9911796707
TMI Blog2021 (11) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... e rejected. Whether this application will come in the purview of multiple proceeding with respect to the same debt? - HELD THAT:- The Corporate Debtor mentions that the Application cannot be maintained against M/s. Koyenco Autos Private Limited Private Limited, the Corporate Debtor/Co-borrower, for the same debt arising out of identical loan in IBA/25/KOB/2020, in the matter of M/s. Platino Classic Motors (India) Private Ltd. This Bench takes note of the contention and is of the view that the present application IBA/37/KOB/2020 has been filed by M/s. BMW India Financial Services Private Limited is only against Corporate Debtor herein i.e., Koyenco Autos Private Limited and not against M/s. Platino Classic Motors (India) Private Ltd. - Since this application has been filed by the Financial Creditor against the Co-borrower, M/s. Koyenco Autos Private Limited and not against M/s. Platino Classic Motors (India) Private Limited, there is no bar in admitting the present application against the Corporate Debtor. Whether there is a Creditor-Debtor relationship between the Financial Creditor and Corporate Debtor herein? - HELD THAT:- From the records filed by both the parties we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nancial Creditor) on 16.10.2020 by invoking the provisions of Section 7(4) of the Insolvency and Bankruptcy Code (hereinafter called as Code) against Koyenco Autos Private Limited, 53 C, Koyenco House West Hill P.O., Kozhikode, Kerala 673 005. (hereinafter called as 'Corporate Debtor') stating that the total amount of admitted default from time to time, including interest, under three financial facilities as on the latest date of default being 29.02.2020 is ₹ 24,20,59,951.14/- (Rupees Twenty-Four Crores Twenty Lakhs Fifty-Nine Thousand Nine Hundred Fifty-One and Fourteen Paise Only), out of which ₹ 19,86,17,729.02/- (Rupees Nineteen Crores Eighty-Six Lakhs Seventeen Thousand Seven Hundred Twenty-Nine and Two Paise Only) is towards outstanding principal under the various financial facilities and ₹ 4,34,42,222.12/- (Rupees Four Crores Thirty-Four Lakhs Forty-Two Thousand Two Hundred Twenty-Two and Twelve Paise Only) towards interest. 2. The Corporate Debtor is a private limited company incorporated on 20.02.2003. The Authorised Share Capital of the Corporate Debtor Company is ₹ 5,00,00,000 (Rupees Five Crores) and the Paid-up Share Capital is ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 13(2) of the SARFAESI Act, 2002 on 29.11.2019. The Corporate Debtor continued to be default as it failed to pay the admitted outstanding amount and at the request made by Corporate Debtor on 24.01.2020, the Financial Creditor vide letter dated 13.03.2020 shared the update and revised amount of default as of 29.02.2020, being ₹ 24,20,59,951.14/- (Rupees Twenty Four Crores Twenty Lakhs Fifty Nine Thousand Nine Hundred Fifty One and Fourteen Paise Only), which still continues to be default as the Corporate Debtor has failed to make the payment, in spite of agreeing to do so in terms of the Settlement Agreement. 7. It is stated that the Platino Classic Motors India Private Limited ( Platino ) being an erstwhile dealer of BMW India Private Limited ( BMW ), until 31 December, 2018, was engaged in the sale, distribution and maintenance of BMW vehicles and BMW parts, within the State of Kerala. For the purposes of smooth functioning and operation of its (then existing) dealership, Platino had approached the Financial Creditor for various financial facilities from time to time. 8. It is stated that during the financial year 2017-2018, when Platino was finding it difficult to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ility was also secured by, inter alia, the personal guarantees furnished by Mr. P.P. Ashique and Ms. Shamina Ashique. In relation to such personal guarantees, the Financial Creditor reserves its rights to initiate appropriate proceedings. That the Floorplan Facility was also secured by way of Demand Promissory Note issued by Platino for an amount of ₹ 11,00,00,000 (Rupees Eleven Crore) and Deed of Hypothecation dated 15.10.2016. The Financial Creditor had received an amount of ₹ 2,75,673 (Rupees Two Lakhs Seventy-Five Thousand Six Hundred and Seventy-Three Only) from the Platino on 01.12.2018. However, no clarification was provided by Platino to the Financial Creditor as to against which of the Financing Facilities the aforesaid payment was made. In absence of any such clarification, the Financial Creditor had adjusted the same against the outstanding under the Floorplan Financing Facility. After such adjustment, the total amount payable by the Corporate Debtor towards outstanding principal under the Floorplan Financing Facility as on 29.02.2020 is ₹ 1,46,46,494.41 (Rupees One Crore Forty-Six Lakhs Forty-Six Thousand Four Hundred Ninety-Four and Forty-One Paise On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p.a. for a term of 10 years. The Term Loan Facility is secured by the personal guarantees furnished by Mr. Shamina Ashique and Mr. P.P. Ashique. In relation to such personal guarantees, the Financial Creditor reserves its rights to initiate appropriate proceedings. Further promissory note and Deed of Hypothecation was also provided to secure the said facility The total outstanding under the Term Loan Facility as on 29 February, 2020 is ₹ 11,89,74,030.81 (Rupees Eleven Crores Eighty-Nine Lakhs Seventy-Four Thousand and Thirty and Eighty-One Paise Only) towards principal and ₹ 1,61,92,168.18 (Rupees One Crores Sixty-One Lakh Ninety-Two Thousand One Hundred and Sixty-Eight and Eighteen Paise Only) towards outstanding interest, thereby, as on 29 February, 2020 totalling to ₹ 13,51,66,198.99 (Rupees Thirteen Crores Fifty-One Lakhs Sixty-Six Thousand One Hundred and Ninety-Eight and Ninety-Nine Paise Only) d). Spare Part Financing Agreement: It is submitted that there is no default amount outstanding under this facility qua to the Corporate Debtor, as it paid the entire outstanding amount on 16.10.2018, however, only for the sake of completeness in relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ff which were purportedly in relation to its business with BMW India Private Limited, and not the Financial Creditor. 13. It is further stated that, in order to minimize its total outstanding exposure towards the Financial Creditor, the Platino for itself and the Corporate Debtor wrote a letter dated 02.05.2019 for handing over of the hypothecated vehicles which were lying in its possession. It was accordingly requested by them to Financial Creditor to adjust the net realized value from hypothecated vehicles against the total outstanding. Subsequently, Mr. PP Ashique for Platino and the Corporate Debtor sent an email dated 11.06.2019 whereby he requested for revised outstanding and dues from the Corporate Debtor and Platino payable to the Financial Creditor. Vide email dated 21.06.2019, it was jointly communicated by BMW India and the Financial Creditor to Platino and the Corporate Debtor that its dues and outstanding towards the Financial Creditor stood at ₹ 25,18,33,300/- (as of 31.05.2019). 14. It is stated that in relation to the above exchanges, a meeting was convened amongst the representatives of Platino, Corporate Debtor, BMW India and the Financial Creditor on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 38 OF 2017). AU Small Finance Bank Ltd. Vs. Prabhu Shanti Real Estate (P) Ltd. ((IB)-477 (PB)/2017). Submission by the Corporate Debtor 18. The Corporate Debtor stated that the application filed by the Financial Creditor is not maintainable and also barred by limitation. It is stated that in the year 2007, a Dealership Agreement was stated to have been entered into between M/s. Platino Classic Motors (India) Pvt. Ltd.( Platino ) and BMW India Private Limited ( BMW ) which was extended periodically till the end of the year 2018. The dealership commenced without any term loans. Platino was the exclusive dealer of BMW in Kerala and had made record sales of BMW cars. Owing to this stellar performance of Platino, BMW wheedled and coaxed Platino into expanding the dealership in the State or Kerala. Pursuant to the above, several meetings were held between the Managing Director of Platino, representatives of BMW and the Financial Creditor, wherein the Financial Creditor constantly exercised undue pressure on Platino by forcing it to expand its operations. However, when Platino refused to take up such a huge investment, the Financial Creditor, particularly the then Presi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew of the provisions of Section 60 of the IB Code on account of the fact that, insolvency proceedings have already been initiated against the alleged principal debtor being, Platino Classic Motors (India) Private Limited. The Financial Creditor having made a claim for amount claimed herein before the Resolution Professional of Platino Classic Motors (India) Private Limited by filing Form-C, the claim made hereunder, vide a separate application is not sustainable in law or in equity. To the best of the understanding of the Corporate Debtor herein, the Claim filed by the Financial Creditor has not been admitted. In the event, the claim of the Financial Creditor is dismissed, the claim of the Financial Creditor will also be rendered void and unsustainable. Therefore, in view of Section 60(2) and Section 60(3) above, it is imperative that both matters are heard together as both matters pertain to the same set of claims, and an independent application is not maintainable in law. 20. It is also stated that the nature of dispute between the Financial Creditor and Corporate Debtor herein is a mixed question of fact and law, which can be decided only by appreciation of evidence let in d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding on the Parties. The aforementioned arbitration clause, Section 8 of the Arbitration Act in clear terms mandates that the judicial authority before which an action is brought in a matter which is subject of an arbitration agreement ought to refer such parties to arbitration. The reliefs sought by the Financial Creditor directly arises out of the Addendum Agreement dated 17.05.2017 and further agreements as to payment obligations in relation to the same. In any view of the matter, in the facts of the present case, where several parties are involved, and all-pervasive adjudication is required to be done, in the arbitration proceedings the present application under Section 7 apart from being not maintainable is premature unjust, unreasonable and prejudicial. The dispute arising in this case is not only as between the Financial Creditor and the Respondent herein, but also essentially and intricately involves Platino and BMW India Ltd. When such disputes involving third parties are pending Insolvency Proceedings initiated against another for adjudication of such dispute at a Forum where all concerned have a say is against the very scheme of Insolvency. 22. It is also stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t there has been default in terms of the agreement. The addendum agreement dated 17.05.2017 shows that the Corporate Debtor was added as a co-borrower to the Floor Plan Facility Agreement dated 06.09.2010, Working Capital Agreement dated 13.12.2010 and Spare Parts Facility Agreement dated 14.01.2015. As could be seen from the documents that, the Corporate Debtor was added as a co-borrower for the Floor plan agreement dated 06.09.2010, working capital agreement dated 13.12.2010 and spare parts facility agreement dated 14.01.2015. 24. It is also stated that the Floor Plan Financing Agreement dated 06.09.2010 produced by the Financial Creditor was superseded by the Floor Plan Financing Agreement dated 01.02.2011 produced by the Financial Creditor, wherein there is an over-riding provision which states that This Financing Agreement and any other documents attached hereto or referred to herein, integrate all the terms and conditions mentioned herein or incidental hereto and supersedes all oral negotiations and prior writings in respect of the subject matter hereof, except for those provisions of the sanction letter, issued prior or post to the execution of this Financing Agreement w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Debtor has not been added as a co-borrower in the Working Capital Agreement dated 30.11.2011. Hence the Corporate Debtor is not bound by any of the documents executed by Platino with regard to the Working Capital Agreement dated 30.11.2011 dated or any documents or Capital amendments pursuant thereto. 26. It is further stated that without prejudice to the contention that the Corporate Debtor is not a party to the Working Capital Agreement dated 30.11.2011, the Working Capital Agreement dated 13.12.2010 is an existence alter execution of the Floor Plan Financing Agreement dated 30.11.2011, by virtue of the Addendum Agreement dated 17.05.2017, the Corporate Debtor cannot be considered as a Financial Creditor of the Financial Creditor for the Working Capital Agreement dated 13.12.2010, with effect from original dates mentioned in those agreements, but only from 17.05.2017. No amount has been disbursed by the Financial Creditor to Platino Classic Motors India Pvt. Ltd. or this respondent after 17.05.2017 under the working capital demand credit facility agreement so as to fasten any legal liability on this Corporate Debtor. Hence the Corporate Debtor cannot by any stretch of imagi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8, purports to creates a charge on the immovable property scheduled in the agreement and hence is compulsorily registrable. In the absence of registration, the document cannot be relied on or admissible in evidence. The Memorandum of Entry dated 06.06.2017 and Amendment to the Memorandum of Entry dated 06.06.2017 executed on 23.07.2018 produced along with Annexure IV purports to constitute the important terms of the transaction and in the absence of registration as required by law, the said agreement and its terms cannot be admitted in evidence to prove the transaction. 29. It is further stated that the Deed of Settlement dated 04.09.2019 produced by the Financial Creditor is inadmissible in evidence. Clause No. 11 of the Deed of Settlement states that In the event, Platino Group fails to pay the entire full and final settlement amount within the period specified in clause 6 above, this Deed of Settlement shall be rendered null and void. The Financial Creditor ought not to have produced a document which is null and void before this Tribunal. The Corporate Debtor cannot be fastened with any liability on the basis of a document which is null and void. It is also stated that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been sanctioned to the Corporate Debtor as stated in the application under the Floor Plan Financing Facility dated 06.09.2010 and Working Capital Agreement dated 13.12.2010. The Financial Creditor has only sanctioned an amount of ₹ 13,00,000/- under the Term Loan Agreement dated 17.05.2017. There was no correspondence between the Financial Creditor and the Corporate Debtor on 18.01.2019. The allegation that the Corporate Debtor wrote letters dated 02.05.2019 and 11.06.2019 is false. It is further stated that the Financial Creditor is falsely attributing letters and correspondences issued by the Financial Creditor as that issued to the Corporate Debtor. The Corporate Debtor denies all such correspondences referred by the Financial Creditor in this application as being done jointly by a different entity by the name Platino Classic Motors India Pvt. Ltd. for and on behalf of the Corporate Debtor. The respondent is a legal entity and only those correspondences issued by the Corporate Debtor could be attributed to the Corporate Debtor and correspondence made by Platino cannot be attributed as that of the Corporate Debtor. 32. The Corporate Debtor further stated that there i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ights, interests and liabilities of Borrower to the Agreement referred to above. Co-borrower undertake to comply with all the terms and conditions specified in the Agreement along with the Schedules and related documents executed along with the Agreement and to be bound by the terms and conditions of this addendum. ii. Co-Borrower hereby agree that all rights and obligations of borrower under the Agreement shall also vest with himself along with Borrower and be shared jointly by both. iii. With effect from the date as specified in clause 1 above, Co-borrower shall be treated as if it had originally been a party to the Agreement and all references in the Agreement and documents executed along with the Agreement, in any capacity shall be read and construed as if they were references to the Co-borrower. iv. Borrower and Co-borrower agree to release, indemnify and keep indemnified from and against any liability incurred as a result of any action, demand, claim or proceeding against BMW Financial Services at any time by any party under or in respect of the Agreement relating to any act or omission of the Borrower and Co-borrower at any time (including prior to the Date of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of account and its indebtedness, and the present frivolous objection on statement of account has only been made now as an afterthought and to wriggle out of its liability. 36. The defaults under the loan accounts are continuing defaults, and therefore, the objection of limitation would not be of any avail more so when the loan was recalled only in the year 2019 and the admission of such defaults was reduced in writing vide the Deed of Settlement dated 04.09.2019. As such, the question of limitation would not arise. 37. It is stated that the MOE with respect to equitable mortgage are not required under law to be registered, however, the present Insolvency Application has been filed to determine the default of Corporate Debtor with respect to the loan facilities. Hence, the Corporate Debtor cannot deny the default. The objection on the Deed of Settlement is only on account of Corporate Debtor's own non-compliance. The Corporate Debtor states that Clause 11 of the Deed provides that if the payment of dues is not made by the Corporate Debtor in terms of Clause 6, the Deed of Settlement shall be rendered null and void. It is stated that such a statement can only be an oversigh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assigned or transferred to. This means that the Financial Creditor should be a person to whom a financial debt is owed. The expression financial debt has been defined in Section 5(8). Amongst other categories specified therein, it could be a debt along with interest, which is disbursed against the consideration for the time value of money and would include the amount of any liability in respect of any of the guarantee or indemnity for any of the items referred to in sub-clauses (a) to (h) of the same clause. Indubitably, a right or cause of action would ensure to the lender (financial creditor) to proceed against the principal borrower, as well as the co-borrower in equal measure in case they commit default in repayment of the amount of debt. As a consequence of such default, the status of the co-borrower metamorphoses into a debtor or a corporate debtor, if it happens to be a corporate person, within the meaning of Section 3(8) of the Code. For, as aforesaid, expression default has also been defined in Section 3(12) of the Code to mean non-payment of debt when whole or any part or instalment of the amount of debt has become due or payable and is not paid by the debtor or the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the financial creditor has not only the right to recover the outstanding dues by filing a suit but also has a right to initiate resolution process against the corporate person (being a corporate debtor) whose liability is coextensive with that of the principal borrower and more so when it activates from the written acknowledge of liability and failure of both to discharge that liability and that a fresh period of limitation is required to be computed from the date of acknowledgment of debt by the principal borrower from time to time. 40. On perusal of the documents, it is seen that the defaults under the loan accounts are continuing defaults, and therefore, the objection of limitation would not be of any avail more so when the loan was recalled only in the year 2019 and the admission of such defaults was reduced in writing vide the Deed of settlement dated 04.09.2019. Suffice it to conclude that there is no substance even in the second ground urged by the Corporate Debtor regarding the maintainability of the application filed by the Financial Creditor under Section 7 of the Code on the ground of being barred by limitation. Hence, the contentions regarding maintainability/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Fifty-One Only), out of which ₹ 19,88,93,402.02/- (Rupees Nineteen Crores Eighty-Eight Lakhs, Ninety-Three Thousand Four Hundred Two and Two Paise Only) is towards outstanding principal under various facilities and ₹ 4,31,66,549.12 (Rupees Four Crores Thirty-One Lakhs Sixty-Six Thousand Five Hundred Forty-Nine and Twelve Paise Only) towards outstanding interest which is recoverable from the Corporate Debtor viz., M/s. Koyenco Autos Private Limited is a fit case for admission and initiation of CIRP against the Corporate Debtor. The documents produced on record prove the disbursement of various loan facilities granted by the Financial Creditor to the Corporate Debtor. 44. The Corporate Debtor committed default in repayment of the loan amount to the Financial Creditor, and hence its Loan Account was declared as NPA. In the light of above facts and circumstances, the existence of debt and default is reasonably established by the Financial Creditor as a major constituent for admission of an application under Section 7(4) of the I B Code. 45. The Application under Sub-Section (4) of Section 7 of I B Code, 2016 is complete in all respects. Accordingly, the application fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per the provisions of the Code. vii. That the Interim Resolution Professional shall perform the duties as assigned under Section 15 and Section 18 of the Code and inform the progress of the C.I.R.P. and the compliance of the directions of this Order within 30 days to this Bench. Liberty is granted to intimate even at an early date, if need be. viii. The commencement of the Corporate Insolvency Resolution Process shall be effective from the date of the Order of Admission. ix. During the CIRP period, the management of the Corporate Debtor shall vest in the IRP/RP in terms of Section 17 of the IBC. The Directors/Officers and Managers of the Corporate Debtor shall provide all documents in their possession and furnish every information in their knowledge to the IRP within a period of one week from the date of receipt of this Order, in default coercive steps will follow. x. The Registry is directed to communicate this order to the Financial Creditor, the Corporate Debtor and the IRP by Speed Post and email within two days from the date of this Order. xi. A copy of this Order be also sent to the Registrar of Companies, Kerala, for updating the Master Data of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
