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TMI Blog2024 (12) TMI 362X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the State Bank of India. Erstwhile Andhra Bank (now Union Bank of India) took over existing facilities sanctioned by the State Bank of India vide its sanction order dated 16.09.2014. The facilities were renewed by erstwhile Andhra Bank. Andhra Bank vide sanctioned letter dated 23.07.2019 reviewed and renewed the existing working capital limits for a further period of one year. By sanction letter dated 16.09.2017, Andhra Bank issued a sanction for cash credit of Rs.50,00,00,000/- and Bank Guarantee renewal of Rs.10,00,00,000/- on the rate of interest and other conditions as contained in the sanction letter. By sanction letter dated 16.09.2020, Union Bank of India sanctioned Funded Interest Term Loan of Rs.3,21,63,265/- with maximum tenure of six months upto 31.03.2021. Repayment was to be made by six monthly instalment commencing from 06.03.2020. Interest was to be serviced as and when debited to the account. Due to the problems faced by the Corporate Debtor during the COVID-19 period, Union Bank of India sanctioned Rs.10 Crores as Guaranteed Emergency Credit Line (GECL) with moratorium of 12 months and repayable in 48 equated instalments. Interest liability to be discharged as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity cannot be a ground to initiate any application under Section 7. It is further submitted that the Corporate Debtor has been paying the EMIs regularly and by 1st, 2nd, 3rd and 4th EMI, extra amount was paid and only 5th EMI, there was default of Rs.54,19,562/- and there was overdue amount of 5th and 6th EMIs. Counsel for the Appellant during course of submission has submitted an "EMI repayment chart", according to which, total amount due as on 31.03.2021 is Rs.1,09,28,247.22/-. Counsel submits that with regard to facility under "Guarantee Emergency Credit Line" of Rs.10 Crore, out of which amount of Rs.4,65,00,000/- was unilaterally adjusted by the bank. It is submitted that on 25.03.2021, when sanction letter was issued by the Bank there can be no default on the part of the borrower. Issue of sanction letter on 25.03.2021 fully proves that there was no default on 25.03.2021 and there was no occasion to declare the account NPA on 31.03.2021. Date of default, if any, was during Section 10A period and application was clearly barred by Section 10A. Referring to EMI repayment chart, learned counsel for the Appellant submits that as on 31.03.2021, amount available in cash and credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bank of India). Andhra Bank has reviewed and renewed the financial facilities from time to time. By sanction letter dated 23.07.2019 issued to the Corporate Debtor, OCC renewal was granted for Rs.50 Crores and BG/SBLC was of Rs.10 Crores. Corporate Debtor had issued a Revival Letter dated 30.08.2019 to the Branch Manager of the Bank admitting outstanding as on 31.07.2019 as Rs.50,73,04,993.72/-. Revival Letter issued by the corporate debtor is part of Section 7 application filed by the bank which was filed in Annexure A-21 to the Section 7 application which is to the following effect:- "REVIVAL LETTER Place: New Delhi Date: 30.08.2019 To The Branch Manager Connaught Circus Brach New Delhi Dear Sir, Sub: Renewal of Limits I/We have been sanctioned the following limits: Facility Limit OCC 50,00,00,000/- BG/SBLC 10,00,00,000/- Total 60,00,00,000/- For a period of one year I/We have executed the documents for the above limits on 18.09.2017 As the period has expired, now at my/our request the bank has renewed the limits for further period of One Year subject to the terms and conditions contained in the sanction letter ng. 0084/01/S+15 dated 08.07.2019 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... EFAULT Cash Credit* 008413100000830 50,00,00,00/- 47,76,63,538 .32 6074080 6.2 53,84,04,34 4.52 456 FITL- 008430100010350 3,21,63,265/- 1,08,67,156. 36 0.0 1,08,67,156. 36 456 GECL2.0*0084301000 10457 10,00,00,000/- 10,00,00,000 .00 1088896 0.9 11,08,88,96 0.9 456 BG Invoked- 014127040000001 5,00,00,000/ 4,65,21,803. 00 5491665. 76 5,20,13468, 76 456 BG Invoked- 014127040000002 5,00,00,000/ 4,46,92,986. 00 9315648. 52 5,40,08,634. 52 456 11. When we look into the calculation chart, it is clear that the amount has been calculated w.e.f. 31.03.2021. The amount was claimed due on the date of filing of the application. The above calculation chart further clearly state that there was default committed by the corporate debtor even after 10A period. There was continuous default after 10A period which was much more than the threshold amount. Counsel for the Appellant has contended that the bank has treated the date of NPA as date of default which is not in accordance with the RBI guidelines. 12. In the above context, we may refer to the judgment of the Hon'ble Supreme Court in "Laxmi Pat Surana vs. Union Bank of India & Anr.-(2021) 8 SCC 481" where Hon'ble S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st be before the expiration of the prescribed period of limitation including the fresh period of limitation due to acknowledgment of the debt, from time to time, for institution of the proceedings under Section 7 IBC. Further, the acknowledgment must be of a liability in respect of which the financial creditor can initiate action under Section 7 IBC." 13. Adjudicating Authority has also relied on the judgment of this Tribunal in "Jagdish Prasad Sarda Vs Allahabad Bank- Company Appeal (AT) (Insolvency) No.183 of 2020". In paragraph 11 of the impugned order, Adjudicating Authority has made following observations:- "11. Further, on perusal of Part- IV in the application, we observe that the applicant has treated the date of NPA i.e. 31.03.2021 as the date of default. It is pertinent to mention that Date of NPA is to be treated as date of default in consideration of order of Hon'ble NCLAT in the case of Jagdish Prasad Sarada Vs. Allahabad Bank [CA (AT) (Insolvency) No. 183 of 2020. The relevant extract of the Hon'ble NCLAT's judgment is as under : "10. The Hon'ble Supreme Court has already observed in Civil Appeal No. 439, 436, 3137, 4979, 5819 & 7289 of 2018 in B ..... X X X X Extracts X X X X X X X X Extracts X X X X
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