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TMI Blog2022 (4) TMI 571X X X X Extracts X X X X X X X X Extracts X X X X ..... Demand Notice - HELD THAT:- The present application has been filed under Section 7 of the I B Code. Issuance of Demand Notice being one of the pre-requisites to file an application is a requirement under Section 9 of the I B Code and not under Section 7 - this bench finds no merit in the contentions of the Corporate Debtor w.r.t. the petition being non-maintainable due to non-issuance of Demand Notice for the alleged default/claim. Genuineness of the Mortgage Deed and charging of higher interest by the Corporate Debtor - HELD THAT:- It can be clearly seen that it is not in the spirit of the I B Code for this bench to determine the whether the Mortgage Deed entered into was genuine or that higher interest was charged by the Corporate Debtor. It is the role of the Resolution Professional to determine the validity of these claims made by the Corporate Debtor - there are no merit in the contentions of the Corporate Debtor w.r.t. the petition being non-maintainable due to the Mortgage Deed entered into not being genuine or higher interest being charged by the Corporate Debtor as opposed to what was agreed upon. Thus, it is clear that financial debt amounting to more than ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,80,00,000/- (Rupees eleven crore and eighty lakh only). iii. Funded Interest Term Loan (Account Number -34246064451) of ₹ 11,25,00,000/- (Rupees eleven crore and twenty-five lakh only). iv. Term Loan I (Account Number - 34249871938) of ₹ 9,11,00,000/- (Rupees nine Crore and eleven lakh only). v. Term Loan II (Account Number - 34249818272) of ₹ 2,58,96,899/- (Rupees two Crore fifty-eight lakh ninety-six thousand eight hundred and ninety-nine only). b. While covering the chain of events with regards to the above-mentioned credit facilities, the Financial Creditor submits that the Corporate Debtor had approached them with an application dated 08.10.2004 seeking sanction of loan/credit facilities to the tune of ₹ 15.27 Crore. The said application was accepted and credit facilities worth ₹ 15.27 Crore were granted via sanction letter dated 01.01.2005. The loan documents of the said facilities were duly signed and executed by the directors of the Corporate Debtor. c. A Working Capital Consortium Agreement was also executed on 30.10.2007 between Axis Bank and Barclays Bank PLC which subsequently led to a Master Joint Lenders Forum ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereby 8,78,000 shares of the Corporate Debtor were pledged in favour of SBICAP Trustee Company and a Deed of Ratification and Rectification dated 02.02.2015 (annexed as Exhibit 'N' at page 415-425 of the Petition) as well as a Deed of Mortgage dated 26.12.2015 were executed by the Corporate Debtor. g. The Financial Creditor submits that the Corporate Debtor first defaulted on 28.06.2014. Upon continued failure of the Corporate Debtor to service its account with the Financial Creditor, it was repeatedly requested to regularize its account. h. As the Corporate Debtor continued to default in repayments of its debt to the Financial Creditor, its account was classified as an NPA on 27.09.2014 as per the directions issued by the Reserve Bank of India. Further, The Financial Creditor also issued a Legal Demand Notice dated 16.08.2017 upon the Corporate Debtor and the Personal Guarantors (as stated in para 4(f)) recalling the total outstanding liability due and owed to the Financial Creditor. In addition to sending a Legal Demand Notice, the Financial Creditor also filed an application dated 01.10.2018 against the Corporate Debtor and all the Personal Guarantors before t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... natural justice as it was filed without the issuance of any demand notice for the said default/claim in question. f. The Corporate Debtor further submits that the present company petition is not maintainable as it is barred by the law of limitation. While explaining the reason for the same, it has been submitted that the account of the Corporate Debtor was declared Non-Performing Asset ( NPA ) as on 27.09.2014 and therefore, the latest date by which an application can be filed would be 27.09.2017 in terms of Limitation Act, 1963. Declaring the Corporate Debtor as NPA was an admission on part of the Financial Creditor that a default had occurred on part of the Corporate Debtor. In this regard the Corporate Debtor has relied on decision of the Honourable Supreme Court in the case of B.K. Educational Services (P) Ltd. V. Parag Gupta Associates - (2019) 11 SCC 633 where it was held that -- . The right to sue therefore, accrues when a default occurs. If the default has occurred over three years prior to the date of filing of the application, the application would be barred under Article 137 of the Limitation Act, save and except in those cases where, in facts of the case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Exhibit 'B (Colly)' at page 25-27 of the Petition). In the said letter the Financial Creditor was informed that the promoters of the Corporate Debtor were contemplating on offering a onetime settlement scheme. c. Extracts of the above-mentioned letter have been shown below: d. This letter which was issued by the Corporate Debtor to the Financial Creditor clearly highlights the existence of Debt due and Corporate Debtor's willingness to settle the same. There are clear contradictions in what the Corporate Debtor has contended before this bench and what it has communicated to the Financial Creditor. e. In addition to the above-mentioned letter, the Financial Creditor and Corporate Debtor had entered into a Deed of Pledge dated 27.12.2014 and a Deed of Ratification and Rectification dated 26.12.2015. Further, the bench has also observed that the Corporate Debtor has also admitted its liability in its Audited Financial Statements as on 31.03.2016, 31.03.2017, 31.03.2018 and 31.03.2019. f. It is clear from the records that the Corporate Debtor has time and again acknowledged the debt which was due and payable to the Financial Creditor. g. R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... djudicating authority is to be satisfied that a default has occurred, that the corporate debtor is entitled to point out that a default has not occurred in the sense that the debt , which may also include a disputed claim, is not due. A debt may not be due if it is not payable in law or in fact. The moment the adjudicating authority is satisfied that a default has occurred, the application must be admitted unless it is incomplete, in which case it may give notice to the applicant to rectify the defect within 7 days of receipt of a notice from the adjudicating authority. d. In view of the above-mentioned points, it can be clearly seen that it is not in the spirit of the I B Code for this bench to determine the whether the Mortgage Deed entered into was genuine or that higher interest was charged by the Corporate Debtor. It is the role of the Resolution Professional to determine the validity of these claims made by the Corporate Debtor. e. Therefore, this bench finds no merit in the contentions of the Corporate Debtor w.r.t. the petition being non-maintainable due to the Mortgage Deed entered into not being genuine or higher interest being charged by the Corporate Debtor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e supply of essential goods or services to the corporate debtor, if continuing, shall not be terminated or suspended or interrupted during the moratorium period. III. That the provisions of sub-section (1) of Section 14 of I B Code shall not apply to, a. such transactions as may be notified by the Central Government in consultation with any financial sector regulator; b. a surety in a contract of guarantee to a Corporate Debtor. IV. That the order of moratorium shall have effect from the date of this order till the completion of the corporate insolvency resolution process or until this Bench approves the resolution plan under subsection (1) of section 31 of I B Code or passes an order for the liquidation of the corporate debtor under section 33 of I B Code, as the case may be. V. The Financial Creditor shall deposit a sum of ₹ 5,00,000/-(Rupees Five Lakh only) with the IRP to meet the expenses arising out of issuing public notice and inviting claims. These expenses are subject to approval by the Committee of Creditors (CoC). VI. That the public announcement of the corporate insolvency resolution process shall be made immediately as specified unde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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