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TMI Blog2024 (8) TMI 854X X X X Extracts X X X X X X X X Extracts X X X X ..... unt disbursed default was claimed. Admittedly, for Cash Credit and Term Loan, Guarantees dated 22.08.2015 and 18.11.2016 are very much covering the said Cash Credit, Term Loan and for sanction of Adhoc Cash Credit and FITL. Sanction letter as extracted above clearly indicate that the existing securities shall cover. The Consortium Agreement which was executed on 06.11.2020 between the parties clearly mentions that it was not to affect existing securities. There are no novation of contract between the parties. Disbursement made pursuant to sanction made in the year 2013 and the guarantees issued by the corporate guarantor on 22.08.2015 and 18.11.2016 are still continuing and binds the corporate guarantor to discharge the debt. Subsequent to disbursement, Adhoc Limit and FITL sanctioned on 26.12.2019 and 09.09.2020 are also covered by the existing securities - the invocation of guarantee on 06.03.2023 by the Bank was right invocation which obliges the corporate guarantor to clear the dues. It is relevant to notice that there is no submission of the Appellant that no amount is due. Debt and default is not even contested. Appellant sought to get over his liabilities on the ground that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 020. On 29.06.2022, Notice under Section 13(2) of the SARFAESI Act was issued upon the Appellant by the Central Bank of India. On 06.03.2023, a demand notice was issued by the Central Bank of India to the Corporate Debtor calling upon the Corporate Debtor to pay the defaulted amount. After issuance of notice dated 06.03.2023, an application under Section 7 was filed by the Central Bank of India claiming total debt and default of Rs.94,71,23,119/- as on 06.03.2023. Part-IV contains the details of nature of facilities i.e. Cash Credit, Term Loan, FITL and Cash Credit Adhoc. A reply to Section 7 application was filed by the Corporate Debtor. Letter was also sent by the Corporate Debtor submitting the restructuring proposal on 10.10.2023. Adjudicating Authority vide impugned order admitted Section 7 application holding that the guarantee was invoked by notice dated 06.03.2023. Corporate Guarantee Deeds dated 22.08.2015 and 18.11.2016 were invoked by notice dated 06.03.2023. Application is filed within time after invocation of guarantee on 06.03.2023. Application is not barred by Section 10 A. Aggrieved by the order admitting Section 7 application, this Appeal has been filed. 3. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out. He submits that the Investor has not giving the binding letter and there are several shortcomings in the proposal which are submitted. In view of the facts brought on the Additional Affidavit we are of the view that a last opportunity be given to the appellant to finalise restructuring, if any, before the next date. List this appeal on 03.07.2024. Interim order to continue. We make it clear that in event the if restructuring is not completed; parties shall address the submission on the next date. 5. Ultimately, on 16.07.2024, it was informed on behalf of the Bank that the lead bank is not in favour of re-structuring of group. Re-structuring proposal could not be finalised despite several opportunities, hence, counsel for the Appellant addressed the submissions on merits. 6. Counsel for the Appellant has filed Additional-Affidavit bringing relevant documents on the record. Counsel for the Central Bank of India has filed compilation of documents on behalf of the Respondent. 7. We have heard Shri Krishnendu Datta, Learned Senior Counsel for the Appellant and Shri Abhijeet Sinha, Learned Senior Counsel for the Respondent. 8. Shri Krishnendu Datta, Learned Senior Counsel for the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich were issued by the Bank on 26.12.2019 and 09.09.2020 clearly contemplated that existing securities continues. It is submitted that Section 7 application was fully maintainable and has been rightly admitted by the Adjudicating Authority. It is submitted that in spite of ample opportunities granted by this Tribunal, re-structuring could not be finalised, hence, the debt and default continues. 10. We have considered the submissions of the Counsel for the parties and perused the record. 11. Before we proceed to consider the respective submissions of the Counsel for the parties, we may first notice the Notice of Invocation dated 06.03.2023. The notice dated 06.03.2023 has been brought on record by the Appellant along with Additional-Affidavit. It is useful to extract the Notice dated 06.03.2023, which is as follows:- To, March 06, 2023 Superfine Profile and Extrusions Private Ltd 1267 Pratibha Dalmandai Ahemednagar-414001 Subject: Legal Notice for invocation of corporate guarantee and calling upon you to repay the outstanding loan amount of Rs.94,71,23,119.18/- (Rupees Ninety Four Crore Seventy One Lakhs Twenty Three Thousand One Hundred and Nineteen and Eighteen Paisa). Reference: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e application under Section 7 filed by the Central Bank of India. Part-IV of the application filed by the Central Bank which contains a detail of amount claimed which included all facilities, are as follows:- PARTICULARS OF FINANCIAL DEBT 1 TOTAL AMOUNT OF DEBT GRANTED DATE(S) OF DISBURSEMENT Total amount of debt granted to superfine Metals Pvt Ltd for which corporate debtor has provided corporate guarantee dated August 22, 2015 and November 18, 2016. Rs.66,21, 05,008/- (Rupees Sixty-Six Crore Twenty-One Lakh Five Thousand and Eight Only). Nature of Facility A/C No. Amount Disbursed (Rs.) Cash Credit 3056432616 54,27,45,208.00 Term Loan 3305046620 50,67,01,98.00 FITL 3852802470 3,16,90,762.00 Cash Credit Adhoc 3793059834 3,69,98,840.00 Total 66,21,05,008/- The schedule of disbursement of the aforesaid facilities is hereto annexed and marked as Annexure D ; 2 AMUNT CLAIMED TO BE IN DEFAULT AND THE DATE ON WHICH THE DEFAULT OCCURRED (ATTACH THE WORKINGS FOR COMPUTATION OF AMOUNT AND DAYS OF DEFAULT IN TABULAR FORM) Total Amount of debt in default from the Corporate Debtor is Rs.94,71,23,119.18/- (Rupees Ninty Four Crore Seventy One Lakh Twenty Three Thousand One Hundred and Nineteen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T LTD, a company incorporated under the Companies Act 1956 and having its registered office at 'Pratibha , 1267 Dalmandai, Ahmednagar hereinafter referred to as the Guarantors which expression shall unless repugnant to context or meaning thereof be deemed to include its successor and assigns in favour of Central Bank of India Consortium represented by Central Bank of India as Lead Bank as defined in the working capital consortium agreement dated 18th November 2016 (hereinafter referred to us Lead Bank which expression shall unless repugnant to the context or meaning thereof be deemed to include the Central Bank of India and other consortium member banks constituting the Central Bank of India Consortium from time to time or each of them or any one or more of them and their respective successor and assigns) whereas in terms of the working capital consortium Agreement dated 18th November 2016 and Joint Deed of Hypothecation dated 18th November 2016 executed by SUPERFINE METALS PVT LTD, a company within the meaning of the Companies Act 1956 and having its registered office at 'Pratibha', 1267 Dalmandai, Ahmednagar (Hereinafter referred to as the Borrower which expression sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stipulated in this letter: ✓ Committee has approved adhoc limit of Rs.3.70 crore for a period of 90 days, subject to compliance of terms conditions as stipulated under: 1. Interest rate- 1 yr MCLR + 3.00% p.a. + additional interest 2.00% p.a. (i.e. ROI for Adhoc Limit- 1 yr MCLR + 5.00% p.a) 2. Security-As applicable for existing FBWC limits. 3. Margin-25% on paid stock 25% on boo -debts upto 90 days 4. Processing charges:- Concession of 50 % in processing charges on pro rata basis or till adjustment of ad-hoc, whichever is later. 5. Validity:- 90 days. Ad-hoc is to be adjusted on or before the expiry of 90 days from the date of availment 6. The Ad-hoc limit shall be secured by way of our exclusive charge over the additional current assets created out of the said Ad-hoc limit. 17. It is relevant to notice that sanction dated 26.12.2019 was Ad-hoc Limit where Clause 2 clearly mentions security- As applicable for existing FBWC limits . 18. The next sanction letter on which reliance is placed is sanction letter dated 09.09.2020 by which amount of Rs.3,16,90,762/- has been sanctioned under FITL Scheme. Sanction letter dated 09.09.2020 provides as follows:- SANCTION ADVISE TO THE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... When we revert to Part-IV of the Section 7 Application, Cash Credit, Term Loan, FITL and Cash Credit Adhoc are the facilities for which with regard to amount disbursed default was claimed. Admittedly, for Cash Credit and Term Loan, Guarantees dated 22.08.2015 and 18.11.2016 are very much covering the said Cash Credit, Term Loan and for sanction of Adhoc Cash Credit and FITL. Sanction letter as extracted above clearly indicate that the existing securities shall cover. 21. Counsel for the Appellant has much relied on guarantee deed dated 06.11.2020 which was guarantee deed executed with regard to Term Loan Facility aggregating to Rs.114.22 Crores. It is relevant to notice following extract of the corporate guarantee dated 06.11.2020:- WHEREAS AT THE REQUEST OF THE BORROWER, which is the Group Company of the Guarantor and also on the request of the Guarantor, which is the Group Company of the Borrower, THE LENDER agreed in principle to lend and advance to the Borrower the Term Loan (Hypothecation) facility aggregating to Rs.114.22 Crores (Rs. Rupees One Hundred Fourteen Crores Twenty Two Lacs only), hereinafter referred to as the said Facilities as the context admits, on the terms an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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