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TMI Blog2021 (5) TMI 728X X X X Extracts X X X X X X X X Extracts X X X X ..... lear that both the parties had agreed to treat the amount as a 'loan' with an agreed rate of interest to be paid - The obtaining of an NOC by the Corporate Debtor from the Banks to which the assets were hypothecated was the primary and only major condition before executing the sale transaction as per the Agreement arrived between the Parties. It is for the non-obtaining of NOC by the Corporate Debtor that the sale transaction could not be executed and, therefore, the agreement was terminated as per the relevant clause of the agreement and demand was raised vide letter dated 09.01.2020 for paying the default amount along with interest within 30 days. The Bench also notes that the Corporate Debtor in its financial statement has recorded and admitted that it to be a financial debt. The Petitioner has not received the outstanding Debt from the Corporate Debtor and that the formalities as prescribed under the Code have been completed by the Petitioner, this Petition deserves 'Admission'. Petition admitted - moratorium declared. - CP No. 1398/(IB)-MB-V/2020 - - - Dated:- 13-5-2021 - Suchitra Kanuparthi, Member (J) And Chandra Bhan Singh, Member (T) For the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of consortium and other lenders: i) State Bank of India ii) Bank of India iii) Canara Bank iv) Syndicate Bank v) Indian Overseas Bank vi) Vijaya Bank vii) Bank of Baroda viii) IDBI Bank ix) Andhra Bank x) Sugar Development Fund (SDF) 9. Therefore, the mortgage/charges need to be released prior to the execution of the purchase transaction. 10. On 15.10.2018, the Petitioner requested the Corporate Debtor for getting one time settlement (OTS) approval from the lending banks of the Corporate Debtor. 11. Thereafter on 15.10.2018 the Corporate Debtor informed the Deputy General Manager of State Bank of India Stressed Asset Management Branch-II that the Petitioner is purchasing the assets of the Corporate Debtor and dues of the bank will be settled via one time settlement. The Corporate Debtor requested the bank to allow the Petitioner to operate the upcoming crushing season for 2018-2019. 12. The Petitioner again requested the Samarth Sahakari Bank Ltd. Solapur to disburse the Short-Term Loan amounting to ₹ 1,75,00,000/- and on 03.11.2018, the Petitioner and the Corporate Debtor issued a Guarantee Bond in a Favor of Sama ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ger statements for FY 2018-19. 20. The total outstanding dues of the Petitioner from the Corporate Debtor are as mentioned below: 21. Hence, due to nonpayment of debts the Petitioner file this Petition u/s. 7 of the IBC as a Financial Creditor for initiating the Corporate insolvency Resolution process (CIRP). SUBMISSIONS BY THE CORPORATE DEBTOR: 22. The Corporate Debtor submits that the Petitioner approached the Corporate Debtor in the year 2018 and expressed his desire to purchase the assets of the Corporate Debtor and several agreements were signed and executed between the respective parties, the list of which is given below: 23. The Corporate Debtor submits that Petitioner well knows that the Mortgage/Charge is there over the assets of the Corporate Debtor. 24. The Corporate Debtor and Petitioner entered into a lease agreement on 27.11.2018 for the period of 3 years i.e., from 01.07.2018 to 30.06.2021 or till the last day of crushing season from the singing of the agreement. As per the terms of the deed the Petitioner had agreed to share 30% of the profit with the Corporate Debtor and the termination deed clearly mentions that the termination will be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notes that this is an unsecured loan, therefore, no charges are registered or required to be registered with RoC. 33. The Bench understands that the whole substratum of the Petition is based on an Agreement between the parties of 20.12.2018 which is broadly an Agreement for sale for which money has been given by the Petitioner by way of an inter corporate loan. This Agreement has a clear-cut clause that in the event of non-issuance of NOC by the Banks, to which the assets of the Corporate Debtor is hypothecated and the final asset purchase transaction not materializing between parties, the amount will be treated as Inter Corporate Loan carrying an interest of 18% per annum. This clause 3 of the terms and conditions of the Agreement is reproduced as under:- 3. THAT during the pendency of the issuance of NOC by the banks and till the execution of the asset purchase transaction, the amount advanced by Autade to Fabtech will be treated as Inter Corporate Loan bearing interest at the rate of 18% per annum. That it is an Inter Corporate Loan is also clear from para 4 of the agreement dated 20.12.2018 which reads as under:- 4. THAT the said Inter Corporate Borrowin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to information and explanation given to us the company has accepted inter corporate loan from Autade Sugar Pvt. Ltd. of ₹ 162.53 Crore and repayment of ₹ 127.65 Crore and the closing balance as on 31.03.2019 is ₹ 34.89 Crore. 36. The Annual Report incorporating the independent Auditor's report and the financial statement clearly shows that the Corporate Debtor has not only admitted the liability but also further treated it as an Inter Corporate loan. Therefore, the Bench has not an doubt in its mind that the monies advanced to the Corporate Debtor is an interest bearing Inter-corporate Loan. 37. We also note that the Corporate Debtor has not disputed the loan disbursed and the execution of the agreement between the parties. There is no dispute as to receipt of the money or dispute regarding the transaction having taken place. 38. The Bench notes that in the written submission before the bench, the Corporate Debtor has contended that this debt is not a financial debt. The basis of this argument as per the Corporate Debtor is that, (a) the agreement signed between the parties is an agreement to sale. Therefore, it was a sale-purchase transaction an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty, which had allotted the said land to the 'Corporate Debtor'. It is stated that in the event of not obtaining the NOC, (as per Clause 6-A of the Agreement) the 'Corporate Debtor' had to indemnify the first Corporate Debtor under Clause 11 of the Agreement by refunding the amount paid together with interest @ 24% per annum. It was averred that as the 'Corporate Debtor' had failed to commence the Project on time, TSIIC informed the 'Corporate Debtor' in February 2018 that the said allotment would be cancelled. As the time under the OTS offer letter dated 13.11.2017 had expired in the month of May, 2018 it was stated that the first Corporate Debtor had issued a notice to the 'Corporate Debtor' in October 2018 seeking repayment of the entire amount of ₹ 2.35/- Crores paid to the Lender on behalf of the 'Corporate Debtor' together with interest @ 24% per annum as agreed upon under the Agreement. It was stated that there was no response, an Application under Section 7 was filed by the first Corporate Debtor before the Learned Adjudicating Authority. Thus, Hon'ble Supreme Court has held that the 'financial debt' unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only on behalf of the 'Corporate Debtor' and furthermore in the event of the failure on the part of the 'Corporate Debtor' to adhere to the terms of the Agreement, the said consideration amount was to be repaid by the 'Corporate Debtor' alongwith interest in the event the transaction did not materialize. It is seen from the record that a Right to Payment accrued to the first Corporate Debtor in terms of Clause 11 of the Agreement. (Emphasis supplied) Finally, Hon'ble NCLAT has dismissed the Appeal and had upheld that the debt was a financial debt. 43. This Bench notes that the present Petition is almost similar. As in this case also the aim of the Agreement was to purchase the asset of the Corporate Debtor after obtaining necessary NOC by the Corporate Debtor from the Bank. However, it had saving clauses that in the event it doesn't happen, the agreement to sale would be terminated and the Applicant has the right to demand back the money which as per the Agreement itself is an inter corporate loan at the rate of interest of 18%. In view of the above, this Bench has no doubt that there is a financial debt as per Section 5(8) of IBC, 2016 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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