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TMI Blog2019 (11) TMI 1521X X X X Extracts X X X X X X X X Extracts X X X X ..... nts that there is no privity of Contracts or the term 'obligor' does not bind them, nor documents does not directly or indirectly connect the Claimants with that of the Corporate Debtor, is of no consequence or for consideration. The Applications doesn't deserve any consideration by this bench are required to be dismissed on merits - Application dismissed. - M.A. Nos. 999 and 1124/2019 in CP No. 2714/2018 - - - Dated:- 13-11-2019 - Bhaskara Pantula Mohan , Member ( J ) And Shyam Babu Gautam , Member ( T ) For the Appellant : Mustafa Doctor, Sr. Advocate, Jehangir Jejibhoy, S.S. Ghosh, Advocates i/b Hariani Co., Shyam Kapadia, Shivangi A., Advocates For the Resolution Professional: Krupa R. Parikh, Advocate For the Respondents : Zal Andhyarujina and Denzil, Advocate i/b Wadia Ghandy Co. ORDER Bhaskara Pantula Mohan , Member ( J ) FACTS OF THE CASE (M.A. No. 999/2019) 1. Both these Miscellaneous Applications have been filed under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 (hereinafter the Code ) challenging the admission of various claims and the determination of the voting share of various financial creditor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tra ITC (India) Ltd. Further, HDFC also prayed that this Tribunal may direct the RP to changer the voting ratio of financial creditors. 8. Ld. Sr. Counsel appearing on behalf of HDFC argues that while the Corporate Debtor is an 'Obligor' for the amounts advanced under the various financial documents produced by Respondent Nos. 2 to 4, the Corporate Debtor has provided 'security' in the nature of a mortgage or a guarantee only for lesser amounts. Therefore, it was submitted that the status of Respondent Nos. 2 to 4 as 'financial creditors' must be restricted only to these lesser amounts. 9. The Applicant states that the Resolution Professional has proceeded on the basis that, under the terms of the aforesaid DTD, the Corporate Debtor is jointly and severally liable to repay/redeem the debentures. However, it is argued that the DTD does not cast any obligation on the Corporate Debtor to pay thereunder and the liability (if any) of the Corporate Debtor to pay under the Debenture Trust Deeds could never be owed to Respondent Nos. 2 to 4, since they are not parties to the same. 10. Applicant further submits that the Respondent Nos. 3-4 are not parties to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the time value of money, not is it a guarantor in the absence of any guarantee. OBJECTIONS BY VISTRA, AASAN AND IIFL (REPONDENT NOs 2-4, RESPECTIVELY) 17. Abovementioned Respondents have taken a preliminary objection that the current applications are not maintainable under section 60(5) of the code at this stage and reliance has been placed on Arcelormittal India Private Limited versus Satish Kumar Gupta Ors. and State Bank of India v. Metallica Industries Limited [Judgement of the NCLT dated 29th October 2018, MA/1253/2018 in CP(IB)/1329/I BP/2017]. 18. It is argued that the present Applications are not maintainable at this stage as the resolution plans placed before the Committee of Creditors are yet to be considered and voted upon. The Ld. Counsel has further argued that this Hon'ble Tribunal shall only when the resolution plan is placed for approval may decide on such an issue under section 60(5). 19. It is further argued by the Ld. Counsel that the legislature has now made it clear that the corporate insolvency resolution process must be mandatorily completed within 330 (three hundred and thirty) days. Therefore, it is submitted that applications of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,00,00,000/- Claim II: Aggregate amount: ₹ 200,00,00,000/- 22. Laying emphasis on the facts it is pointed out that the in case of Aasan, the Corporate Debtor is a party named in relation to each of the aforesaid four deposits claimed by Aasan and is also a named obligor for each of the deposits advanced. Thereafter, IIFL has filed one claim before the RP based on the basis of a Debenture Trust Deed (DTD). Reliance has been placed on DTD and it has been argued that based on the clauses of the DTD it is evident that the debenture holder is a financial creditor of the Corporate Debtor. The Corporate Debtor has an express obligation to pay the amounts due under the debentures as an 'Obligor' named under the DTD. Additionally, the Corporate Debtor has also created additionally securities over certain properties belonging to the Corporate Debtor as specified in the DTD. 23. Lastly, with regards to Vistra it is submitted that they have filed 3 (three) claims, the first and the second on the basis of the Debenture Trust Deed (DTD). It is stated that provisions of DTD make it clear that the Corporate Debtor is an 'Obligor' named therein and Vistra is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law arising out of such order, within the time specified in Section 62. Section 64 also makes it clear that the timelines that are to be adhered to by the NCLT and NCLAT are of great importance, and that reasons must be recorded by either the NCLT or NCLAT if the matter is not disposed of within the time limit specified. Section 60(5), when it speaks of the NCLT having jurisdiction to entertain or dispose of any application or proceeding by or against the corporate debtor or corporate person, does not invest the NCLT with the jurisdiction to interfere at an applicant's behest at a stage before the quasi-judicial determination made by the Adjudicating Authority. The non-obstante clause in Section 60(5) is designed for a different purpose: to ensure that the NCLT alone has jurisdiction when it comes to applications and proceedings by or against a corporate debtor covered by the Code, making it clear that no other forum has jurisdiction to entertain or dispose of such applications or proceedings. (Emphasis Supplied) The categorical view taken by the Hon'ble Supreme Court in the above case was also followed by the Mumbai Bench of NCLT, Mr. Sunil Gopichand Teckchandan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Guarantee by the Corporate Debtor dated 29 December 2017 in the sum of ₹ 20 crores in favour of Respondent No. 2; iv. Demand Promissory Note dated 27 September 2017 inter alia by the Corporate Debtor in the sum of ₹ 15 crores in favour of Respondent No. 2; and\ v. Deed of Mortgage dated 13 October 2017 inter alia by the Corporate Debtor in favour of Respondent No. 2. b. Respondent No. 3 (IIFL Trustee Ltd.) i. Debenture Trust Deed dated 16 February 2015 (for a principal sum of ₹ 150 crores); ii. Escrow Agreement dated 18 February 2015 between the Corporate Debtor, Axis Trustee Services Ltd. (the Debenture Trustee) and HDFC Bank Ltd (the Escrow Agent); iii. Demand Promissory Note dated 18 February 2015; and iv. Recall Notice dated 21 December 2016 issued by Axis Trustee Services Ltd. c. Respondent No. 4 (Vistra ITCL Ltd.) i. Debenture Trust Deed dated 21 February 2014 (for a principal sum of ₹ 200 crores); ii. Escrow Agreement dated 21 February 2014 between the Corporate Debtor, Axis Trustee Services Ltd. (the Debenture Trustee) and HDFC Bank Ltd (the Escrow Agent); iii. Debenture Trust Deed dated 16 F ..... X X X X Extracts X X X X X X X X Extracts X X X X
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