TaxTMI 
TaxTMI 
TaxTMI 
2020 (10) TMI 771
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....y. The Corporate Debtor has also been extended separate term loan facility and Cash Credit Facility from Allahabad Bank vide Sanction Letter dated 26.08.2014 and Sanction Letter dated 12.01.2016 respectively. Subsequent, to issuance of the aforesaid sanction letters, PNB and Allahabad Bank also entered into a Working Capital Consortium Agreement along with the applicant in respect of the Cash Credit Facilities sanction in favour of the Corporate Debtor. On 24.11.2016, the Corporate Debtor, issued a communication in the form of a proposal for restructuring to the Financial Creditor, which inter alia included a request for a fresh term loan, required for the business. 3. As per the averments, during the consortium meeting dated 28.11.2016, request of the Corporate Debtor for an additional term loan was deliberated upon and accordingly, it was resolved that PNB will appoint its empanelled agency for Techno Economic Viability (TEV) Study for restructuring proposal of the Company. The Corporate Debtor issued another communication on 03.12.2016, inter alia requesting PNB to appoint expert for TEV study of the restructuring proposal. Thereafter, a consortium meeting was convened on 30.01....
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....d below -- "Mr. Rajeev Khera, DGM Punjab National Bank informed that the restructuring proposal was sent to head office with due recommendation of Branch, Circle Office and Zonal Office, however in between the new guidelines of Reserve Bank of India came on Stressed Assets, which stated that the Resolution Plan/Restructuring Package has to be get rated by any RBI approved rating agency before sanction. He informed that, due to the aforesaid guidelines of RBI and non-routing of sales of the company through the cash credit account, the head office has delisted the proposal and advised to send the Resolution Plan with the present circumstances. 6. The Financial Creditor has recalled the loan facilities vide its letter dated 03.04.2018. The Applicant argues that the said letter of recalling the loan facility, was a subject matter of challenge before the Hon'ble High Court of Bilaspur and further that it was served on them during the period when the Financial Creditor has itself directed the Applicant to submit a resolution plan in terms of the RBI Circular dated 12.02.2018. It has been alleged by the Corporate Debtor that since the resolution plan submitted by them in terms of th....
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....0.09.2018 and various deficiencies as noted there in were pointed out. Owing to the such deficiencies the resolution of the Corporate Debtor was not considered and proceeding for recovery before this Tribunal. iv) Aforesaid, sequence of events indicate that the Corporate Debtor has been proceeded by the Financial Creditor by virtue of the present application under section 7 of the IBC, 2016 not on account of RBI circular dated 12.02.2018 but because of the failure of the Corporate Debtor to repay the debts and to various deficiencies in its resolution plan which has no relation with the said RBI Circular. Financial Creditor has also submitted on record, Minutes of the Meeting of the Consortium on 05.04.2019, wherein the forensic audit report of the account of Corporate Debtor were considered, wherein the Consortium found various abnormal transactions as detailed in the said minutes which, prima facie, indicate large scale diversion of funds. v) The present proceeding under IBC 2016 have been initiated due to failure of the Corporate Debtor to pay the outstanding amount dues as under taken in the loan agreement and due to various deficiencies in its resolution plan and not only ....
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....ion is made by the Code between debts owed to financial creditors and operational creditors. A financial creditor has been defined under Section 5(8) to mean a debt which is disbursed against consideration for the time value of money. As opposed to this, an operational creditor means a person to whom an operational debt is owed and an operational debt under Section 5(21) means a claim in respect of provision of goods or services ". "When it comes to a financial creditor triggering the process, Section 7 becomes relevant. Under the Explanation to Section 7(1), a default is in respect of a financial debt- it need not be a debt owed to the applicant financial creditor. Under Section 7(2), an application is to be made under sub-Section (1) in such form and manner as is prescribed, which takes us to the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. Under Rule 4, the application is made by a financial creditor in Form 1 accompanied by documents and records required therein. Form 1 is a detailed form in 5 parts, which required particular of the applicant in Part I, particulars of the corporate debtor in Part II, particulars of the proposed Interim Resolu....