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TMI Blog2019 (1) TMI 1769X X X X Extracts X X X X X X X X Extracts X X X X ..... Book are not in accordance with the Bankers' Book Evidence Act, it is essential to look into Part V of Form I in respect to Entry 7 of this Part V. In Entry 7, two things are requisite, one is, it must be a copy of entry in a Bankers Book, two, that copy shall be attached with Form No. 1. If we see the definition of Bankers' Books , statement of account being a record used in the ordinary business of the Bank, it will fall within the definition of Bankers' Book. In Entry No. 7, what is asked to attach is the copy of the Bankers' Book, it has not been asked to file a certified copy as certified under Bankers Book Evidence Act. Therefore, it can't be said that unless a certified copy is filed, it should not be looked into. Existence of debt and default or not - HELD THAT:- The Financial Creditor has established that the loan was duly sanctioned and duly disbursed to the Corporate Debtor but there has been default in payment of Debt on the part of the Corporate Debtor - the nature of Debt is a Financial Debt as defined under section 5 (8) of the Code. It has also been established that admittedly there is a Default as defined under section 3 (12) of the Code ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een IDFC, HDFC, Union Bank of India and the Corporate Debtor for advancement of a further amount of ₹ 46,00,00,000/- to the Corporate Debtor (Term Loan III). IDFC also executed an Inter-creditor Agreement dated 24.05.2012 as well as a Security Trustee Agreement dated 24.05.2012 in respect of Term Loan III. (B) Submissions by the Financial Creditor 5. As far as Term Loan I is concerned, it was repaid in entirety by the Corporate Debtor to IDFC and the claim of the Petitioner does not constitute any part of Term Loan I. This is an admitted fact. Term Loan II was secured by a Deed of Mortgage and a Further Charge dated 27.11.2009. Term Loan II is repaid partly to the tune of ₹ 17,10,20,020/- (out of ₹ 22,00,00,000/-) and the outstanding amount as claimed by the Petitioner is ₹ 9,35,15,240/-. Nothing is repaid as far as Term Loan III is concerned and the outstanding amount is ₹ 84,51,37,153/- (₹ 46,00,00,000/- being the principal amount @ the interest rate of 3.5% as on 25.09.2017). Hence, Term Loan II and Term Loan III were not repaid as per the agreed terms and conditions. Above said facts can be summarised in the table herein below: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years from the date when money sued for becomes due as per Article 62 of the Limitation Act, 1963. 10. The Petitioner further submits that the petition is complete in all respects as regards the contention of the Corporate Debtor that the Statement of Accounts annexed to the Petition are false and are not certified under Bankers' Books of Evidence Act. The Petitioner further explains that the statement of accounts for the period prior to the assignment of debt to the Petitioner by IDFC were provided to the Corporate Debtor and the same have been produced at Exhibit 1 to the Affidavit in Reply. 11. As regards the RTGS payment of ₹ 77,00,00,000/- towards Term Loan I and Term Loan II made by the Corporate Debtor on 09.08.2012, it is submitted that the same has been adjusted towards the full payment of principal, interest, further interest and Liquidated damages due under Term Loam I and PART PAYMENT of principal, interest, further interest and Liquidated damages due under Term Loam II. Hence, the Petitioner contends that the argument of the respondent questioning the assignment of Term Loan II, is wrong in law, ought to be rejected. 12. The Petitioner further conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied to assign the balance debt to an assignee i.e. Phoenix ARC. 13.3 Pendency of the JLF: The Corporate Debtor contends that the Petitioner has in breach of the RBI Circulars and directives: (i) obstructed the formation of JLF; (ii) not abided by the majority decisions of the JLF; (iii) not abided by the obligations under the Corrective Action Plan (CAP); (iv) not exited the JLF. It is argued that pending any rectification, restructuring and recovery of out-standings by various entities to banks and financial institutions by the JLF, no proceeding for recovery or coercive action including proceedings under the IBC can be initiated by any entity which is bound by the RBI circulars/directives. 13.4 Suppression and/or falsehood of several illegal and wrongful charges claimed in the Petition: It is contended that the Petitioner has failed to disclose the facts in relation to failure of IDFC and subsequently the Petitioner to provide additional financing and backtracking on their commitments to the Respondent and other lenders of the consortium. The Corporate Debtor also contends that the declaration of its account as NPA in itself is a wrongful act. Findings : 14. On perusa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of money secured by a mortgage of immovable property. Hence, as per article 62 of the Limitation Act, 1963, the limitation period is twelve years from the date when the money sued for becomes due. Here, the Date of Default is 11.03.2015 as per Form I annexed to the petition and the petition is filed on 29.09.2017. In the absence of any specific denial or evidence from the side of the Debtor, it is unreasonable and unjustifiable not to believe the date of default as 11-3-2015. Hence, this Bench is of the view that in either case, i.e. three years or twelve years, this petition is well within limitation and the contention of the respondent that the debt is time barred is rejected. 15. As far as the issue of filing of false and incomplete statements of accounts by the Petitioner is concerned, the Petitioner has rightfully placed reliance on Standard Chartered Bank v. Ruchi Soya Industries Ltd. [2018] 89 taxmann.com 154 (NCLT - Mum.) and I am also of the similar view that since the Corporate Debtor's case is that these entries in Bankers Book are not in accordance with the Bankers' Book Evidence Act, it is essential to look into Part V of Form I in respect to Entry 7 of thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on that the Respondent has not obtained permission or consent of JLF to the present proceeding which will be adversely affect loan of other members cannot be accepted and fit to be rejected . 17.1 Hence, in the present case, the above mentioned argument of the Corporate Debtor that IDFC or the Petitioner did not agree for the Joint documentation of further loans to be granted to the Corporate debtor by the consortium is all clich ' for deciding the fate of the present case. A defaulter cannot dictate a term on the creditor to choose its line of action for due security of the debt. The decision of the creditor to form a consortium of lenders or to join a lending forum is a prerogative of the lender which cannot be intervened by the borrower. In this case, it is also important to place on record that at that point of time when this decision was taken by the petitioner/lender, there was no resistance or objection from the side of the Corporate Debtor. Since as long as there is a 'debt' and a 'default', this Tribunal is inclined to admit the petition 18. Furthermore, it is considered by this Bench that the debt is undisputedly unpaid with regard to Term Loan I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of Moratorium as prescribed under section 14 of the Code shall be operative henceforth with effect from the date of order shall be applicable by prohibiting institution of any Suit before a Court of Law, transferring/encumbering any of the assets of the Debtor etc. However, the supply of essential goods or services to the Corporate Debtor shall not be terminated during Moratorium period. It shall be effective till completion of the Insolvency Resolution Process or until the approval of the Resolution Plan prescribed under section 31 of the Code. 26. That as prescribed under section 13 of the Code on declaration of Moratorium the next step of Public Announcement of the Initiation of Corporate Insolvency Resolution Process shall be carried out by the IRP immediately on appointment, as per the provisions of the Code. 27. That the Interim Resolution Professional shall perform the duties as assigned under section 18 and Section 15 of the Code and inform the progress of the Resolution Plan and the compliance of the directions of this Order within 30 days to this Bench. A liberty is granted to intimate even at an early date, if need be. 28. The Petition is hereby Admitted . ..... X X X X Extracts X X X X X X X X Extracts X X X X
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