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TMI Blog2021 (6) TMI 528X X X X Extracts X X X X X X X X Extracts X X X X ..... erformance of obligations by the Corporate Debtor. Upon perusal of Facility Agreement and security created in pursuance of monies lent to the Corporate Debtor, it is established beyond doubt that the Facility Agreement executed between the parties entails the details of debt of ₹ 15 Crores, as was sanctioned and disbursed to the Corporate Debtor. The events of default expressly define the rights accrued to the Financial Creditor to recall the entire loan on non-payment of dues by the Corporate Debtor. The Corporate Debtor has also not disputed that he had availed the said monies and hence, has offered to settle the said outstanding amount by way of proposal on 24.02.2021. Hence, all the ingredient of Section 7 are satisfied and Petition is admitted. The nature of Debt is a Financial Debt as defined under section 5(8) of the Code. It has also been established that there is a Default as defined under section 3(12) of the Code on the part of the Debtor. The two essential qualifications, i.e., existence of 'debt' and 'default', for admission of a Petition under section 7 of the I B Code, have been met in this case - Petition admitted - moratorium decla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at they have availed a short-term loan facility from the Petitioner for the principal amount of ₹ 15 crores and agreed to repay the same along with agreed rate of interest. The Corporate Debtor and the Guarantors provided 7 Post-dated Cheques each corresponding to the dates of monthly interest payments and cheque for repayment of entire principal amount. 7. From the very outset, the Corporate Debtor delayed monthly payment of interest due, the Petitioner was repeatedly following up with the Corporate Debtor for outstanding payments on account of interest, penal interest and fee amount. 8. M/s. Vasant J. Mehta and Company, Chartered accountants, issued a certificate dated 14.06.2019 to the Petitioner, certifying the fact that the short-term facility of ₹ 15 crores were availed on 18.04.2019 and the disbursed amount had been applied and utilised towards general corporate purpose by the Corporate Debtor in accordance with purpose stated in the facility agreement. 9. The Corporate Debtor continues to delay payments and actually they were obligated to provide quarterly valuation report for the pledged shares, create a mortgage in Dahisar Property. However, the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Corporate Debtor. 16. The total amount in default as on 22.10.2020 is ₹ 26,30,11,626/-. The breakup of outstanding amount is as follows: 17. The Corporate Debtor executed following securities in favour of the Petitioner to secure debts: 1) A first and exclusive charge by Harish Raghavji Patel, Rajesh Raghavji Patel, Shilpa Rajesh Patel, Praveena Kantilal Patel, Anita Harish Patel and Pratik Harish Patel ( Pledgors ) of 76% of the paid-up equity share capital of the Corporate Debtor (free from all restrictive covenants, lien, or other encumbrance) together with all accretions thereon. This is by way of a Deed of Pledge executed by the Petitioner, the Corporate Debtor, and the Pledgors on 16th April 2019 ( Pledge ). In this regard, the Pledgors also confirmed the Pledge and addressed individual Dividend Mandates dated 16th April 2019 to the Corporate Debtor (with a copy to the Petitioner) in favour of the Petitioner, and executed Power of Attorney on 16th April 2019 in favour of the Petitioner. The Pledgors also provided the originals of the pledged shares along with executed transfer deeds to the Petitioner under cover of their letter dated 18th April 2019. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18. List of documents annexed to the Petition to prove the existence of financial debt and amounts in default: 1) The Facility Agreement dated 16th April 2019 along with sanction letter dated 15.04.2019. 2) Deeds of Guarantee executed by Rajesh Raghavji Patel and Haresh Raghavji Patel dated 16th April 2019. 3) Deed of Pledge dated 16th April 2019. 4) Dividend Mandates issued by the Pledgors on 16th April 2019. 5) Powers of Attorney executed by the Pledgors in favour of the Applicant on 16th April 2019. 6) Letter dated 18th April 2019 addressed by the Corporate Debtor to the Applicant providing originals of the pledged shares along with executed transfer deeds. 7) Demand Promissory Notice dated 18th April 2019 issued by the corporate Debtor in favour of the Applicant, along with the Letter of Continuity. 8) Undertaking for creation of a Negative Lien dated 18th April 2020. 9) The Corporate Debtor's letter dated 18th April 2019 requested drawdown of the facility. 10) The bank statement of the Applicant showing the disbursement on 18th April 2019. 11) Letters dated 23rd April 2019 addressed by the Corporate Debtor, Rajesh Ragh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st rate @ 2% over and above also applicable, an additional interest rate for failure of two perfect security @ 2% was also applicable. 20. The Corporate Debtor on 23.04.2019 confirmed that they have availed the facility for the principal amount of ₹ 15 crores and that they have agreed to repay the same along with interest. 21. The Corporate Debtor failed to pay the amounts of interest as per the schedule and hence, the Petitioner was constrained to issue a notice dated 22.01.2020 calling upon them to pay the outstanding dues as per the Facility Agreement. The Corporate Debtor addressed an email dated 31.03.2020 and mentioned as follows: You will understand that we are unable to meet with our obligations with respect to the facilities referred to the aforesaid sanction letter and other commercial understandings till the time as may be required to bring the situation under control or reasons of Force Majeure are cured . 22. The Petitioner replied to Corporate Debtor's mail on 03.04.2020 and pointed out that the facility was to be repaid on 19.10.2019 much prior to outbreak of COVID-19. 23. A copy of informational utility and Bankers Book was annexed to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary companies will be in peril. 27. The Corporate Debtor is engaged in development and construction of real estate within Mumbai and other places in India. The value of current assets of the Corporate Debtor is more than ₹ 240 crores and has been carrying out business for over 55 years and have completed various project till date, delivering numerous homes to its customers. As on date, there are 600 workers of Corporate Debtor and its group companies. Findings: 28. It is undisputed fact that the Petitioner had granted a short term loan to the Corporate Debtor for general corporate purposes for real estate projects by way of a Sanction Letter dated 15.04.2019 and thereafter, executed a facility agreement dated 16.04.2019 wherein the total amount of ₹ 15 crores were lent by the Petitioner to the Corporate Debtor. In terms of the facility agreement, the Petitioner paid the amounts as per the drawdown at clause 2.3 of facility agreement. 29. The Facility Agreement contained specific clauses in relation to payment of interest, default interest, additional interest and additional interest too. The repayment term was captured at Clause 3.1 of Facility Agreement. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titute an Event of Default for the purpose of this Agreement and other Financing Documents: i) Any Obligor fails to pay in terms of the Financing Documents i.e. when it fails to pay to the Lender any sum due to be paid under any financing Document at the time, in the currency and in the manner specifies therein; ii) any of the Obligors is/are in breach or default of the performance of any covenant, undertaking, term, condition or agreement under any Financing document or any representation or statement made by any of the Obligors in this Agreement or in any of the Financing Documents or in any notice or other document, certificate of statement delivered by it/them/him/her pursuant hereto or in connection herewith or orally is or proves to have been false, incorrect or misleading; 31. The Corporate Debtor provided securities to the Petitioner to secure repayment of loan amount lent by the Corporate Debtor which includes personal guarantees of two promoter, a pledge of shares, a demand promissory note, undertaking of the Corporate Debtor and its promoter, negative lien of 24% of shares pledged, post-date cheques from guarantors. 32. The Corporate Debtor has evidentl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is pending against the said proposed Interim Resolution Professional. 38. The Financial Creditor has proposed the name of Insolvency Professional. The IRP proposed by the Financial Creditor, Mr. Abhijit Gokhle, having Registration No. IBBI/IPA-002/IP-N00964/2020-2021/13092 is hereby appointed as Interim Resolution Professional to conduct the Insolvency Resolution Process. 39. Having admitted the Petition/Application, the provisions of Moratorium as prescribed under Section 14 of the Code shall be operative henceforth with effect from the date of order, and shall be applicable by prohibiting institution of any Suit before a Court of Law, transferring/encumbering any of the assets of the Debtor etc. However, the supply of essential goods or services to the Corporate Debtor shall not be terminated during Moratorium period. It shall be effective till completion of the Insolvency Resolution Process or until the approval of the Resolution Plan prescribed under Section 31 of the Code. 40. That as prescribed under Section 13 of the Code on declaration of Moratorium, the next step of Public Announcement of the Initiation of Corporate Insolvency Resolution Process shall be carrie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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