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TMI Blog2022 (3) TMI 1425X X X X Extracts X X X X X X X X Extracts X X X X ..... y of stamp duty payable on documents of corporate guarantee, but we are concerned with the issue whether the appellant Company deserves to be wound up or not - thus, the issue of stamp duty raised by the Corporate Debtor is not legally sustainable and is liable to be rejected. Validity of the letter of guarantee - HELD THAT:- The contention of the Corporate Debtor to the effect that there was no consent of the principal borrower to the letter of guarantee executed by Corporate Debtor has no force of law. It is also appropriate to mention here that the Financial Creditor had issued a recall notice dated 30.07.2018 to the principal borrower as well as the Corporate Debtor and another personal guarantor Mr. Rishi Agarwal which was duly received by them. The Corporate Debtor having received the said notice did not raise any objection nor sent any reply disputing the liability and therefore the Corporate Debtor is stopped from raising all the above pleas in this Company Petition. Value of pledged shares and other securities - HELD THAT:- It is not the case of the Corporate Debtor that the pledged shares have been sold by the Financial Creditor. The pledged shares are claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, whereby the Applicant granted a rupee term loan facility to the Borrower to the extent of INR 30,00,00,000/- (Rupees Thirty Crores Only) ( Loan Facility ) on the terms and conditions as more particularly mentioned in the said Loan Agreement. Pursuant to the Loan Agreement the Applicant disbursed the Loan Amount of Rs. 29,00,00,000/- to the Borrower. III. The Corporate Debtor in consideration of the Applicant having agreed to advance the said Loan Facility to the Borrower, executed Corporate Guarantee under which it irrevocably and unconditionally agreed for repayment on demand of the Loan Facility advanced to the Borrower by the Applicant along with interest and other monies, costs, charges or expenses which may be incurred or suffered or become due and payable by the Borrower to the Applicant at any point of time. IV. The Financial Creditor submits that one Mr. Rishi Agarwal, provided personal guarantee to secure the repayment of the amounts by the Borrower pursuant to the Loan Agreement by the Applicant. Further, the Memorandum of Entry recording mortgage of immovable property of the Corporate Debtor by deposit original title deeds was prepared was provided to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Pledge Agreement. X. The Financial Creditor issued follow up notice inter-alia to the corporate Debtor reiterating the Events of Defaults committed inter-alia by the Borrower and Corporate Debtor and their ongoing obligation to make payment of the then outstanding amount as per the terms of the Loan Agreement. XI. The Borrower and the Corporate Debtor, have failed to make repayment of the loan, as per the terms of the Loan Agreement or the Security Agreement, or the other security documents. Hence this Petition. 3. The Corporate Debtor filed affidavit in reply through Sandeep Kasare, Authorised Representative of the Corporate Debtor opposing the admission of the above Company Petition. The brief submissions of the Corporate Debtor are as follows: I. The Corporate Debtor submitted that he is neither a borrower nor a guarantor nor a mortgagor in respect of the alleged rupee term loan. The Corporate Debtor has not availed any loan from the Applicant. The Financial Creditor is a non-banking finance company engaged in the business of Financial Creditor is a non-banking finance company engaged in the business of Financial and advisory services. II. The Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m against Mrs. Anupama Agarwal (the borrower). The Guarantor/Corporate Debtor provided guarantee for the personal financial assistance without knowledge of the understanding between the borrower and the lender behind the curtain. In that particular case, the Financial Creditor ought to have had the knowledge for the use of such huge loan availed by Mrs. Anupama Agarwal. Since the end us being a back to back loan to said M/s. Vadraj Cement Ltd. and the Financial Creditor being the majority shareholder the proceedings taken out against the Corporate Debtor is abuse of process of law and liable to be dismissed with the costs. VII. The Corporate Debtor further states that the Financial Creditor although appropriate shares bearing the face value of 10 each against unilateral rate of Rs. 8 each failed to give credit for the shares appropriated them and proceeding to recover the amount concealing the fact of appropriate of security. VIII. Further, the borrower has filed a Proof of Debt before the Official Liquidator, Hon'ble Bombay High Court. Thereafter, in the notice that dated 26.12.2018 issued under Section 13(2) of the SARFAESI Act, 2002 the account of the borrower ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mp Act. iii. The loan advanced by the Financial Creditor has been secured with various securities including pledge of certain shares and Financial Creditor is claiming the entire amount under the guarantee without deducting the value of securities. 2. The first issue with regard to stamp duty. Similar issue fell for consideration before the Division Bench of the Hon'ble Bombay High Court headed by Hon'ble Chief Justice, Manjula Chellur, and Hon'ble Justice M.S. Sonak, J. in Appeal (L) No. 911 of 2015 in Company Petition No. 317 of 2012 (Classic Diamonds Vs. ICICI Bank) while dealing with a winding up petition. The following are the observations of the said Division Bench in para 8 of the judgment with regard to the plea of deficit stamp duty payable on the documents raised by the appellant. Para-8:-In the State of Gujrat where the document of corporate guarantee was executed, it was based an adequate stamp duty payable on the instrument so far as that State. According to the appellant, when this document comes to the State of Maharashtra in the light of sections 18 and 19 of Bombay Stamp Act which are applicable in the State of Maharashtra, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which was duly received by them. The Corporate Debtor having received the said notice did not raise any objection nor sent any reply disputing the liability and therefore the Corporate Debtor is stopped from raising all the above pleas in this Company Petition. 4. The next issue is with regard to the value of pledged shares and other securities. It is the contention of the Corporate Debtor that the Financial Creditor is claiming the entire amount from the Corporate Debtor without giving credit of the value of shares and other securities. It is not the case of the Corporate Debtor that the pledged shares have been sold by the Financial Creditor. The pledged shares are claimed to have been transferred in the name of Financial Creditor and the Financial Creditor is exercising certain voting rights under the transferred shares. It is settled proposition of law that the proceedings before the NCLAT are in the nature of resolution and not for recovery. It is not the case of the Corporate Debtor that the amount due and payable to the Financial Creditor is less than the threshold limit for admitting the Section 7 Application. 5. In view of the foregoing reasons, this Benc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ebtor, 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 employees of the corporate debtor shall provide all documents in their possession and furnish every information in their knowledge to the IRP/RP. j. Registry shall send a copy of this order to the Registrar of Companies, Mumbai, for updating the M ..... X X X X Extracts X X X X X X X X Extracts X X X X
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