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TMI Blog2022 (4) TMI 1450X X X X Extracts X X X X X X X X Extracts X X X X ..... e books of accounts declared that the Corporate Debtor has no liability towards the debt. The transaction auditor has also pointed out that in a prior securitisation application filed by the Corporate Debtor before DRT, Mumbai specifically contained an averment that due to failure on part of the DHFL in disbursement of the complete loan amount, the Corporate Debtor wrote a letter to its sister concern namely RDPL seeking assistance. Further, the transaction auditor has also pointed out that RDPL directed to utilize the amount lying in the account of DHFL to settle the dues of the Corporate Debtor. As the amount of the repayment of the loan of the AREDPL by RD PL is disputed by the DHFL and accordingly the Corporate Debtor has filed application with Debt Recovery tribunal, Mumbai with Case No.: SA/74/2021 dated 30th April 2021 - It has also been observed in the Securitisation Application filed by the AREDPL in the DRT, Mumbai, it is specifically averred that due to failure on part of DHFL in disbursing the complete loan amount, the AREDPL decided to repay the said loan to DHFL and therefore, the AREDPL wrote a letter to its sister concern i.e. RDPL seeking assistance. The Compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... han 32 meters - HELD THAT:- The series of correspondence and exchange of letters between the Corporate Debtor and its sister concern RDPL establish the fact that RDPL has provided financial assistance to the Corporate Debtor and consequently, the amounts lying in the account of DHFL were adjusted towards the repayment of the loan of the Corporate Debtor. This Bench takes on record the internal correspondence between Corporate Debtor and its sister concern namely RDPL and the books of accounts of Corporate Debtor dated 31.03.2021. It is not the case of the applicant that his right of repayment of the outstanding amounts is lost by this adjustment. The applicant can exercise and enforce the debt outstanding from the RDPL. This Bench is of the view that the claim of the applicant namely Piramal Capital Housing Finance Limited cannot be admitted - Application dismissed. - Interlocutory Application 182/2022 in Company Petition No. 481/I&BC/NCLT/MAH/2021 and Interlocutory Application 308/2022 in Company Petition No. 481/I&BC/NCLT/MAH/2021 - - - Dated:- 21-4-2022 - Hon ble Smt. Suchitra Kanuparthi, Member (J) and Hon ble Smt. Anuradha Sanjay Bhatia, Member (T) For the Appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of the loan was inter alia secured by the following: a. Exclusive charge by way of registered mortgage on the land and Project along with present and future construction thereon including developers share of unsold and booked units as set out in Annexures I and II of the Sanction Letter, but excluding the units set out in Annexure IV of the Sanction Letter as per the terms of the Deed of simple mortgage dated 6 June 2018; and b. Exclusive charge by way of hypothecation on the receivables arising out of the developer's share from 'present and future', 'unsold, booked and sold' units in the Project, more particularly described in Annexures I, II and III of the Sanction Letter; c. Personal guarantees of Mr. Harshit Narendra Mehta, Mrs. Niyati Harshit Mehta, Mr. Ritesh V. Shah, Mr. Samit Shirish Dadia, Mr. Pratik Shantilal Jiyani and Mr. Santosh Kumar Prajapati; and d. Corporate guarantee of Rite Developers Private Limited ( RDPL ), an affiliate entity of the Corporate Debtor 5. The Applicant disbursed a total sum of Rs. 32,50,00,000/- (Rupees Thirty-Two Crores Fifty Lakhs) ( Disbursed Loan ) in the following tranches to the Corpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nor any of the guarantors/mortgagors made any payment of the outstanding amounts due under the Loan. Accordingly, the Applicant in exercise of the powers conferred to it under sub-section (4) of Section 13 of SARFAESI Act, affixed the possession notice dated 5 December 2020 and took a symbolic possession of the Project land with effect from 5 December 2020 and served the said Possession Notice to all the concerned parties through RPAD vide its letter dated 7 December 2020. Submission of the claim before the Respondent 8. Pursuant to the Admission Order, the Respondent made a public announcement dated 28 August 2021 in accordance with sub-regulation (1) Regulation 6 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 ( CIRP Regulations ) and called upon the stakeholders of the Corporate Debtor to submit their claim along with the proof/supporting documents by electronic means. 9. The Applicant submitted its claim for a financial debt of INR 48,63,51,064 (Rupees Forty-Eight Crores Sixty Three Lakhs Fifty One Thousand and Sixty Four) ( Claim ) as on the insolvency commencement date vide its Form-C dated 27 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... guarantor as sought by the Respondent, the Respondent was informed that the relevant evidence and supporting document for the purpose of verification and admission of the claim, including the statement of account for the Loan availed by the Corporate Debtor had already been provided, and the transaction audit report in the CIRP of DHFL is totally irrelevant for the purpose of admission of the Claim in the CIRP of the Corporate Debtor. The Respondent was also apprised of the Applicant's frustration and apprehension that the issue pertaining to RDPL is clearly an attempt by the promoters of the Corporate Debtor and RDPL to mislead the Respondent. 12. However, much to the Applicant's surprise, in spite of providing the Respondent with all the information/clarification regarding the Claim, including the statement of the loan account of the Corporate Debtor, the Respondent vide its email dated 14 December 2021 once again erroneously placed reliance on the proceedings before the DRT and stated that the Claim is still being processed/verified by him. By an email dated 14 December 2021, an unattested and unsigned copy of the application filed by the Corporate Debtor before DRT, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and books of accounts of the Corporate Debtor. 18. It is established from the following serious discrepancies in relation to the procedure of facilitating the loan which is as under: a. The condition of Escrow Account was never followed which was part of terms of sanction; b. No monitoring mechanism was put in place to ensure money goes into project and the funds disbursed have been allowed to be transferred to RDPL instead of direct use on project development; c. As per clause 11 of sanction letter interest shall be charged from the 1st disbursement. In the first 36 months only interest needs to be paid every month. PDCs covering interest should be furnished with each disbursement. If there is a default in payment of interest or principal for 2 consecutive months it shall be construed as violation of the terms of sanction the entire loan shall be recalled; d. The project has been sanctioned for the floors up to 38 floors for which even construction permission/plans are not in place; e. The disbursements of Rs. 9.50 Crores have been made even after the date of marking account as NPA on 01/11/2018 as mentioned in the application; f. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by this Adjudicating Authority vide its order dated 11/03/2019. It is submitted that pursuant thereto suspended management of RDPL arrived at a settlement with Arjun Bulchandani by repaying an amount of Rs. 7.75 Crores and accordingly an application for withdrawal of CIRP under Section 60(5) read with Rule 11 of NCLT Rules, 2016 came to be preferred before this Hon'ble Authority for repayment of the same. C. Amount sought to be claimed as Financial Debt to the tune of Rs. 32.50 Crores plus interest etc. required to be admitted by the respondent as Financial Claim entirely settled by RDPL, being Corporate Guarantor, to the corporate debtor on 19.11.2018. Despite discharge of entire liability by the Corporate Debtor through the Corporate Guarantor i.e. RDPL, the Applicant illegally issued demand notice dated 05.08.2020 under Section 13(2) of the Securitization and Reconstruction of the Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as SARFAESI Act ) calling upon the Corporate Debtor to make payments of Rs. 41,78,22,974 and thereafter affixed possession notice dated 05.12.2020 and took a symbolic possession of the Project L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 100 Crores of the loan, possible collusion of Suspended Management and DHFL for syphoning the funds and interest of other home buyers. 22. The factual matrix germane for the determination of the present application is herein under: Date Particular 04.03.2021 Application was filed by Financial Creditors, namely, Shri Deepak Cheeda others under Section 7 of the Code seeking initiation of the Corporate Insolvency Resolution Process against Corporate Debtor before this Hon ble Tribunal. 11.08.2021 Order passed by this Hon ble Tribunal to initiate corporate insolvency resolution process of Corporate Debtor. The Respondent herein was appointed as the Interim Resolution Professional vide the same order. 28.08.2021 Public Announcement made in the format of Form-A in the newspaper Active Times(English) and Mumbai Lakshadweep(Marathi) inviting claims from all the creditors with respect to the Corporate Debtor and the last date of submission of claim was 10.09.2021 22.09.2021 Corr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Applicant with respect to the pending proceedings before the Learned DRT, Mumbai. 09.12.2021 The Applicant vide email clarified that the alleged payment by RDPL has been for its own loan availed by it from Dewan Housing Finance Limited (hereinafter referred to as DHFL ). It is relevant to mention that in relation to documents sought for to verify that the debt is outstanding towards the corporate debtor and not RDPL, the applicant refrained from sharing the said documents and stated that the same is unwarranted and irrelevant. A copy of the email dated 09.12.2021 along with letter is attached herewith as Annexure-R10 to the present affidavit. 14.12.2021 The Respondent vide letter informed the Applicant that their claim has not been rejected and is undergoing the process of verification. The Respondent also informed that the Respondent is seeking clarification and information from the Suspended management as well. The Respondent vide email also sought clarifications and documents from the suspended management of the Corporate Debtor on particulars with respect to the pending appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... memorandum is annexed as Annexure R-13 to the present affidavit. 13.01.2022 Legal opinion of Retd. Hon ble Justice K. Puj was received wherein the Applicant was advised to approach the Adjudicating Authority to adjudicate upon the claim. The Respondent begs to annex a copy of the legal opinion dated 12.01.2022 as Annexure R-14 to the present affidavit. 26.01.2022 It is stated that the Respondent herein has filed Interlocutory Applications pertaining to i. seeking an extension of 90 days of the corporate insolvency resolution process u/s 12 read with Section 60(5) of the Insolvency and Bankruptcy Code, 2016 and Rule 11 of NCLT Rules, 2016. ii. Section 19 of the Insolvency and Bankruptcy Code, 2016 read with Section 60(5) of the Insolvency and Bankruptcy Code, 2016 , Rule 11 of NCLT Rules, 2016 and Regulation 30 of IBBI(CIRP) Regulations, 2016 seeking this Hon ble Tribunal to direct the Suspended Management comprising of Ritesh Virchand Shah and Pratik Shantilal Jiyani to deposit Cash on Hand amounting to Rs. 9586571/- (Ninety five lakhs eighty six thousand five hundred and seventy one)i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uspended management of the Corporate Debtor/RDPL to evade their liability as applicant. I.A. 308 of 2022 26. The present Application is filed under Section 60(5) of the Insolvency and Bankruptcy code, 2016 read with Regulations 13 and 14 of the IBBI (CIRP) Regulations, 2016 and rule 11 of NCLT Rules, 2016 for requesting the Hon'ble Tribunal to adjudicate the claim of the Respondent in the Corporate Insolvency Resolution Process of the Corporate Debtor. 27. The Applicant submits that this Hon'ble Tribunal vide its order dated 11.08.2021 was pleased to admit said application (CP No. 481/(IB)-MB-V/2021) filed by the Financial Creditors and appointed CA Arpan Maheshkumar Shah as the Interim Resolution Professional of the Corporate Debtor. 28. The Applicant submits that Applicant herein made public announcement dated 28.08.2021 in prescribed Form A as contemplated under Section 13 (1) (b) read with Section 15 of the Code and regulations framed there under and thereby invited claims from all the creditors. The Applicant submits that the said announcement was published in the newspapers, i.e., Active Times (English) and Mumbai Lakshadweep (Marathi) on 28.08.2021 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al, Mumbai, the Applicant sought legal opinion from Retd. Hon'ble Justice K.A. Puj with regards to admitting the claim of the Respondent when the provisional financials of the Corporate Debtor show the repayment by the Corporate Guarantor to the Respondent and the continuance of the CIRP process pending the verification of the claim. The Applicant submits that Retd. Hon'ble Justice K.A. Puj advised the Applicant to seek further clarifications and documents from the Respondent and the Corporate Debtor since the proceedings before the DRT were stayed in light of the Moratorium period prescribed under Section 14 of the Code and the claim could not be crystallized. 34. The Applicant states that the Applicant vide email dated 03.12.2021 in response to email from the Respondent dated 03.12.2021 seeking admittance of their claim informed the Respondent that their claim is in the process of being verified and in furtherance of the same intimated about scheduling a discussion over Zoom Call for seeking further clarifications with respect to the claim and the link for the same was emailed to the Respondent vide email dated 06.12.2021. 35. The Applicant states that the Applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ode, pursuant to which the public announcement dated 28.10.2021 was made inviting claims from creditors. 40. The Applicant submits that additionally a corrigendum to the public notice dated 28.08.22021 was published on 22.09.2021 and pursuant to the same, Ms. Mona Vora was appointed as the Authorised Representative for the Class of Creditors i.e. the Home buyers. The last date of submission of the claim was 27.09.2021. The Applicant further submits that the 1st CoC meeting was held on 25.10.2021 during which the Applicant was appointed as the Resolution Professional (RP) u/s. 22 of the Code. 41. The Applicant further submits that the Respondent submitted its claim for an amount of Rs. 48,63,51,054 purportedly as the secured financial creditor of the Corporate Debtor by filing Form C dated 27.10.2021 and the documents were submitted on 01.11.2021 and 02.11.2021 i.e. nearly 30 days after the last date of submission of claim. 42. The Applicant submits that the Applicant on performing its duty of verifying the Claim under Regulation 13 of the IBBI (CIRP) Regulations, 2016 found that the claim was not being reflected in the books of the account and financial records of the Corp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g clarifications from all concerned individuals, the Applicant has filed the present application to request this Hon'ble Tribunal to adjudicate upon the claim of the Respondent. Finding 48. Heard the counsel for the Applicant in I.A. 182 of 2022 and the applicant in the cross I.A. 308 of 2022 and perused the records. 49. The legal question which arises for consideration is whether Piramal Capital and Housing Finance Ltd. (earlier known as DHFL/Applicant) is a Financial Creditor in terms of section 5(7) of the Code. 50. It is the case of the Applicant in I.A. 182 of 2022 that the Respondent/RP has refused to admit the claim of the Applicant as the Financial Creditor. The Applicant has produced a letter of sanction of project loan to the tune of Rs. 100 crores dated 01.06.2018. The said sanction letter was executed by the Applicant/Corporate Debtor/Rite Developers Private Limited. The annexures attached with the sanction letter including terms and conditions of the agreement, list of unsold units, list of booked units, list of sold units, list of units of Lord Shree Ganesh Developers (Joint owner of the Land in project), unsold flats repayments, booked flat wise rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and hence, they decided to peruse other means of obtaining financial aid and further sought a assistance of RDPL to close the transactions with the DHFL. On 18th February, 2021 Rite Developers Private Limited have offered the financial assistance and categorically stated that the amount of Rs. 38,51,98,790 lying in the accounts of DHFL, can be unconditionally adjusted towards the loan amount availed by Corporate Debtor to the tune of Rs. 32,50,00,000/-. The letters dated 27.07.2020 and 18.02.2021 have reproduced below: 56. The Respondent/RP therefore reiterated that in view of the internal communication between the inter-corporate group and the clarification dated 29.12.2021 by the erst while director of the Corporate Debtor, they came to a conclusion that the outstanding loan of the applicant namely Piramal Capital Housing Finance Limited has been repaid and hence, failed to admit the claim of the Applicant. The letter of 29.12.2020 is reproduced below; 57. During the course of the hearing, this Tribunal sought to expand the scope of transaction audit report and directed the RP to conduct a transaction with relation to the transaction between DHFL and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uradha Real Estate Developers Private Limited). The said accounting entry was passed in the Books of Accounts of Corporate Debtor on dated 31/03/2021). The Lender DHFL has denied to loan repayment of AREDPL and have informed that RDPL is not only a Corporate Guarantor for the loan availed by the AREDPL from the DHFL but has also availed a separate mortgage loan of Rs. 758,51,98,790/- under Loan Account Code No. 00034776 from the erstwhile DHFL. DHFL (Piramal) further submitted that the payment made by RDPL was towards the part payment of the sold loan and not for the loan availed by the AREDPI. As the amount of the repayment of the loan of the AREDPL by RD PL is disputed by the DHFL and accordingly the Corporate Debtor has filed application with Debt Recovery tribunal, Mumbai with Case No.: SA/74/2021 dated 30th April 2021. It has also been observed in the Securitisation Application filed by the AREDPL in the DRT, Mumbai, it is specifically averred that due to failure on part of DHFL in disbursing the complete loan amount, the AREDPL decided to repay the said loan to DHFL and therefore, the AREDPL wrote a letter to its sister concern i.e. RDPL seeking ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Samir Dadia and from Samir Dadia the same was transferred to Mr. Bulchandani as Mr. Bulchandani has filed case against the Company Rites Developers Private Limited and to satisfy the claim of Mr. Bulchandani this transaction of Rs. 8.00 Crores was undertaken. It can be seen the loan amount was not used for the purpose for which the loan was sanction. This tranche of Rs. 9.50 Crores was disbursed even when the other conditions mentioned in Page 6 of 26 of Sanction letter remained non-complied. As informed by the erst while management of the Company the said transaction was undertaken on behest of DHFL. 4) Mortgage till 38th floors whereas the building height cannot be more than 32 meters: It has been stated by the Architect that the width of the road in the area in which the project is situated is less than 9 meters and hence the construction of the building cannot be more than 32 meters i.e. 9 floors. Whereas the sanction letter and mortgage agreements shows that mortgage of the flat was done till 38th floor. Question arises how one can mortgage the floors which cannot come into existence looking to the situation of the project. Regarding Sanction ..... X X X X Extracts X X X X X X X X Extracts X X X X
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