TaxTMI 
TaxTMI 
2022 (8) TMI 473
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....der Section 7 of Insolvency and Bankruptcy Code, 2016 (hereafter called the 'Code') read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. 2. The Present Petition is filed before this Adjudicating Authority on the ground that the Corporate Debtor has failed to make payment of a sum of Rs. 140,5590,642/-. 3. The Petitioner is established as an irrevocable, determinate Trust under the Trust Act, 1882 vide Indenture of Trust dated May 30, 2014 and the Corporate Debtor is a private limited company incorporated under the provisions of the Companies Act, 1956. The Corporate Debtor is engaged in the business of real estate development. 4. The brief facts of the Petition are as follows: (i) The captioned Company Petition has been filed by the Financial Creditor, acting through its investment manager ICICI Prudential Asset Management Company Limited ("Investment Manager") under Section 7 of the Insolvency & Bankruptcy Code, 2016 ("IBC"). The Investment Manager is empowered to file the captioned Company Petition on behalf of the Financial Creditor under clause 4.2.28 (a) of the Investment Management Agreement dated July 31, 20....
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....ollowing documents were executed between the parties: * Debenture Trust Deed dated August 29, 2017 * Supplemental Deed to the Debenture Trust Deed dated September 15, 2017 * Personal Guarantee of the Promoters dated August 28, 2017. * Pledge of shares of the Corporate Debtor pursuant to the Share Pledge Agreement dated August 28, 2017 and March 16, 2018 executed by the Promoters in favour of the Debenture Trustee. * Copy of Debenture Subscription Agreement * Copies of Debenture Certificates issued by the Corporate Debtor to the Petitioner * Certified copies of the bank statement of the Petitioner showing disbursement by the Petitioner and interim payments by the Corporate Debtor. (vii) Relying on the representations made by the Corporate Debtor and its Promoters, the Petitioner disbursed the Subscription Amount to the Corporate Debtor in the following manner: Disbursement Date Amount (INR) September 01, 2017 67,20,00,000/- March 20, 2018 10,00,00,000/- (viii) Pursuant to the DSA, the Corporate Debtor issued the Debenture to the Petitioner. A copy of the MGT-7 (Annual Return) of the Corporate D....
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....the investment manager of the Petitioner and Portfolio Manager of other subscribers of the debentures issued by the Corporate Debtor pursuant to the DSA) inter alia to the Petitioner calling upon the Corporate Debtor to make the payment of the outstanding interest as detailed in the Notice 1 within 30 days of receipt of Notice 1. A copy of the Notice is annexed to the Petition. (xiv) As stated in Part IV of the Petition, the Corporate Debtor paid sum of Rs. 7,94,228/- on April 03, 2021, towards interest for the quarter ending September 2019. The Corporate Debtor thus failed in meeting its payment obligation in accordance with the Notice 1. (xv) The Investment Manager (on behalf of the Financial Creditor and certain other debenture holders) issued a default notice dated July 20, 2021 and notified the Corporate Debtor and Personal Guarantors to make payment of an aggregate amount of Rs. 167,03,19,104 (as there were multiple subscribers under the DSA, the amount includes the amounts subscribed to by the Financial Creditor as well as the other subscribers thereunder) in terms of the DSA. The Corporate Debtor did not respond to the aforesaid notice. (xvi) Howe....
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....uthorised to file the present Company Petition as there was no consent from the majority debenture holders under the DTD. (ii) The default in redemption of debentures is hit by Section 10A of the IBC. The default to be asserted under the DSA, if any, can only relate to a default in redemption of the Debentures as provided for in clause 6. The default can occur only in redemption of the Debentures and further that a default in payment of interest is not considered a default under the terms of the DSA. Findings: 6. Before coming into the legal aspects in deciding the above company Petition, it is important to mention here that the Corporate Debtor did not choose to file any reply even after taking number of adjournments. On the other hand, the counsel appearing for the Corporate Debtor, on 5th May 2022, mentioned before this Bench as if the Corporate Debtor is admitting the liability which was recorded in the daily order dated 5th May 2022. Thereafter, the matter was reserved for orders. Since the order could not be passed by this Bench due to demitting office by one of the Member, the matter was reopened and relisted for de novo arguments. At this stage, the Corporate Debto....
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....d by the Corporate Debtor's counsel during the hearing of the captioned Company Petition, which was duly recorded by this Tribunal in its order dated May 5, 2022. (iii) Thirdly, in any event, the Financial Creditor is subscriber of approximately 80% of the debentures issued under the DSA (77,200 out of 97,200) and therefore the question of consent of majority debenture holders not being there does not arise. The default committed by the Corporate Debtor is in respect of meeting its obligations of payment of interest in relation to the debentures subscribed to by the Financial Creditor under the DSA. (iv) Fourthly, the Financial Creditor, i.e., ICICI Prudential Real Estate AIF-I is a scheme of ICICI Prudential Real Estate AIF, which has been registered as a Category- II Alternative Investment Fund under the provisions of the Securities and Exchange Board of India (Alternate Investment Funds) Regulations, 2012. IDBI Trusteeship Services Limited ("Trustee") is the sole trustee appointed in respect of ICICI Prudential Real Estate AIF. The Investment Manager is appointed under an Investment Management Agreement July 31, 2014, executed between the Trustee and the Invest....
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....ng payment of Interest) under the terms of the DSA qualifies as an event of default under the DSA. EVENT OF DEFAULT: "Failure / breach / default by the Company to meet its payment obligations (including principal amount, Interest or Penal IRR) when they become due in respect of the Debentures or to redeem the Debentures as provided in this Agreement or under any of the Transaction Documents;" (iv) Article 17.2 of the DSA enlists the various consequences that may follow upon commission of default by the Corporate Debtor. These include an acceleration of all payment obligations under the DSA (Article 17.2.1.1 of the DSA) and further permit the Financial Creditor to exercise any rights available to it under the documents executed in relation to the Debentures, including enforcement of its security interest created under various security documents and further to exercise all rights available to it under law (Article 17.2.1.6 of the DSA). (v) Therefore, it is clear that any default in payment of interest in relation to the Debentures qualifies as an express event of default under the terms of the DSA and in particular Article 17.1.2 of the DSA. ....
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....nfirming to legal aspects. Therefore, the question of passing any separate order in the above Application does not arise. Accordingly, the above IA stands disposed of with the above observations. Despite granting the liberty the corporate debtor did not choose to file any written submissions. 11. IA 1896 of 2022 This is an Application filed by the Corporate Debtor for the maintainability of the above Company Petition. This Bench had Reserved the main Company Petition for orders on 14.07.2022 wherein, the contentions of the IA are already dealt by the Bench in the CP itself. Thus, This IA is filed belatedly and stands infructuous and disposed of. 12. Accordingly, the above Company Petition is admitted by passing the following: ORDER a. The above Company Petition No. (IB) 1221 (MB)/2021 is hereby allowed and initiation of Corporate Insolvency Resolution Process (CIRP) is ordered against Gagan I-Land Township Private Limited. b. This Bench hereby appoints Mr. Manish Motilal Jaju, Insolvency Professional, Registration No: IBBI/IPA-001/IPP00034/ 2016-17/10087 residing at D 502 Neelkanth Business Park Vidyavihar, Mumbai, Maharashtra - 400086, Email ID- mm....