TaxTMI 
TaxTMI 
2022 (5) TMI 313
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....fault Interest Amount Rs.16,01,21,723/- Interest over Default Interest Rs.1,05,33,17,459/- Total Rs.502,91,64,495/- 3. The date of Default is 30.04.2019. 4. The case of the Financial Creditor is as under: a) The Petition is filed by the Financial Creditor who acting as Debenture Trustee on behalf of Edelweiss Asset Reconstruction Company Limited as per the Debenture Trust Deed dated 17.11.2017. b) Vide the said Debenture Trust Deed, the Corporate Debtor proposed to issue Non-convertible Debentures with the face value of Rs.10,00,000/- (Rupees ten lakh only) each for the cash at par aggregating to Rs.310,00,00,000/- (Rupees three hundred ten crore only) in such series as may be decided by the Financial Creditor to prospective subscribers on the terms and conditions mentioned and, in the manner, as set out in the disclosure documents. The Corporate Debtor neglected and failed to make the interest payment on respective Interest payments dates and the default in the payment of interest is an event of default under the Debenture Trust Deed. The debt payable under the 3100 Non-convertible Debentures issued via private placement to the Debenture Hold....
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....so filed CIBIL Report dated 20.05.2020 which is at pp 154-159 of the Petition. 6. The Financial Creditor has issued Loan Recall Notice dated 03.03.2020 to the Corporate Debtor claiming a total sum of Rs.4,71,48,24,473/- (Rupees four hundred seventy-one crore fourth-eight lakh twenty-four thousand four hundred seventy-three only) 7. The Corporate Debtor has filed its Affidavit of Reply and submits as under: a) The Financial Creditor filed the Petition in matter of Beacon Trusteeship v. Neptune Ventures and Developers, CP (IB) No. 993 of 2020 where the Financial Creditor had security over its claim and the security documents vested in the Financial Creditor the power of enforcing the security interest upon occurrence of a default without the intervention of any court, held that a Petition seeking initiation of CIRP under section 7 of the IBC was not maintainable as the Financial Creditor had recourse under the law to recover all the monies due to it. Thus, vide order dated 07.10.2021, this Tribunal was pleased to dismiss the said Petition and held as follows: "27. The Petition has absolute rights in the mortgaged property and cannot initiate any action under s....
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.... upon the mortgaged properties and taking possession thereof, to transfer the mortgaged properties by way of lease, sub-lease or leave and licenses, to invoke the guarantees and enforce the securities, to appoint and remove a nominee director on the Board of Director of the Corporate Debtor etc; iii) Clause 7A-Sale without Intervention of the Court: If an event of default occurs, the Financial Creditor may sell, assign, monetize or otherwise dispose of the mortgaged properties without the consent of the Corporate Debtor or the permission of any court; iv) Clause 19-power of Trustee to Appoint Receiver: If an event of default occurs, the Financial Creditor shall have the power to appoint a receiver for the mortgaged properties, having all the powers of the Financial Creditor under the DTD. e) It is adequately clear that under the DTD, the Financial Creditor is entitled to enforce its security interest by several means, appropriate the security interest for realizing any amounts allegedly payable to it without the intervention of any court. f) The Corporate Debtor with a genuine and bona fide intention to settle all is disputes wi....
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....hareholders, Secured and Unsecured Creditors of Applicant No.5" c. Under DTD, the Financial Creditor has various remedies and recourses, including to enter upon the mortgaged properties and taking possession thereof, to transfer the Mortgaged Property by way of lease, sub-lease or leave and licenses, to invoke the guarantees and enforce the securities, to appoint and remove a nominee director on the Board of Directors of the Corporate Debtor etc. Thus, the general powers available to the Financial Creditor under the DTD are powers for recovery of dues, i.e., to initiate recovery proceedings. There is no power under the DTD to institute proceedings under IBC, nor can the present proceedings be treated as debt recovery proceedings. d. The Corporate Debtor is the owner of certain land admeasuring 16,000 sq. meters (approx) located at Thane (West), Maharashtra. With a genuine and bona-fide intention to resolve all its disputes with the Financial Creditor, the Corporate Debtor approached on Cushman & Wakefield India Private Limited, an advisory concern, to oversee the sale of the said Property. Thereafter, the Corporate Debtor requested Edelweiss Asset Reconstruction C....
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....g the Project related expenses, being constructed on 14.3 acres of land bearing Survey Nos. 464 (A), 465 & 466 at Thane i.e. the Project Land. c. The NCDs are secured by mortgage over the rights, title, entitlement, benefits and receivables of the said Project along with the Project Land, owned by the Corporate Debtor. They are also secured by Pledge of Shares and Personal and Corporate Guarantees. Due to default in the interest payments, Recall Notice was issued to the Corporate Debtor. However, no payments were made by the Corporate Debtor. d. Following are the documents establishing the default and records of default: i) Debenture Trust Deed dated 17.11.2017 executed between the Financial Creditor and the Corporate Debtor defining the terms and conditions for the issuance of the debentures and the repayment thereof; ii) Demand Promissory Note dated 20.11.2017 executed by the Corporate Debtor for an amount of Rs.310 crore; iii) Amendment to terms regarding coupon rate dated 23.11.2017 issued by the Corporate Debtor; iv) Commercial Credit Information Report reflecting the debenture amount disbursed; v) Statement of Acc....
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....an English Mortgage has held as under: "26. Therefore, in terms of the English Mortgage, the Mortgagor has a recourse to repay the mortgaged debt and has the right to seek reconveyance of the properties to the mortgagor upon complete satisfaction of Debt. 27. The Petitioner has absolute rights in the mortgaged property and cannot initiate any action under section 7 upon non-payment of dues under the Debenture Trust Deed, the Petitioner has agreed to recourse and sell the mortgaged assets and recover the money due." g. The discipline warrants and mandates that a Judgment of Co-ordinate Bench is to be applied and followed by another Co-ordinate Bench. The said principle has been recognised and consistently applied by the Hon'ble Supreme Court and has been followed by NCLAT in the matter of DLF Phase - IV Commercial Developers Limited, Company Appeal (AT) No. 180 of 2019. h. Clause 6 of Mortgage Trust Deed and Clause 31 of the said Mortgage entitles the Financial Creditor to select an appropriate remedy at its discretion. As per Clause 4.3, the Corporate Debtor has covenanted to repay the Mortgage monies to the Financial Creditor. As and by way of S....
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....d sell the mortgaged assets and recover the money due". 21. We are of the view that the above view taken by the Tribunal in "Beacon Trusteeship Limited" is not inconsonance with Section 7 read with Section 238 of the 'I&B Code'. The Financial Creditor has full right to initiate action under Section 7 for non-payment of dues. We, thus, are of the view that the judgment of the co-ordinate Bench in "Beacon Trusteeship Limited" was not a binding precedent to be followed by any other coordinate Bench. We, thus, are also of the view that no error has been committed by the Adjudicating Authority in admitting Section 7 Application filed by the Financial Creditor. There is no merit in this Appeal. The Appeal is dismissed." 15. From the above observation, this Bench is of view that the Corporate Debtor has takin excuses of Mortgage and the Debenture Trust Deed and trying to avoid the liability. 16. On perusal of the documents submitted by the Applicant, it is clear that financial debt amounting to more than Rs.1,00,00,000/- (Rupees One Crore Only) is due and payable by the Corporate Debtor to the Applicant. There is default by the Corporate Debtor in payment of debt amount. Th....