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TMI Blog2020 (12) TMI 642X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the case of MOBILOX INNOVATIONS PRIVATE LIMITED VERSUS KIRUSA SOFTWARE PRIVATE LIMITED [ 2017 (9) TMI 1270 - SUPREME COURT ], has inter alia, held that I B Code, 2016 is not intended to be substitute to a recovery forum. The Code cannot be used prematurely or for extraneous considerations or reasons as a substitute for debt enforcement procedures - this Petition is only filed to use this Tribunal as a recovery forum in its continuing recovery actions against the Respondent Corporate Debtor, and in any case is premature as an accepted OTS proposal is pending final approval of the Petitioner Bank. The fact is also taken into account that due to the Covid-19 pandemic, the Central and State governments have ordered lockdowns for different periods which led to large scale hindrance to movement of men and material. This has impacted businesses all over India, and has necessitated several pronouncements for facilitating business. Statutory changes such as increase of thresh hold limit for filing a petition under the IBC for initiating CIRP, suspension of CIRP, deferment of loan repayments and restructuring of debt etc. have been made to prevent businesses from going into liquidati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd ₹ 2,38,55,052/-towards Over Draft facility. 2. Brief facts of the case, as mentioned in the instant Petition, are as follows: (1) M/s. Corporation Bank is a Public Sector Bank having its Head Office at Mangala Devi Temple Road, Mangalore, Karnataka and having Branches inter alia one at Sound-end Road, Mill Corner, Sheshadripuram PO, Malleshwaram, Bangalore-560020. (2) M/s. Mindlogicx Infratec Limited is a Limited Company incorporated on 28.07.2010 under the Companies Act, 1956 bearing CIN: U72200KA2010PLC054598 and having its office at Unit-I, Techllano 10/1 -B, Graphite India Road, Hoodi Village, KR Puram Hobli, Bangalore-560048. (3) The Financial Creditor entered an agreement with Corporate Debtor and provided a term loan of ₹ 9,28,66,590/- and Overdraft facility of ₹ 1,00,00,000/- on 30.05.2013. The Corporate Debtor after availing the said term loan and over draft failed to pay the amount as per the terms of loan agreement. In accordance with the prudential accounting and income recognition norms prescribed by the Reserve Bank of India, for the banks, the Financial Creditor classified the. loan accounts in the name of the Corporate Debtor a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... instalments i.e., whenever the payments are received by the Respondent from the University. (4) It is stated that the Petitioner rescheduled the term loan on 28.05.2014. A Supplementary Deed of Hypothecation was entered into. However, the Petitioner sent an email on 11.08.2014 requiring the Respondent Company to deposit a sum of ₹ 1,14,00,000/- for regularisation of the account and held that the Respondent Company loan account has slipped into a Non-performing Asset (NPA) with effect from 29.05.2014. The said email was issued by the Petitioner unilaterally completely ignored the revised restructuring of the term loan. The Respondent Company vide email dated 14.08.2014 pointed out the terms of revised/restructured loan. But the Petitioner arbitrarily issued a letter dated 18.08.2014 cancelling the restructuring order. (5) The Petitioner informed the Respondent that to regularise the account the Respondent Company is required to pay a sum of ₹ 2,70,00,000/-(Rupees Two Crores Seventy Lakhs only) on or before 28.08.2014, which was inconsistent and arbitrary as against the demand of ₹ 1,14,00,000/- vide email dated 11.08.2014. So the Respondent filed a W.P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inflicted huge loss to it. (9) It is submitted that the Respondent Company always wanted to pay off the loan and after several rounds of discussions, both the parties arrived at ₹ 9,93,00,000/- including interest as on 31.0.2018 as full and final payment. The Respondent Company submitted a revised letter dated 29.05.2018, as requested along with 5 self named security cheques to the Petitioner Bank. However, the Petitioner went back on its words and demanded a sum of ₹ 13,01,10,123/- as against ₹ 9, 93, 00,000. (10) The W.P No. 42451/2014 came up and the Hon'ble High Court quashed the letter dated 18.08.2014 of Petitioner Bank disallowing the restructure and classifying the account of Respondent as NPA and gave liberty to the Respondent to submit a fresh representation. The Respondent vide letter dated 08.05.2019 requested the Petitioner Bank to consider its request as per the orders of the Hon'ble High Court of Karnataka, however, the Bank wilfully refused to consider the representation. The Respondent Company filed a petition before the Hon'ble High Court for Contempt committed by the Petitioner. Suppressing the above mentioned facts the Pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d no examinations are scheduled since Covid-19 crisis hit India and that the Respondent is ready to honour payments as per the letter dated 07.07.2020. 6. The aforesaid letter dated 07.07.2020 addressed by the Respondent to the Petitioner requesting for continuation of the sanctioned OTS amount as mentioned in letter dated 21.03.2020 and rescheduling the repayment schedule reads as under: Sl. No. As per sanction letter dt. 21.03.20 New repayment schedule now proposed Date of payment Amt. (in Rs. Lakhs) Date of payment Amt. (in Rs. Lakhs) 1. 20.03.2020 100.00 31.01.2021 100.00 2. 20.05.2020 100.00 28.02.2021 100.00 3. 20.07.2020 100.00 31.03.2021 100.00 4. 20.08.2020 150.00 30.04.2021 100.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actions against the Respondent Corporate Debtor, and in any case is premature as an accepted OTS proposal is pending final approval of the Petitioner Bank. 10. We also take notice of the fact that due to the Covid-19 pandemic, the Central and State governments have ordered lockdowns for different periods which led to large scale hindrance to movement of men and material. This has impacted businesses all over India, and has necessitated several pronouncements for facilitating business. Statutory changes such as increase of thresh hold limit for filing a petition under the IBC for initiating CIRP, suspension of CIRP, deferment of loan repayments and restructuring of debt etc. have been made to prevent businesses from going into liquidation. Under the circumstances narrated in the objections filed by the Respondent, it is clear that its business has been hampered in the current economic scenario, as all the Educational Institutions and Universities have postponed examinations and no tentative dates are fixed for any examination. This has led to non-receipt of revenue from business on account of closure of educational institutions, which in turn leads to its difficulty in timely re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r is unable to repay its debts. In fact it has paid a substantial part of the debt and interest, which shows its intent as well as capability to pay. It is not the objective of the Code to push viable Companies into CIRP or into liquidation. Matters under the IBC also cannot be kept pending endlessly or assume the role of recovery enforcement. In these facts and circumstances, we are not satisfied that a case is made out for admitting the Petition and pushing the Respondent into CIRP. 13. Though we do not find the Petition to be fit for admission, we are conscious of the fact that the Petitioner is a responsible Bank and the custodian of public money and has to effectively discharge its onerous banking functions. Hence, in the facts and circumstances of the case, at this point in time it would be premature to either dismiss or admit the Petition. We therefore consider it just to dispose of the Petition granting liberty to the Petitioner to file a fresh Petition if the debt owed is not repaid by the Respondent, as per the settlement talks that are admittedly in progress and pending before the Petitioner Bank, within a reasonable time, provided a case is otherwise made out as pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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