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TMI Blog2022 (8) TMI 655X X X X Extracts X X X X X X X X Extracts X X X X ..... with the MRA. The Corporate Debtor contented that the amount claimed in the Application is not due and payable, the moment there is revocation of the MRA, the rights and liabilities of the parties falls back to the original facility agreements which were already declared NPA by the Applicant as has been demonstrated above upon the perusal of records. It is noticed that both the parties entered into MRA and there is no record of terminating MRA. Therefore, the Corporate Debtor s arguments are devoid of merits that the amount claimed is not due and payable under MRA. The application made by the Financial Creditor is complete in all respects as required by law. It clearly shows that the Corporate Debtor is in default of a debt due and payable, and the default is in excess of minimum amount stipulated under section 4(1) of the IBC. Therefore, the debt and default stands established and there is no reason to deny the admission of the Petition. In view of this, this Adjudicating Authority admits this Petition and orders initiation of CIRP against the Corporate Debtor. Petition admitted - moratorium declared. - CP (IB) 1807/MB/C-I/2018 - - - Dated:- 12-8-2022 - Hon'ble M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Baroda ( Applicant ) states that it had granted certain term loan and working capital facilities to Topworth Urja Metals Limited ( Corporate Debtor ) from time to time which were restructured on the terms and conditions set out under the Sanction Letter dated March 27, 2015 (Exhibit 7, Vol-II, pages 243 to 260 of the Application) and Master Restructuring Agreement dated March 30, 2015 ( MRA ) (Exhibit-7, Vol-II, pages 261 to 342 of the Application). The detailed terms and conditions of enhanced working capital credit facilities are captured in the First Supplemental Working Capital Consortium Agreement dated May 14, 2015 ( Supplemental WC Agreement ) (Exhibit-7, Vol- II, pages 343 to 365 of the Application). Under the MRA and the Supplemental WC Agreement, the Applicant s exposure to the Corporate Debtor is as follows (set out in Schedule III of the MRA pages 323 to 324 of the Application) and the Second Schedule of the Supplemental WC Agreement (page 355 of the Application): (i) Term Loan I or RTL I - Rs.29.20 crore; (ii) Term Loan II or RTL II - Rs.39.06 crore; (iii) Funded Interest Term Loan I or FITL I - Rs.6.42 crore (iv) Funded Inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Application: (a) Record of default under the report of the Central Repository of Information on Large Credits dated 1st September 2017. (Exhibit-8, Vol-II, pages 366 to 368 [relevant serial No.19 on page 367 and serial no.8 on page 368] of the Application) (b) Record of default under the report of the CIBIL dated 1st August 2017 (Exhibit-8, Vol-II, pages 369 to 503 of the Application): (i) Term Loan I (06960600000893) Credit Facility 106 (Exhibit-8, page 440 of the Application); (ii) Funded Interest Term Loan I (06960600001282) Credit Facility 108 (Exhibit-8, page 442 of the Application); (iii) Term Loan II (06960600001006) -Credit Facility 107 (Exhibit-8, page 441 of the Application); (iv) Funded Interest Term Loan II (06960600001282) - Credit Facility 109 (Exhibit-8, page 443 of the Application); (v) Cash Credit (06960500000075) Credit Facility 10 (Exhibit-8, page 385 of the Application). (c) Copies of entries in the bankers book maintained by State Bank of India in accordance with Bankers Book Evidence Act, 1891 (Exhibit -9, Vol-III, pages 504 to 1003 of the Application): (i) Term Loan I (06960600000893) entry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tility; (e) Details of succession certificate, or probate of a will, or letter of administration, or court decree (as may be applicable), under the Indian Succession Act, 1925; (f) The latest and complete copy of the financial contract reflecting all amendments and waivers to date; (g) A record if default as available with any credit information company; (h) Copies of entries in a bankers book in accordance with the Bankers Books Evidence Act, 1891. 11. It is further submitted that the Principal Outstanding amounts in default provided in the Statement of Accounts are also acknowledged by the Corporate Debtor in its Annual Report for the Financial Year 2015-16. 12. Further, the Corporate Debtor has acknowledged a debt of Rs.1,51,96,40,085/- as an Amount Outstanding as on 31.03.2018 towards the Applicant in its Standalone Financial Statements for the period of 01.04.2017 to 31.03.2018 as available on the MCA website @ page 47 of the Standalone Financial Statements). Copy of the said Financial Statements for 01.04.2017 to 31.03.2018 is annexed hereto as Annexure 3. 13. In view of the defaults committed by the Corporate Debtor, the Applicants vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eged amount claimed by the Applicant is not due and payable in fact and thereby the present application under section 7 of the Code is defective; and III. the alleged amount is not due and payable in law, it being barred by limitation. I. The present Section 7 Application is defective as the same has been filed on the basis of an incorrect date of default. 18. The Applicant had granted certain loans and working capital facilities to the Respondent from time to time which were restructured on the terms and conditions set out in the Master Restructuring Agreement, dated 30.03.2015 ( MRA ) Exhibit7, Section 7 Application, pages 261 to 342). The Applicant has filed the present Section 7 Application on the basis of an alleged default committed under this MRA. 19. The Respondent submits that the date of default stated by the Applicant is incorrect as the same has been taken conveniently without any basis. In this regard the Applicant relies on the following documents placed before this Tribunal. i) Notice dated 16.01.2017 under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 issued by the Stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dgement Compilation) II. The alleged amount claimed by the Applicant is not due and payable in fact 23. It is submitted that the present Section 7 application has been filed by the Applicant on the basis of the alleged default committed under the MRA. The MRA was entered into between the Applicant and the Respondent on 27.03.2015. Relevant causes of the MRA are as follows: i) In terms of Clause 8.2 of the MRA, the Applicant had a right to revoke the MRA on account of failure by the Respondent to make payment of any amount due under the MRA (Exhibit 7, Section 7 Application, pages @311). ii) Further, in terms of Clause 8.3 of the MRS depicting consequence of revocation of MRA, in case of any default in the MRA and subsequent revocation of the MRA, the rights and remedies of the Applicant falls back to the original loan agreements/facility agreements (Exhibit 7, Section 7 Application, pages @ 312) 24. As a matter of fact, the MRA was revoked by the Applicant by its letter dated 01.02.2016 and the Applicant called upon the Respondent to pay an amount of ₹174.61 crores as on 31.12.2015 (Exhibit 10, Section 7 Application, pages @1004). 25. The Applicant argu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f default. The Section 7 Application could only have been filed on the basis of the date of NPA which in the present case is either 01.12.2014 or 27.03.2015. However, the present Application filed on 17.05.2018 which is 3 years after the date of declaration of account as NPA. Therefore, the present application is barred by limitation. 32. The Respondent submits that it is a settled law that date of declaration of the account as NPA is the starting date of counting a three (3) year period of limitation for the purpose of application under Section 7 of the Code. In support of the arguments, reliance is placed upon the following judgements: See paragraph 3, 6 of Gaurav Hargovind Dave v. Asset Reconstruction Company India Ltd. and Anr. Civil Appeal No.4952 of 2019 (pages 56, 57, of Judgement Compilation). See paragraph 3 of Sri Kaustuv Ray v. State Bank of India Anr. CA(AT)(I) No.804 of 202 (Pages 227,228 of Judgement Compilation) See paragraph 1 of Invent Asset Securitization and Reconstruction Pvt. Ltd. Xylon Electrotechnic Private Limited, Civil Appeal No.3783 of 2020 (Page 225 of Judgement Compilation) 33. Further submits that in the present case, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e repayment schedule of MRA. 37. Vide letter dated 01.02.2016, the Financial Creditor called upon the Corporate Debtor to pay a sum of Rs.174.61 crore being the amount due and payable as on 31.12.2015 within 7 (Seven) days from the date of receipt of recalled notice. Therefore, it can be construed as date of default were taken by the Applicant were correct. The Corporate Debtor failed to comply with the MRA. 38. Secondly, the Corporate Debtor contented that the amount claimed in the Application is not due and payable, the moment there is revocation of the MRA, the rights and liabilities of the parties falls back to the original facility agreements which were already declared NPA by the Applicant as has been demonstrated above upon the perusal of records. We have noticed that both the parties entered into MRA and there is no record of terminating MRA. Therefore, the Corporate Debtor s arguments are devoid of merits that the amount claimed is not due and payable under MRA. 39. Also, the reliance placed by the Corporate Debtor on judgement of Innoventive Industries is misplaced, even if we consider the situation that MRA was revoked and rights and liabilities of parties falls ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atorium under section 14 of the IBC, in regard to the following: (i) The institution of suits or continuation of pending suits or proceedings against the Corporate Debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; (ii) Transferring, encumbering, alienating or disposing of by the Corporate Debtor any of its assets or any legal right or beneficial interest therein; (iii) Any action to foreclose, recover or enforce any security interest created by the Corporate Debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002; (iv) The recovery of any property by an owner or lessor where such property is occupied by or in possession of the Corporate Debtor. (c) Notwithstanding the above, during the period of moratorium:- (i) The supply of essential goods or services to the Corporate Debtor, if continuing, shall not be terminated or suspended or interrupted during the moratorium period; (ii) The provisions of sub-section (1) of section 14 of the IBC shall not apply to such trans ..... X X X X Extracts X X X X X X X X Extracts X X X X
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