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TMI Blog2022 (11) TMI 804X X X X Extracts X X X X X X X X Extracts X X X X ..... 0505. Therefore, this Bench has jurisdiction to deal with this petition. 3. As per form Part 4 of Form 1 of the Petition, Rs.235,29,34,240 (Rupees Two Hundred Thirty-Five Crores Twenty-Nine Lakh Thirty-Four Thousand Two Hundred and Forty Only) as on 15.12.2019 along with the further interests, charges and expenses till realisation is due and payable by the Corporate Debtor to the Applicant and the date of default is 28.09.2017. Submissions made by the Financial Creditor by the way of Petition: 4. It is the case of the Petitioner that in October 2013, the South Indian Bank ("Assignor Bank") sanctioned a Standby Letter of Credit Facility to the Corporate Debtor for an amount of USD 21,700,000 (United States Dollar Twenty-One Million and Seven Hundred Thousand Only) (SBLC Facility). A copy of the same is annexed as Annexure I(K) to the Petition. 5. The Assignor Bank and the Corporate Debtor executed a Credit Facility Agreement dated 09.10.2013. As per the terms agreed, the SBLC Facility was valid for 5 years with a bullet repayment at the end of 5 years. 6. The Assignor Bank entered into an Assignment Agreement with the Applicant as on 04.07.2018. Vide the said agreement the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... EMENT SANCTION: 15. The Petitioner states that vide letter dated 18.05.2021, the Petitioner had sanctioned a fresh settlement proposal to the Respondent. Vide the same letter dated 18.05.2021, the Petitioner granted fresh period of repayment of dues with fresh terms. The letter dated 18.05.2021 was issued after filing of the present petition, where the default of earlier date that is 28.09.2017 was pleaded by the Petitioner which is not in existence once the letter dated 18.05.2021 comes in the existence. Therefore, the Petitioner be estopped from pressing the present petition once the new sanction letter is issued. Therefore, the present petition deserves dismissal on this sole ground. The Letter dated 18.05.2021 is annexed and marked as Annexure II to this reply (page 22). B. THE ALLEGED DEFAULT OCCURRED AFTER THE COMPANY IS DECLARED AS RELIEF UNDERTAKING: 16. The Respondent company had also borrowed about Rs.63,34,00,000,00/- from Government of Maharashtra. Taking into consideration the financial position of the Respondent Company and the consequences that were likely to ensue if the industry which was being run by it was to be closed, the Government of Maharashtra took act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In fact, Bilcare Limited is even today protected by the Notification by State Government as a relief undertaking. Therefore, the default never accrued. C. ABSENCE OF PROPER AUTHORITY 21. The Respondent submits that in order to file an Application under Section 7 of the IBC, it is necessary that the Application so filed is in the form and manner so prescribed by the IBC including the rules and regulations prescribed therewith. The enactment of the IBC is to be followed in its letter and spirit so as to avoid causing any grievance or inconvenience to any Party including the Respondent herein. 22. The Respondent submits that the Application filed by the Applicant is not tenable as it has not been filed in consonance with the procedure as laid down by law. The Respondent submits that the Application filed by the Applicant has not been filed by a proper Authority or a person having the proper and necessary authorisation to file the same, one Mr. Akash Deep, Chief Manager of the Applicant has signed the application as an authorised person on behalf of the Applicant. As mentioned in Form 1, it is mandated and required that an authorization be enclosed by the Applicant in favour of su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions of the Companies Act, 1956 and hence, now bound by the Provisions of the Companies Act, 2013. As per section 21 of the Companies Act, 2013, any document requiring authentication by the Company may be signed by any employees however only upon due authorisation by the authenticating company. The present petition is signed and authenticated by Mr. Akash Deep, who is employee of the petitioner claiming his authority on a power of attorney. It is surprising to note that no board resolution authorising Mr. Akash Deep to authenticate the document for and on behalf of the Petition is annexed. Therefore, it is humbly stated that the present petition is filed without appropriate authority to the person authenticating the same and hence the present petition deserves dismissal on this sole ground. D. THE DEBT CLAIMED TO BE A FINANCIAL DEBT IS NOT A FINANCIAL DEBT AS PER SECTION 5(8) OF THE IBC 26. It is submitted that the amount claimed by the applicant as the financial debt is not a financial debt as stipulated in Section 5(8) of the Insolvency and Bankruptcy Code, 2016 (IBC). 27. The Respondent submits that the actual beneficiary of the Standby Letter of Credit (SBLC) issued by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at it had provided its assets as a security for loans taken by Bilcare Packaging Ltd. There was no direct nexus between the Respondent and the Applicant whereas the root requirement of a Creditor to be a Financial Creditor for the purpose of Section 7 of the IBC is the transaction vis-a vis the actual Corporate Debtor viz Bilcare Packaging Ltd. As per the observations of the Hon'ble Supreme Court, since the Respondent has given its assets to secure the debt of a third party viz Bilcare Packaging Ltd, the same may fall squarely within the definition of Debt as per 3(10) of the IBC but it cannot partake the character of a financial debt within the meaning of Section 5(8) of the Code. Hence in the present circumstances, the Applicant will only be considered as a Secured Creditor of the Respondent and not a Financial Creditor as per the provisions of Section 5(7) read with Section 7 of the IBC. 30. It is admitted that the Guarantee Deed is executed by the Respondent in favor of the Petitioner. However, the Corporate Debtor humbly states that mere execution of deed of guarantee also does not create any Financial Debt in favor of the Petitioner. To explain this point further, the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... creditor as claimed and therefore, this petition deserves dismissal on this sole ground. Findings : 33. We have heard both the parties and perused the records. 34. We note that the first defence of the Corporate Debtor regarding entering into a separate settlement sanction with the Financial Creditor cannot sustain since there is mention of certain pre-conditions for the agreement to come into effect. However, the Corporate Debtor has failed to satisfy the compliance of the first condition precedent i.e. payment of 15% of the total settlement amount of Rs. 89 crore. Moreover, it is nowhere mentioned that the present sanction letter debars the Financial Creditor to approach this forum, considering that the Corporate Debtor has once previously breached the consent terms. 35. This Bench finds it pertinent to note the order of the Hon'ble Supreme Court in Rajendra Narottamdas Sheth & Anr Vs. Chandra Prakash Jain & Anr. (Civil Appeal No. 4222 of 2020) para 11: "The NCLAT in its judgment in Palogix Infrastructure (supra) held that a 'power of attorney holder' is not competent to file an application under Section 7 on behalf of the financial creditor. However, the NCLAT made certai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claiming that a specific authorisation has not been given to the applicant to file the Petition on its behalf, we have in the contrary found a clear power of attorney executed by the financial creditor in favour of the Applicant in paragraph 2 of the "Power of Attorney" as annexed to the Petition. 37. We note that as per paragraph 1 of the Credit Facility Agreement entered into between the parties, the agreement was formed between the "Assignor Bank" and the "Corporate Debtor" in the present case. At the request of the Corporate Debtor the Standby Letter(s) of Credit facility was extended to M/s Bilcare Packing Ltd. Hence, the claim of the Corporate Debtor that it is not the "Corporate Debtor" in the present petition is nothing but an attempt to shy away from its liability, considering that all the clauses were agreed between the "Assignor Bank" and the "Corporate Debtor". The Corporate Debtor has potrayed the facts in a deranged manner and has tried to misguide this Bench. 38. We also consider the facts of the case in the lights of the Order passed by Hon'ble Supreme Court in Swiss Ribbons Pvt. Ltd. & Ors. Vs. Union of India & Ors. [Writ Petition (Civil) No. 99 of 2018] upholdin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcement 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 transactions as may be notified by the Central Government in consultation with any sectoral regulator; d) The moratorium shall have effect from the date of this order till the completion of the CIRP or until this Adjudicating Authority approves the resolution plan under sub-section (1) of section 31 of the IBC or passes an order for liquidation of Corporate Debtor under section 33 of the IBC, as the case may be. e) Public announcement of the CIRP shall be made immediately as specified under section 13 of the IBC read with regulation 6 of the Insolvency & Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. f) Mr. Ashutosh Agarwala ..... X X X X Extracts X X X X X X X X Extracts X X X X
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