TaxTMI 
TaxTMI 
2019 (11) TMI 1476
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....head "Particulars of Financial Debt" the total amount of Debt granted on 01.09.2016 is stated to be Rs. 10,00,00,000/- (Rupees Ten Crores Only), and the amount claimed to be in default is Rs. 9,33,30,086.48/- (Rupees nine crores thirty-three lakhs thirty thousand and eight six and forty-eight paisa only) as on 02.07.2018. 3. The Corporate Debtor is M/s. Hindustan Newsprint Ltd (hereinafter referred to as HNL), a central public sector undertaking under the administrative control of the Department of Heavy Industries. It is a wholly owned subsidiary of Hindustan Paper Corporation Limited (hereinafter referred to as 'HPCL'). Submissions by the Financial Creditor 4. The Ld. Counsel for the Financial Creditor/ Bank submitted that during the month of August, 2016, the corporate debtor had approached the Bank for availing certain credit facility. Considering the request and the documents submitted by the Corporate Debtor, the Bank had sanctioned the credit facilities vide Sanction Letter dated 23.08.2016 (Annexure I (4) of the application). The terms of the sanction letter were amended vide addendum arrangement letters dated 24.08.2016 and 30.08.2016. 5. The counsel st....
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....of the application). 9. It is further submitted that the Corporate Debtor had also executed a letter of indemnity for fax/ e-mails instructions given to the Bank on 26.08.2016 and an Agreement for bill purchase/ bill discounted limits, counter indemnity for buyers credit and counter indemnity for guarantee limit each dated 26.08.2016 ( Annexure I (12) and Annexure I (13) of the application respectively). 10. The counsel stated that as per the working capital facility agreement, the Corporate Debtor was required to obtain No Objection Certificate (NOC) from other lenders from whom they are enjoying credit facilities under multiple banking systems. Despite many reminders the Corporate Debtor had failed to obtain the same. 11. The counsel for the Financial Creditor submitted that from February 5, 2018 to February 14, 2018, seven bills under bill discounting facilities fell due for payment, against which Corporate Debtor have issued two cheques for Rs. 45,76,335/- and Rs. 87,93,728/-. The cheques bearing No. 564746 for Rs. 45,76,335/- was cleared whereas the cheque bearing No. 564745 for Rs. 87,93,728/- was dishonoured for want of funds. It was again presented on 29.03.2018, b....
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....al to disinvest 100% shareholding of HNL to a strategic buyer. Pursuant to this the Department of Asset Valuers and Inter-Ministerial Group (IMG for short) to appoint Transaction Advisor and Legal Advisor. The Board of Directors of HPCL at its meeting held on 30.01.2017 approved the proposal of strategic disinvestment of shareholding of HPCL in HNL. 18. The counsel submitted that the Corporate Debtor vide letter dated 15.03.2018 requested all the lender Banks for waiver of interest and allow the company to repay the principal amount outstanding as on 31.02.2017 in 180 equal instalments. However, banks did not agree to the proposal except IndusInd Bank Ltd. As a consequence, HNL has failed to service the interest and principal repayment commitment to the lender banks. Consequently, the entire Bank Accounts of HNL with the lender banks have been classified under NPA in the Financial year 2017-18. 19. The counsel further submitted that on July, 2019 HNL has an outstanding total loan amount including accrued interest is approximately Rs. 197.39 Crores. Meanwhile, the lending banks (RBL, SBI, Indusind Bank, Bank of Baroda and TNMBL) have already started legal proceedings against H....
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....s of the Kerala Land Acquisition Act, 1961. Agreements were entered into between HPCL and the State, whereby, parcels of land were transferred by them to HPCL. As per the agreement, 'the Company shall not be entitled to transfer the land acquired or any part thereof by sale, gift, lease or otherwise except with the previous sanction of the Government. Thus, any transfer of the lands provided to HPCL by the State can only be done by the Company with the prior sanction of the State. 25. It is further submitted that the State of Kerala is keen, especially in public interest, to take over and revive HNL. The intention of the State is to purchase the share capital of HNL and to retain it as a public sector unit, and to protect HNL from being privatised. The applicant, at its highest level, is currently engaged in formulating a proposal for the takeover of HNL. However, the same is a time-consuming process in view of the various factors/issues that are required to be considered before a concrete proposal may be approved. The applicant believes that the Government of Kerala will require at least three months' time to devise and approve a concrete proposal for the take-over of H....
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.... Page 6 "Further, we may observe that except the applicant (financial creditor) and the 'corporate debtor', there is no requirement of hearing a third-party including Intervener at the stage of admission. The order is required to be passed as per the decision of the Hon'ble Supreme Court as quoted above. The appeal stands disposed of with aforesaid observation and directions. No cost". 30. The financial Creditor has also submitted that they have filed the application under Section 7 of the Code, since the Corporate Debtor has committed default in repayment of the debt of Rs. 9,33,30,086.48 which includes the principle due of Rs. 9.26 crores as on 24.7.2018. The Corporate Debtor has admitted in its counter statement that an amount of Rs. 9.26 crores is due to the Financial Creditor towards principle as on 28.2.2019 excluding unapplied interest in the statement produced at pages 20 along with the letter issued to the State of Kerala at pages 15-19. Therefore, it has been proved beyond doubt, in addition to the evidence filed by the Financial Creditor, that the amount is due to the Financial Creditor and is not repaid, hence the matter deserves to be admitted. ....
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....d 25.11.2019, wherein, the approval was given and permission was granted to Liquidator of HPCL to sell HPCL's holding in HNL to the State to the tune of 25 Crores within the time lines permitted as per IBBI (Liquidator Process) Regulation, 2016. Findings: 36. Both the sides have been heard at length. Case record is perused carefully along with the evidences as well as the case laws referred. Certain facts as discussed above are not in dispute and summarised hereinbelow with the purpose of addressing the claim and counter claim of both the sides. A Petition is filed in the capacity of a 'Financial Creditor' for a 'Financial Debt' of Rs. 9,33,30,086.48/- (Rupees nine crores thirty-three lakhs thirty thousand and eight six and forty-eight paisa only) recoverable from the Corporate Debtor-Hindustan Newsprint Limited. Whereas, the Corporate Debtor in their counter argument did not state that they have not availed any loan or the due amount do not fall within the definition of Financial Debt. Instead they have mentioned that the parent company is under liquidation as per the Order of NCLT, New Delhi dated 02.05.2019. 37. In our view, the present application f....
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....nment of Kerala should have taken these measures long back, instead of coming at the last moment seeking to implead in the application. They should have taken steps to arrive at an amicable understanding with the Financial Creditor. Instead, they are praying for deferring this application for which Financial Creditor is not agreeable. As such, our hands are tied in this scenario and we have to go by the Rule Book only. Even at this juncture, if Government of Kerala is serious in continuing HNL as a State Government Undertaking, they can still take steps till the Resolution Plan is approved by the Adjudicating Authority. 42. Taking into account the interests of all the stakeholders, we are of the view that there is an urgent need to find a resolution to the long pending saga of Hindustan Newsprint Limited. In the aforesaid background, and after thoroughly perusing the records, we are of the view that, the application filed on behalf of financial creditor/ Applicant is complete. Therefore, the application filed under Section 7(5)(a) of the I & B Code, 2016 deserves to be Admitted. 43. Having admitted the Petition/Application, the provisions of Moratorium as prescribed under Sec....