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TMI Blog2022 (8) TMI 473X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of a financial debt. The above CP being filed on 11.11.2021 is within 3 years from the date of default. Thus the CP satisfies all the legal requirements for admission. The initiation of Corporate Insolvency Resolution Process (CIRP) is ordered against Gagan I-Land Township Private Limited - petition admitted - moratorium declared. - IA No. 1827 of 2022 IA No. 1896 of 2022 In C.P. No. 1221/MB/I&B/2021 - - - Dated:- 27-7-2022 - Hon ble Shri. H.V. Subba Rao, Member (Judicial) And Hon ble Smt. Anuradha Sanjay Bhatia, Member (Technical) For the Petitioner : Mr. Rohan Rajadhaksha, Mr. Ryan Dsouza, Mr. Karl T Tamboly, Mr. Nirav Shah, Mr. Zaid Mansuri Advocate i/b DSK Legal For the Respondent: Mr. Dev Upadhyay, Mr. Amir Arshiwala, Advocate ORDER 1. The Petitioners viz. ICICI Prudential Real Estate AIF - I (hereinafter as Petitioner) has furnished Form No. 1 under Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (hereinafter as Rules) in the capacity of Petitioner by invoking the provisions of Section 7 of the Insolvency and Bankruptcy Code (hereinafter as Code) against Gagan I Land Township Pvt. Ltd. (herei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion Agreement is annexed to the Petition. The DSA was amended by an Addendum dated August 31, 2017 ( Addendum to DSA ). A copy of the Addendum to DSA is annexed to the petition. The Debenture Subscription Agreement and the Addendum to the DSA are hereinafter collectively referred to as the DSA . (iii) In the requisite Form-1, under the head Amount in Default the amount claimed to be in default is Rs. 140,55,90,642/- which was due and payable by the Corporate Debtor to the Petitioner, as per the terms of Debenture Subscription Agreement (hereinafter DSA). The date of first default is stated to be 30.09.2019, as per part IV of the Petition. (iv) The Corporate Debtor is the owner of land comprising of sub Plot Nos. 262/B admeasuring 3381.118 square meters and 262/C admeasuring 1207.552 square meters, collectively admeasuring 4588.67 square meters out of final plot no. 262 situated in Sangamwadi Town Planning Scheme III, Village Ghorpadi, Taluka Haveli, Pune ( Property ) and was to develop a commercial real estate project on the Property. (v) The Petitioner is currently holding 76,589 Debentures ( Outstanding Debentures ) issued by the Corporate Debtor. (vi) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chieve a Guaranteed IRR (as defined under the DSA) of 19.5% on the Subscription Amount. (xi) The Debentures were to be redeemed by the Corporate Debtor on the following dates Repayment Date Repayment Instalment August 31, 2020 being the last day of the period of 36 months from the First Tranche Closing Date 1/3rd of the Subscription Amount along with such additional amounts so as to ensure the Subscriber receives the Guaranteed IRR (as defined under the DSA) on such amount November 30, 2020 being the last day of the period of 39 months from the First Tranche Closing Date ~Same as above~ February 28, 2021 being the last day of the period of 42 months from the First Tranche Closing Date ~Same as above~ (xii) The Subscription Amount was disbursed to the Corporate Debtor in 2 tranches. The First Tranche Closing Date was September 1, 2017 on which date, the Financial Creditor disbursed an amount of Rs. 67.2 Crore. The next disbursement of Rs. 10 Crore was on March 20, 2018. (xiii) The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and to waive penal IRR on account of the pandemic. A copy of the letter dated September 9, 2021 is annexed to the Petition. (xviii) Accordingly, the Petitioner by a letter dated October 01, 2021 responded to the Corporate Debtor and rejected the request of the Corporate Debtor. It may be noted that the Corporate Debtor has failed to meet its payment obligations by making payment of entire Interest since quarter ending September 2019. A copy of the letter dated October 01, 2021 is annexed to the Petition. (xix) The Debenture Trustee issued a letter dated 14.09.2021 on the Personal Guarantor for invoking the Personal Guarantee dated 28.08.2017. A copy of the letter dated September 14, 2021 is annexed to the Petition. (xx) As on October 31, 2021, an amount of Rs.140,55,90,642/- (Rupees One Hundred Forty Crores Fifty-Five Lacs Ninety Thousand Six Hundred and Forty-Two Only) is due and payable to the Petitioner in accordance with the DSA. (xxi) The Corporate Debtor is unable to repay the amounts due and payable . Hence the Application u/s 7 is filed before this Tribunal. 5. The Corporate Debtor orally argued the case and raised the following objections: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ks to rely on clause 35.1 of the debenture trust deed dated August 29, 2017 ( DTD ) to argue that the debenture trustee viz. Vistra ITCL (India) Limited appointed under the DTD was not authorised to file the present Company Petition as there was no consent from the majority debenture holders under the DTD. The argument is wholly incorrect for the following reasons: (i) Firstly, the captioned Company Petition is filed on behalf of the debenture holder viz. the Financial Creditor (ICICI Prudential Real Estate AIF - I) acting through the Investment Manager. The debenture trustee appointed under the DTD is Vistra ITCL (India) Limited. On a perusal of the captioned Company Petition, it is clear that the debenture trustee is not the financial creditor who has presented the captioned Company Petition. (ii) Secondly, the captioned Company Petition is filed upon the Corporate Debtor defaulting under the terms of the debenture subscription agreement dated August 28, 2017 read with Addendum dated August 31, 2017 (collectively DSA ). The Financial Creditor is a party to the DSA and the same is clear from a perusal of the DSA. The Corporate Debtor admittedly failed in payment of its inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorised to present the captioned Company Petition through the Investment Manager and therefore this argument of the Corporate Debtor ought to be rejected. b. Another objection taken by the Corporate Debtor is that the default in redemption of Debentures is hit by Section 10A of the IBC. The Corporate Debtor has sought to argue that the default to be asserted under the DSA, if any, can only relate to a default in redemption of the Debentures as provided for in clause 6 of the DSA. The Corporate Debtor then seeks to rely upon Article 10 of the DSA to argue that a purported default can occur only in redemption of the Debentures and further that a default in payment of interest is not considered a default under the terms of the DSA. This argument is wholly incorrect and unsustainable for the following reasons: (i) A perusal of the DSA, in particular clause 2, it is abundantly clear that the Corporate Debtor was liable to pay interest at the rate of 15% per annum compounded quarterly and the same was payable on the outstanding Subscription Amount. (ii) As per clause 2.2 and clause 2.3 of the DSA, the interest payments were to commence on March 31, 2018 and payable on a quar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e IBC is March 25, 2020 to March 25, 2021. Clearly the default committed by the Corporate Debtor does not fall within the period prescribed under section 10A of the IBC. In the instant case the default was committed by the Corporate Debtor in September 2019, i.e., prior to the outbreak of the COVID - 19 pandemic. Therefore, it cannot be considered as a default during COVID period. 9. On hearing the counsel for the Petitioner and upon going through Form-1 filed by the Petitioner and the related materials, this Bench is of the view that the Corporate Debtor has committed default in repayment of a financial debt. The above CP being filed on 11.11.2021 is within 3 years from the date of default. Thus the CP satisfies all the legal requirements for admission. 10. IA 1827 of 2022: The above application was filed on 08.07.2022 after reopening the matter for fresh arguments since the order could not be passed by the earlier Bench due to demitting the office by the Judicial Member. The present Bench who had heard the arguments afresh on 14.07.2022 made it very clear to the Counsel appearing for the Corporate Debtor that they will dismiss the above Application No. IA 1827 of 2022 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the Corporate Debtor. e. That the supply of essential goods or services to the Corporate Debtor, if continuing, shall not be terminated or suspended or interrupted during moratorium period. f. That the provisions of sub-section (1) of Section 14 shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator. g. That the order of moratorium shall have effect from the date of pronouncement of this order till the completion of the corporate insolvency resolution process or until this Bench approves the resolution plan under sub-section (1) of section 31 or passes an order for liquidation of corporate debtor under section 33, as the case may be. h. That the public announcement of the corporate insolvency resolution process shall be made immediately as specified under section 13 of the Code. i. During the CIRP period, the management of the corporate debtor will vest in the IRP/RP. The suspended directors and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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