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TMI Blog2021 (5) TMI 754X X X X Extracts X X X X X X X X Extracts X X X X ..... gger the CIRP because the nature of remedy being sought for under the provisions of the IB Code is Remedy in Rem in respect of the CD - present IB Petition is filed by the duly authorised official of the Petitioner Bank in a prescribed format under Section 7 of the IB Code annexing copies of loan documents confirming the existence of debt due, payble and defaulted and proposed a name of a Resolution Professional to act as an Interim Resolution Professional (IRP). Petition admitted - moratorium declared. - C.P. (IB)No.08/GB/2020 - - - Dated:- 5-5-2021 - Hon ble Shri H. V. Subba Rao, Member (J) And Hon ble Shri Prasanta Kumar Mohanty, Member (T) MR. S. DUTTA ADVOCATE PETITIONER MS. MILLI HAZARIKA ADVOCATE RESPONDENT CONFERENCE ORDER [ Per : Mr. Prasanta Kumar Mohanty , Member ( T ) ] 1. The present I. B. Petition is filed by the Financial Creditor Punjab National Bank under Section 7 of the Insolvency and Bankruptcy Code, 2016 (herein after referred to as a Code ), seeking initiation of Corporate Insolvency Resolution Process ( CIRP ) against the Corporate Debtor namely, M/s. Megha Granules Pvt. Ltd. for the default committed by the Corporate Debtor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cash credit amount only and the same also forms part of the record of the case. The petition under Section 7, documents/annexures (filed by the erstwhile United Bank of India) and the Additional Affidavit along with corrected uncharged interest calculation sheet had been properly served through Dasti Service and the said service report was duly filed with this Hon ble Tribunal on 16.03.2021. The said report was duly filed by both E-filing as well as by submitting hard copies thereof. 5. Regarding Debt pertaining to United Bank of India prior to amalgamation/merger with Punjab National Bank, it is stated that one M/s. Megha Granules Pvt. Ltd. (being the Corporate Debtor) had approached individual banks for financial assistance under a consortium and accordingly a consortium of 4 nos. of banks (State Bank of India, Central Bank of India and Punjab National Bank) including the Financial Creditor (United Bank of India) agreed in principle to grant / sanction total consortium loan amount of ₹ 117.98 Crores (Rupees One hundred Seventeen Crores Ninety Eight lakhs) only with the State Bank of India initially being the lead bank [ (SBI TL of ₹ 45.00 Crores, BG of ₹ 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Hypothecation (Term Loan and Working Capital) both dated 10.08.2015, Undertakings dated 27.07.2012, 27.07.2012 and 22.05.2013, Joint and Several Deeds of Personal Guarantee dated 27.07.2012, 22.05.2013 and 27.04.2015, Consortium Guarantee Agreements dated 27.07.2012, 22.05.2013 and 27.04.2015 by Corporate Guarantors, Consortium Term Loan Agreement dated 27.07.2012, Working Capital Consortium Agreement dated 22.05.2012, Master Restructuring Agreement dated 27.04.2015, Trust and Retention Account Agreement dated 10.08.2015, Facility Agreement (Joint Lender Forum Term Loan) dated 10.008.2015 and Working Capital Lenders Forum Agreement dated 10.08.2015, Inter-se Agreements dated 27.07.2012, 10.08.2015 and 10.08.2015 and with respect to the entire consortium loans sanctioned / enhanced / restructured by the Consortium Lenders including the FC from time to time, as security for repayment of the consortium loan and also agreed to the terms and conditions of the said consortium agreements. 11. The CD has also created equitable mortgage leasehold right period (60 years) over a plot of land measuring 1.07,063 square metres (80 bighas) situated within the Industrial Growth Centre at Cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dorsing and confirming the sanction of the Consortium loan facilities in connection thereof and also of the share of the Financial Creditor (erstwhile UBI). 15. The CD has also registered the charge over the secured properties (hypothecated and mortgaged properties) with the Registrar of Companies and relevant documents have been filed therein. 16. It is further submitted that so far limitation aspect is concerned, the CD had also signed and executed Letter of Acknowledgment of Debt cum Balance Confirmation dated 31.07.2017 in favour of the financial creditor, thereby confirming that all the security documents executed by it in favour of the consortium banks including the FC (erstwhile UBI). Balance Sheets of the CD are also enclosed and therefore, this application has been filed well within the prescribed period of Limitation. 17. It is submitted that the Corporate Debtor has failed to maintain the loan accounts Term Loan, Cash Credit, WCTL-1, WCTL-2, FITL-1, FITL-2, FITL-3, FITL-4, INV LC and INV BG maintained by the Financial Creditor as it failed to pay the instalments and the over dues as per terms and conditions of sanction. The loan accounts were classified as NPA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout affecting the overall consortium arrangement. Again vide Sanction Letter dated 30.01.2016, the Cash Credit was renewed and enhanced from the existing limit of ₹ 2.71 Crores to ₹ 4.27 Crores. Similarly, the existing Term Loan stood restructured and rescheduled at ₹ 3.46 Crores. The Financial Creditor (PNB) also converted the unrecovered portion of Cash Credit Facility of short fall of DP that is ₹ 2.80 Crores limit sanctioned/approved/restructured limit of ₹ 2.71 Crores. The unpaid interest of ₹ 0.78 Crore (₹ 0.76 Crore of TL and ₹ 0.02 Crore of WCTL-CC) was converted to funded interest Term Loan. Again an amount of ₹ 0.09 Crore being the repayment of FITL had been converted into Working Capital Term Loan. Under the scheme sanctioned, a Bank Guarantee of ₹ 0.47 Crore was also sanctioned with LC limit of ₹ 0.65 Crore. 20. Therefore, the credit facilities sanctioned by the Consortium Lenders to the tune of ₹ 65.40 Crores (Rupees Sixty Five Crores Forty Lacs only) as Consortium Term Loan and ₹ 29.88 Crores (Rupees Twenty Nine Crores and Eighty Eight lacs only) as Working Capital Facilities including ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aggregating to ₹ 15.50 Crores. 27. The Corporate Debtor through its Directors and the Consortium Banks had signed and executed all necessary security cum Loan and Consortium Documents/Agreements including Inter-se and Trust Agreements inter alia Joint Deed of Hypothecation dated 27.07.2012, Joint Deed of Hypothecation dated 22.05.2013 and Joint Deeds of Hypothecation (Term Loan and Working Capital) both dated 10.08.2015, Undertakings dated 27.07.2012, 27.07.2012 and 22.05.2013, Joint and Several Deeds of Personal Guarantee dated 27.07.2012, 22.05.2013 and 27.04.2015, Consortium Guarantee Agreements dated 27.07.2012, 22.05.2013 and 27.04.2015 by Corporate Guarantors, Consortium Term Loan Agreement dated 27.07.2012, Working Capital Consortium Agreement dated 22.05.2013, Master Restructuring Agreement 27.04.2015, Trust and Retention Account Agreement dated 10.08.2015, Facility Agreement (Joint Lender Forum Term Loan) dated 10.08.2015 and Working Capital Lenders Forum Agreement dated 10.08.2015, Inter-se Agreements dated 27.07.2012, 10.08.2015 and 10.08.2015 and with respect to the entire consortium loans sanctioned/enhanced/ restructures by the Consortium Lenders includin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n by debiting from the Cash Credit Account (CC A/C No. 0189008700009059) of the Corporate Debtor. The Financial Creditor had intimated the Corporate Borrower vide its letter dated 13.03.2020 about the said invocation. 32. It is also stated that necessary Board Resolutions by the Corporate Debtor and the Corporate Guarantors dated 20.09.2011, 18.03.2015 and 01.02.2016, 15.09.2011, 15.09.2011, 15.09.2011, 15.09.2011, 27.03.2015, 27.03.2015, 27.03.2015, 27.03.2015, 27.03.2015, 01.02.2016, 01.02.2016, 01.02.2016, 01.02.2016 and 01.02.2016 respectively had been passed from time to time endorsing and confirming the sanction of the Consortium loan facilities in connection thereof and also of the share of the Financial Creditor. 33. It is stated that the Corporate Debtor had also registered the charge over the secured properties (hypothecated and mortgaged properties) with the Registrar of Companies and relevant documents have been filed therein. 34. It is further stated that the Corporate Debtor had also signed and executed Balance and Security Confirmation Letters dated 01.04.2017, 01.04.2017, 01.04.2017 and 25.02.2018 in favour of the Financial Creditor, thereby confirming the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 856.25 (Rupees Thirty Two crores Fifty Nine lacs Ninety Nine thousand Eight hundred Fifty Six and paise Twenty Five only) and the FC having proved the loans, debts and defaults of the CD along with the issues pertaining to Limitation and Jurisdiction through more than sufficient documents annexed with the petition / amended petition / additional affidavit cum amendment and taking into consideration of the facts and records of the case, it is respectfully prayed by the Petitioner that this Hon ble Tribunal may be pleased to admit the petition and pass such other order / orders as to this Hon ble Tribunal may deem fit and proper. 37. Further, it is submitted that the FC do not admit the statements, allegation and submissions made in the written submission filed by the CD which are not consistent with the records with the case and it is further submitted that the debt has been established and proven beyond any reasonable doubt and the same had backed by irrefutable documentary evidence. Further, the vary admission and insistence on the part of the CD itself goes on to prove the existence of debt. So far the technicallity raised in the written submission the same is not at all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Deposit (pages 782 783) 10. EM dated 22.12.2009 (pages 784 815) 11. Master Restructuring Agreement (pages 1033 1050 dtd.27.4.2015) 12. Joint Lender Forum Authority (pages 1094 1095) 13. Trust and Retention Account Agreement dated 10.08.2015 (pages 1131 1158) 14. Working Capital Lenders Forum Agreement dated 10.08.2015(pages 1192 1246) 15. BG Invocation letter dated 17.01.2019 (pages 1294) 16. Letter of acknowledgement of debt cum balance confirmation dated 31.07.2017 (page- 1314) 17. CRILIC Report dated 07.02.2020 (page 1325) 18. CIBIL Report (pages 1326 1396) 19. Loan Recall Notice cum Guarantee Invocation dated 26.04.2019, SARFAESI Notice dated 01.06.2018 and letter dated 14.12.2018 (pages 1399- 1403, 1404 1407 and 1408 1410) 20. Balance sheets for the year 2015 2016 (pages 1411 1439) 21. Valuation Reports dated 22.06.2018 and 18.07.2018 (pages 1440 1463 and 1464 1473). 22. Consent of the Proposed Interim Resolution Professional and declaration regarding eligibility for appointment as IRP (pages 1474, 1475 1476) 23. Copy of demand draft dated 19.02.2020 for ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner Bank has suggested the name of Insolvency Professional Mr. Sandep Khaitan, 2nd Floor, Sanmati Plaza, G. S. Road, ABC, Guwahati-5, E-mail ID: [email protected], Ph- 8011048037, having IP Registration No.IPA-001/IPP00532/ 17-18/10957 to be appointed, if this petition is allowed and the proposed IRP has also given his affirmation/consent in writing, which is annexed with the petition. OBSERVATIONS 46. It is found that the Petitioner Bank has submitted the documents duly executed by the Corporate Debtors and guarantors along with the Statement of Accounts with Certificate under the Banker s Book of Evidence Act, 1891 CRILIC Report in support of their IB Petition for initiation of CIRP. 46.I The credit facilities were sanctioned and released by the Petitioner Bank along with other consortium lenders and the same were availed by the CD, M/s. Megha Granules Pvt. Ltd. and the Charges have been registered by the CD with the ROC in favour of the Petitioner Bank. 46.II The CD has defaulted in making repayment of the credit facilities to the Petitioner Bank due on 31.03.2018 and 06.04.2019. The Total Debt as per the Statement of Accounts and the Affidavit filed on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor and the application filed by the Petitioner Bank under Section 7 of the IBC is found to be complete for the purpose of initiation of Corporate Insolvency Resolution Process against the Corporate Debtor; Hence, the present IB Petition is admitted with the following directions/observations. The date of admission of this petition is 05.05.2021. 48. As per the provisions of Section 13 and 14 of the IB Code on the date of commencement of insolvency, this Adjudicating Authority declares moratorium with effect from today for prohibiting all of the following, namely :- I. (a) The institution of suits or continuation of pending suits or proceedings against the Corporate Debtor including execution of any judgement, decree or order in any court of law, tribunal, arbitration panel or other authority. (b) Transferring, encumbering, alienating or disposing of by the Corporate Debtor any of its assets or any legal right or beneficial interest therein. (c) Any action to foreclose, recover or enforce any security interest created by the Corporate Debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application to this Tribunal with a prayer for passing an appropriate order. The IRP shall be under duty to protect and preserve the value of the property of the Corporate Debtor as a part of its obligations imposed by Section 20 of the Code and perform all his functions strictly in accordance with the provisions of the Code, Rules and Regulations. 51. It is also observed that the Petitioner Bank has claimed an aggregate amount as under- United Bank of India = ₹ 23,57,23,005.33 (PART-A) Punjab National Bank = ₹ 9,02,76,850.92 (PART-B) Total Debt (A+B) = ₹ 32,59,99,856.25 (Rupees Thirty Two Crores Fifty Nine Lacs Ninety Nine thousand Eight hundred Fifty Six and paise Twenty Five) only. 52. One of the prime objectives of the Insolvency and Bankruptcy Code, 2016 is to quickly find out a viable Insolvency Resolution Plan for the Corporate Debtor and in order to have a Resolution Plan Viable, feasible and implementation successful, in the era of Minimum Cost of funds-based Lending Rate ( MCLR )/ Repo Linked Interest Rate/ Interest rate falling regime and competitive market condition, the Committee of Creditors (COC) may explore, while finalizing the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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