TaxTMI 
TaxTMI 
TaxTMI 
2020 (10) TMI 445
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....'the applicant') under section 42 of the Insolvency and Bankruptcy Code, 2016 ('I&B Code') challenging the order dated 12th September, 2018 passed by the liquidator rejecting the claim of Rs. 57,08,06,489.91 submitted by the applicant as a financial creditor under regulation 18 read with Form-D of the IBBI (Liquidation Process) Regulations, 2016. 3. Section 42 of the I&B Code reads as follows: 6. Appeal against the decision of liquidator.-A creditor may appeal to the Adjudicating Authority against the decision of the liquidator rejecting the claims within fourteen days of the receipt of such decision." 4. The present application in hand should have been filed within 14 days of the decision of the liquidator. However, the same is filed after a delay of 18 days. Hence, it is also prayed by the applicant that this delay be condoned given section 238A of the I&B Code read with section 5 of the Limitation Act, 1963. 5. The applicant submits that certain financial facilities were executed by and amongst Varan Resources Ltd. ('the borrower') and the applicant's Hong Kong Branch as agent and applicant's Singapore Branch as arranger starting from the yea....
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....s were addressed, and supporting documents were delivered to the liquidator on 24th August, 2018. The liquidator finally on 29th August, 2018 issued a notice to the applicant to show reasons for not rejecting the claim within seven days from that place. The notice was duly replied to by the applicant drawing reference to the indemnity obligations of the corporate debtor which, as per the applicant, squarely falls within the definition of the financial debt under section 5(8)(a) read with section 5(8)(f) of the I&B Code. 11. Despite the same, the liquidator rejected the applicant's claim vide email dated 12th September, 2018 saying that the corporate debtor performed its part of the pledge agreement dated 2nd August, 2016, i.e., it has already pledged the equity shares of the borrower held by it in favour of SBICAP Trustee Company Ltd., the Security Trustee. 12. The applicant submits that the right of the applicant to recover the debt is concurrent to the right of the applicant to retain the pledged shares under section 176 of the Contract Act, 1872. The applicant is placing reliance on the decision of NCLT, Mumbai Bench in the matter of SREI Infrastructure Finance Ltd. v. Ste....
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....nditions hereof and against all actions, proceedings, claims, demands, costs, charges and expenses (including legal and other fees on full indemnity basis) and all goods and services, value added or other similar tax which may be incurred, sustained or which may arise in or on the non-performance or non-observance of any of the undertaking and agreements on the part of the pledgors and/or the borrower, herein contained or under any document delivered hereunder in respect of any matter or things done or omitted relating in any way whatsoever to this deed or such document or any of the pledged shares. All sums necessary to effect the indemnity and all sums payable by the pledgors shall form part of the secured obligations and shall constitute a charge on the pledged shares." (emphasis supplied) 15. This clause as reproduced above casts an obligation on the corporate debtor to indemnify the applicant for the "event of default" by the borrower. Clause 11 of the said pledge agreement does not state about the "event of default". It is further stated that the corporate debtor is not even a party to the Master Restructuring JLF Agreement dated 31st March, 2015 as amended on 29th June, 20....
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....sal of its claims and this process caused the delay in filing this application. Hence, I at this moment condone the delay in filing this application by the provisions of the Code. 19. Coming onto the merits of the case, it is clear that the loan agreements are executed between applicant and the borrower. It is worth to notice that the corporate debtor is not a party to the Loan agreement. It is also noticed that under Master Restructuring JLF Agreement dated 29th June, 2015, the Pledge Agreement dated 2nd August, 2016 was executed, among other things, by Varan Corporation Ltd. in favour of SBICAP Trustee Company Ltd., a security trustee, acting as agent and security trustee for various lenders including for ICICI Bank Ltd. (Applicant). The corporate debtor has not undertaken any counter-indemnity obligation by the said pledge agreement dated 2nd August, 2016 in respect of any guarantee, indemnity, bond, documentary letter of credit or any other instrument given/issued by ICICI Bank. As per liquidator, ICICI Bank has also confirmed that there is no guarantee given by the corporate debtor. 20. The corporate debtor has only given security in the form of a pledge of shares of borrowe....