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TMI Blog2022 (8) TMI 421X X X X Extracts X X X X X X X X Extracts X X X X ..... Hyderabad Bench, Hyderabad) is of the considered view that the aspect of Debt and Default were established. When once the Debt due and payable in Law and in fact is established on the part of the Financial Creditor / Bank in a given case, then the rigour of Section 7 of the Insolvency Bankruptcy Code, 2016 comes into operative plea. More importantly, the Default incurred by the Corporate Debtor / 3rd Respondent is not disputed on behalf of the Appellant before this Appellate Tribunal. To put it precisely, the Corporate Debtor had acknowledged that on 05.05.2019 a sum of Rs.63,36,61,897.26 was due and that was reflected in the Balance Sheet dated 31.03.2019. This Tribunal unhesitatingly, comes to a consequent conclusion that the Adj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Having heard the learned counsels for both sides, it may be stated that the Corporate Debtor had not denied availing of the credit facilities as stated in the application, besides Bank Guarantee facility for a sum of Rs.19,16,20,100.00, from the Financial Creditor. It is also not the case of the Corporate Debtor that it had discharged even the fund-based facilities extended to and availed by the Corporate Debtor. The main plea of the Corporate Debtor appears to be that the Financial Creditor has honoured the request of the beneficiary for encashment of the Bank Guarantee despite the said invocation by the beneficiary being wrongful, and then converted the aid amount into fund-based liability and claimed a debt of Rs.8.40 crores as due and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Debtor being beyond the threshold limit of this Tribunal, probing the submission of the learned Senior Counsel for the Corporate Debtor as regards the invocation of Bank Guarantee, in our considered view will not impact our above finding, and it will be an exercise in futile. That apart, Bank Guarantee being an independent contract between the beneficiary and the Bank is governed by the terms and conditions between the said parties. So much so, when the beneficiary has invoked the same as per the terms the Banker is bound to honour the request for its encashment without any demur, unless fraud is pleaded and established. 18. Therefore, in view of our discussion as above, we are satisfied that the financial creditor has established be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 109/7/HDB/2020. 5) The primordial submission on behalf of the Appellant before this Tribunal , is that in the instant Company Appeal (AT)(CH)(Ins) No.315/2022 that the 1st Respondent / Canara Bank is actively considering the proposal for OTS of Rs.55 Crore and in fact the Appellant had paid a sum of Rs.5,14,80,000/- on 11.05.2022 through Cheque to the Bank in respect of the Loan Amount , and hence, prayed for some time to be granted to and in favour of the Appellant for awaiting any kind of possible Reply from the 1st Respondent / Bank. 6) Repelling the contention advanced on behalf of the Appellant, the 1st Respondent / Canara Bank / Financial Creditor takes a stand through the Learned Counsel, in the instant case, that the Ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1st Respondent / Bank had sanctioned the following working Capital limits in favour of the Appellant, viz., (a) Secure Overdraft Facility - Rs.12 Crore (b) Bank Guarantee Limit - Rs.100 Crore and these sanctioned limits were secured with Collateral Securities covering 19 properties worth about Rs.38 Crore and personal guarantees of Directors of the Corporate Debtor / Respondent No.3. 12) For a fuller and better appreciation of the facts of the present case the Debt sanctioned by the 1st Respondent / Financial Creditor and disbursed by the Syndicate Bank is given in tabular form , as under:- Sl. No. Nature of Facility Amount Sanctioned Amount Disburs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14) To be noted, that the total sum outstanding on Secure Overdraft facility as per the Statement of Account dated 30.11.2019 was Rs.74,52,87,564.93 Ps. and BG outstanding was Rs.19,16,20,100.00 as per particulars of Financial Debt mentioned in Part IV of the Section 7 Application filed by the Syndicate Bank / Financial Creditor (presently Canara Bank 1st Respondent herein). 15) The Adjudicating Authority under Section 7 of the Insolvency Bankruptcy Code, 2016 is to ascertain whether there is a Debt and Default committed by the Corporate Debtor . Always, it is open to the Corporate Debtor to point out that the Default has not occurred and the Debt / Default Claim is not due. 16) Be that as it may, this Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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