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TMI Blog2022 (5) TMI 1475X X X X Extracts X X X X X X X X Extracts X X X X ..... 5190MH2004GO1148838 having its registered office at IDBI Tower, W.T.C. Complex, Cuffe Parade MUMBAI 400005 The applicant is in the Banking business of providing various types of financial facilities including business loans, personal loans, consumer loans, loan against property, home equity loans, term loan etc. 3. The corporate debtor is a Private limited company, incorporated under the provisions of The Companies Act, 1956 on 24.10.2002, duly registered with Registrar of Companies, Ahmedabad with CIN: U41000GJ2002PTC041470 and having registered office at Bodakdev, Ahmedabad, Gujarat State. The Authorized share capital of the Respondent is Rs. 8,00,00,000/- and paid up share capital of the company is Rs. 42,82,360/-. The corporate debtor is an associate company of M/s. Doshion Water Solution Private Limited being a part of Doshion Group. The corporate debtor is engaged in the business of manufacturing water treatment plant & equipment and trading of water treatment components. 4. The present application is filed by IDBI Bank Ltd. against corporate debtor who is the corporate Guarantor for securing the financial assistance granted by the applicant to M/s. Doshion Water Solution P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .06.2014 and also approved the execution of various documents in favour of Consortium led by BOB along with the applicant. 9. The applicant had issued restructuring sanction letter dated 26.06.2014 to the Borrower which explicitly mentioned the terms and conditions, details of secured assets, rate of interest, repayment schedule, other specific conditions of the said restructured enhanced facility. The said sanction letter along with all terms and conditions has been duly acknowledged and accepted by the Borrower and Guarantors including the corporate debtor being corporate Guarantor. The said restructured enhanced financial facility was granted against: * 1st pari passu charge on the current assets of the Borrower; and * Pari passu first charge on immovable properties as described in sanction letter; and * Personal guarantee of Mr. Ashit Dhirajlal Doshi, Mr. Rakshit Dhirajlal Doshi, Mrs. Kalpana Ashit Doshi, Mrs. Krupa Sujit Doshi, Mrs. Rupa Nishit Doshi, Mrs. Purvi Rakshit Doshi & Mrs. Pooja Amit Doshi; and * On corporate guarantees of M/s. Doshion Pvt. Ltd., M/s. Thomson Nusa Metals Pvt. Ltd. & M/s. Fivebro International Private Limited. 10. The applicant further state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cluding corporate guarantee of the corporate debtor by letter dated 04.11.2016, but, both - Borrowers and Guarantors have failed to respond to the said notice and neither made any payment not even after receiving the aforesaid recall and guarantee invocation notices. 13. The applicant further states that as the Borrower continued to neglect the repayment of loan amount, the applicant Bank issued demand notice/statutory notice dated 22.03.2017 under Section 13(2) of SARFESI Act, 2002 to the Borrower, copy of which was also sent to both personal and corporate guarantors including the corporate debtor. It is further submitted by the applicant that notice issued under Section 13(2) of SARRFAESI Act, 2002 dated 25.10.2019 was replied by the corporate debtor vide letter dated 04.01.2020. The applicant Bank has already initiated legal recovery proceedings under Section 19 of the Recovery of Debts and Bankruptcy Act, 1993 before DRT by filing OA No. 519/2017 on 16.08.2017 against the Borrower and personal Guarantors and corporate Guarantors including the corporate debtor. In the said proceedings, the contesting defendants (M/s. Doshion Water Solutions Private Limited), personal Guarantors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 06.04.2018; * The corporate debtor company is a going concern and is able to make payments to its own financial creditor. 17. The applicant filed affidavit rebutting the contentions raised in the reply filed by the corporate debtor inter alia as: (i) Under "Delegation of Powers" affirmed by Board of Directors of the applicant Bank bestowing various powers on various designated officers to act on behalf of the applicant Bank, DGM is empowered to approve the application and other documents to be filed before Adjudicating Authorities. (ii) As regards the issue of limitation, the applicant has rebutted that the recall notice was issued on 20.09.2016, the guarantee invocation notice was issued on 04.11.2016 (Statutory Notice under Section 13(2) of SARFAESI Act was issued on 22.03.2017). The present application was filed on 26.10.2018, thus the present application is within the period of limitation. (iii) As regards the contention raised by the corporate debtor that they have no common directors with the Borrower company resulting into no obligation, the applicant relied on the master data of the corporate debtor as well as details of the directors obtained from office of Ro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssuance of requisite deeds of guarantee. * Corporate debtor has executed deed of guarantee dated 27.06.2014 in favour of the security trustee who had acted as an agent on behalf of all Banks/lenders under Consortium funding. * Corporate debtor has executed deed of guarantee dated 27.06.2014 in favour of the security trustee who had acted as an agent on behalf of all Banks/lenders under Consortium funding. The trustee had acted by the consent of Borrower and lender in terms of security trustee agreement dated 26.11.2013 as his agent. As per clause No. 7 & 9 of guarantee agreement, such guarantee would be enforced as if present corporate debtor were principal debtor to the lenders. As per clause 8, such guarantee of corporate debtor was continuing irrevocably and enforceable, notwithstanding any dispute between Borrower and lenders. Further clause 18 makes guarantee deed executed by corporate debtor independent and distinct from any other security agreement. * Subsequently, the Borrower and corporate debtor had jointly executed the revival letter dated 07.03.2017 acknowledging the debt. * The applicant has recalled the loan facility by notice dated 20.09.2016, copy of which w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Prabodh Kumar Das v. Gillanders Arbuthnot) 02 AIR 1981 AIR 215 (Union of India v. Narayanasetti Jugadeshwararao & Ors. 03 1963 RLW 430 (Ram Narain v. Ltd. Col. Hah Singh) 04 [1861-73] All ER Ext 1634 (Westhead & Ors. v. Spronson & Anr. 05 [1874-80] All ER Rep. Ext. 1799 (Morell v. Cowan 06 [2017] 82 taxman.com 396 (NCLAT) State Bank of India, Colombo v. Western Refrigeration (P.) Ltd. 07 [2017]86 taxmann.com 81 (NCLAT) (Palogix Infrastructure P. Ltd. v. ICICI Bank 08 [2018] 98 taxmann.com 213 (SC) (BK Educational Services P. Ltd. v. Parag Gupta & Associates) 09 [2020] 118 taxmann.com 48 (NCLAT) (Bijay Kumar Agarwal v. State Bank of India 10 [2020] 117 taxmann.com 478 (NCLT-Hyd.) (State Bank of India v. Athena Energy Ventures (P.) Ltd. 11 [2020] 116 taxmann.com 967 (NCLT-Allahabad) (Indiabulls Housing Finance Ltd. v. EMM VEE Infrastructure (I) P. Ltd. 12 [2020] 115 taxmann.com 356 (NCLT-Hyd.) SEW Infrastructure Ltd. v. Mahendra Investment 13 [2019] 101 TAXMANN.COM 464 (NCLAT) Dr. Vishnu Kumar Agarwal v. Piramal Enterprises Ltd. 21. In compliance of order dated 21.08.2019, the applicant filed additional affidavit to submit the details on record with respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Corporate debtor had executed deed of guarantee dated 27.06.2014 in favour of the security trustee who had acted as an agent on behalf of all Banks/lenders under Consortium funding. The trustee had acted by the consent of Borrower and lender in terms of security trustee agreement dated 26.11.2013 as his agent. Relevant portion/clauses of the Deed of Guarantee dated 27.6.2014 is reproduced below: "1. If at any time default shall be made by the Borrower in payment of the principal sum (not exceeding Rs. 408.64 crores) together with interest, costs, charges, expenses and/or other moneys for the time being due to the BOB Consortium in respect of or under the abovementioned credit facilities or any one of them the Guarantor shall forthwith on demand pay to the BOB Consortium the whole of such principal sum (not exceeding Rs. 408.64 crores) together with interest, costs, charges, expenses and/or other money as may be due to the BOB Consortium in respect of the above mentioned credit facilities and shall indemnify and keep indemnified the BOB Consortium against all losses of the said principal sum, interest or other money due and all costs, charges, expenses whatsoever which the BOB Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Borrower with the BOB Consortium/security trustee which security documents would contain stipulations as to insurance assignment and delivery of insurance policies to BOB Consortium/security trustee the margin of insurance policies to BOB Consortium/security trustee the margin of value of properties to be maintained and the periodical furnishing of different statements to the BOB Consortium and other matters the Guarantor agrees that failure in requiring or obtaining such security or in the observance or performance of any of the stipulations or terms of the said security documents and no default of the BOB Consortium in requiring or enforcing the observance or performance of any of the said stipulations or terms effect of releasing or discharging or in any manner affecting the liability of the Guarantor under these presents. 5. The BOB Consortium shall be at liberty to take in addition to the subsisting securities any other securities for the abovementioned credit facilities or any of them or any part thereof and to release or forbear to enforce all or any of the remedies upon or under such securities and any collateral security or securities now held by the BOB Consorti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terest as well as costs, (as between advocate and client) charges and expenses, and/or other money for the time being due to the BOB Consortium in respect of or under the abovementioned credit facilities or any of them without requiring the BOB Consortium to realise from the Borrower the amount due to the BOB Consortium in respect of the abovementioned credit facilities and/or requiring the BOB Consortium to enforce any remedies or securities available to the BOB Consortium. 10. The guarantee herein contained shall not be or in any way prejudiced by any absorption of or by BOB Consortium or by any amalgamation thereof or therewith but shall ensure and be available for and by the absorbing or amalgamated BOB Consortium of concern. 11. The guarantee shall be irrevocable and enforceable against the Guarantor's notwithstanding any dispute between the BOB Consortium and the Borrower. 12. The Guarantor affirms, confirms and declares that any balance confirmation and/or acknowledgement of debt and/or admission of liability given or promise or part payment made by the Borrower or the authorised agent of the Borrower to the BOB Consortium shall be deemed to have been made and/or g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e deemed to have consented to or acquiesced in the same. 17. The Guarantor agrees that if the Borrower being an individual becomes an insolvent or being a company enters into liquidation or winding up (whether compulsory or voluntary) or if the management of the undertaking of the Borrower is taken over under any law or if the Borrower and/or the undertaking of the Borrower is nationalised under any law or make any arrangement or composition with creditors the BOB Consortium may (notwithstanding payment to the BOB Consortium by the Guarantor or any other person of the whole or any part of the amount hereby secured) rank as creditor and prove against the estate of the Borrower for the full amount of the BOB Consortium's claims against the Borrower or agree to accept and composition in respect thereof and the BOB Consortium may receive and retain the whole of the dividends, composition or other payments thereon to the exclusion of all the rights of the Guarantor in completion with the BOB Consortium until all the BOB Consortium claims are fully satisfied and the Guarantor will not by paying off the amounts payable by them or any part thereof otherwise prove of claim against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Guarantor agrees that the loans hereby guaranteed shall be payable to the BOB Consortium on the BOB Consortium serving the Guarantor with a notice requiring payment of the amount and such notice shall be deemed to have been served on the Guarantor either by actual delivery thereof to the Guarantor or by dispatch thereof by Registered Post or certificate of posting to the Guarantor address herein given or any other address in India to which, the Guarantor may by written intimation given to the BOB Consortium request the communication addressed to the Guarantor be dispatched. Any notice dispatched by the BOB Consortium by registered posting to the address to which it is required to be dispatched under this clause shall be deemed to have been duly served on the Guarantor four days after the date of posting thereof and shall be sufficient if signed by any officer of the BOB Consortium and in proving such service it shall be sufficient if it is established that the envelope containing such notice, communication or demand was properly addressed and put into the post. 21. The Guarantor hereby understands that as a pre-condition relating to grant of the loans/advances/other non-fund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank's and/or financial institution's and/or Securitisation Company or special purpose vehicle (SPV) or third parties without giving any notice to Guarantor and on such terms and conditions as the BOB Consortium may deem fit at Guarantor's costs and expenses. While doing so, the BOB Consortium may either reserve the right to collect the dues and/or to proceed against Guarantor/Borrower on behalf of the purchaser's assignee's or transferee's. In the event of the BOB Consortium assigning, securitising, transferring as above, the BOB Consortium/assignee may if it so desire and at its sole discretion appoint a trustee or a company or a SPV for the benefit of such purchasers/assigners and may transfer/assign the securities and the security/loan documents executed by the Borrower/Guarantor in favour of such trustee/company/SPV for holding the same on behalf and for the benefit of the assignees/purchasers/investors and such trustee/company/SPV may raise funds for such purchase on the strength of the assigned securities, Borrower's and Guarantor's obligations by issuing pass through/pay through certificates, bonds or other instruments to the investors on such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntext thereof, include its successors and assigns); IN WITNESS WHEREOF the Guarantor has executed these presents on the day and year first hereinabove written." 24. As per clause No. 7 & 9 of guarantee agreement, such guarantee would be enforced as if corporate debtor was principal debtor to the lenders. As per clause 8, such guarantee of corporate debtor was continuing and such guarantee of corporate debtor is irrevocable and enforceable notwithstanding any dispute between Borrower and lenders. Further clause 18 makes guarantee deed executed by corporate debtor independent and distinct from any other security agreement. Subsequently, the Borrower and corporate debtor had executed the revival letter dated 07.03.2017 acknowledging the debt. As per said revival letter, the corporate debtor had acknowledged the entire outstanding debts in terms of section 18 of Limitation Act. The applicant has recalled the loan facility by notice dated 20.09.2016 and the copy of which was also forwarded to corporate debtor. Thereafter, the corporate guarantee was invoked on 04.11.2016. The present application is filed by DGM who is authorised to act on behalf of the applicant Bank pursuant to clau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P of corporate debtor having registration number IBBI/IPA-001/IP-P-00157/2017-18/10326 having office at 9-B, Vardan Tower, Near Vimal House, Lakhudi Circle, Navrangpura, Ahmedabad 380014, subject to the condition that no disciplinary proceedings are pending against him. Specific consent of the IRP in Form 2 along with disclosures as required under IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 is filed which is on record. 31. We direct the Financial Creditor to deposit a sum of Rs. 2.00 lacs (Rupees two lacs only) with the Interim Resolution Professional, namely Mr. R.D. Choudhary to meet out the expenses for performing functions assigned to him in accordance with regulation 6 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Person) Regulations, 2016. The needful shall be done within one week from the date of receipt of this order by the Financial Creditor. The amount however be subject to adjustment by the Committee of Creditors, as accounted for by Interim Resolution Professional, and shall be paid back to the Financial Creditor. 32. As a consequence of the application being admitted in terms of Section 7(5) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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