9911796707
TMI Blog2018 (8) TMI 2066X X X X Extracts X X X X X X X X Extracts X X X X ..... of different IRP s to each group company separately is perfectly legal and perhaps it s the only way the procedure has to be worked out. Therefore, we are completely in tune with the explanation given by the Ld. Senior Counsel appearing on behalf of the Petitioner and we hereby hold that appointment of different IRP s to each company differently is not hit by any provisions of the Code and hence is perfectly maintainable. The Doctrine of Estoppel is clearly applicable and tilts the entire case in favour of the Petitioner. Apart from that it can be noticed from the documentation that term obligor and co-obligor is used for the entities which means, in so far as the loan agreement, there is no distinction between an obligor and a co-obligor as far as the liability is concerned and legally all of them must be considered as Debtors for the purpose of this Code - the arrangement and the manner in which the documentation was done for the purpose of advancing loans is perfectly legal and the Corporate Debtor herein is liable to pay the debt and is bound by the proceedings as projected in Form 1 and since there is a default in the repayment of the same, the application is hereb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 100 50 150 SBP 100 60 160 Total 1700 950 2650 3. The Petitioner further submits that on 08.08.2012, a Rupee Term Loan agreement ( RTL ) was entered between consortium banks including SBI, Videocon Industries Limited and its 12 group companies including the Corporate Debtor herein, wherein Videocon Industries Limited (VIL) is termed as Obligor Agent whereas the other 12 companies including the Corporate Debtor herein are termed individually as Co-Obligor and collectively as Obligors . In the preamble to the said agreement all the entities are mentioned as obligors and the said document has been signed by all the entities separately under the name of each entity and the Obligor agent is represented by one Mr. V.N. Dhoot and the Authorised Representatives concerned for each Unit. The following table discloses the Rupee Term Loan sanctioned and the disbursal to Videocon Industries Limited and its 12 group companies: Facility Sanctioned Amount (i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he co-obligors including the Corporate Debtor herein; Facility Total Overdue as on December 31, 2017 (In INR Crores) Initial Date of Default Days of Default till December 31, 2017 Principal Interest Penal Interest Total Defaulted Debt SBI RTL facility 51.80 260.46 3.03 315.29 31.01.2017 334 SBBJ RTL facility 2.50 13.85 0.16 16.51 31.01.2017 334 SBH RTL facility 7.50 40.99 0.46 48.95 31.01.2017 334 SBM RTL facility 6.25 31.62 0:35 38.22 31.01.2017 334 SBP RTL facility 1.14 5.83 0.06 7.03 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eby assumed all obligations of the obligors under the Rupee Facility Agreement towards the lenders which includes SBI and its associate banks (i.e. SBM, SBBJ and SBP). 11. As stated supra, apart from the aforesaid loan facility, this Corporate Debtor stood as a co-obligor towards other loans granted to its associated company, however, this case is limited only to the claim made by the Petitioner against the Corporate Debtor in the Rupee Term Loan Agreement dated 08.08.2012. 12. It is to be noted that, the associate banks of SBI have already merged with SBI and the latter has made this claim aggregating the amounts payable not only to SBI but also to other erstwhile Banks namely SBB J, SBM and SBP. As details of the sanctioned limits, disbursed amounts and dates of disbursements and amounts outstanding (principal + interest) as on 31.12.2017 have been disclosed in the table mentioned above, for the sake of avoiding repetition, it has not been mentioned again. 13. The argument on behalf of the Financial Creditor is that the present petition is filed u/s 7 of the Insolvency and Bankruptcy Code, 2016 against the Respondent who is a co-obligor under the Rupee Term Loan agreemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... io the Corporate Debtor represented by Ld. Counsel Mr, Zal Andhyarujina had advanced the following points: i. The Petitioner SBI has not factually disbursed any amount to the Respondent against the consideration of time value of money and hence the same cannot be called as financial debt and in turn SBI cannot be called as Financial Creditor, ii. The Respondent, Obligor/Co-obligor Companies can neither be called as Guarantor nor Indemnifier under the relevant provisions of Contract Act hence there is no specific carve out in Insolvency and Bankruptcy Code 2016 to separately initiate CIRP against Obligor/Co-obligor but it has to be included in CIRP already initiated against VIL in CP(IB) No.2/2018; iii. Separate and independent resolution plan/s cannot be made separately by different IRP/RP against each of the Co-Obligor Company for the same set of secured assets pursuant to Sec.18(f) of Insolvency and Bankruptcy Code, 2016 and due to consolidated balance sheet, the very same assets are already in control and custody of RP appointed for CIRP against Videocon Industries Ltd in CP(IB) No.2/2018; iv. Pursuant to initiation of CIRP against VIL and the same set Of assets are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CLA 321] which states, at Paragraph 29 that: For coming within the definition of Financial Debt as defined under sub-section (8) of Section 5, the Claimant is required to show that (i) there is a debt alongwith interest, if any, which has been disbursed and (ii) such disbursement has been made against the consideration for the time value of money.... TO show that there is a debt due which was disbursed against the consideration for the time value of money , it is not necessary to show that an amount has been disbursed to the Corporate Debtor . A person can show that the disbursement has been made against the consideration for the time value of money through any instrument. f. The debt and default of VIL are established: Debt as defined under section 3(11) of the Code means a liability or obligation in respect of a claim which is due from any person and includes a financial debt and an operational debt. Further, definition of financial debt under section 5(8) of the Code is illustrative, and hence should be treated with a wide import: financial debt means a debt alongwith interest, if any, which is disbursed against the consideration for the tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, sent to all co-obligors. (Annexed as Exhibit 18, page 691, Vol. IV of the Application); (xi) Letter giving Balance Confirmation Details of VIL as on June 30, 2017 (Annexed as Exhibit 15, page 658, Vol. IV of the Application). h. Different Interim Resolution professionals for specified companies: (i) It is submitted by the Ld. Counsel for the Corporate Debtor that the CIRP for each of the Specified Companies of the Videocon Group under the supervision of different interim resolution professionals would lead to complications as the CIRP will be carried out under the supervision of different resolution professionals and the committees of creditors. (ii) It was submitted by the Ld. Senior Counsel for the Petitioner that for the 12 applications filed by the Petitioner against the co-obligors under the RTL Agreement, 4 different IRPs have been proposed in order to satisfy the requirement under Item 22 of the Code of Conduct for Insolvency Professionals, provided under the First Schedule of the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016: Occupation, employability and restrictions. 22. An insolvency professional must ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs for advancing loan facilities in their group companies. The fact remains that all the group companies represented by their Authorised Representative had approached the banks and signed the documents together projecting themselves as one entity. Here an example has to be given wherein five persons put together approach a lender for a loan facility treating them as one unit and the lender consents for advancing/ disbursing the money as per the request of the parties concerned or to whomsoever suggested by the entire group together, then, in the event of default, the lender shall have to treat all the five members as one unit and can proceed against them singly or jointly as per law. The same situation is seen in the present case as the banks were approached by the Videocon group companies as one Unit (jointly), consisting of different entities. So, it cannot be said that there is no disbursement of loan to the Corporate Debtor in the present petition. Therefore, we hold that the obligor and co-obligors to the debt are a single unit and disbursement to one obligor amounts to disbursement to all of them put together and hence the Videocon group companies are jointly and severally li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er must be considered as one single entity and are termed as Obligors collectively as per the Rupee Term Loan Agreement dated 08.08.2012. Apart from that, the contention that it cannot be called as a guarantee nor an indemnity, is also not appreciated. When we look at the facts, all the group companies together executed the documents which practically implies that each party is a guarantor to the other or each party would indemnify the other in case of default, for the reason that they are the different organs of the same body i.e. the Videocon group. There is a guarantee/ indemnity by legal fiction and law estops the other party or parties in the same group from repudiating the liability cast on them. The Doctrine of Estoppel is clearly applicable and tilts the entire case in favour of the Petitioner. Apart from that it can be noticed from the documentation that term obligor and co-obligor is used for the entities which means, in so far as the loan agreement, there is no distinction between an obligor and a co-obligor as far as the liability is concerned and legally all of them must be considered as Debtors for the purpose of this Code. Therefore, we hold that the arrangem ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
