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TMI Blog2022 (3) TMI 1111X X X X Extracts X X X X X X X X Extracts X X X X ..... as defined in the Loan Agreement in Article 8 and further Ninex Developers Pvt. Ltd. and Red Topaz Real Estate Pvt. Ltd. who are co-borrowers in the said Loan Agreement dated 27.04.2016 are already under CIRP due to their inability to repay the loan amounts. Furthermore, statutory demand notice under Section 25 of the Payment and Settlement Systems Act, 2007 r/w Negotiable Instruments Act, 1881 dated 19.03.2019 and legal notice dated 2.06.2019 issued on behalf of the Financial Creditor to the Corporate Debtor also establish the Event of Default. This default has first taken place on 15.09.2019 and hence, the section 7 application is under limitation. The Agreement to Sell is done with the purpose of repayment of Loan Facility and can hardly be called a collusive action by the Financial Creditor alongwith Pardos Realtors Pvt. Ltd. against the Corporate Debtor - It has also asked for return of the refundable security deposit of ₹ 10,88,73,790/- together with interest at the rate of 30% per annum compound monthly as stated in Paragraph 4 of termination letter. Be that as it may, the termination of the agreement to sell has no bar on the adjudication of section 7 application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bhushan ] Chairperson And [ Dr. Alok Srivastava ] Member ( Technical ) For the Appellant : Mr. Manish Paliwal, Mr. Vikas Kumar, Mr. Nikhil Sharma, Advocates For Respondent: Mr. Vipul Ganda, Mr. Guresha Bhamra, Mr. Sumit Chander, Advocates for R1. Mr. Shashwat Anand, Mr. Shashwar Parihar, Mr. Veenu Drall, Mr. Dhruva Vig, Mr. Adya Singh, Advocates for R2. JUDGMENT [ Per. Dr. Alok Srivastava, Member (Technical) ] This Appeal is preferred by the Appellants who are aggrieved by the order dated 11.03.2021 (hereafter called impugned order ) of the Adjudicating Authority (National Company Law Tribunal, New Delhi) in CP (IB) No. 2115(ND)/2019 filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (in short IBC ). 2. The Appellant is aggrieved by the fact that despite there being no default and incorrect averments of the Appellant, Section 7 application submitted by the Respondent No. 1 was admitted vide the Impugned Order 3. The Appellants have stated in the appeal that they are ex-directors of the Corporate Debtor-M/s Abloom Infotech Pvt. Ltd., which is an associate company of Ninex Group of Companies. The four companies in Ninex Group entered into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... personal guarantor (Appellant No. 2) under section 95 of the IBC and despite a stay order dated 12.10.2020 in a writ petition filed by the Appellant in Delhi High Court the Adjudicating Authority went ahead and admitted the section 7 application. During consideration of section 7 application the Resolution Professional (in short RP ) of Ninex Group filed an impleadment application as it is a co-borrower with the Corporate Debtor but this application for impleadment was rejected by the Adjudicating Authority. 6. The questions that have been raised by the Appellants in this appeal are:- (i) Whether any amount was due and payable by the Corporate Debtor Abloom Infotech Pvt. Ltd./Corporate Debtor to the Financial Creditor (Respondent No. 1); (ii) Whether the financial creditor can invoke multiple remedies by filing claims of the same amount in some other Corporate Insolvency Resolution Processes (in short CIRP ) going on against other companies of the Ninex Group; and (iii) Whether the claim of Respondent No. 1 which is being considered in the CIRP of the Corporate Debtor/Abloom Infotech Pvt. Ltd. does not preclude him from filing an application for initiating CIRP agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same alleged financial debt prior to admission of proceedings under Section 7 of IBC in this case and therefore, the present proceedings are not maintainable. Respondent No. 1 has filed claim for the same amount in the CIRP of Ninex Developers Ltd. (refer Pg. 16 of Rejoinder of the Appellant) and also filed claim regarding the same amount in the CIRP of Red Topaz Real Estate Pvt. Ltd. (refer Pg. 31 of Rejoinder of Appellant). It has also invoked proceedings against property located at Baddi (Himachal Pradesh) worth more than 18 Crores under the SARFAESI Act, 2002. Also, Respondent No. 1 has also filed personal Insolvency Petition against Mr. Ram Mehar Garg, a personal guarantor for the same amount before the NCLT. (vii) Red Topaz Real Estate, a co-borrower, is undergoing CIRP in which the Respondent No. 1 is a secured creditor whose claim has been admitted by the RP. The liquidation value of assets of Red Topaz Real Estate is more than ₹ 102 Crores and the total financial debt due to the secured creditors is less than the liquidation value. After approval of the resolution plan by the Adjudicating Authority the entire debt due to the Respondent No. 1 will be paid and, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by the Corporate Debtor at that time and hence the debt and default are not disputed. The main dispute raised by the Appellant is that there are CIRPs going on against two other co-borrowers viz Ninex Developers and Red Topaz Real Estate companies on the basis of the same loan agreement, and hence the section 7 application against Abloom Infotech is not maintainable. 13. In order to examine whether debt was disbursed and if so whether it was disbursed against time value of money we look at the definition of financial debt given in Section 5(8) of IBC, which is as follows:- 5(8) financial debt means a debt alongwith interest, if any, which is disbursed against the consideration for the time value of money and includes (a) money borrowed against the payment of interest; xxx xxx 14. The loan agreement dated 27.04.2016 (Attached at pp. 58-154 of Appeal Paper book), which is not disputed, shows that the loan facility was sanctioned by the Respondent No. 1 for the Corporate Debtor alongwith three other co-borrowers. This loan agreement was between Ninex Developers Limited (First Part), Red Topaz Real Estate (P) Limited, (2nd Part), RMG Developers (P) Limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t pp. 433 503 of Reply filed by the Respondent No. 1 Vol. III at Pg. 437) states as follows:- 4.3 That the loans which were granted by the Financial Creditor to the Ninex Group Companies were secured by the various assets of the Ninex Group Companies under the various documentations which executed between the Financial Creditor and the said companies. 4.5 That however on account of certain financial problems and inability to pay their loans to other, two of the co of Ninex Group namely M/s Ninex Developers Limited as well as M/s Red Topaz Real Estate Pvt. Ltd. are presently under CIRP and IRP has been appointed in their cases and CIRP on going. There is a moratorium declared under Section 14 of the IBC, 2016 process as regards the said companies. The Financial Creditor in the case of CIRP of M/s Ninex Developers Limited has filed a claim before the IRP for a sum of ₹ 2,19,58,952/- for penal interest and costs despite their full and final settlement between the Financial Creditor and said M/s Ninex Developers Limited. The said claim has till d ate not been verified and approved by the RP. The said claim is an unwarranted claim in light of the no claim letters issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Book which is as hereunder:- 2. The following Security Interest shall be created in favour of Lender for securing the Obligations: Xxx (b) Security Interest to be created after first Drawdown: (i) The following security interest shall be created by Abloom in favour of the Lender, in a form satisfactory to be Lender, within forty five (45) days of final decision of the High Court of Allahabad in Civil Miscellaneous Writ Petition No. 4923 of 2013 or by or before 15.04.2017 whichever is earlier and for this purpose, Abloom shall apply for necessary permission to mortgage to the NOIDA Authority and make payment of all its dues to for the IT Land to the NOIDA Authority; (a) First charge by way of equitable mortgage on the entire right title and interest in IT Land; (b) First charge by way of hypothecation over the IT Project Receivables and all movable assets, current assets and work in progress relating to the IT Project; and (c) Escrow of the IT Project Receivables and first charge by way of hypothecation over such Escrow Accounts in respect thereof in favour of the Lender, in a form satisfactory to the Lender, including the terms of Schedule 7C. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermitted Purpose is repayment repayment and full and final settlement of unsecured loans obtained by Abloom as identified below and repayment and full and final settlement of unsecured loans obtained by Abloom from Dhoot Ninex Projects Pvt. Ltd. Thus, repayment of unsecured loans towards full and final settlement is a permitted purpose of Loan Facility and hence, the amount disbursed vide agreement dated 27.04.2016 qualifies as financial debt as defined in Section 5(8)(a) of the IBC. Admittedly, the default has taken place in accordance with the Event of Default as defined in the Loan Agreement in Article 8 and further Ninex Developers Pvt. Ltd. and Red Topaz Real Estate Pvt. Ltd. who are co-borrowers in the said Loan Agreement dated 27.04.2016 are already under CIRP due to their inability to repay the loan amounts. Furthermore, statutory demand notice under Section 25 of the Payment and Settlement Systems Act, 2007 r/w Negotiable Instruments Act, 1881 dated 19.03.2019 and legal notice dated 2.06.2019 issued on behalf of the Financial Creditor to the Corporate Debtor also establish the Event of Default. This default has first taken place on 15.09.2019 and hence, the section 7 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose of repayment of Loan Facility and can hardly be called a collusive action by the Financial Creditor alongwith Pardos Realtors Pvt. Ltd. against the Corporate Debtor. Later, this IT Land agreement was also terminated vide letter dated 27.08.2019 (attached at pp. 194-196 of the Appeal Paper Book) wherein Pardos Realtors Pvt. Ltd. has exercised its right to terminate the said agreement to sell/buy as the Corporate Debtor failed to take actions required for transfer of the loan, including withdrawal of the Writ Petitions/Litigations initiated by the Corporate Debtor against the Noida Authority thereby delaying the transfer. It has also asked for return of the refundable security deposit of ₹ 10,88,73,790/- together with interest at the rate of 30% per annum compound monthly as stated in Paragraph 4 of termination letter. Be that as it may, the termination of the agreement to sell has no bar on the adjudication of section 7 application. 30. The Ld. Counsel for Appellants has opposed the simultaneously on-going CIRPs against co-borrowers. The judgments of Hon ble Supreme Court in the matters of Lalit Kumar Jain Vs. Union of India Ors. [Transferred Case (C) No. 245 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aken note of and adjusted in the other CIRP. This can be conveniently done, more so when IRP/RP in both the CIRP is same. Insolvency and Bankruptcy Board of India may have to lay down regulations to guide IRP/RPs in this regard. Xxx xxx xxx xxx 32. There is no substance in the submissions of Counsel for Respondent that case would be different if same IRP/RP is there in the two CIRPs. It would be just a matter of co-ordination between the two IRPs/RPs. Till payment is received in one CIRP, claim can be maintained in both CIRPs Company Appeal (AT) (Ins.) No. 186 of 2021 for same amount and representation in CoC in both CIRPs to the extent of amount due will be justified. This is the reason why Section 60 (3) provides for transfer of proceeding to Adjudicating Authority where already there is a pending proceeding. There is no question of looking into Judgments when Section 60 of IBC is clear and makes the two CIRPs maintainable in such matters. If they are maintainable, claim in both (subject to adjustments on receipts) would also be maintainable. There is no need to be tied down with Judgments if we see Section 60 which has been reproduced (supra). That is the law. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Debtor and Corporate Guarantor. If two Applications can be file, the same amount against Principal Borrower and Guarantor keeping in view the above provisions, the Applications can also be maintained. It is for such reason that Sub-Section (3) of Section 60 provides that if insolvency resolution process or liquidation or bankruptcy proceedings of a Corporate Debtor is pending in any Court or Tribunal, it shall stand transferred to the Adjudicating Authority dealing with insolvency resolution process or liquidation proceeding of such Corporate Debtor. Apparently and for obvious reasons, the law requires that both the proceedings should be before same Adjudicating Authority. 35. In the Judgment of Hon ble Supreme Court in the matter of State Bank of India Vs. Ramakrishna Anr. (Civil Appeal No. 3595 of 2018), it is held in Para 23 as follows: 23...... The object of the Code is not to allow such guarantors to escape from an independent and co-extensive liability to pay off the entire outstanding debt, which is why Section 14 is not applied to them. However, insofar as firms and individuals are concerned, guarantees are given in respect of individual debts by persons who ..... X X X X Extracts X X X X X X X X Extracts X X X X
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