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TMI Blog2019 (9) TMI 932X X X X Extracts X X X X X X X X Extracts X X X X ..... MR B.S.V. PRAKASH KUMAR, MEMBER (JUDICIAL) It is a Company Petition, State Bank of India (Financial Creditor) filed u/s 7 of the Insolvency Bankruptcy Code, 2016 ( the Code ) against the Corporate Debtor (Debtor) for initiation of Corporate Insolvency Resolution Process against the Debtor on the ground that the Debtor defaulted in repaying ₹ 175,76,35,263 as on November 30th 2018. 2. It is the case of the Creditor Bank that it has issued sanction letter dated 13.01.2007 to the Debtor agreeing to grant sanction limit for an amount of ₹ 36.94 Crores, in pursuance thereof, the Debtor on 16.03.2007 executed a Loan Agreement in favour of the Financial Creditor for hypothecation of goods, right to charge interest at such rates as may be determined by the Bank and other conditions put forth by the Bank as stated in the agreement of Hypothecation of goods and assets. Thereafter, on 27.10.2008, the Creditor Bank enhanced sanction limit to the Creditor from ₹ 36.94 Crores to ₹ 60.42 Crores, in furtherance of it, the Debtor and the Creditor Bank entered into Supplementary Facility Agreement in between them. Again on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave proceeded against the Corporate Debtor because the Debtor has approached the Creditor Bank several times with OTS proposal while reference of the Corporate Debtor was pending before BIFR under SICA, in pursuance of it, finally on 23.05.2016 Joint Lenders unanimously agreed for one-time settlement with an agreement that the Creditor Bank would release the mortgaged items as the Corporate Debtor has kept repaying against each of the mortgaged items as mentioned in the chart below. Indeed the Corporate Debtor, in compliance of OTS agreement has repaid ₹ 5,65,55,947, the creditor Bank should not have filed this Company Petition against the Corporate Debtor. 5. The Corporate Debtor further says that in pursuance of the settlement, the Creditor Bank returned original documents pertaining to four properties but not returned the documents of the property of House Plot No 371 admeasuring 375 square yards situated in Miyapur Villages, Hyderabad vide Document No 617/1985 dated 31.01.1985 despite the Corporate Debtor has already paid ₹ 5,65,55,947 for the release of the five properties. As per the agreement, the Corporate Debtor is liable only to pay the balance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nk released the properties from the mortgage as mentioned in the Annexure to the sanction letter against payment of ₹ 5.15 Crores. In the chart below it has been reflected, as to how much payment and by what date the corporate debtor ought to pay and how much he paid and by what time he paid in terms of the OTS. The payment schedule is as follows: Instalment No. Payment Time line Cumulative Due from the company within time line Cumulative Payment made by company within time line TOKEN AMOUNT ₹ 1.00 cr on handing over of sanction letter 06.10.2016 1.00 cr 1.02 cr 1 ₹ 6.00 cr within 3 months from the date of sanction letter 06.01.2017 7.00 cr 5.42 cr 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record that debt is in existence, thereafter the Corporate Debtor failed to repay the loan amount by which the account has become NPA. It was referred to BIFR to declare it as sick company, in spite of all these things, the Bank sanctioned OTS scheme for settling it for payment of ₹ 17 Crores against total dues of ₹ 127.35 Crores. As the Corporate Debtor agreed to pay instalments of OTS as mentioned in the OTS, the Creditor bank sanctioned for settlement of dues to ₹ 17 Crores under OTS against dues of Rs. l27.35 Crores under the assumption that the Corporate Debtor would pay the OTS amount within the time limits mentioned in the chart annexed to the OTS but on the contrary it has failed to pay hardly after three months from the date of sanction letter. It is not that the Creditor Bank immediately filed this case against the Corporate Debtor. The Creditor Bank sent reminders to the Corporate Debtor; thereafter cancelled OTS when no payment came from the Creditor Bank. It is quite obvious when the scheme of OTS failed, the Bank is entitled to proceed against the corporate debtor for recovery of entire amount, not for only the balance remained payable under OTS. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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