TaxTMI 
TaxTMI 
2021 (12) TMI 9
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....Law Tribunal, Kolkata Bench) in CP(IB) No. 131/KB/2020. Whereby, admitted the Application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) filed by ICICI Bank Limited Financial Creditor (Respondent No. 1) and initiated Corporate Insolvency Resolution Process (CIRP) against Mc Nally Sayaji Engineering Limited Corporate Debtor (Respondent No. 2). 2. The Appellant "Mr. Aseem Srivastav" Suspended Director of the Corporate Debtor Company has filed CA (AT) (Ins) No. 147 of 2021, whereas one of the Financial Creditor "Kotak Mahendra Bank Limited" has filed CA (AT) (Ins) No. 378 of 2021 against the impugned order dated 11.02.2021. In this Appeal for the sake of convenience the ICICI Bank Limited (Respondent No. 1) and Mc NallySayaji Engineering Limited (Respondent No. 2) are referred as Financial Creditor and the Corporate Debtor respectively. 3. Brief and relevant facts of these Appeals are that ICICI Bank Limited (Financial Creditor) had granted and disbursed Rupee Term Loan facility and Working Capital facility to the Corporate Debtor as under:- (i) Rupee Term Loan facility of Rs. 25 Crores "Rupee Term Loan facility I"; and date of disbursement dated June....
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....t the Financial Debt is not payable in fact and in law, the debt is time barred and there aremisjoinder of cause of action as dates of default are different. Another Appeal is filed by the "Kotak Mahindra Bank Limited" on the ground that 5 Banks i.e. Kotak Mahindra, ICICI, DBS, IDBI and State Bank of India had advanced loan to the Corporate Debtor. Ld. Adjudicating Authority failed to appreciate that more than 50% Members of lenders of consortium had opposed the initiation of CIRP, as they were considering the restructuring of loan outside the scheme of the IBC. According to them the restructuring of loan is more beneficial to the creditors as they were not taking the haircut. In the eventuality of a resolution plan being implemented or liquidation process being initiated, the Financial Creditors including the Appellant "Kotak Mahindra Bank Limited" will have to take a haircut. 7. Both the Appeals are resisted by the ICICI Bank Limited (Respondent No. 1) on variety of grounds. Submissions in CA (AT) (Ins) No. 147 of 2021. 8. Ld. Sr. Counsel for the Appellant representing Mr. Aseem Srivastav submitted that Section 7 Application was filed for alleged debts for different agre....
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....the alleged debt of default i.e. 31.01.2019. The Application under Section 7 of the IBC included an amount which is not due and payable in fact. For this purpose, he drew our attention towards the repayment schedule Annexure A-18 (At Pg. 301). It is submitted that the amount not due would be due and payable/ in default on or after 25.03.2020 for such amount, an Application for initiation of CIRP can never be filed as provided in Section 10A of the IBC.In support cited Judgment of the Hon'ble Supreme Court in the case of Ramesh Kymal Vs. M/s Siemens Gamesa Renewable Power Pvt. Ltd. Civil Appeal No. 4050 of 2020 decided on 09.02.2021. Thus, there can be no default under the IBC and the alleged debt includes an amount not due and payable in fact. Therefore, the Application under Section 7 of the IBC is not maintainable. 11. Ld. Sr. Counsel for the Appellant further submitted that date of default for Working Capital facility was 17.12.2015 which was more than three years prior to the date of filing of the Section 7 Application i.e. 08.01.2020. Thus, the Application under Section 7 of the IBC is time barred. For this proposition of law, he placed reliance on the Judgment of Hon'ble S....
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....tydefault took place on 28.01.2019 whereas in respect of Rupee Term Loan default took place on 31.01.2019 the account of Corporate Debtor was classified as NPA on 31.03.2019. The Loan recall cum demand notice was issued on 03.01.2020. No reply was issued to the demand notice by the Corporate Debtor.The Application for initiation of CIRP under Section 7 was filed on 09.01.2020. Thus, the Section 10A of the IBC has no application to the present matter. Ld. Adjudicating Authority has satisfied itself regarding existing of debt, default and completeness of the Application and no denial was made in this regard in the replies filed by the Corporate Debtor on 07.12.2020 and 15.12.2020. It is submitted that the Judgment of International Road Dynamics (Supra) was passed in relation to an Application under Section 9 of the IBC filed by the Operational Creditor having clubbed claims under separate and different contracts. Whereas the present the Application was filed under Section 7 of the IBC, the provisions of Section 7 of the IBC are so wide that a joint Application on behalf of the Financial Creditors can be filed under Section 7 of the IBC. Thus, the Application does not suffer from misj....
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....tted that in view of the facts and circumstances, the Appeal may be allowed and set aside the impugned order. 18. Per contra, Ld. Sr. Counsel for the Respondent No. 1 (ICICI) submitted that the Appellant has no locus standi to file the present Appeal. The Appellant is one of the Financial Creditors to the Corporate Debtor. The Appellant was aware about the pendency of Section 7 Application from the very inception, however, no impleadment/intervention Application was filed before the Adjudicating Authority. The Appellant does not fall within the phrase any aggrieved person under Section 61(1) of the IBC. Thus, at the instance of Kotak Mahindra Bank the present Appeal is not maintainable. The Appeal is filed at the behest of the Corporate Debtor, raising frivolous ground that a resolution plan for the Corporate Debtor was under consideration. The Appellant has not raised any challenge to the existence of debt, default and completeness of the Application filed by the ICICI(Financial Creditor). The CIRP is not adversarial to the interest of the Corporate Debtor or its creditors. On the other hand, IBC is a beneficial legislation for equal treatment to the creditors and to revive the....
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....he agreement dated 26.06.2015. For these loans the dates of default are 28.01.2019, 31.01.2019 and 31.01.2019. For these defaults the Financial Creditor (ICICI) sent a loan recall/demand notice dated 03.01.2020 to the Corporate Debtor in which it is mentioned that the account of the Appellant was classified as NPA on 31.03.2019. According to the Ld. Counsel for the Appellant the claims arising out of different agreements having different dates of default, there being a separate cause of actions, cannot be clubbed together. For this purpose, they have placed reliance on the Judgment of this Appellate Tribunal in the case of International Road Dynamics South Asia Pvt. Ltd. (Supra). 22. We have gone through the cited Judgment in this case the claim arising out of different agreements or work order, having different amount and different dates of default, therefore, it was held that different dates of default cannot be clubbed together in one Application under Section 9 of the IBC and such application is defective and is not maintainable. 23. In the present case, we are dealing the Application under Section 7 of the IBC. There is a difference between the claim under Section 7 & un....
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....ication under Section 7 of the IBC. Issue No. (ii) Whether the debt is not payable in fact? 27. According to the Ld. Counsel for the Appellant the repayment schedule of term loan I and term loan II specified dates as and when instalments become due and payable under the agreement. It is evident from the repayment schedule two such instalments could have been due and payable on 17.06.2020 and 17.12.2020 respectively. In the Application the date of default is 31.01.2019 whereas the aforesaid two instalments were not due and payable. 28. Section 3(12) of the IBC defines "default" means non-payment of debt when whole or any part or instalment of the amount of debt has become due and payable and is not paid by the debtor or the Corporate Debtor as the case may be". With the aforesaid definition, it is clear that the two instalments i.e. dated 17.06.2020 and 17.12.2020 were not due and payable even though the earlier instalments were become due and payable and the Corporate Debtor had committed default. Therefore, it cannot be said that the Corporate Debtor has not committed any default in respect of the aforesaid loans and the debt is not payable in fact. Issue No. (iii) ....
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....g proposal is unsustainable in law? 33. According to the Appellant Kotak Mahindra Bank one of the Financial Creditor of the Corporate Debtor submitted that five banks including Financial Creditor (ICICI Bank) and Kotak Mahindra Bank advanced the loan to the Corporate Debtor and in the joint lenders meeting, there was a deliberations on the restructuring proposal, such proposal is more beneficial to the all the lenders, however, Financial Creditor (ICICI Bank) has taken a isolated action against the interest of all other lenders and decided to pursue the Application under Section 7 of the IBC. Such Application is unsustainable in law. 34. The Financial Creditor (ICICI Bank) submitted that they had rejected the restructuring proposal and vide email dated 08.01.2021 the decision was communicated to all the lenders. 35. Ld. Counsel for the Appellant unable to convince us that during the pendency of restructuring proposal outside the purview of IBC, the Application under Section 7 of IBC is unsustainable in law. On the other hand, The Appellant has candidly admitted in Para 10 of Written Submission that none of the judgments passed by the Hon'ble Judicial Forums have dealt with....
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....ain the existence of default from the records of an information utility or on the basis of other evidence furnished by the Financial Creditor passed an order under Section 7(5). Section 7 (5) provides that where the Adjudicating Authority is satisfied that a default has occurred and the Application is complete and there is no disciplinary proceedings pending against the proposed Resolution Professional, it may by order admit such application. In the present case, the Corporate Debtor committed default and the Application is complete and there is no disciplinary proceedings pending against the Resolution Professional. Therefore, the AdjudicatingAuthority has no option except to admit the Application under Section 7 and to initiate the CIRP. 40. We find thatthe Adjudicating Authority was not obliged to consider that restructuring outside the purview of IBC would be beneficial to the Financial Creditors. Issue No. (vii) Whether Kotak Mahindra Bank can maintain the Appeal under Section 61(1) of the IBC? 41. Ld. Counsel for the Respondent No. 1 representing Financial Creditor raised an objection that under Section 61(1) of the IBC any person aggrieved by the order of the Adj....