TaxTMI 
TaxTMI 
2022 (3) TMI 1397
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....ising and/or purporting to exercise any voting right in the Committee of Creditors of the Corporate Debtor. d. to pass ex-parte ad interim orders in terms of prayer (a) to (c) above. 2. That the facts of the application in brief are as follows: i. That the Applicant is one of the Financial Creditors of the Corporate Debtor and is approaching this Tribunal being aggrieved by the following acts of omission and commission of the Interim Resolution Professional and to seek appropriate directions from this Tribunal: a. Admitting the claims of Respondent No. 2 based on Corporate Guarantee even though there is no default by the principal borrower, for whose debt corporate guarantees were furnished by the Corporate Debtor. b. Inclusion of "related party" of the Corporate Debtor in the Committee of creditors. ii. Exclusion of interest from the claim of the Applicant and admitting the claims of the Applicant 'provisionally' a. That the Corporate Debtor is engaged in the business of real estate development and is developing a group housing residential complex at GH-05, SC-1, Adjoining Tech Zone IV, Greater Noida, Uttar Pradesh b....
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....tors of the Corporate Debtor. Further, all decisions taken in the meeting of Board of Directors of the Corporate Debtor are subject to the confirmation of the Debenture holders and the lender i.e., the Respondent No. 2- b. Apart therefrom, the Debenture holders not only participate in policy making process of the Corporate Debtor but control each and every fact of the business of the Corporate Debtor. The Debenture holders not only formulate the business plan of the Corporate Debtor but also control the sales of inventory, bank accounts, salary and remuneration of the key managerial personnel of the Corporate Debtor etc. c. That the Debenture holders and lenders i.e., the Respondent No. 2 and 3 by virtue of such control are related party' of the Corporate Debtor and hence, could not have been included in the Committee of Creditors of the Corporate Debtor. d. That the Respondent No. 1 being the Interim Resolution Professional ought to have checked and confirmed, prior to admitting the Respondent No. 2 and 3 in the Committee of Creditors of the Corporate Debtor, that they are not 'related party' of the Corporate Debtor. 3. The Respondent No. ....
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.... commencement of the corporate insolvency resolution process, owing to alleged delay by the Corporate Debtor, in delivering the project. It is further submitted that the relationship between the Applicant and the Corporate Debtor is governed by the contracts i.e., Agreement(s) for Allotment, accompanying the Form CA (undated) furnished by the Applicant and as per Clause 4.4 of the Agreement for Allotment prescribes that the Applicant is entitled to compensation for delay @ Rs. 5 per sq. ft. per month for the super area of the premises in question. The Applicant had concealed and suppressed this fact in the Form CA (undated) furnished by the Applicant as well as in the present Application. iii. That the Applicant has no locus standi to raise objections and challenge the acceptance of the claims of other creditors including Respondent Nos. 2 and 3, without proper verification of facts. All creditors of the Corporate Debtor including Respondent Nos. 2 and 3, furnished their claim forms along with documents supporting their respective claims to the Respondent No. 1 of which the Applicant has no knowledge and his allegations accordingly are based on unverified information. In o....
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....pal Borrower had entered into a Facility Agreement dated 22.09.2017 with ECL Finance Limited along with the Corporate Debtor Palm Developers Private Limited was also a party to the said Facility Agreement as one of the Obligors being "Obligor No. 5". iv. That in furtherance to the terms of the Facility Agreement, the Principal Borrower along with the Obligors was required to create and procure creation of securities in favour of ECL Finance Limited on various properties including but not limiting to first charge and mortgage over various projects, furnishing personal as well as corporate guarantees including an irrevocable and unconditional corporate guarantee from the Corporate Debtor and Pledge of its shares held by its shareholders in favour of ECL Finance Limited to secure the due performance of all the conditions of the Facility Agreement and payment of dues in accordance with the terms of the Facility Agreement. v. That in compliance with the conditions mentioned in the Facility Agreement, the Corporate Debtor vide Guarantee Agreement dated 22.09.2017 had extended a Corporate Guarantee in favour of ECL Finance Limited which vide the Assignment Agreement has ....
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....ipal Borrower and/or the Obligors will rectify the defaults in a timely manner. ix. That since, the default had been continuing, the ECL Finance Limited vide communication dated 02.04.2019, bearing reference number ECLF/REAP/4056 and 26.09.2019 bearing reference number ECLF/REAP/4412 pointed out the defaults committed by the Principal Borrower and/or the Obligors under the Facility Agreement. The Lender also exchanged various communication with the Principal Borrower and/or the Obligors highlighting the defaults and asking them to rectify the said defaults. x. That in pursuance of public announcement, on 7.02.2020 the Lender, ECL Finance Limited submitted its form C along with necessary documents, showing default from 2017 and claiming an amount of INR 139,02,83,168.68 as against the principal and interest due and payable. xi. That on 20.02.2020, the Insolvency Resolution Professional constituted Committee of Creditors in which the Lender ECL Finance was made a member with a status of "Financial Creditor", as the claim submitted by it were valid claim in terms of the provisions of the Insolvency and Bankruptcy Code. xii. Thus, in terms of the cla....
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.... file claim pursuant to the public announcement made under Section 13 (1) (b) read with Section 15(1) (c) or for collating of claims under Section 18(1)(b) or for updating claims under Section 25 (2) (e). 5. The Respondent No. 3 in his reply dated 18.09.2020 has reiterated almost the some statements as stated in the reply filed by Respondent no. 2, save and except the followings: i. That in or around June, 2016, Saha Infratech Private Limited (hereinafter referred to as 'Issuer" Principal Borrower'! with a view of augmenting their resources for meeting the requirement of funds to carry their business operations, development of various Projects namely. Encore, Amadeus, Abet and Elicit offered to issue upto 160 numbers of senior, fully secured, redeemable, transferable and interest bearing Privately Placed non-convertible debentures ("Debentures") having face value of INR. 1,00,00,000/-. each, for an aggregate amount of upto INR 160 Cores in two trenches, in the First Tranche the Issuer proposed to issue 110 Debentures and in the Second Tranche will issue 50 Debentures. The issuer accordingly appointed Respondent No. 3 10 act as the trustee for the holders of the ....
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.... the Obligors in payment/redemption of the Debentures, interest and other monies in accordance with the terms of Debenture Trust Deed, or in the event of default on the part of the Issuer and/or the Obligors to comply with or perform any of the terms, conditions and covenant contained in the Debenture Trust Deed, or other transaction documents, the Corporate Debtor being the Guarantor shall, upon demand, forthwith pay to the Debenture Holders or the Respondent No. 3 herein all the amounts payable by the Issuer and/or the Obligors under the Debenture Trust Deed, vii. That additionally, the Corporate Debtor has executed and delivered various documents including Demand Promissory Note, Indenture of Mortgage creating mortgage on properties of Encore project, Deed of Hypothecation hypothecating Encore project Receivables and Revenue Escrow Agreement in respect of entire receivables of the Encore Project, all dated 02.07.2016 in favour of Respondent No. 3 to secure the due performance of the terms and conditions and payment of all amounts under the Debenture Trust Deed, The documents have been filed by the answering Respondent with the Resolution Professional of the Corporate De....
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....erms, conditions and covenants contained in the Debenture Trust Deed and other transaction documents, the Corporate Debtor, being the Guarantor shall, upon demand from the Debenture Trustee i.e., Respondent No. 3 herein pay without demure all the amount so payable. xiii. In terms of the Debenture Trust Deed read with the Guarantee Agreement, it is beyond doubt that Respondent No. 3 is a 'Financial Creditor' of the Corporate Debtor and has a right to be a part of Committee of Creditor. 6. The Applicant in his rejoinder to the reply filed by the Respondent No. I dated 08.10.2020 has submitted that: i. No interest as contemplated by Regulation 16A(7) of the Insolvency and Bankruptcy Board of India (Corporate Insolvency Resolution Process for Corporate persons) Regulations, 2016 ("CIRP Regulations") has been granted to the Applicant as well as the other allottees. ii. The Respondent No. 1 has only taken symbolic possession of the assets of the Palm Developers Private Limited ("Corporate Debtor") whereas the Respondent No. 1 is required to take control and custody of the assets of the Corporate Debtor, as mandated by Section 18(1)(f) of the Insolven....
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....te Debtor, The Hon'ble Supreme Court of India in Civil Appeal No. 8512-8527 of 2019 Anuj Join Interim Resolution Professional for Jaypee Infratech Limited Vs. Axis Bank Limited Etc. ("Jaypee Judgment") has held that for a debt' to become a 'financial debt' for the purposes of Part II of the Code, there has to be disbursal of money to the Corporate Debtor against consideration for the time value of money. It is submitted that there is no disbursement from the Respondent No. 2 to the Corporate Debtor, as would be evident from the balance sheet of the Corporate Debtor, Even otherwise, ACRE has not been able to show any disbursement to the Corporate Debtor It is further submitted that the Respondent No. 2 cannot be a part of the Committee of Creditors. iv. It is further submitted that not a single document has been produced by ACRE to establish any default by Saha Infratech Pvt. Ltd. (Principal Borrower/SIPL). No account statement is produced by ACRE to even try and establish the default by SIPL. v. Further, the Respondent No. 2 has been wrongly included in the Committer of Creditors of the Corporate Debtor. Respondent No. 2, who is also the debenture ....
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....n Saha Infratech Private Limited ("Principal Borrower"/"SIPL") prior to filing of the claim. 9. The IRP (Mr. Krit Narayan Mishra) in his reply dated 19.08.2021 to the Application, to the limited extent of the issues in respect of the claims of respondent Nos. 2 and 3, has submitted that: i. It is a matter of record that the CIRP in the instant case was initiated on 27.01.2020, on an application filed by operational creditor under Section 9 of IBC. ii. The answering respondent has been appointed as the IRP in the present case vide order dated 13.07.2021 of this Tribunal, whereby the erstwhile IRP, Mr. Manoj Kumar Singh, was removed as the IRP, on an application preferred by the IBBI, white the answering respondent was appointed by this Tribunal. On his appointment, the answering respondent observed that amongst the CoC, so constituted were ECL Finance Ltd. and IDBI Trusteeship Services Ltd. (Respondent Nos. 2 and 3), who are holders of corporate guarantee executed by the corporate debtor for financial assistance being enjoyed by Shah Infratech Pvt. Ltd. (principal borrower). On admitting the respondent nos. 2 and 3 in the CoC, they held about 88% voting share in....
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....olution Professional he cannot adjudicate upon the claims of the Applicants and his role is limited to the extent of collating and verifying the claims so received. ii. It is submitted that subsequent to filing of claims by the Respondent Nos. 2 and 3 on 07.02.2020, the erstwhile IRP had already verified and admitted the claims of ECL Finance Ltd. and IDBI Trusteeship Services Limited on 20.02.2020, and that Mr. Krit Narayan Mishra now cannot intervene and challenge the already admitted claims of Respondent Nos. 2 and 3 and the said additional reply has been filed in complete abuse of the process of law and it is unlawful for the present IRP to challenge the claims of the respondent Nos. 2 and 3 that have been already admitted by the erstwhile interim resolution professional. iii. Further, it is submitted that the IRP has filed the present additional reply without disputing the reply filed by erstwhile IRP, hence the present IRP is estopped from taking a contradictory stand in facts and law in the captioned application. iv. It is submitted that the IRP in his additional affidavit in reply has failed to disclose any reason or justification whatsoever for h....
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.... defined under Section 126 of the Indian Contract Act, 1872 is a contract to perform the promise, or discharge the liability of a third person in case of his default. By necessary implication, the disbursement of loan amount takes place to or at the instructions of the principal borrower and not to guarantor, viii. It is submitted that in the judgment passed by the Hon'ble NCLAT in the matter of "Ascot Realty Private Limited Vs. Ajay Kumar Agarwal and Ors" wherein the Hon'ble NCLAT has discussed and provided clarity in terms of the judgment relied upon by the Interim Resolution professional ('Anuj Jain"). The present Interim Resolution professional has wrongly relied upon the judgment mention herein above (" Anuj Jain Interim Resolution Professional for Jaypee Infratech Ltd., Vs. Axis Bank") as the facts of the present case are different and the Hon'ble NCLAT has cleared the air as such that the above mentioned judgment does not apply in respect of guarantee. ix. It is further submitted that the position in Ascot Realty (supra) has been reaffirmed by NCLAT in the recent judgment in the case of 9M Corporation v. Naresh Verma: Co. Appeal (AT) (Ins) 4....
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...."), being the secured financial creditor of Palm Developers Private Limited the "Corporate Debtor herein"), vide Assignment Agreement dated 27.03.2020 has assigned all the rights, title and interests in the financial assistances sanctioned by it to Saha Infratech Private Limited along with the guarantees including the guarantees furnished by the Corporate Debtor herein and underlying security interests and the security documents creating security interest in the properties, in favour of Applicant No. 2 (being the "Assignee ARC")- As such, the Applicant No. 2/Assignee ARC has stepped into the shoes of Applicant No. 1/Assignor, as the Secured Financial Creditor of the Corporate Debtor herein in respect of the aforesaid credit facilities for all purposes. ii. The Applicant No. 2 is now vested with full and absolute rights of a legal owner of the financial assets and securities of the Applicant No. 1 qua the Facility Agreement dated 22.09.2017 including the Guarantee Agreement dated 22.09.2017 executed by the Corporate Debtor and the securities created by the Corporate Debtor to secure the said financial assistance and hence is entitled to receive the repayment of debt as well....
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....ssignment Agreement was produced before the previous interim Resolution Professional, however, there is nothing on record to suggest the same and the said IRP did not inform the CoC about such an assignment Regulation 28(2] of the CIRP Regulation, 2016 stipulates that the IRP has to inform every participant about any assignment c. Clause 1.1 (n) of the Assignment Agreement suggests that the Purchase Consideration for the assignment is Rs. 130 acres. However, no evidence of payment of such consideration of the assignment has been produced by ACRE and hence it should be directed to produce the same. ii. That although CIRP commenced on 28.02.2020 with respect to the Corporate Debtor, the SIPL, ECL and IDBI Trusteeship Limited ("IDBI") recalled the loan only on 24.03.2020 and 25.03.2020, respectively i.e., alter the CIRP commencement date. Since the Applicant Abhinav Mukerji had raised the issue of ECL being a related party of the Corporate Debtor. ECL has purportedly attempted to assign the loans advanced to SIPL only with malafide to circumvent the prospect of it being relegated as a 'related party of the Corporate Debtor. iii. That the documents filed ....
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.... 1 i.e.. ECL Finance Ltd. which is an 'Non-Banking Financial Company' who has assigned the entire debt with underlying rights, interest and securities in favour of Applicant no. 2 i.e. ACRE ARC which is a registered ARC with RBI. The said assignment is under Section 5 of SARFAESI Act. Section 5 of SARFAESI Act clearly provides for acquisition of rights or interest in financial assets by an asset reconstruction company [ARC] for the purpose of asset reconstruction or securitization by way of an agreement executed by such bank/NBKC for such acquisition on such terms and conditions as may be agreed upon between them. On such acquisition, the ARC shall be deemed to be the lender and all the rights of such bank or NBFC shall vest in such ARC in relation to such financial assets. Accordingly vide assignment deed dated 27.03.2020, ACRE ARC (assignee) has stepped into the shoes of ECL Finance Ltd.(assignor) as against the principal borrower i.e., Saha Infratech Pvt. Ltd. and all other securities in relation to the said financial assistance including Corporate Guarantor i.e., Corporate Debtor in the present matter. It referred to Section 35 of SARFAESI Act over-riding provisions of ....
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....#39;financial debt under the assignment deed is legally established and is beyond challenge in the present proceedings. 19. We have the heard the Ld. Counsels for the Applicant of IA No. 1610/2020 as well as the Applicant of IA No. 4130/2020. The prayer of the Applicant of IA No. 4130/2020 is to substitute the Applicant No. 2-Assets Care And Reconstruction Enterprise Limited in place of Applicant No. 1 as Respondent No. 2 in IA 1610/2020. 20. Since facts of both the applications are related with each other, therefore, we would like to dispose of both the applications by this common order. 21. By Cling the amended application IA No. 1610/2020, the Applicant has confined his prayer with respect to admitting of the claims by the IRP based on corporate guarantee even though there is no default by the principal borrower, for whose debt, the corporate guarantee is furnished by the Corporate Debtor. And Second ground relates to inclusion of related party of the Corporate Debtor in the Committee of Creditors (COC) and the exclusion of interest from the claim of the Applicant. 22. Since, the admission of claims of ECL Finance Ltd. of Respondent No. 2 of IA 1610/2020 as well as R....
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....ended that the decision of Hon'ble Supreme Court in Anuj Jain Case is applicable in the case in hand. He has further submitted that since the IRP is not empowered under the law to review the decision, that is the reason the same has not been reviewed. In other words, the IRP has supported the contentions of the Applicant regarding removal of the Respondent No. 2 and 3 as Financial Creditors. 28. Before considering the aforesaid submissions, we would like to refer to the following definitions given in the IBC: a. Section 3(6) claim (6) "claim" means- (a) a right to payment, whether or not such right is reduced to Judgment, fixed, disputed, undisputed, legal, equitable, secured, or unsecured; (b) right to remedy for breach of contract under any law for the time being in force, if such breach gives rise to a right to payment, whether or not such right is reduced to Judgment, fixed, matured, unmatured, disputed, undisputed, secured or unsecured; 6. Section 3(10) Creditor, (10) "creditor" means any person to whom a debt is owed and includes a Financial Creditor" an Operational Creditor, a secured creditor, an unsecured credito....
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....mnity for any of the items referred to in sub-clause (a) to (h) of this clause; f. Section 5(7) Financial Creditor (7) "Financial Creditor" means any person to whom a financial debt is owed and includes g. Section 5 (24) related party. (24) "related party ", in relation to a Corporate Debtor, means-- (a) a director or partner of the Corporate Debtor or a relative of a director or partner of the Corporate Debtor, (b) a key managerial personnel of the Corporate Debtor or a relative of a key managerial personnel of the Corporate Debtor; (c) a limited liability partnership or a partnership firm in which a director, partner, or manager of the Corporate Debtor or his relative is a partner; (d) a private company in which a director, partner or manager of the Corporate Debtor is a director and holds along with his relatives, more than two per cent, of its share capital; (e) a public company in which a director, partner or manager of the Corporate Debtor is a director and holds along with relatives, more than two per cent of its paid' up share capital; (f) anybody corporate whose board of directors....
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....d as a Financial Creditor, to whom a financial debt is owed and includes a person to whom such debt has been legally assigned or transferred. The definition of financial debt is also discussed by the Hon'ble Supreme Court in the Anuj Jain's Case. Therefore, at this juncture, we would also like to refer to the decision of Hon'ble Supreme Court in Anuj Jain's Case and the relevant portion is reproduced below: "43. Applying the aforementioned fundamental principles to the definition occurring in Section 5(8) of the Code, we have not an iota of doubt that for a debt to become 'financial debt' for the purpose of Part II of the Code, the basic elements are that it ought to be a disbursal against the consideration for tone value of money. It may include any of the methods for raising money or incurring liability by the modes prescribed in sub-clauses (a) to (f) of Section 5(8); it may also include any derivative transaction or counter-indemnity obligation as per sub-clauses (g) and (h) of Section 5(8); and it may also be the amount of any liability in respect of any of the guarantee or indemnity for any of the items referred to in subclauses (a) to (h). Th....
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....ur view, the peculiar elements of these expressions "Financial Creditor" and "financial debt", as occurring In Sections 5(7) and 5(8), when visualised and compared with the generic expressions "creditor" and "debt" respectively, as occurring in Sections 3(10) and 3(11) of the Code, the scheme of things envisaged by the Code becomes clearer. The generic term "creditor" is defined to mean any person to whom the debt is owed and then, it has also been made clear that it includes a 'Financial Creditor', a 'secured creditor', an 'unsecured creditor', an 'Operational Creditor', and a decree-holder'. Similarly, a "debt" means a liability or obligation in respect of a claim which is due from any person and this expression has also been given an extended meaning to include a 'financial debt' and an 'operational debt'- 46.1. The use of the expression 'means and includes' in these clauses, on the very same principles of interpretation as indicated above, makes it clear that for a person to become a creditor, there has to be a debt i.e., a liability or obligation in respect of a claim which may be due from any person. A '....
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....ls with reasonable capacity of repaying its debts and to attend on its other obligations. Protection of the rights of all other stakeholders, including other creditors, would obviously be concomitant of such resurgence of the Corporate Debtor. 47.1. Keeping the objectives of the Code in view, the position and role of a person having only security interest over the assets of the Corporate Debtor could easily be contrasted with the role of a Financial Creditor because the former shall have only the interest of realising the value of its security (there being no other stakes involved and least any stake in the Corporate Debtor's growth or equitable liquidation) while the latter would, apart from looking at safeguards of its own interests. would also and simultaneously be interested in rejuvenation, revival and growth of the Corporate Debtor Thus understood, it is dear that if the former i.e., a person having only security interest over the assets of the Corporate Debtor is also included as a Financial Creditor and thereby allowed to have its say in the processes contemplated by Part. II of the Code, the growth and revival of the Corporate Debtor may be the casualty. Such ....
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....by the Hon'ble NCLAT in Company Appeal 80(Ins.) (AT) 658/2019. When we perused the order of the Hon'ble NCLAT in Company Appeal 80(Ins) (AT) 658/2019, we observe that though the Anuj Jain's Case has been distinguished by the Hon'ble NCLAT but in that decision part III of IBC. 2016 was not discussed There is a distinction between the subject matters referred to in Part II of the Code and Part HI of the Code. Under the Part II of the Code, a Financial Creditor or the Operational Creditor or Corporate Debtor may initiate a CIR Process against the corporate debtor, if there is any default in payment of financial debt or the operational debt, as the case may be. 35. Whereas, under Chapter HI of IBC, a debtor or creditor, as the case may be, may initiate insolvency resolution process. In our considered view, the intention of legislature to make a separate provision for the Financial Creditor, Operational Creditor and Corporate Debtor under Part II of the Code and provision for a debtor or creditor under Part III of the Code is based on the definition of Creditor under Section 3(10) of the IBC. 2016, which clearly makes a distinction between the creditor and a Financial....
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....tor on the Board of the Company. 40. The Respondent No. 2 and 3 in their written submissions have contended that though there is a provision but the respondents have not appointed their nominee Director, which would be evident from the MCA data. As it is seen that part II of the Article of Association of the corporate debtor clearly says that in case of conflict between the two. part 11 shall prevail over the part I, which shows that Director, or Manager of the corporate debtor cannot take any decision without the written approval of the debenture holders. In other words, the debenture holder will actively participate in the policy making process of the corporate debtor. Therefore, we have not even an iota of doubt that the Respondents no 2 and 3 are not in a position to have control over the policy decisions of the corporate debtor and on the composition of the board of directors. As per the definition of related party, what is required to be established is, whether a person is in a position to control the composition of the Board of Directors and it is not necessary that he/they is/are the director(s) of the corporate debtor or not. Hence, we are unable to accept the contentio....
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....o. 2 and 3 are not the Financial Creditors and the admission of claims of the Respondents no. 2 and 3 as 'Financial Creditors' is contrary to the provisions of law. Accordingly, in terms of this order, the IRP/RP is directed to revise the claims of Respondents no. 2 and 3 and reconstitute the CoC. 49. So far as the prayer of the applicant regarding the acceptance of interest is concerned, the IRP/RP is directed to examine the same on merit and in accordance with the provision of law. 50. Accordingly, in tetras of aforesaid order, the IA 1610/2020 stands disposed of. IA No. 4130/2020 51. In terms of the findings, given in IA No. 1610/2020, we are of the considered view that since the Applicant No. 1 ECL Finance Ltd. is not a 'Financial Creditor', therefore, the question of substituting the Applicant no. 2 in place of Applicant No. 1 in IA 1610/2020 on the basis of the assignment deed does not arise. 52. Therefore, it is also needless to examine the issue of validity of the assignment deed as raised by the Applicant in IA No. 1610/2020. 53. Accordingly, the IA No. 4130/2020 is Dismissed in terms of the order passed in IA 1610/2020. ============= ....
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....laim of Rs. 1,39,02,83,169/- while IDBI has filed a claim of Rs. 1.26.96.88,698 out of which the erstehale IRP had illegally admitted a claim of Rs. 89.39,72.602/- for ACRE and Ra 97,27,02,627/- for IDBI. 8. Since the loans to SIPL were recalled on 24.03.2020 and 25.03.2020 by R2 and R3 respectively i.e. both after the CIRP commencement date of the CD, the claim as on the said date cannot be in excess of the obligation of the Principal Borrower. Events subsequent to the commencement of the CIRP cannot be quantified in the claim filed in the CIRP of the Corporate Debtor. The documents filed by ACRE show that the default of the Principal Berrower as on the CIRP commencement date was only Rs. 3,11,75,000/- while the documents filed by IDBI show that the default was only Rs. 9,16,66,666/-. The Respondents have not disbursed any money to the Corporate Debt 9. The Respondents have in their Reply taken a stand that the Corporate Debtor was both a Guarantor as well as an Obligor and had therefore an obligation to repay the loan and interest. 10. The Hon'ble Supreme Coun has held in Amy Jain Interim Resolution Professional for Jasper Infratech....
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....ort receipts of an amount of Rs 39.6 Crores received from Mr. Anurag Jain. under any project: 16. The aforesaid acts of commission and omission of the promoters (of SIPL as well as the CD) discloses an act of 'fraud' as defined in the Monitoring of Frauds in NBFCs (Reserve Bank) Directions, 2016 dated 29.09.2016 (Fraud Circular"). The Fraud Circular made it mandatory for the R2 and R3 to: a. Report the matter to the Department of Banking Supervision, Reserve Bank of India, Frauds Monitoring Cell of the RBI as per Rule 3 of Chapter IV of the Fraud Circular. b. Make necessary disclosure in its Balance Sheets as per Rule 5 Chapter III of the Fraud Circular c. Initiate appropriate criminal proceedings against the promoters of the Corporate Debtor 17 Admittedly no such disclosure has been made by the R2 and R3 in its Balance Sheet, nor any proceeding much less a criminal proceeding has been initiated by R2 and R3 against the promoter of the CD. Rather, the R2 and R3, particularly the R2 continue to harbour the promoters as would be evident from the letter dated 16 November 2021 issued by Mrs. Neets Saha to the RP. 18. For reasons best know....
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....hat both the aforesaid objections are legally and factually untaneable and are liable to be rejected for the reasons mentioned hereunder. 1. 2. 3. 4. 5 Respondent No. 2 vide Facility Agreement dated 22.09.2017 has extended a Loan of amount 90 Cr to Saha Infratec, against which the Corporate Debtor herein has executed a Corporate Guarantee dated 22.09.2017 in favor of Respondent No. 2 [Refer Clause 2,3, 4 and 8 Page 172-186 (Reply ACRE)). Similarly Respondent No. 3 acting on behalf of Debenture Holders has subscribed to 110 Crs debenture issued by Saha Infratec vide Debenture Trust Deed dated 01.07.2017 for securing the said issuance Corporate Debtor has further executed Guarantee Agreement dated 02.07.2016 in favor of Respondent No. 3 [Refer Clause (ii), (iii), (iv) and (x) at Page 322-343 (Reply IDBI)]. It is pertinent to mention that in terms of the Facility Agreement as well as the Debenture Trust Deed the Corporate Debtor herein is not only a Corporate Guarantor but is also one of the "Obligors" to the said facility. THE CLAIM FILED BY RESPONDENT NO. 2 AND 3 IS A VALID CLAIM Pertinently, in terms of the Facili....
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....210 of the Reply Filed on behalf of ACRE] [Reference be placed on Letter dated 30.10.2018- Page 350; Letter dated 08.01.2019 Page 354; Letter Dated 02.04.2019 Page 357; Letter dated 27.09.2019 Page 360-P195 199 age 363; Default Notice dated 25.03.2020 Page 371 and 372; Invocation of Guarantee dated 07.04.2020 Page 373 Reply Filed on behalf of IDBI] Without prejudice to the aforesaid, Section 13 (1) (b), 15(1)(c) and 18 (1) (b) of the Code envisage filing of a claim, which is defined under Section 3(6) arises upon creation of a right to payment. Default is not relevant for filing a claim, though it may be relevant for filing Application under Section 7 or 9 which is not case with Respondent No. 2 and 3. The Aforesaid Pages shows beyond doubt that there exint defaults by Principal Borrowers much before the initiation of Insolvency of Palm Developers (Corporate Guarantos), the Palm being Corporate Guarantox as well as the Obligor was aware of defaults since 2017-2018. Thus, the averment made is factually as well as legally not tenable. [Reference be Placed on NCLAT in Andhra Bank Vs F.M. Hammerle: Para Nos. 9 and 11 and Axis Bank v....
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....admitted and CIRP was initiated and on 07.02.2020 the Assignor submitted its claim 'Form-C' on 07.02.2020 of INR 139,02,83,168,68/- as on 27.01.2020. (Refer pg. 214-234/Annexure A-8/Reply of ACRE). The Assignor vide Assignment Deed dated 27.03.2020 assigned all the right, title and interests in the respect of all financial assistances of Principal Borrower along with guarantees (including Corporate Debtor) in favour of ACRE ARC. (Refer Pg. 5-84/Annexure A-1/Additional Affidavit dtd. 20.01.2021 filed by ACRE) (ii) ITSL (Respondent No.3) vide Debenture Trust Deed dated 01.07.2016 ("DTD) executed inter-alia amongst the Principal Borrower (Issuer), Corporate Debtor and ITSL offered to issue upto 160 nos. of semior, fully secured, redeemable, transferrable interest bearing Privately Placed NCDs having face value of INR 1,00,00,000/- for aggregate amount of INR 160 Crs, in two tranches inter-alia for the purpose of construction of project of the Corporate Debtor Subscription of First tranche of INR 110 Crores has been subscribed. (Refer Pg. 40-321/Annexure A- 3/Reply of ITSL). Corporate Debtor vide Guarantee Agreement dated 02.07.2016 provided....
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....s based on a misreading of a judgment passed by the Hon'ble Supreme Coart a. Anuj Jain RP for Jaypee Infratech Limited vs. Axis Bank Limited CA 8512- 8527/2019 SC is not applicable to the present facts of the case as the same relates to mortgages and not corporate guarantee [Para 43-461. b. In fact, the inapplicability of the Anuj Jain judgment to matters relating to corporate guarantee Isas been interpreted and settled by the Hon'ble NCLAT in the matter of Ascot Realty Private Limited vs. Ajay Kumar Agarwal and Others -Ca Appeal (AT) (l) 658/2019 [Pura 25-291 is annexed herewith as ANNEXURE R-3. Claims of Respondent Nos. 2 and 3 are valid as debt payable by the Corporate Debtor is due, crystallized and has been defaulted. a. ACRE and ITSL are financial creditors as the Corporate Debtor is not only a Guarantor but also as Obligor and admisedly the Principal borrower and Corporate Debtor has committed default under the Facility Agreement and DTD respectively. The debt payable by Corporate Debtor is a financial debt as defined US. 5(8)(h) of IBC. Important dates with reference for convenience is annexed herewith as ANNEXURE R-4. b....
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....0) 8 SCC 401 is not applicable to the present facts of the case. d. Case of Laxmi Pat Surana v. Union Bank of India & Anr. (2021 SCC Online SC 267) has been misinterpreted by the present RP. The issue dealt with therein is whether proceedings under Section 7 IBC can be initiated by a financial creditor against corporate guarantor where the principal borrower is not a corporate person, wherein it has been held that obligation of guarantor is coextensive and coterminous with that of the principal borrower. (Refer Para 22/pg.7/Additional Reply of present RP). Further the said case pertains to filing of Section 7 of IBC and not filing of "claims" which also includes future claims. e. Present RP is estopped by law and principles of natural justice from taking contrary stand from reply filed by the erstwhile IRP. Document 4 PARTI The provisions of Part I of these Articles shall be supplemental to and in addition to the Part II of these Articles and Part II shall be read along with Part 1. Part II would form an integral part of the Artides of Association of the Company. The provisions of Puri II shall have effect notwithstanding anything contain....
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....ging director for any reason whatsoever (including death or disability); (Gyckpages or is any stacks and kop (x) (x)) Undertake any distribution declaration of dividends or any distributions to any Shareholders or redeem or repurchase of any shares of any class or make my advances/ payments/ loans (of any (xii) Change the name of the Encore Project, (xi) Fay any commission to its promoters, directors, managers or other persons for furnishing guarantees, counter-guarantees, pledge or indemnities or for undurtaking any other liability in connection with any other obligation undertaken for or by the Company; (xiv) Undertake any increase, decrease or other alteration or modification in the authorized or issued share capital, or creation or issue of other sccuntius (including equity shares, preference shares. fully convertible debentures, non convertible debentures, non-voting shares, warrants, debentures, options. bombs, debt instruments or any other optionally fully mandatorily convertible or exchangeable instruments, or securities etc.) and the terms thereof and/ or approve or disapprouve any transfer of securities of the Company or any is....
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....n exceeding in a cumulative value of Rs. 5,00,00,000/- (Rupees Five Crores Only) or other proceedings or make a general assignment for the benefit of the creditors or admit in writing, the Company's inability to pay its dubts, (xxva) linter into, amend or terminate any material agreement to which the Company is a party which would materially and' or adversely affect the Company's ability to conduct, its business. (xxviii) Change its financial or accounting or tax policies or practices; (xxix) Change the financial year for preparation of audited accounts; (xxx) Amend change the Articles and, or, the Memorandam of Association of the Company except for any ameraliment to reflect the provisions of the Dehenture Trust Deed: (xxxi) Enter into any arrangements for the use, encumber or undertake sale of the Company's brand, logo or trademark; (xxxii) Execute any agreements with any Third Parties with respect to the Encore Project Land material Assets anal, ce, cuipments other than as set forth in the Fincure Business Plan; (xxxiii) Extend any advances or loans to any Director Shareholder Affiliate of a Shareholder or any Third Party, other than as ....
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....r the Encore Business Plan: Utilise any direct und, or, indirect compensation ar benefit (whether monetary or otherwise) ansing out of the settlement or us an award or ander of the competent court, of any disputes/ ligations between the Promoters and ATS Infrastructure Private Limited uncluding for the purposes of repayment to the creditors of the Promoter, the Company and, or, their Affiliates; (iv) Any decisions with respect to the Affiliates pertaining to obsining of any loans (of any nature whatsoever), liabilities, contingent liabilities or any other financial indebtedness etc. Any decisions with respect in the Company Subsidiaries pertaining to obtaining any secured loans (of any nature whatsoever) or any other secured indebtedness: (vii) Undertake any activities and perform any action which shall in any manner create any liability on the Company and, or, shall affect the Security created under these Articles and the DTD, other than as permitted under the Transaction Documents; (Iviii) Initiale any winding up/ liquidation/ dissolution proceedings pertaining to the Company, and (lix) Any commitment or agreement or arrangement (oral or wri....