TaxTMI 
TaxTMI 
2022 (5) TMI 1475
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....1956, bearing corporate identity number L65190MH2004GO1148838 having its registered office at IDBI Tower, W.T.C. Complex, Cuffe Parade MUMBAI 400005 The applicant is in the Banking business of providing various types of financial facilities including business loans, personal loans, consumer loans, loan against property, home equity loans, term loan etc. 3. The corporate debtor is a Private limited company, incorporated under the provisions of The Companies Act, 1956 on 24.10.2002, duly registered with Registrar of Companies, Ahmedabad with CIN: U41000GJ2002PTC041470 and having registered office at Bodakdev, Ahmedabad, Gujarat State. The Authorized share capital of the Respondent is Rs. 8,00,00,000/- and paid up share capital of the company is Rs. 42,82,360/-. The corporate debtor is an associate company of M/s. Doshion Water Solution Private Limited being a part of Doshion Group. The corporate debtor is engaged in the business of manufacturing water treatment plant & equipment and trading of water treatment components. 4. The present application is filed by IDBI Bank Ltd. against corporate debtor who is the corporate Guarantor for securing the financial assistance granted by ....
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....e Borrower company by way of Board Resolution dated 20.06.2014 and also approved the execution of various documents in favour of Consortium led by BOB along with the applicant. 9. The applicant had issued restructuring sanction letter dated 26.06.2014 to the Borrower which explicitly mentioned the terms and conditions, details of secured assets, rate of interest, repayment schedule, other specific conditions of the said restructured enhanced facility. The said sanction letter along with all terms and conditions has been duly acknowledged and accepted by the Borrower and Guarantors including the corporate debtor being corporate Guarantor. The said restructured enhanced financial facility was granted against: * 1st pari passu charge on the current assets of the Borrower; and * Pari passu first charge on immovable properties as described in sanction letter; and * Personal guarantee of Mr. Ashit Dhirajlal Doshi, Mr. Rakshit Dhirajlal Doshi, Mrs. Kalpana Ashit Doshi, Mrs. Krupa Sujit Doshi, Mrs. Rupa Nishit Doshi, Mrs. Purvi Rakshit Doshi & Mrs. Pooja Amit Doshi; and * On corporate guarantees of M/s. Doshion Pvt. Ltd., M/s. Thomson Nusa Metals Pvt.....
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....Guarantor. Resultantly, the applicant had invoked all personal and corporate guarantees including corporate guarantee of the corporate debtor by letter dated 04.11.2016, but, both - Borrowers and Guarantors have failed to respond to the said notice and neither made any payment not even after receiving the aforesaid recall and guarantee invocation notices. 13. The applicant further states that as the Borrower continued to neglect the repayment of loan amount, the applicant Bank issued demand notice/statutory notice dated 22.03.2017 under Section 13(2) of SARFESI Act, 2002 to the Borrower, copy of which was also sent to both personal and corporate guarantors including the corporate debtor. It is further submitted by the applicant that notice issued under Section 13(2) of SARRFAESI Act, 2002 dated 25.10.2019 was replied by the corporate debtor vide letter dated 04.01.2020. The applicant Bank has already initiated legal recovery proceedings under Section 19 of the Recovery of Debts and Bankruptcy Act, 1993 before DRT by filing OA No. 519/2017 on 16.08.2017 against the Borrower and personal Guarantors and corporate Guarantors including the corporate debtor. In the said proceedings, t....
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.... Hon'ble DRT on similar grounds to obtain attachment before judgment over the corporate debtor's properties situated at Sanand and such application was rejected vide order dated 06.04.2018; * The corporate debtor company is a going concern and is able to make payments to its own financial creditor. 17. The applicant filed affidavit rebutting the contentions raised in the reply filed by the corporate debtor inter alia as: (i) Under "Delegation of Powers" affirmed by Board of Directors of the applicant Bank bestowing various powers on various designated officers to act on behalf of the applicant Bank, DGM is empowered to approve the application and other documents to be filed before Adjudicating Authorities. (ii) As regards the issue of limitation, the applicant has rebutted that the recall notice was issued on 20.09.2016, the guarantee invocation notice was issued on 04.11.2016 (Statutory Notice under Section 13(2) of SARFAESI Act was issued on 22.03.2017). The present application was filed on 26.10.2018, thus the present application is within the period of limitation. (iii) As regards the contention raised by the corporate debtor that ....
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....to the Borrower wherein corporate debtor had duly acknowledged such sanction as corporate Guarantor. The corporate debtor, by Board resolution dated 20.06.2014, had resolved to acknowledge guarantee for credit facilities upto Rs. 408.64 crores and further resolved for issuance of requisite deeds of guarantee. * Corporate debtor has executed deed of guarantee dated 27.06.2014 in favour of the security trustee who had acted as an agent on behalf of all Banks/lenders under Consortium funding. * Corporate debtor has executed deed of guarantee dated 27.06.2014 in favour of the security trustee who had acted as an agent on behalf of all Banks/lenders under Consortium funding. The trustee had acted by the consent of Borrower and lender in terms of security trustee agreement dated 26.11.2013 as his agent. As per clause No. 7 & 9 of guarantee agreement, such guarantee would be enforced as if present corporate debtor were principal debtor to the lenders. As per clause 8, such guarantee of corporate debtor was continuing irrevocably and enforceable, notwithstanding any dispute between Borrower and lenders. Further clause 18 makes guarantee deed executed by corporate debtor i....
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.... * The Guarantor stands completely discharged on account of the failure to finance the guaranteed amount - the minimum required for restructuring agreement to materialise. 20. The corporate debtor merely filed following judgments without placing any arguments whether the same are applicable or support their case. Sr. No Authority 01 AIR 1934 Cal 699 (Prabodh Kumar Das v. Gillanders Arbuthnot) 02 AIR 1981 AIR 215 (Union of India v. Narayanasetti Jugadeshwararao & Ors. 03 1963 RLW 430 (Ram Narain v. Ltd. Col. Hah Singh) 04 [1861-73] All ER Ext 1634 (Westhead & Ors. v. Spronson & Anr. 05 [1874-80] All ER Rep. Ext. 1799 (Morell v. Cowan 06 [2017] 82 taxman.com 396 (NCLAT) State Bank of India, Colombo v. Western Refrigeration (P.) Ltd. 07 [2017]86 taxmann.com 81 (NCLAT) (Palogix Infrastructure P. Ltd. v. ICICI Bank 08 [2018] 98 taxmann.com 213 (SC) (BK Educational Services P. Ltd. v. Parag Gupta & Associates) 09 [2020] 118 taxmann.com 48 (NCLAT) (Bijay Kumar Agarwal v. State Bank of India 10 [2020] 117 taxmann.com 478 (NCLT-Hyd.) (State Bank of India v. Athena Energy Ventures (P.) Ltd. 11 [2020] 116 taxmann....
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.... BG/LC of Rs. 1,43,79,494/-. On perusal of the record it appears that on 24.04.2014 the sanction letter under restructuring was issued by the applicant to the Borrower wherein corporate debtor had duly acknowledged such sanction as corporate Guarantor. The corporate debtor, by Board resolution dated 20.06.2014, had resolved to acknowledge guarantee for credit facilities upto Rs. 408.64 crores and further resolved for issuance of requisite deeds of guarantee. Corporate debtor had executed deed of guarantee dated 27.06.2014 in favour of the security trustee who had acted as an agent on behalf of all Banks/lenders under Consortium funding. The trustee had acted by the consent of Borrower and lender in terms of security trustee agreement dated 26.11.2013 as his agent. Relevant portion/clauses of the Deed of Guarantee dated 27.6.2014 is reproduced below: "1. If at any time default shall be made by the Borrower in payment of the principal sum (not exceeding Rs. 408.64 crores) together with interest, costs, charges, expenses and/or other moneys for the time being due to the BOB Consortium in respect of or under the abovementioned credit facilities or any one of them the Guarantor....
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....her indulgence by the BOB Consortium to the Borrower or by any other matters or things whatsoever which under the law relating to the sureties would but for this provision have effect of so releasing the Guarantor. 4. As the above mentioned credit facilities have been further secured by hypothecation and/or pledge of the Borrower's movable properties and/or mortgage of the Borrower's immovable properties by way of first charge under separate security documents executed by the Borrower with the BOB Consortium/security trustee which security documents would contain stipulations as to insurance assignment and delivery of insurance policies to BOB Consortium/security trustee the margin of insurance policies to BOB Consortium/security trustee the margin of value of properties to be maintained and the periodical furnishing of different statements to the BOB Consortium and other matters the Guarantor agrees that failure in requiring or obtaining such security or in the observance or performance of any of the stipulations or terms of the said security documents and no default of the BOB Consortium in requiring or enforcing the observance or performance of any of the said s....
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....ned or to be opened by the BOB Consortium becoming nil or coming into credit at any time from time to time or by reason of the said accounts being opened in respect of fresh facilities being granted within the overall limit sanctioned to the Borrower. 9. Notwithstanding the BOB Consortium's rights under any security which the BOB Consortium may have obtained or may obtain the Bank shall have fullest liberty to call upon the Guarantor to pay the principal sum not exceeding Rs. 408.64 crores, together with interest as well as costs, (as between advocate and client) charges and expenses, and/or other money for the time being due to the BOB Consortium in respect of or under the abovementioned credit facilities or any of them without requiring the BOB Consortium to realise from the Borrower the amount due to the BOB Consortium in respect of the abovementioned credit facilities and/or requiring the BOB Consortium to enforce any remedies or securities available to the BOB Consortium. 10. The guarantee herein contained shall not be or in any way prejudiced by any absorption of or by BOB Consortium or by any amalgamation thereof or therewith but shall ensure and be ava....
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....ey held by the BOB Consortium to the credit of or for the benefit of the Guarantor on any account or otherwise howsoever towards the discharge and satisfaction of the liability of the Guarantor under these presents. 16. The Guarantor agrees notwithstanding the BOB Consortium for any reason whatsoever losing and/or parting with any of the securities given by the Borrower, the Guarantor shall not be released or discharged of their obligations under this guarantee and in the event of the BOB Consortium so losing or parting with the security the Guarantor shall be deemed to have consented to or acquiesced in the same. 17. The Guarantor agrees that if the Borrower being an individual becomes an insolvent or being a company enters into liquidation or winding up (whether compulsory or voluntary) or if the management of the undertaking of the Borrower is taken over under any law or if the Borrower and/or the undertaking of the Borrower is nationalised under any law or make any arrangement or composition with creditors the BOB Consortium may (notwithstanding payment to the BOB Consortium by the Guarantor or any other person of the whole or any part of the amount hereby sec....
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....ower shall be binding on the Guarantor and the Guarantor accept the correctness of any statement of account that may be served on the Borrower which is duly certified by any officer of the BOB Consortium and the same shall be binding and conclusive as against the Guarantor also and the Guarantor further agree that in the event of the Borrower making an acknowledgement or making a payment, the Borrower shall in addition to his personal capacity be deemed to act as the Guarantor duly authorised agent in that behalf for the purposes of sections 18 and 19 of the Limitation Act of 1963. 20. The Guarantor agrees that the loans hereby guaranteed shall be payable to the BOB Consortium on the BOB Consortium serving the Guarantor with a notice requiring payment of the amount and such notice shall be deemed to have been served on the Guarantor either by actual delivery thereof to the Guarantor or by dispatch thereof by Registered Post or certificate of posting to the Guarantor address herein given or any other address in India to which, the Guarantor may by written intimation given to the BOB Consortium request the communication addressed to the Guarantor be dispatched. Any notice di....
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....edit facilities and/or Guarantor's details to third parties, pursuant to the provisions of the Right to Information Act or such other similar Acts. Such disclosure made by the BOB Consortium to this parties shall not be objected to or challenged by Guarantor. 23. The Guarantor also confirms the rights of the BOB Consortium to securitise, assign and transfer the said credit facilities or any of them granted to the Borrower (either with or without the underlying securities created by Borrower/Guarantor in favour of the BOB Consortium) and the Guarantor hereby confirms that the guarantee's executed by Guarantor shall also be assignable/transferable to any Bank's and/or financial institution's and/or Securitisation Company or special purpose vehicle (SPV) or third parties without giving any notice to Guarantor and on such terms and conditions as the BOB Consortium may deem fit at Guarantor's costs and expenses. While doing so, the BOB Consortium may either reserve the right to collect the dues and/or to proceed against Guarantor/Borrower on behalf of the purchaser's assignee's or transferee's. In the event of the BOB Consortium assigning, securi....
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....eet II, Ground Floor, Near Mithakali Six Roads, Ahmedabad 380006 (hereinafter referred to as the Bank which expression shall, unless it be repugnant to the subject or context thereof, include its successors and assigns); AND 4) IDBI Bank Limited, a company incorporated and registered under Companies Act, 1956 (1 of 1956) and a Banking company within the meaning of Section 5(c) of the Banking Regulation Act, 1949 (10 of 1949) and having its registered office at IDBI Tower, WTC complex, Cuffe Parade, Mumbai 400005 and a branch office at IDBI Complex, Near Lal Bungalow, Off. C.G. Road, Ahmedabad 380006 (hereinafter called IDBI which expression shall, unless it be repugnant to the subject or context thereof, include its successors and assigns); IN WITNESS WHEREOF the Guarantor has executed these presents on the day and year first hereinabove written." 24. As per clause No. 7 & 9 of guarantee agreement, such guarantee would be enforced as if corporate debtor was principal debtor to the lenders. As per clause 8, such guarantee of corporate debtor was continuing and such guarantee of corporate debtor is irrevocable and enforceable notwithstanding any dispute betwee....
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....orate debtor executed the documents binding itself for liability of the principal Borrower or as Guarantor to repay the debt of borrower jointly and severally, leaving no doubt that default has occurred and application is fit for admission. 29. The present application is complete in terms of Section 7(5) of the Code. The applicant is entitled to claim its dues, establishing the default in payment of the financial debt beyond doubt. In light of the above facts and records the present application is admitted and CIRP is ordered to be initiated against corporate debtor. 30. The applicant has proposed the name of Mr. Ramchandra Dallaram Choudhary as Insolvency Resolution Professional, who is be and hereby appointed as IRP of corporate debtor having registration number IBBI/IPA-001/IP-P-00157/2017-18/10326 having office at 9-B, Vardan Tower, Near Vimal House, Lakhudi Circle, Navrangpura, Ahmedabad 380014, subject to the condition that no disciplinary proceedings are pending against him. Specific consent of the IRP in Form 2 along with disclosures as required under IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 is filed which is on record. 31. We di....