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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 ..... to the statement, EMI repayment chart submitted by the Appellant during the course of hearing indicate that there is overdue amount of 5th and 6th EMI and according to own statement of the Appellant, amount due on 31.03.2021 was Rs.1,09,28,247/-. 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 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. Reference made to the judgment of the Hon ble Supreme Court in Laxmi Pat Surana vs. Union Bank of India Anr. [ 2021 (3) TMI 1179 - SUPREME COURT ] where Hon ble Supreme Court has held that ordinarily, upon declaration of the loan account/ debt as NPA that date can be reckoned as the date of default to enable the Financial Creditor to initiate action under Section 7 of the Code. The facts of the present case, clearly indicate that the borrower ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nction 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 and when due. The documents including undertaking, guarantee etc. were also issued in reference to the aforesaid facilities. On 25.03.2021, sanction letter was issued reviewing and renewing the existing working capital limits i.e., the Cash Credit and Bank Guarantee, including the GECL for a further period of six months. On 31.03.2021, Union Bank of India classified the accounts of the Corporate Debtor as a Non-Performing Asset. A notice under Section 13(2) of the SARFAESI Act, 2002 was issued by the Union Bank of India to the Corporate Debtor on 09.06.2021 communicating outstanding amount as on 31.03.2021 of Rs.66, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 account was Rs.2,23,35,461/- and bank should have transferred the amount of Rs.1.09 Crore from cash and credit account to take care of the due amount of Rs.1.09 Crore as on 31.03.2021. It is submitted that the default has been deliberately generated by the Union Bank of India to initiate proceeding under Section 13(2) of the SARFAESI Act. The application filed by the bank was clearly barred by Section 10A and deserves to be rejected. 5. Counsel for the Bank refuting the submissions of the Appellant submits that the Appellant failed to pay the amount due and outstanding as per the repayment schedule under the sanction lette ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 which are acceptable to me/us. The amount due to the bank under the facilities sanctioned to me/us is : Facility Outstanding as on 31.07.19 Remarks OCC 50,73,04,993.72 Inclusive of interest upto 31.07.2019 BG/SBLC 10,00,00,000.00/- Total In addition to the above, Bank Guarantee of Rs. 100000/- availed against 100% cash margin. I/We admit and acknowledge the same and undertake to repay the above together with interest thereon as per the terms and conditions stipulated by the bank and further agree and assure that the loan documents executed by me/us at the time of availment of the said facilities continue to be enforceable and binding on me/us. I/We also agree th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0A 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 Supreme Court has held that ordinarily, upon declaration of the loan account/ debt as NPA that date can be reckoned as the date of default to enable the Financial Creditor to initiate action under Section 7 of the Code. The above observations of the Hon ble Supreme Court has been quoted with approval by the Hon ble Supreme Court in Asset Reconstruction Company (India) Limited vs. Bishal Jaiswal and Another- (2021) 6 SCC 366 . We may refer to paragraph 43 of the judgment of the Hon ble Supreme Court in Laksmi Pat Surana which lays down following:- 43. Ordinarily, upon declaration of the loan account/debt as NPA that date can be reckoned as the date of default to enable the financial creditor to initiate action under Section 7 IBC. However, Section 7 comes into play when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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.K. Educational Services Pvt. Ltd Vs. Parag Gupta and Associates dated 11.10.2019 that the limitation period for application under section 7 of the Code is 3 years as provided by Article 137 of the Limitation Act, 1963 which commences from the date of default and is extend able only by application of section 5 of Limitation Act, 1963 if any case for condonation of delay is made out. The view taken by the Hon'ble Apex Court in 'B.K. Educational Services Company Appeal (AT) (Insolvency) No. 183 of2020 Private Limited Vs. Parag Gupta and Associates' that the limitation period for application under Section 7 of the I B Code is three years as provided by Article 137 of the Limitation Act, which commences from the date of default and is extendable only by application of Section 5 of The Limitation Act, 1963 if any case for condo nation of delay ..... X X X X Extracts X X X X X X X X Extracts X X X X
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