Applicant, EXIM Bank is not covered within the definition of Financial Creditor under Section 5(7) r/w Section 5(8) of the I B Code. It was submitted that Financial Debt defined under Section 5(8) means a debt which is disbursed against the consideration for time value of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y (NELP-V) Private Limited . 17. The obligation of JEPL was further secured by execution of Counter Corporate Guarantee by JEKPL in favour of the Appellant on 01.08.2011. The JEKPL executed the Counter Corporate Guarantee to ensure the fulfillment of JEPL s obligation wherein JEPL has guaranteed the term loan facility availed by JENV and JEBHV. Therefore, as per terms of Counter Corporate Guarantee , JEKPL s obligation also is limited to the amount of the value of investments, assets and receivables therefrom from JEHBV, JENV, JODPL, Jubilant Oil Gas Pvt. Ltd., Jubilant Energy (NELP-V) Pvt. Ltd. and itself. 18. The Deed of Guarantee dated 01.08.2011 was executed between the Principal Borrower JENV, Netherlands and Appellant EXIM Bank by sanction of Dollar Loan to the tune of US$ 50 Million. 19. On the same date i.e. 01.08.2011 a Deed of Guarantee was executed at Noida by JEPL in favour of Appellant EXIM Bank. In Schedule II, JENV, Netherlands has been shown to be the borrower in whose favour loan has been sanctioned by the EXIM Bank. In the said Deed of Guarantee it is mentioned that the general condition in annexure therein forms integral part of Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) which was admitted. Pursuant to the public announcement, the claims invited on 27.06.2017. Appellant Axis Bank Ltd. submitted its claim in prescribed Form C alongwith supporting documents before the Resolution Professional for amount aggregating to ₹ 396,76,07,676.68/-. 26. On 22.07.2017, the Resolution Professional rejected the claim of the Appellant on the ground that the Corporate Guarantee cannot be invoked during ongoing Corporate Insolvency Resolution Process and order of moratorium. 27. The Axis Bank Ltd. submitted updated claim on 11.08.2017 in Form C explaining the position of law to the Resolution Professional, which was rejected by Resolution Professional by email dated 06.09.2017 stating that the so-called claim of the Appellant cannot be accepted/ estimated/ entertained in accordance with the provisions of law and facts. The Appellant Axis Bank Ltd. , thereafter, filed an application under Section 60(5) before the Adjudicating Authority (National Company Law Tribunal), Principal Bench, New Delhi to set aside the decision of the Resolution Professional. 28. The Adjudicating Authority by impugned order dated 27.12.2017 rejected the claim holding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h expression shall, unless it be repugnant to the subject or context thereof, include its successors in title and permitted assigns). IN FAVOUR OF SBICAP TRUSTEE COMPANY LIMITED , a company incorporated under the company Act, 1956 (1 of 1956) and having its Registered Office at 202, Maker Tower E Cuffe Parade, Mumbai-400005, in the state of Maharashtra, India and its corporate office at Appeejay House, 6th Floor, West Wing, 3 Dinshaw Wachha Road, Churchgate, Mumbai-400 020, in the state of Maharashtra, India and its branch office at 424-425, 4th Floor, World Trade Centre, Babar Lane, New Delhi-110 001, India (hereinafter referred to as the Security Trustee , which expression shall, unless it be repugnant to the subject or context thereof, include its successors, assigns, substitutes and replacements) in its capacity as the Security Trustee acting for the benefit of the CDR Lenders and Standard Chartered Bank as the Non CDR Lender, as detailed in Schedule I. 34. The terms of the guarantee show that in the event of any default on the part of the Principal Borrower in payment or repayment and reimbursement of any of the monies referred to in the same or i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd having its Central Office at Axis House, 2nd Floor, Wadia International Centre, Pandurang Budhkar Marg, Worli, Mumbai 400025, in the State of Maharashtra, India and Mini Credit Management center at Ground Floor, Shop No 1- 6 8-10, Ninex Time Centre Suncity, Sector 54, Golf Course Road, Gurgaon-122002, in the State of Haryana, India (hereinafter referred to as Axis , which expression shall unless it be repugnant to the subject or context thereof include its successors and assigns); X X X X PART C PARTICULARS OF THE CORPORATE LENDERS 2) AXIS BANK LIMITED , a company incorporated under the Companies Act, 1956 and a banking company within the meaning of Section 5(c) of the Banking Regulation Act, 1949 and having its Registered Office at Trishul, Opp. Samartheswar Temple, Law Garden, Ellisbridge, Ahmedabad 380 006 in the State of Gujarat, India and having its Central Office at Axis House, 2nd Floor, Wadia International Centre, Pandurang Budhkar Marg, Worli, Mumbai 400025, in the State of Maharashtra, India and Mini Credit Management center at Ground Floor, Shop No 1- 6 8-10, Ninex Time Centre Suncity, Sector 54, Golf Course Road, Gurgaon-122002, in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant, the Axis Bank Ltd. was contractually bound to give demand notice before claiming any amount. Reliance has been placed on Section 14 to suggest that during the period of moratorium, the Corporate Guarantee cannot be invoked. 40. Further, according to learned counsel for the Committee of Creditors, the same amount cannot be claimed simultaneously against the Principal Borrower and the Corporate Guarantor . Relevant Provisions of Law:- 41. Section 3(6) defines claim as:- 3(6) claim means - ( a) a right to payment, whether or not such right is reduced to judgment, fixed, disputed, undisputed, legal, equitable, secured or unsecured; ( b) right to remedy for breach of contract under any law for the time being in force, if such breach gives rise to a right to payment, whether or not such right is reduced to judgment, fixed, matured, unmatured, disputed, undisputed, secured or unsecured. 42. From the aforesaid definition it is clear that a right of payment whether secured or unsecured come within the meaning of claim. 43. The debt on the other hand as defined under Section 3(11), means: 3(11) debt means a liability or obli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y derivative transaction, only the market value of such transaction shall be taken into account; ( h) any counter-indemnity obligation in respect of a guarantee, indemnity, bond, documentary letter of credit or any other instrument issued by a bank or financial institution; ( i) the amount of any liability in respect of any of the guarantee or indemnity for any of the items referred to in sub-clauses (a) to (h) of this clause; 49. From the aforesaid provision, it is clear that Section 5(8)(h) includes any counter-indemnity obligation in respect of- (i) a guarantee, (ii) indemnity, (iii) bond, (iv) documentary letter of credit and (v) includes any other instrument issued by a bank or financial institution 50. From the aforesaid provision it is clear that Counter-Indemnity Obligation in respect of a guarantee or indemnity or bond or documentary letter of credit is not necessarily to be issued by a bank or financial institution , but can be issued by any person to whom Financial Debt is owed. 51. Whether claim, means the claim matured or not is one of the question raised. 52. While declaring moratorium under Section 13 in terms of 13(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rpose of collating information relating to assets, finances and operations of Corporate Debtor or financial position of the Corporate Debtor, including the liabilities as on the date of initiation of the Resolution Process as per Section 18(1), it is the duty of the Resolution Professional to collate all the claims and to verify the same from the records of assets and liabilities maintained by the Corporate Debtor. EXIM Bank Matter:- 57. Admittedly, JEKPL has given the Counter-Indemnity Obligation by way of Guarantee (Counter Guarantee) and thereby it falls within clause (h) of Section 5(8). Such Counter-Indemnity Obligation in respect of Counter Guarantee has been given by JEKPL as the EXIM Bank disbursed the debt against the consideration for the time value of money in favour of the Principal Borrower (JENV). 58. In view of the said provision we hold that EXIM Bank come within the meaning of Financial Creditor as defined under Section 5(7) r/w Section 5(8) of the I B Code. 59. In view of finding aforesaid, the claim of EXIM Bank having been wrongly rejected by the Adjudicating Authority by impugned order dated 27.11.2017 in CA No. 159/2017 in CP No.24/ALD/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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