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TMI Blog2020 (6) TMI 793X X X X Extracts X X X X X X X X Extracts X X X X ..... rik Banerjee, Advocate For, Oriental Bank of Commerce Mr. Shakeel Mohammed Akhter, Advocates For Corporate Debtor. ORDER Per Shri Jinan K.R., Hon'ble Member (J) 1. M/s. Ascot Realty Private Limited, filed this unnumbered application, in the CP(IB) No. 1671/KB/2019, wherein the M/s. RDH Technologies Private Limited/the corporate debtor was ordered to be admitted for initiating the Corporate Insolvency Resolution Process (in short, CIRP) vide order dated 28/08/2019 in an application filed by the Oriental Bank of Commerce. Mr. Ajay Kumar Agarwal who was appointed as the Resolution Professional (in short, RP) continued the CIRP after the formation of Committee of Creditors (CoC). 2. The applicant herein on the strength of an arbitral award submitted its claim to the RP. Although, its claim was firstly rejected by the RP, its claim was later admitted by him as a secured Financial Creditor and was allowed to attend the 3rd CoC meeting onwards held on 04/02/2020. 3. In the meanwhile the applicant learned that the claim of Oriental Bank of Commerce and IndiaBulls Housing Finance Limited(R-3) to the extent of the amount admitted towards Corporate Guarantee given by the Corporate D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Respondent No. 1 from allowing the respondent No. 3 and Oriental Bank of Commerce, to the extent of corporate guarantee furnished by the corporate debtor for third party debts, to hold and represent themselves to be the Financial Creditors of the Corporate Debtor herein and from participating in any proceedings relating to the Committee of Creditors; 6. Ad-interim orders in terms of prayers above; 7. Pass such other and/or further order/orders as this Hon'ble Tribunal may deem fit and proper. 4. Notices have been served upon the respondents through e-mail. The urgency set out in the application being found satisfactory the case was listed for hearing on today through video conference (VC). The applicant, the financial creditor, Corporate debtor, as well as respondents No.1, the Resolution Professional, R-3, and R-4, appears in person as well as through their respective counsel. R3 has filed brief written submissions of defence and none others filed any written submissions even if directed to submit brief written defence. 5. Heard both sides. Perused the records. 6. The Ld.Counsel Mr. Mainak Bose, for the applicant submits that inclusion of the claims of R3 and that part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and for the said reason why the claim of R-3, Indian Bulls was admitted as financial creditor. According to him in the case of Anuj Jain IRP for JP Infratech Limited -vs- Axis Bank Limited the CD was not a borrower. But here the CD in respect of loan availed by the CD is a co-borrower and thus the said CD is the Principal Borrower of R-3 and has created the mortgage to secure the said loan and hence, the debt herein is a financial debt within the meaning of Section 5(8) of the I & B Code and is very much entitled to be a member of the CoC. So, the said judgement of Hon'ble Supreme Court is not applicable to the facts and circumstances to R-3 and OBC. He reiterated. 10. Ld. Counsel Mr. Arik Banerjee for the OBC submits that the application is not maintainable as against the Oriental Bank of Commerce as it has been merged with Punjab National Bank w.e.f. 01/04/2020. So according to him the application in present form is not maintainable without the name of the bank to be changed as Punjab National Bank. One other submission regarding maintainability is that the applicant I.e Ascot Realty Pvt. Ltd. is a related party of the CD and as per an arbitration award awarded in favour of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 2,50,37,300/- taken from R-3, sanctioned on 31/03/2016 and the CD executed Term Loan Agreement dt. 31/03/2016. A co-borrower is not at all a guarantor. R-3's claim has been rightly admitted in the claim as financial debt and allowed to participate in CoC meetings as a member of CoC. As the CD is a co-borrower to R-3, the Hon'ble Supreme Court's judgement is not applicable to the present case. According to him its claim falls under the definition of financial debt u/s. 5(8) of the Code. The term Loan agreement has been provided to RP and it is on the strength of it the RP admitted its claim and therefore inclusion of R3 as a member to the CoC is perfectly legal and proper. Argued by him. 13. Ld. Counsel Mr. Shakeel Mohammed Akhter, for the directors of the suspended board of CD supporting the contentions on the side of the applicant submits that invocation of Corporate Guarantee is not factually correct. According to him Rs. 7.54 crores and odd is for default in payment of term loan and Rs. 19.04 Crores and odd relates to corporate guarantee in respect of 5 companies was not at all invoked when the application was filed by the OBC. He disputed the authenticity of the letter sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e mortgage on the entire fixed assets by simply depositing title deeds of the Company together with the High Tech building proposed to be constructed therein at Plot No. F1, Block GP Electronics Complex, Sector V, Salt Lake City, Kolkata 700091 with an area of 0.34 acres of leasehold land in favour of the Financial Creditor Bank. The Corporate Debtor also executed an agreement of Term Loan. The OBC/Financial Creditor in its application has submitted that the amount of Rs. 7,54,68,438/- (Rupees Seven Crore Fifty Four Lacs Sixty Eight Thousand Four Hundred Thirty Eight Only) was due as on 30th September, 2018 and the account of the Corporate Debtor had been classified as a Non Performing Asset as on 15th December, 2012 when the amount of Rs. 5,31,14,402/- was due. The Financial Creditor has further submitted that the Corporate Debtor had stood guarantee for M/s. Bahubali Commercial Pvt. Ltd. a sum of Rs. 3,03,17,328/- inclusive of interest till 27.03.2014, (2) M/s. Safal Dealers Pvt. Ltd. a sum of Rs. 3,84,05,667.60 P. inclusive of interest till 27.03.2014, (3) M/s. Gandhyanya Properties Pvt. Ltd. a sum of Rs. 94,26,284.23p. inclusive of interest till 30.04.2012, (4) M/s. Purushotam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he debts in question were in the form of third party security that were given by the corporate debtor Jaypee Infratech Limited so as to secure the loans/advances/facilities obtained by Jaiprakash Associates Limited from the respondent-lenders. The Supreme Court had held that such a 'debt' is not and cannot be a 'financial debt' within the meaning of Section 5(8) of the Code. 19. In the present case the debt due to the OBC appears to me falls under the definition of financial debt and the lender is therefore a financial creditor. Because the lender/OBC had invoked the corporate guarantee even before the CIRP (i.e. on 26.09.2018). The concepts of financial debt as discussed in the above cited judgment is different from the debt claimed by the OBC in the case in hand. In this regards it appears to me that once a guarantee is invoked against the Guarantor, the Guarantor steps into the shoes of the principal borrower, the debt that originally is a "financial debt" under section 5(8) towards the principal borrower becomes a "financial debt" towards the guarantor and the same could be enforced as if it were being enforced against the principal borrower. The above said view also seems to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... debt, which is disbursed against the consideration for the time value of money, in our view, remains an essential part even in respect of any of the transactions/dealings stated in sub-clauses (a) to (i) of Section 5(8), even if it is not necessarily stated therein..." In view of the foregoing discussion and the proposition of law, I am of the view that inclusion of the entire claim of the financial creditor/ Oriental Bank of Commerce, by the RP is not illegal, as their claims falls under the definition of the financial debt 5(8) (i) and not contrary to the proposition laid down by the Hon'ble Supreme Court of India in the case of Anuj Jain. 20. The next question is whether the inclusion of the entire claim of the financial creditor/ IndiaBulls Housing Finance Ltd./R3 by the RP is illegal, and contrary to the proposition laid down by the Hon'ble Supreme Court of India in the case of Anuj Jain as alleged?. From the written submissions on the side of the R3 it is understood that the Corporate Debtor, along with other borrowers has availed a Loan for a sum of Rs. 2,50,37,300/-and R-3 sanctioned the loan facility of the aforesaid amount and a Loan agreement dated 31.03.2016 was exec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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