TaxTMI 
TaxTMI 
2019 (1) TMI 631
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....ons set out under the Sanction Letter ("Restructuring Sanction Letter" or "RSL") dated 27.03.2015 and the Common Debt Restructuring Agreement ("CDRA") dated 30.03.2015 entered among the Corporate Debtor, the Financial Creditor and certain other consortium lenders. There are Working Capital Facilities agreed upon in sanction letter dated 11.04.2014 which were unchanged in the RSL. 3. Under the RSL and CDRA the Bank has sanctioned Term Loan to the tune of Rs. 28.25crore; Funded Interest Term Loan - I to the tune of Rs. 6.22crore; Cash Credit facility to the tune of Rs. 13crore; Letter of Credit facility to the tune of Rs. 95crore; and Bank Guarantee to the tune of Rs. 46crore. 4. The Petitioner has submitted the certified copy of the Board Resolution of the Petitioner Bank dated 14.11.2017 in which the Chief Managers of Bank of Baroda is authorised to file this petition. The petition has been submitted by Mr Dilip Anantrao Wankhede, Chief Manager of the Bank of Baroda. 5. The amounts in default under Term Loan is of Rs. 37,01,50,302.38/-; under Funded Interest Term Loan - I is of Rs. 5,08,55,913.73/-; under Cash Credit facility is of Rs. 1,45,19,01,581.75/-; Letter of Credit facil....
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.... (a) Term loan facility- Rs. 28.25 Crores; (b) Funded interest term loan - I or "FITL - I" - Rs. 6.22 Crores; (c) Cash credit - Rs. 13 Crores; (d) Letter of credit - Rs. 95 Crores; and (e) Bank guarantee - Rs. 46 Crores. The facilities above will be collectively referred to as the "Facilities". The Applicant submits that the limits described above of the working capital facility were set out in the Sanction Letter dated 11 th April 2014 (Exhibit-8, pages 110 to 123 ofthe Application). The Applicant submits that such limits have not been changed in the Restructuring Letter. Under the Facilities, the Applicant disbursed the following amounts to the Corporate Debtor (Exhibit-3, pages 26 to 28 ofthe Application): a. Rs. 47,28,22,672/- under the term loan facility; b. Rs. under the Funded Interest Term Loan -1; c. Rs. (limit of Cash Credit facility was reviewed and kept at the existing limit ofRs. as on March 27, 2015); d. Rs. 83,04,99,674/- under the letter of credit (Letter of Credit facility is the first LC issued after restructuring on March 27, 2015. The said LC was opened on May 27, 2015 (Open Date) and was valid till June 25, 2015 (Expiry Date) and has not ....
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....posed Mr K. G. Somani to be the interim resolution professional for the corporate insolvency resolution process of the Corporate Debtor (Annexure-Il, pages 549 to 555). The undertaking of Mr K. G. Somani that there are no disciplinary proceedings pending against him with the Insolvency and Bankruptcy Board or Indian Institute of Insolvency Professional of ICAI is at page 550 of the Application. During course of argument the counsel appearing on behallf of the corporate debtor submitted that he has no objection if the petition for initiation of CIRP is admiited.But after argument was over, the corporate debtor Topworth Pipes & Tubes Private Ltd. ("Corporate Debtor") have placed on record an Affidavit dated 27th November, 2018 by which they have confirmed that inter alia by order dated 7th June 2016 read-with subsequent orders passed by the Hon'ble Bombay High Court in Company Petition No. 175 of 2015, the Company Petition No. 175 of 2015 had been admitted against the Corporate Debtor, and a provisional liquidator had been appointed by the Hon'ble Bombay High Court for the Corporate Debtor. After that the Bank of Baroda , financial creditor , has filed Written Submissions....
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.... winding up order has been passed, it is open to such a company, whose reference was deemed to be pending with BIFR, to seek remedies under IBC before NCLT" (para 53) 57. "It was submitted, and I agree with Mr. Dwarkadas, that admission of the winding up petition by the ,jurisdictional High Court would not mean that NCLT either loses jurisdiction or cannot exercise jurisdiction in case of a petition which is filed by another creditor (financial, operational or the company itself under section 10 of IBC). The legislature is deemed to be aware of the provisions of an existing law, i.e., the Companies Act, whilst enacting the provisions of IBC as well as the fact that company petitions that may have been filed prior to IBC coming into force may have been admitted and pending final disposal in the jurisdictional High Court." (Para 57) 62." In fact, the Hon'ble Supreme Court in the case of Madura Coats Ltd. v. Modi Rubber Ltd. (supra) has held that the provisions of SICA would prevail over the provisions of the Companies Act and proceedings under the Companies Act must give way to proceedings under SICA. Therefore since SICA is repealed and replaced by IBC (S. 252 read with VI....
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....Company Courts which are referred as saved petitions. " (para 42) "45. In view of the afore-stated reasoning and the case laws cited, we are of the considered opinion that the Company Court while dealing with the winding up petitions (saved petitions) shall have no_jurisdiction to stay the proceedings before the NCLT in respect of revival or resolution issue. We may further state that in case the forum under the IBC, 2016 i.e. NCLT fails to revive or successfully implement the resolution plan, then the Company Judge seized with the winding up petitions (saved petitions) would deal with the petition in accordance with law. We are of the view that allowing both the forums i.e. Company Court and NCLT to go ahead with liquidation proceedings/winding up proceedings simultaneously would not serve any likely situation,we observe that the Company Judge,in saved petitions ,would exercise jurisdiction in case revival efforts by NCLT fails. " (para 45) "46. We find that the learned Single Judge approached the issue in its proper perspective and harmoniously considered various provisions of the relevant enactments keeping in view the object behind the special statutes. We do not find any....
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....emed" used in the Section would thus mean, "supposed", "considered","construed", "thought", "taken to be" or "presumed". " (12) The aforesaid findings in the matter of Rishab Agro Industries Ltd. vs P.N.B. Capital Services Ltd. [(2000) 5 SCC 5 1 5] have been relied upon by the Hon'ble Supreme Court in paragraph 25 in the case of Madhura Coats Ltd. vs Modi Rubber Ltd. & Anr.[(2016) 7 SCC 603]. (13) The Hon'ble Supreme Court in the case of Bank Of New York Mellon London Branch vs Zenith Infotech Limited [(2017) 5 SCC l] has held as under: "The core principles laid down in the said decisions of the Court, namely, that immediately on registration of a reference under Section 15 of the erstwhile SICA, the enquiry under Section 16 is deemed to have commenced and that the winding up proceedings against a company stood terminated only after orders under Section 481 of the Companies Act, 1956, are passed, will have to be noticed to adjudge the correctness of the said view of the High Court. (14) In light of the aforesaid , the position seems settled that an order of winding up or liquidation in no manner means a culmination of proceedings and it is only once an order under ....
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....en by the High Court in concluding that the winding up proceedings before the Company Court cannot continue after a reference has been registered by the BIFR and an enquiry initiated under Section 16 of the SICA. " (paras 25 to 28) (18) The Hon'ble Supreme Court in the case of Rishab Agro Industries Ltd. vs P.N.B. Capital Services Ltd. [(2000) 5 SCC 515] examined the operation of the moratorium under SICA to 'proceedings' post winding up in greater detail and held as under: "9. It is true that for invoking the applicability of Section 22 it has to be established that an inquiry under Section 16 is pending or any scheme referred to under Section 17 is under preparation or sanctioned scheme is under implementation or an appeal under Section 25 to an industrial company is pending. But it cannot be said that despite existence of the aforesaid exigencies the provision of Section 22 would not be attracted after the order of winding up of the company is passed. " 7. "Hence, we find it difficult to agree with the findings of the High Court to the effect: "The expression "proceeding"appearing in Section 22, sub- section (1) of the Act means the proceeding up to the stage....
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....sed there is scope to revive a company. (23) Hence, it could never be the intention of the legislature that despite the existence of the provisions of the Code, a company should be wound up without giving it a chance for resolution of its insolvency. Such revival has been held to be possible even post a winding up order under the erstwhile provisions of SICA. The Ld counsel arguing on behalf of the petitioner has also relied on the case law of Hon'ble Bomaby High Court in case of HDFC Bank Vs The Deputy Commissioner of Income Tax Mumbai 2016 SCC ONLINE Bombay 1109 ,wherein it has been held that: "26. We are conscious of the fact that we are fallible and, therefore, an order passed by us may not meet the approval of all and some may justifiably consider our order to be incorrect. However the same has to be corrected/rectified in a manner known to law and not by disregarding binding decisions of this Court. In fact our court in Panjumal Hassomal Advani v. Harpal Singh Abnashi Singh Sawhney AIR 1975 (Bom) 120 has observed that a coordinate bench cannot refuse to follow an earlier decision on the ground that it is incorrect and/or rendered on misinterpretation. This for the reaso....
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.... identical issues arising before it. It is not open to the Tribunal to disregard the binding decisions of this Court, the grounds indicated in the impugned order which are not at all sustainable. Unless the Tribunal follows this discipline, it would result in uncertainty of the law and confusion among the tax paying public as to what are their obligations under the Act. Besides opening the gates for arbitrary action in the administration of law, as each authority would then decide disregarding the binding precedents leading to complete chaos and anarchy in the administration of law." Given the law laid down by the Hon'ble High Court in HDFC Bank (supra) it is clear that the judgement of the Honble High Court has a binding effect on the Tribunal. Order by the Hon'ble High Court of Bombay passed in the matter of Jotun India Pvt Ltd (supra), which has been passed after the judgement of the Hon'ble NCLAT passed in the cases of "India bulls Housing","Kumar Motors","Arise India Ltd", "Forech India Pvt Ltd", "Unigreen Global India Ltd", is binding on this tribunal. The position seems settled that an order of winding up or liquidation in no manner means a culmination of proceedings and....