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TMI Blog2021 (2) TMI 1196X X X X Extracts X X X X X X X X Extracts X X X X ..... loan/pledge Agreement by Premier Ltd. who is already under CIRP vide admission order dated 29.01.2021 and no recoveries were possible under the said pledge document, the debt and default are established and the ingredients of Section 7 of the Code are thus fulfilled. The definition of Pledge under Section 172 of the Indian Contract Act, 1872 states that Pledge is a Bailment of goods for security for payment or performance of a promise. The principles of promise of payment are akin to the principles of contract of Surety under Section 126 of the Contract Act, 1872. The facts of the present case, the Corporate Debtor as borrower No.1 and Pledgor. The entire Loan cum Pledge Agreement executed in favor of the Petitioner confirms the liability of borrower(s) is co-extensive/ joint and several as entailed in the terms conditions of payment/repayment, and even where the events of default is triggered under the contract - It is an undisputed fact that the default is proved and liability is established and that an order of admission is passed against the Borrower (Premier Limited) for the same set of loan. This Bench, on perusal of the documents filed by the Financial Creditor, is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... btor under another Loan cum Pledge Agreement dated 04.05.2016 for a term of 6 months from the date of disbursement. The amount was disbursed to Premier Limited on 05.05.2016. Thereafter, the tenure of the Loan cum Pledge Agreement dated 04.05.2016 was extended by a period of 18 months up to 04.05.2018 through an addendum dated 06.10.2016 (Facility 2). 4. The Petitioner granted a loan of ₹1,00,00,000/- to Premier Limited and Corporate Debtor under another Loan cum Pledge Agreement dated 05.10.2016 for a term of 1 month from the date of disbursement. The amount was disbursed to the Corporate Debtor on 06.10.2016 (Facility 3). 5. Under the Loan Agreement, the Corporate Debtor, pledged 53,01,000 shares held by it in the Premier Limited in favor of the Petitioner to secure the repayment of amounts disbursed under the Loan Agreements. 6. The tenure of the above said Facilities got expired and the amounts became due and payable on the following dates: Facility 1: 28.06.2018 Facility 2: 04.05.2018 Facility 3: 04.11.2016 7. Premier Limited made a payment of ₹2,00,00,000/- to the Petitioner through a cheque bearing No. 064101 dated 21.05.2020 towards monthly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viii. Copy of Sanction Letter dated 05.10.2016 ix. Copy of Loan cum Pledge Agreement dated 05.10.2016 x. Bank Account statements of the Petitioner showing debits in favor of the Corporate Debtor xi. Copies of the correspondences between the Petitioner and the Corporate Debtor xii. Copy of the cheque bearing No. 064101 dated 21.05.2020 of ₹ 2,00,00,000/- provided by the Corporate Debtor to the Petitioner xiii. Ledger Account of the Corporate Debtor in the books of the Petitioner for the period 2015 to 2020 Reply of the Corporate Debtor: 11. The Counsel for the Corporate Debtor submits that the present Petition has been filed by the Petitioner on the incorrect and illegal premise that the Doshi Holdings Private Limited is a corporate debtor and it is liable to pay the Petitioner an amount of ₹8,35,25,398/-. It is submitted that the purported financial debt claimed by the Petitioner is lawfully and contractually not existing and not payable by the Corporate Debtor to the Petitioner. 12. The Counsel for the Corporate Debtor submits that as evident form the Petition, the Petitioner has not disbursed any amounts to the Corporate Debtor. The Bank S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lationship existed only between Premier Limited and the Petitioner. A reading of the Loan Agreements reveal that only the party that has borrowed amounts was liable to repay the required amounts to the Petitioner. Therefore, in terms of the Agreements and understanding between the parties, the Corporate Debtor is not liable to pay any amounts that may be owed by the Premier Limited to the Petitioner. Findings: 16. The CIRP against the Premier Limited was passed vide order dated 29.01.2021, the said admission of the CIRP of Premier Limited was based under the loan agreement which was sanctioned to M/s. Premier Limited who had defaulted payment of ₹ 8.35 crores. An amount of the Petitioner had disbursed an amount of ₹ 6 crores as loan to M/s Premier Limited and the present Corporate Debtor as the co-borrower under three different loan cum pledged agreement with subsequent addendums. Under these loan agreements, the co-borrower has been the Corporate Debtor herein pledged ₹ 53.01 lacs shares of Corporate Debtor to the Petitioner to secure repayment of the amount disbursed. 17. The Counsel for the Corporate Debtor further stated that assuming that the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceed to pass the following Order:- ORDER The Appeal is allowed. Impugned Order passed by the Adjudicating Authority dated 4th March, 2020 is quashed and set aside. CP(IB)No. 466/7/HDB/2019 filed by the Appellant before Adjudicating Authority is restored to the file of the Adjudicating Authority. The Adjudicating Authority is directed to admit the Application CP(IB)No.466/7/HDB/2019 and pass further necessary Orders as per provisions of IBC. The Adjudicating Authority is requested to appoint the same IRP/RP as has been appointed in CP(IB)616/7/HDB/2018 in the CIRP proceeding against M/s. Athena Chattisgarh Power Ltd. (Principal Borrower). The IRP/RP will act in accordance with law keeping observations in this Judgment in view. No Orders as to costs. 20. The Hon ble NCLAT while dealing with an appeal filed the appellant bank against the CorporateGuarantor held that the appellant bank had filed a Section 7 application against the principal borrower which was admitted, and had also filed an application under Section 7 seeking imitation of the CIRP against the Corporate Guarantor the application was filed arising out of the same transaction and the same common ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... repayment of debt due to the Petitioner. Infact, it can be said that the Corporate Debtor has accepted the additional liability of being a Borrower and a Pledgor. 24. The tenure of Loan cum Pledge Agreement dated 04.05.2016 was extended by a period of 18 months up to 04.05.2018 through an addendum dated 06.10.2016. Under the Loan Agreement, the Corporate Debtor being the Co-borrower had pledged 53,01,000 shares of Corporate Debtor in favour of the Petitioner. In view of default of not servicing the loan/pledge Agreement by Premier Ltd. who is already under CIRP vide admission order dated 29.01.2021 and no recoveries were possible under the said pledge document, the debt and default are established and the ingredients of Section 7 of the Code are thus fulfilled. 25. The definition of Pledge under Section 172 of the Indian Contract Act, 1872 states that Pledge is a Bailment of goods for security for payment or performance of a promise. The principles of promise of payment are akin to the principles of contract of Surety under Section 126 of the Contract Act, 1872. The facts of the present case, the Corporate Debtor as borrower No.1 and Pledgor. The entire Loan cum Pledge Agreem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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