9911796707
TMI Blog2020 (10) TMI 327X X X X Extracts X X X X X X X X Extracts X X X X ..... 7/- Crs, out of which the Appellant s claim is ₹ 2,44,85,29,569.79/-. It is seen from the material on record that though the Appellant forms part of the Joint Lenders Forum (JLF), only the Appellant had filed the Application under Section 7 qua the debts owed by the Respondent Company to the Appellant and not on behalf of the JLF - the pre-requisite for the invocation of the said Circular is that there should be an aggregate exposure of the lender above ₹ 2,000 Crs. and in the instant case the total outstanding claimed debt amounts to ₹ 1,007/- Crs. out of which the amount claimed by the Appellant Bank is to the tune of ₹ 2,44,85,29,569.79/- Crs;. Additionally, it is seen, that for other accounts with aggregate exposure of the lender below ₹ 2,000/- Crs. and at or above ₹ 100/- Crs., the Reserve Bank intended to announce over a two-year period, reference date for implementing the RP to ensure time-bound resolution of all such accounts in default. Further, the documentary evidence filed before us does not evidence any such announcement made with respect to the subject matter. There is force in the contention of the Learned Counsel appearing for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench, with a direction to decide the Admission of the Application on merits as expeditiously as practicable. - [ Justice Jarat Kumar Jain Member ( Judicial ), [ Mr. Balvinder Singh ] Member ( Technical ) And [ Ms. Shreesha Merla ] Member ( Technical ) For the Appellant : Mr. Piyush Beriwal and Mr. Ankit Raj, Advocates For the Respondent : Ms. Anju Jain and Mr. Hitesh Sachar, Advocates JUDGMENT [ Per; Shreesha Merla, Member ( T ) ] 1. Aggrieved by the Order dated 20.12.2019, passed by the Adjudicating Authority (NCLT) Mumbai Bench-II C.P. No.434/MB/C-II/2018, Punjab National Bank, the Financial Creditor, has preferred this Appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016 (IBC for Short). By the Impugned Order, the Adjudicating Authority has dismissed the Application under Section 7 preferred by the Financial Creditor on the following grounds; 10. Two contradictory arguments of the Bank cannot run side by side that on one hand the action was taken on account of default committed as identified in the impugned RBI Guidelines and now on the other hand saying that the said RBI Guidelines should not be made the basis for quashing of the proceedings because only thos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 26.02.2018, which would show that the Section 7 Application was preferred pursuant to the said RBI Circular. He submitted that the JLF has discussed the offers of the prospective investors viz. Tri Shakti Power Pvt. Ltd. and that there was concern as the High Court of Bombay expressed time bound decisions to be taken regarding the Corporate Debtor, and Hon ble High Court had given time till 06.04.2018 to seek necessary directions in the said Company Petitions and the same was deliberated in the Meeting on 13.03.2018. 4. Learned Counsel drew our attention to the Minutes of the Meeting dated 13.03.2018 and submitted that it was only taking into consideration the interest of unsecured creditors, that the Appellant proposed the filing of the Section 7 Petition under the Code. He further argued that though the Respondent never raised any plea regarding the Section 7 Application being filed pursuant to the RBI Circular, the Adjudicating Authority wrongly relied on the same. 5. Learned Counsel further contended that as per the Circular dated 12.02.2018, the timelines for large accounts to be referred under IBC was with respect to accounts with an aggregate exposure of ₹ 20/- b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proposal was received by the JLF, as the last offer was received on 22.02.2018, subsequent to the RBI Circular. He further submitted that a perusal of the Circular makes it evident that it is not applicable in cases where a Restructuring Scheme has been implemented. 8. The brief point that falls for consideration is whether Section 7 Application is maintainable, whether it is pursuant to the RBI Circular dated 12.02.2018, and if the ratio of Dharani Sugars (Supra) is applicable. 9. On 07.02.2019, the Respondent Company filed WP (Civil) 169 of 2019 Mittal Corp. Ltd. V/s. Reserve Bank of India Or. and the Hon ble Apex Court on 13.02.2019 ordered the parties to maintain status quo . Thereafter, 02.04.2019 in Dharani Sugars (Supra), the Hon ble Supreme Court held that the Circular dated 12.02.2018 issued by the RBI was ultra vires to Section 35AA of the Banking Regulation Act, 1949. Subsequently the Writ Petition filed by the Respondent Company was disposed of vide Order dated 19.04.2019 with the following observations; 7.2 The National Company Law Tribunal is free to consider as to whether insolvency proceedings were initiated pursuant to the Reserve Bank of India-respondent No. 1 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est on FITL shall be paid @ 8.50%. Interest on FITL shall be paid @ 8.50%. Cut off date 01.11.2 017 01.11.20 17 01.04.20 18 01.04.20 18 All other terms of original offer are proposed to remain the same. The committee also discussed the latest RBI Circular no. DBR. No. BP.BC.101/21-04.048/2017-18 dated 12.02.2018, which withdraws the existing guidelines of change in management and other existing Circulars. As per said Circular, all banks will put in place Board approved policies for resolution of stressed assets under new framework, including the timelines for resolution. The committee discussed the revised offer from Trishakti and decided to examine the proposal in light with new guidelines issued by RBI on 12.02.2018 and take views of respective competent authorities. 2) Mr. Chugh informed the house that last hearing in regard to liquidation petition filed by three applicants viz. Morgardshammar AB, Nordea Bank and Banco Di Brescia SPA was held on 20.02.2018 before the Hon ble High Court of Bombay and order of that hearing has been received on Friday evening (23.02.2018). Next date of hearing is scheduled on 27.02.2018. The Hon ble High Court has desired to have concrete instructi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all select IRP out of bids received. Accordingly, it was decided to hold Core Committee meeting on 14.03.2018 OBC further informed that they have selected legal firm namely M/s. MDP Partners for filing application u/s of IBC with NCLT and for other legal assistance. 2. Lenders deliberated on other issues viz issuing recall notice SARFAESI notice invocation of guarantees and suit filing It was decided that a) Recall notice/SARFAESI notice may be issued individually by lenders. b) Guarantee invocation notice may be issued individually by lenders. c) OA shall be filed jointly by the Lead Bank on behalf of all the lenders. It was decided that all the lenders will submit the required papers/information in a time bound manner to enable filing of Joint OA. Lenders who will not provide required information in prescribed time will be made respondent and may file separate OA. It was discussed that draft of above notices shall be prepared by M/s MDP Partners and draft shall be circulated to lenders. The legal cost shall be met from cutback proceeds in TRA. 3. In response to red flagging of account, IDBI Bank informed that they have done RFA mainly due to following reasons; a) ESW MB - delay i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will be proceedings which, being faulted at the very inception, are declared to be non-est. 46. In view of the declaration by this Court that the impugned Circular is ultra vires Section 35AA of the Banking Regulation Act, it is unnecessary to go into any of the other contentions that have been raised in the transferred cases and petitions. The transferred cases and petitions are disposed of accordingly. (Emphasis Supplied) 12. It is the main case of the Appellant that the total outstanding amount due and payable by the Corporate Debtor to the consortium is around ₹ 1,077/- Crs, out of which the Appellant s claim is ₹ 2,44,85,29,569.79/-. It is seen from the material on record that though the Appellant forms part of the Joint Lenders Forum (JLF), only the Appellant had filed the Application under Section 7 qua the debts owed by the Respondent Company to the Appellant and not on behalf of the JLF. The relevant portion of the RBI Circular dated 12.02.2018 is reproduced as hereunder to ascertain whether the instant case is covered by the said Circular, which was declared non-est by the Hon ble Supreme Court in Dharani Sugars (Supra); Guidelines dated 12.02.2018 (RBI/2017-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of which specific instructions have already been issued by the Reserve Bank of the banks for reference under IBC. Lenders shall continue to pursue such cases as per the earlier instructions (Emphasis Supplied) 13. From the aforenoted provisions it is clear that the pre-requisite for the invocation of the said Circular is that there should be an aggregate exposure of the lender above ₹ 2,000 Crs. and in the instant case the total outstanding claimed debt amounts to ₹ 1,007/- Crs. out of which the amount claimed by the Appellant Bank is to the tune of ₹ 2,44,85,29,569.79/- Crs;. Additionally, it is seen, that for other accounts with aggregate exposure of the lender below ₹ 2,000/- Crs. and at or above ₹ 100/- Crs., the Reserve Bank intended to announce over a two-year period, reference date for implementing the RP to ensure time-bound resolution of all such accounts in default. Further, the documentary evidence filed before us does not evidence any such announcement made with respect to the subject matter. We are of the considered view that there is force in the contention of the Learned Counsel appearing for the Appellant that the said Circu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ishes that Application under Section 7 is not maintainable as it is pursuant to the RBI Circular dated 12.02.2018, is untenable as we are of the considered opinion that the Circular itself is not applicable since the amount claimed as debt due and payable is less than ₹ 2,000/- Crs. and the process was initiated by JLF prior to the issuance of the Circular. Merely because the JLF Committee discussed the various offers and also the revised Plan from Tri Shakti and decided to examine the Proposals in light of the new guidelines issued by the RBI on 12.02.2018 and found that finalization of any Resolution Plan prior to 06.04.2018, as directed by the Hon ble High Court, would be difficult and decided to file an Application under Section 7 of IBC 2016, it cannot be construed that the decision to file the Application was initiated only pursuant to the RBI Circular. Additionally, a mere discussion in the Minutes of the Meetings cannot be construed as substantial evidence to establish that the decision to file Section 7 Application was pursuant to the RBI Circular. A perusal of the Order of the Hon ble High Court dated 05.03.2018 shows that time was given till 06.04.2018 to the JLF t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
