TaxTMI 
TaxTMI 
2018 (8) TMI 2066
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....t in repayment of various facilities granted by State Bank of India and its associate Banks viz. State Bank of Hyderabad (SBH), State Bank of Mysore (SBM), State Bank of Travancore (SBT), State Bank of Bikaner & Jaipur (SBBJ) and State Bank of Patiala (SBP), which were all merged with the State Bank of India, the Petitioner herein. The Petitioner submitted that the Corporate Debtor committed default on 31.01.2017 to the extent of Rs. 456.90 crores due to which the entire outstanding of Rs. 3171.37 crores becomes payable immediately. 2. The Petitioner submits that the Petitioners along with its associate banks and other banks entered into a Rupee Facility Agreement on 31.05.2010 as amended by the Agreement of Modification dated 30.08.2010 with Videocon Telecommunications Limited (referred as "VTL") and the following table reveals the facilities granted by the SBI and its associate banks under the said facility Agreement; Bank Rupee Term Loan (In INR Crores) Letter of Credit Facilities (INR Crores) Total SBI 1400 840 2240 SBBJ 100 -- 100 SBM 100 50 150 SBP 100 60 160 Total 1700 950 2650 3. The Petitioner fu....
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....s a Co-Obligor with VTL and be bound by and comply with all the obligations expressed to be assumed by it as a co-obligor under the Rupee Facility Agreement. 2.2 VTL hereby covenants and agrees with the Lenders that with effect on and from the date hereof, it shall perform all duties and obligations of a Co-Obligor under the Rupee Term Loan Agreement as if VTL had been an original party to the Rupee Term Loan Agreement as a Co-Obligor and be bound by and comply with all the obligations expressed to be assumed by it as a Co-Obligor under the Rupee Term Loan Agreement." The Petition discloses the following details in respect of default committed by the co-obligors including the Corporate Debtor herein; Facility Total Overdue as on December 31, 2017 (In INR Crores) Initial Date of Default Days of Default till December 31, 2017 Principal Interest Penal Interest Total Defaulted Debt SBI RTL facility 51.80 260.46 3.03 315.29 31.01.2017 334 SBBJ RTL facility 2.50 13.85 0.16 16.51 31.01.2017 334 SBH RTL facility 7.50 40.99 0.46 48.95 31.01.2017 334 SBM RTL facility ....
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....ly to the claim made by the Petitioner against the Corporate Debtor in the Rupee Term Loan Agreement dated 08.08.2012. 12. It is to be noted that, the associate banks of SBI have already merged with SBI and the latter has made this claim aggregating the amounts payable not only to SBI but also to other erstwhile Banks namely SBB&J, SBM and SBP. As details of the sanctioned limits, disbursed amounts and dates of disbursements and amounts outstanding (principal + interest) as on 31.12.2017 have been disclosed in the table mentioned above, for the sake of avoiding repetition, it has not been mentioned again. 13. The argument on behalf of the Financial Creditor is that the present petition is filed u/s 7 of the Insolvency and Bankruptcy Code, 2016 against the Respondent who is a co-obligor under the Rupee Term Loan agreement dated 08.08.2012. This Tribunal had already passed orders dated 06.06.2018 against Videocon Industries Limited and against Videocon Telecommunications Limited dated 11.06.2018 for the defaults committed therein. By virtue of the fact that all Videocon group companies are co-obligors to the Rupee Term Loan agreement, the liability on the part of the parties th....
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.... ii. The Respondent, Obligor/Co-obligor Companies can neither be called as Guarantor nor Indemnifier under the relevant provisions of Contract Act hence there is no specific carve out in Insolvency and Bankruptcy Code 2016 to separately initiate CIRP against Obligor/Co-obligor but it has to be included in CIRP already initiated against VIL in CP(IB) No.2/2018; iii. Separate and independent resolution plan/s cannot be made separately by different IRP/RP against each of the Co-Obligor Company for the same set of secured assets pursuant to Sec.18(f) of Insolvency and Bankruptcy Code, 2016 and due to consolidated balance sheet, the very same assets are already in control and custody of RP appointed for CIRP against Videocon Industries Ltd in CP(IB) No.2/2018; iv. Pursuant to initiation of CIRP against VIL and the same set Of assets are shown to be secured for the purpose of each application, the rigour of Section 14(c) shall apply for all subsequent proceedings in relation to the very same assets; v. Since a CIRP is already initiated against Videocon Industries Ltd.(VIL) in CP No.2 of 2018 by Order dated 6% June 2018, for the same alleged default amount hen....
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....been made against the 'consideration for the time value of money.... ...TO show that there is a debt due which was disbursed against the 'consideration for the time value of money', it is not necessary to show that an amount has been disbursed to the 'Corporate Debtor'. A person can show that the disbursement has been made against the 'consideration for the time value of money' through any instrument." f. The 'debt' and 'default' of VIL are established: 'Debt' as defined under section 3(11) of the Code means a liability or obligation in respect of a claim which is due from any person and includes a financial debt and an operational debt. Further, definition of 'financial debt' under section 5(8) of the Code is illustrative, and hence should be treated with a wide import: "financial debt" means a debt alongwith interest, if any, which is disbursed against the consideration for the time value of money and includes- (a) money borrowed against the payment of interest; ... (g) the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in sub-clause (a) to (h) of this clause, g. The ....
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....hibit 15, page 658, Vol. IV of the Application). h. Different Interim Resolution professionals for specified companies: (i) It is submitted by the Ld. Counsel for the Corporate Debtor that the CIRP for each of the Specified Companies of the Videocon Group under the supervision of different interim resolution professionals would lead to complications as the CIRP will be carried out under the supervision of different resolution professionals and the committees of creditors. (ii) It was submitted by the Ld. Senior Counsel for the Petitioner that for the 12 applications filed by the Petitioner against the co-obligors under the RTL Agreement, 4 different IRPs have been proposed in order to satisfy the requirement under Item 22 of the Code of Conduct for Insolvency Professionals, provided under the First Schedule of the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016: "Occupation, employability and restrictions. 22. An insolvency professional must refrain from accepting too many assignments, if he is unlikely to be able to devote adequate time to each of his assignments." (iii) It was also submitt....
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....Representative had approached the banks and signed the documents together projecting themselves as one entity. Here an example has to be given wherein five persons put together approach a lender for a loan facility treating them as one unit and the lender consents for advancing/ disbursing the money as per the request of the parties concerned or to whomsoever suggested by the entire group together, then, in the event of default, the lender shall have to treat all the five members as one unit and can proceed against them singly or jointly as per law. The same situation is seen in the present case as the banks were approached by the Videocon group companies as one Unit (jointly), consisting of different entities. So, it cannot be said that there is no disbursement of loan to the Corporate Debtor in the present petition. Therefore, we hold that the obligor and co-obligors to the debt are a single unit and disbursement to one obligor amounts to disbursement to all of them put together and hence the Videocon group companies are jointly and severally liable. c. Another contention on the part of the Respondent is that a separate and independent resolution plan/s cannot be made by....
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.... 08.08.2012. Apart from that, the contention that it cannot be called as a guarantee nor an indemnity, is also not appreciated. When we look at the facts, all the group companies together executed the documents which practically implies that each party is a guarantor to the other or each party would indemnify the other in case of default, for the reason that they are the different organs of the same body i.e. the Videocon group. There is a guarantee/ indemnity by legal fiction and law estops the other party or parties in the same group from repudiating the liability cast on them. The 'Doctrine of Estoppel' is clearly applicable and tilts the entire case in favour of the Petitioner. Apart from that it can be noticed from the documentation that term "obligor" and "co-obligor" is used for the entities which means, in so far as the loan agreement, there is no distinction between an obligor and a co-obligor as far as the liability is concerned and legally all of them must be considered as "Debtors" for the purpose of this Code. Therefore, we hold that the arrangement and the manner in which the documentation was done for the purpose of advancing loans is perfectly legal and the Corporat....