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2020 (10) TMI 734
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....he Corporate Debtor was incorporated on 6th April, 1995 vide Corporate Identification No. (CIN) U61909WB1995PLC070966 with an authorized share capital of Rs. 10,00,00,000/- (Rupees Ten Crore Only) and the total issued and paid up share capital of Rs. 9,99,22,816/- (Rupees Nine Crore Ninety Nine Lakh Twenty Two Thousand Eight Hundred Sixteen Only) as per the master data available on the website of the Ministry of Corporate Affairs. 3. The Financial Creditor has proposed the name of Mr. Bimal Kanti Choudhury, a Chartered Accountant to be appointed as the Interim Resolution Professional in case the application is to be admitted. Mr. Choudhury vide his letter dated 13th March, 2019 has given his consent to act as such. 4. The brief facts leading to the filing of the present application are that the Financial Creditor had agreed to extend a Term Loan Facility of up to Rs. 30,00,00,000/- (Rupees Thirty Crore Only) towards Working Capital Requirements/General Corporate Purposes to Adhunik Meghalaya Steels Private Limited (the 'Borrower'), vide Loan Agreement dated February, 27, 2015 and a sum of Rs. 24,44,44,456/- (Rupees Twenty Four Crore Forty Four Lakh Forty Four Thousand....
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.... held by the Corporate Debtor, the borrower and Sungrowth Shares & Stocks Limited. It is further submitted that the loan agreement dated 27th February, 2015 clearly recorded the sureties and guarantees. There is no guarantee which is mentioned therein that is required to be given by the Corporate Debtor. On the other hand, the Guarantee of Sri Manoj Kumar Agarwal is clearly mentioned in the loan document. The pledge of shares of the Borrower, Corporate Debtor and Sungrowth Shares & Stocks Limited is also mentioned therein which would alone show that no guarantee had been given by the Corporate Debtor for the debts of the Borrower. 9. It is further submitted in the reply affidavit that the Financial Creditor had required a Board Resolution to be provided by the Corporate Debtor wherein the Corporate Debtor would agree to pledge its shares and in terms of the said Board Resolution, the Corporate Debtor executed the pledge agreement and there is no Board Resolution which authorised the Corporate Debtor to execute a guarantee document. It is submitted that the sanction letter dated 19th February, 2015 also clearly lists the nature of security and surety to be provided. The Corporate....
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.... alia on clause 5.1(g), which is reproduced as under:- "5.1(g). be jointly and severally liable as principal debtors without exclusion/preference to the other or others of them for the payment of the Borrower's dues to IFIN and IFIN shall be entitled to recover at its option the amounts due in respect thereof from the Pledgor(s) without exercising or exhausting any other remedy/right it has against the Borrower." 15. Ld. Counsel further referred to clause 6.2(b), which is reproduced as under:- "6.2(b): Sale of Pledged Securities: IFIN shall be entitled (but not bound) to sell or otherwise dispose of, in any manner all or any of the Pledged Securities, at the risk and expense of the Borrower/Pledgor(s), by public auction or private contract in such manner and upon such terms and subject to such conditions as IFIN may think fit, without obtaining consent of the Borrower/Pledgor(s) but after giving written notice of not less than 7 days to the Borrower/Pledgor(s). However, on the happening of an Event of Default on account of failure on the part of the Borrower/Pledgor(s) to maintain the margin on the Pledged Securities. IFIN shall give a written notice of 2(T....
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....ounsel has submitted that even looking at the title of the agreement which is "unattested pledged agreement" and has been intentionally referred to in the pleadings as the "Pledge Cum Guarantee Agreement", just to mislead this Tribunal. 19. The Ld. Counsel has referred to the Loan Agreement having been entered into between the Financial Creditor and the Borrower dated 27th February, 2015. She referred to clause 14.1 which mentions that "the Annexure hereto shall deem to be an integral part of this Agreement and the stipulations thereunder shall be binding and effective on the parties. In case of any difference between the terms stipulated in the Annexure and the provisions of this Agreement the terms stipulated in the Annexure shall prevail". She further referred to Annexure 'J' of the agreement, which is a letter dated 19th February, 2015 by the Financial Creditor to the principal borrower, which is reproduced as under:- "Adhunik Meghalaya Steels Private Limited 14 NS Road Kolkata 700001 Kind attn.: Manoj Agarwal Dear Sir, Re: Term Loan Facility of up to Rs. 300 million With reference to the above, we are pl....
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.... way of cash/cash collateral to be provided within the same timeframe. (b) Personal Guarantee of Mr. Manoj Agarwal II. Other Security (a) Demand Promissory note in favour of Lender. The Promissory note shall bear the common seal of the Borrower duly supported by a resolution of the Board of Directors of the Borrower. (b) ECS Mandate for Principal & Interest." 21. The Ld. Counsel has further referred to extracts from the minutes of the meeting of the Board of Directors dated 19th February, 2015 of the Principal Borrower submitted to the Financial Creditor. The relevant extract thereof would be useful for understanding the nature of the agreement:- "FURTHER THAT in connection with the Borrower's dues with respect to the Facility from IFIN the Company do pledge and do request Mahananda Suppliers Limited and Sungrowth Share & Stocks Limited to pledge the following shares in favour of IFIN as security for the Facility: Name of the holder/owner Name of the Company Number of Securities pledged face value of the Securities Client ID/Depository ID No. Mahananda Suppliers Limited Ad....
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....1, in the column 12(d) extent and operation of the charge, it has been mentioned that "the Company is not a Borrower of this loan facility and it is acting as only a Pledgor providing first charge of equity shares of Adhunik Metaliks Limited (AML), as mentioned in point 14 of this form for credit facilities of Rs. 30 crores availed by Adhunik Meghalaya Steels Private Limited and in column 14, short particulars of the property or assets charges, it is written "Pledge of 2143485 equity shares of Adhunik Metaliks Limited for credit facilities of Rs. 30 crores availed by M/s. Adhunik Meghalaya Steels Private Limited. It is submitted that this form has been digitally signed by the Director of the charge holder i.e. the Financial Creditor as well. Therefore, according to the Ld. Counsel it was unambiguously clear to the parties that the Corporate Debtor is pledging only the shares mentioned in the said form and in no way stood as guarantor or surety for the borrower. 25. Ld. Counsel for the Corporate Debtor has submitted that the intention of the parties in providing the pledge agreement clearly depicts that it was only the Pledge Agreement, thereby pledging the shares of the Corporat....
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....s it cannot be serve as a Guarantee Agreement. 29. The Ld. Counsel further referred to and relied upon judgements of NCLT Mumbai Bench, in the case of ICICI Bank Limited (MA 223/2018), IFCI Limited (MA 199/2018), Standard Chartered Bank Ltd. (MA 261/2018) vs. Mr. Sumit Binani vs. State Bank of India vs. Monnet Ispat & Energy Limited dated 05.06.2018, the relevant extracts thereof is as under:- "On perusal of the facts of the application, it appears that the Corporate Debtor herein gave a Letter of Comfort to the applicant herein stating that sponsor (Corporate Debtor) shall ensure that the borrower repays the facility along with all interest, liquidated damages, front end fee, etc. and in the event of the fund of the borrower being insufficient to meet any debt obligations, the sponsor shall make funds available to the borrower (Monnet Power) to ensure payment by the borrower to the lender on the stipulated date and on the debt obligations under the Facility Agreement by further saying that in the event the borrower defaults in any of its obligations to the lender, the Corporate Debtor shall make good to the lender any loss, damages, expenses or other costs as may accru....
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....2.2015 which required security package for the said loan to be submitted by the Borrower to the Financial Creditor. 31. Under the heading top up of Security, it was specifically mentioned that in the event of any dip in the market of shares by which top up as stipulated above is triggered, it would be necessary for the Borrower to arrange pledge of additional shares of AML from the pledgers in favour of Lender as top up for the short fall in the drawing power within 5 trading days from the date of such short fall. In the event top up by way of pledge of additional shares of AMIL cannot be provided, top up by way of cash/cash collateral to be provided within a time frame, in addition to this personal guarantee of Mr. Manoj Kumar Agarwal. 32. From the pleadings of the parties, documents placed on record and the arguments advanced, we are of the considered view that this agreement can be referred to as a hybrid agreement. Though it is in fact an agreement of pledge but, for the convenience of the Financial Creditor the same is repeatedly being referred to by the Financial Creditor in its pleadings as "Agreement of Pledge and Guarantee" without there being any Guarantee explicitl....