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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 ..... tion filed by Indian Overseas Bank (Respondent No.1 herein). The Appellant aggrieved by admission of Section 7 Application has come up in this appeal. 2. Brief facts of the case necessary to be noticed for deciding the Appeal are : (i) The Corporate Debtor - Shrivallabh Pittie South West Industries Limited has availed various facilities from the Indian Overseas Bank in a consortium towards Working Capital Facility. Respondent No.1 provided a sum of Rs.63 crores to the Corporate Debtor against the stock and receivables not exceeding 180 days. Credit facilities were sanctioned to the Corporate Debtor starting from 03.11.2021 and thereafter from time to time. The credit facilities were revised by amended Sanction Letter dated 14.08.2020. (ii) Respondent No.1 classified the account of the Corporate Debtor as Non-Performing Asset ("NPA") on 02.05.2022 with effect from 31.03.2022 on account of default committed by Corporate Debtor in paying the amount due and payable. The Indian Overseas Bank by notice dated 29.07.2022 demanded payment of Rs.67,12,33,943.83/- as on 30.06.2022 within 10 days. Respondent No.1 also issued notice under Section 13, sub-section (2) of the SARFAESI Act, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dditional Affidavit within three weeks. List this Appeal on 05.12.2023." 4. Subsequently, the Appeal was taken up on various occasion. The Appellant sought liberty to file additional affidavit. An Application (IA No.5749 of 2023) was also filed by Respondent No.1 in this Appeal, praying for vacation of interim stay and direction to proceed with the Corporate Insolvency Resolution Process ("CIRP"). Reply to the additional affidavit was also filed by Respondent No.1 stating that although after admission of Section 7 Application various OTS offers were given by the Appellant, but they were not accepted by the Bank. 5. We have heard Shri Abhijeet Sinha, learned Senior Counsel appearing for the Appellant and Shri J. Rajesh, learned Counsel appearing for Respondent No.1 - Indian Overseas Bank. 6. Learned Senior Counsel for the Appellant in support of his Appeal submitted that the Appellant has endeavoured to service the debt from the very beginning and during Covid-19, also the Corporate Debtor was able to service the debt. It is submitted that observation of the Adjudicating Authority that several opportunities were granted to the Corporate Debtor to file reply is incorrect. On 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with them. It is submitted that debt and default being proved, the Adjudicating Authority did not commit any error in admitting Section 7 Application. 8. We have considered the submissions of learned Counsel for the parties and have perused the record. 9. The sanction of facility by the Consortium Bank, including by Respondent No.1 is not disputed. Last revised sanction was issued by Respondent No.1 on 14.08.2020. Respondent No.1 declared the account of Corporate Debtor NPA by letter dated 02.05.2022 with effect from 31.03.2022. Notice was issued on 29.07.2022 by the Bank, demanding payment of Rs.67,12,33,943.83/- as on 30.06.2022 within 10 days. Notice under SARFAESI Act was also issued on 24.11.2022. Notice dated 29.07.2022 was not replied, however, notice dated 24.11.2022 was replied by letter dated 06.12.2022. In the letter dated 06.12.2022 issued by the Corporate Debtor to Respondent No.1, replying to the notice under Section 13, sub-section (2), the Corporate Debtor did not deny the obligation to make the payment. It will be relevant to notice the reply given by Corporate Debtor dated 06.12.2023 from paragraph 13 to 21, which are as follows: "13. We say that the delay if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay that the said Notice under reply is premature, misconceived and unwarranted at this point of time. 21. Accordingly, in the facts and circumstances as discussed above, we humbly request you to recall the Notice under Reply." 10. As noted above, the Corporate Debtor did not file any reply before the Adjudicating Authority, although opportunity was granted by Adjudicating Authority. In the Appeal, as noted above on 20.10.2023, when the Appeal was heard, the Appellant made a statement that he is ready to liquidate the debt of all the Banks within two weeks. On that statement, the Appeal was entertained and interim order was passed. During the pendency of this Appeal, the Appellant has also made various OTS proposal to Respondent No.1 and the Consortium Bank. Last such proposal was given on 31.01.2024, in which the Appellant offered to clear the entire debt of all the Banks for an amount of Rs.120 crores. Earlier to that settlement, OTS proposal was issued on 27.12.2023, which was also replied by the Bank on 20.01.2024, asking the Appellant to increase the offer. Again on 31.01.2024, the Appellant made an offer for Rs.120 crores towards the outstanding dues of all the Lenders un ..... X X X X Extracts X X X X X X X X Extracts X X X X
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