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TMI Blog2024 (5) TMI 570X X X X Extracts X X X X X X X X Extracts X X X X ..... ctum of existence of financial debt and its default. The finding recorded by the Adjudicating Authority that there is a financial debt, which is in default, does not warrant any interference by this Tribunal in the present Appeal. Debt and default having been proved, the Adjudicating Authority has rightly admitted Section 7 Application filed by the Financial Creditor. Thus, no grounds have been made out to interfere with the impugned order in the present Appeal. There is no merit in the Appeal. The Appeal is dismissed. - [ Justice Ashok Bhushan ] Chairperson , [ Barun Mitra ] Member ( Technical ) And [ Arun Baroka ] Member ( Technical ) For the Appellant : Mr. Abhijeet Sinha, Sr. Advocate with Mr. Chirag Madan, Mr. Aditya Shukla, Ms. Ravleen Sabharwal, Mr. Agam Maloo, Mr. Prakhar Tandon, Mr. Rahul Agarwal, Mr. Randeep Sabharwal, Mr. Manav Sharma, Advocates For the Respondents : Mr. J. Rajesh, Mr. Aniket Mookherjee and Mr. Jaitegan Singh Khurana, Advocates JUDGMENT ASHOK BHUSHAN, J. This Appeal by a Suspended Director of the Corporate Debtor has been filed challenging the order dated 10.10.2023, admitting Section 7 Company Appeal (AT) (Insolvency) No.1401 of 2023 2 Application fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Appellant is endeavouring to liquidate the dues of all the Banks, including Respondent No.1 within two weeks. Noticing the above submission of learned Counsel for the Appellant, Appeal was entertained and an interim order was passed on 20.10.2023. Paragraphs 5 to 8 of the order dated 20.10.2023 are as follows : 5. Learned counsel for the Appellant submits that Appellant is endeavouring to settle with all members of the Consortium and is in dialogue with the Lead Bank of the Consortium of Lender, which also includes Respondent No.1. Appellant has made submission that Appellant s endeavour is to liquidate the dues of all the Banks including the Respondent No.1 for which two weeks time may be allowed. In view of the above submission, we are of the view that ends of justice be served in allowing two weeks time to the Appellant. 6. In the meantime, the IRP shall ensure that the Corporate Debtor is run as a going concern, however, till the next date CoC be not constituted. 7. Issue notice to the Respondents. Respondents are allowed two weeks time to file Reply. Two weeks time is allowed to file Rejoinder. 8. Appellant is permitted to file Additional Affidavit within three weeks ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Consortium Lender, informing that an Oman based investor has shown interest to acquire the units and also settle the Banks outstanding at around Rs.150 crores. However, the said offer was rejected. In Appeal on 20.10.2023, the Appellant undertook to liquidate the debt within two weeks and on the said statement, an interim order was granted by this Tribunal. However, for last six months, the Appellant has been unable to liquidate the debt. Several OTS offers were made, including the offer dated 27.12.2023 of Rs.115 crores towards the dues of all Lenders, which was rejected. On 31.01.2024, the Appellant made an offer of Rs.120 crores to settle the dues of the Lenders, however, the proposal is still to be submitted with upfront payment of 10% of the dues. On 31.01.2024, Respondent No.1 informed the Appellant that proposal be made along with 10% upfront payment and entire payment must be made within 90 days. The Appellant did not submit any proposal with 10% upfront payment and did not issue any further communication. In the Joint Lenders Meeting held on 28.03.2024, all the Consortium Members informed that no OTS proposal was pending with them. It is submitted that debt and default ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered, and therefore, more time was required to process the resolution of the account. Therefore, the present representation should be considered. 18. The Borrower has actively taken steps to arrive at a sustainable solution for the continuing financial and Cash Flow issues faced by the Company to resolve the problems in the long run. The delay, if any, was therefore wholly unintentional and not deliberate, and the proposal mentioned above of the Strategic Investor would demonstrate that the Borrower Company has endeavored to make all payments due and payable. 19. As the priority of the Bank is to recover its dues without taking recourse to litigation, including recourse mentioned under the provisions of the SRFAESI Act, we request that the factum regarding the proposal of the strategic Investor should be taken into consideration. 20. We say that in the aforesaid circumstances and specifically when restructuring plan/ resolution Plan is being actively pursued and discussed there seems no legitimate/ legal requirement to initiate SARFAESI proceedings by way of issuing the Notice under reply. We categorically say that the said Notice under reply is premature, misconceived and unwarran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty. Regards, Sd/- Sudhanshu Tripathi Chief Manager 11. An affidavit has been filed by the Bank that after the said letter dated 31.01.2024, neither any offer was made for deposit of 10% of the OTS, nor any further steps have been taken by the Appellant. Respondent No.1 has also brought on record Minutes of the JLM Meeting on 28.03.2024, in which meeting Lenders participated and it was noted that no OTS proposal by Appellant Corporate Debtor is pending consideration before the Members of the Consortium. 12. From the materials brought on record, it is clear that there is no dispute to the outstanding amount due on the Corporate Debtor. Sequence of events as noted above, clearly indicate that at no stage Corporate Debtor has denied its liability. As noted above, in reply to the notice under Section 13, sub-section (2) of the SARFAESI Act, the Appellant cited reasons for not making the payment, but liability to make payment was not denied. The Adjudicating Authority by the impugned order has found that Financial Creditor has been able to establish the factum of existence of financial debt and its default. The finding recorded by the Adjudicating Authority that there is a financial debt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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