AI Drafter 
TaxTMI 
TaxTMI 
2019 (1) TMI 631
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.... and restructured on the terms and conditions 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....
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....under (Exhibit-8, page 248 and page 261 of the Application): (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....
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....l statement of the Corporate Debtor for the financial year ending 31 st March 2016 proving existence of financial debt and default. (Exhibit-11, pages 430 to 548 of the Application- relevant page 483). The financial creditor has proposed 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 ....
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....orporate debtor. In the case of Jotun India Pvt Ltd V PSL CA No. 572/2017 he the Hon'ble Bombay High Court has inter alia held that: 53. "It has now been held by the Supreme Court in Bank of New York Mellon (Supra) that by virtue of Section 252 of IBC, even in the case of a company where a 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 Suprem....
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....ive field, we are of the view that the IBC 2016 being later enactment and in view of the statement and objects and the purpose [or which it was enacted the provisions relating to revival/resolution of the company incorporated under Chapter Il will have to be given primacy over the provisions of the winding up proceeding pending before the 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....
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....ssolution of the company in terms of Section 481 of the Companies Act. The words "shall be deemed to commence " in Section 441 of the Companies Act clearly show the intention of the legislature that although the winding up of a petition does not in fact commence at the time of presentation of the petition itself but it shall be presumed to commence from that stage. The word "deemed" 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 u....
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....ompanies Act but whatever be the situation, whenever a reference is made to the BIFR under Sections 15 and 16 of the SICA, the provisions of the SICA would come into play and they would prevail over the provisions of the Companies Act and proceedings under the Companies Act must give way to proceedings under the SICA. " 28. In this state of the law, in so far as the present appeal is concerned, we do not find any error in the view taken 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 o....
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.... bringing about its untimely financial death of a debtor. The Code on the other hand mandatorily requires that an attempt at revival be made by appointing an IRP to examine whether such a company can be revived. (22) It is hence clear that the object of the Code would be defeated in its entirety if a petition for insolvency resolution could not be admitted after an order of winding up has been passed. As discussed above, till an order under Section 481 of the Companies Act is passed 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 ord....
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....r an earlier assessment year. This is a clear case of judicial indiscipline and creating confusion in respect of issues which stand settled by the decision of this Court. 28. It is in the above view, that we set aside the impugned order of the Tribunal dated 23rd September, 2015 in its entirety and restore the issue to the Tribunal to decide it afresh on its own merits and in accordance with law. However the Tribunal would scrupulously follow the decisions rendered by this Court wherein a view a has been taken on 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....