TaxTMI 
TaxTMI 
TaxTMI 
2022 (5) TMI 313
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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 Holders aggregating to Rs.310,00,00,000/- (Rupees three hundred ten crore only). c) T....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tal 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 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. 28. In view of the given factual matrix, this....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tor 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 with the Financial Creditor, has entered into commercial negotiations with L&T Asian Realty Project LLP and Sunteck Realty for joint development of certain residential and retail real estate project, being the sale area generated from the contiguous land admeasuring approximately 57962 sq. meters equivalent....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 Company Limited (EARC), the Debenture Holder, to grant a No-Objection Certificate for appointing Cushman & Wakefield India Private Limited. Vide letter dated 31.02.2021, EARC granted NOC for the above purpose. e. In view of the above, to realise the maximum amount possible from the sale, the Corporate Debtor entered into a Service Fee Agree....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rate 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 Accounts maintained by EARC which reflects both, the disbursal of a sum of Rs.310 crore and also the defaults in making the due payments of interest. e. The Corporate Debtor has relied upon the order dated 07.10.2021 passed by this Tribunal in case of Beacon Trusteeship v. Neptune Ventures and Developers, CP (IB) No. 993 of 2020. The Financial Creditor submitted that the above order in view of the decision passed by the NCLAT in the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ts 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 Security, the Corporate Debtor has created an English Mortgage in favour of the Mortgagee, who is acting as the Security Trustee for the Financial Creditor. In order to enforce its rights and to seek repayment amounts, Clause 7A of the said Mortgage grants general enforcement powers to Mortgagee. Findings: 11. We have heard the arguments of the Learned Counsel for both the parties and perused the records. 12. We have prudently gone through the pleadings available on record. The Financial Creditor vide the Debenture....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or 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. Therefore, we do not have any objection on record against the application filed for initiation of CIRP against the Corporate Debtor. a) The application is complete and has been filed under the proper form. The debt amount is more than Rupees One Crore and default of the Corporate Debtor has been established and the application deserves to be admitted. 17. The Applicant has proposed the name of Mr. Bhrugesh Amin, a registered insolvency resolution professional having Registration Number [IBBI/IPA-002/IP-N00353/2017-2018/11003] as Interim Resolution Pro....