9911796707
TMI Blog2018 (12) TMI 1648X X X X Extracts X X X X X X X X Extracts X X X X ..... laration that the assignment made by HSBC to Phoenix as illegal, which can be raised only in a civil suit. The appellant is trying to convert the proceedings under the I B Code as civil proceedings akin to a trial which is not the legislative intent. The objective of the I B Code is to ensure re-organization and insolvency resolution of the corporate persons, partnership firms and individuals, in a time bound manner for maximisation of value of assets of such persons to promote entrepreneurship, availability of credit and balance of interest of all stakeholders. The assignment cannot be challenged in the petition under Section 7 and that too by a party who had the knowledge of Assignment Deed as back as in the year 2012, as noted above, the DRT, Chandigarh, when it requested and never challenged the same before a court of competent jurisdiction. Appeal dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... ear breach of RBI Guidelines and, hence non-est. 5. Further, according to the learned counsel for the appellant, Para B of Article V of the loan agreement provides for 7 business days cure period before declaring an event of default and before acceleration. There is no notice of demand or notice of default or notice of acceleration or notice of cure issued by HSBC India. It is also submitted that the impugned Assignment also contravenes the Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 ('SARFAESI Act'). Section 5(3) of SARFAESI Act provides for assignment of the loan with all underlying security and guarantees etc. HSBC Loan was assigned under the SARFAESI Act but without assigning the most important and liquid security of HSBC SBLC/Guarantee, which was backed by lien and security over cash fixed deposit by the largest shareholder of GPI and formed the very backbone of financing arrangements between 'HSBC India', 'GPI' and 'GLAM'. Further, Clause 2(1)(j) of SARFAESI Act defines 'default' only upon classification of NPA. Despite no default by 'GPI', 'Phoenix' was served with SARFAESI notice demand of ₹ 131 Crores. 6. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter assignment), and also the credit of ₹ 50 crores on 22nd March, 2012 reflecting in the bank account statement of 'GPI'. No benefit of both the aforesaid amounts has been allowed to 'GPI', whose debt admitting assignment stands fully satisfied. If HSBC SBLC/Guarantee was released between 20th March, 2012 and 21st March, 2012 (as stated in Assignment Deed), the draw down of ₹ 81 Crores from HSBC SBLC/Guarantee made on 22nd March, 2012 and the credit of balance of ₹ 50 Crores reflecting in the HSBC Bank account of GPI on 22nd March, 2012 can only be for satisfaction of debt of 'GPI'. The aforesaid facts explain the outcome of release of HSBC SBLC/Guarantee, which encashment reflects in the bank account of 'GPI' in HSBC, and that non-transfer of SBLC/Guarantee with the assignment of loan and encashed subsequently can cause no prejudice to the satisfaction of amount recoverable from 'GPI'. 8. Therefore, according to the learned counsel for the appellant, 'Phoenix' has failed to establish 'default', within the meaning of the 'I&B Code'. The Form 1 filed by Phoenix shows a principal of ₹ 129 crores (Approx.) as on 20th March, 2012 and an interest of ₹ 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , and iii. No disciplinary proceedings against the IP proposed as IP. 14. Apart from the above, the 'Corporate Debtor' had executed balance-cum-security confirmation letter dated 15th March, 2012 admitting the debt due to the 'Financial Creditor'. 15. The loan agreement contains a covenant that the loan can be assigned in part or in whole without permission of the borrower. 16. The appellant has challenged the 'Deed of Assignment' executed between the 'HSBC & Phoenix', but while filing reply to the notice issued during the admission of application u/s 7 of the I&B Code, such issue cannot be raised as it cannot be decided by the Adjudicating Authority on objection. 17. In 'ICICI Bank Ltd. Vs. Official Liquidator of APS Star Industries Ltd. & Ors.' - (2010) 10 SCC 1 it was observed : "Before concluding we may state that NPA's are created on account of the breaches committed by the borrower. He violates his obligation to repay the debts. One fails to appreciate the opportunity, he seeks to participate in the 'transfer of account receivable' from one bank to another". 18. In 'M/s. Innoventive Industries Ltd. Vs. ICICI Bank Ltd. - (2018) 1 SCC 407', the Hon'ble Supreme C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor and corporate debtor within 7 days of admission or rejection of such application, as the case may be. 30. On the other hand, as we have seen, in the case of a corporate debtor who commits a default of a financial debt, the adjudicating authority has merely to see the records of the information utility or other evidence produced by the financial creditor to satisfy itself that a default has occurred. It is of no matter that the debt is disputed so long as the debt is "due" i.e. payable unless interdicted by some law or has not yet become due in the sense that it is payable at some future date. It is only when this is proved to the satisfaction of the adjudicating authority that the adjudicating authority may reject an application and not otherwise. " 19. In the present case we find that the appellant has sought declaration that the assignment made by HSBC to 'Phoenix' as illegal, which can be raised only in a civil suit. The appellant is trying to convert the proceedings under the 'I&B Code' as civil proceedings akin to a trial which is not the legislative intent. 20. In "Binani Industries Ltd. Vs. Bank of Baroda and Ors." in 'Company Appeal (AT)(Insolvency) No. 82 of 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
