TaxTMI 
TaxTMI 
2023 (11) TMI 481
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....der Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the "Code") by Respondent - Piramal Capital & Housing Finance Limited in CP (IB) No.1029/MB-IV/2022 and CP (IB) No.1023/MB-IV/2022 respectively. The Suspended Director of the Corporate Debtor aggrieved by the order of admission of Section 7 Application has filed these Appeals. 2. Facts and issues raised in these two Appeals being common, it shall suffice to refer to the facts in Company Appeal (AT) (Insolvency) No.1198 of 2023 for deciding both the Appeals. 3. Dewan Housing Finance Corporation Limited ("DHFL"), the predecessor in interest of Piramal Capital & Housing Finance Limited had sanctioned a project term loan of Rs.60 crores to Rite Builtec Private Limited, the Corporate Debtor in No.CP (IB) No.1023/MB-IV/2022 - Rite Builtec Private Ltd. was Borrower and Rite Developers Pvt. Ltd. was Coborrower, who is the Corporate Debtor in CP (IB) No.1029/MB-IV/2022. The repayment of loan along with interest was to be made in 24 Equated Monthly Installments (EMIs) commencing after 36 months from the date of first disbursement. Sanctioned order, however, contemplate payment of interest from the dat....
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....the Financial Creditor is barred from filing any petition under the IBC Code for the debt, which is for default committed during 10A period. As per Clauses of the Loan Agreement, it was mandatory to issue notice in case of default, hence, it cannot be said that default on non-payment of interest would automatically lead to recall of the entire loan. The Financial Creditor cannot split the cause of action. The Financial Creditor could not have filed one consolidated petition for entire loan amount for two split causes of action. According to Respondent's own case, one cause of action arose until the default was only till the extent of interest, whereas, the second cause of action arose on 20.08.2020, when the loan recall notice was issued by the Financial Creditor. The Financial Creditor could not have filed petition for both interest component as well as the entire loan amount. There cannot be multiple date of defaults. Bar under limitation is different from statutory bar. 6. Shri Ramji Srinivasan, learned Senior Counsel appearing for the Financial Creditor submits that the default was committed by the Corporate Debtor in regard towards interest payment obligation, i.e. PEMI wit....
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....d in the Schedule I hereunder written. The interest payment to be made by the 15th day of each month in advance for the respective month. It will be payable monthly from the date of first disbursement." 9. Clause 4.2 provided 'Additional interest in case of default'. Clause 8 deals with 'Event of default'. Clause 8.1, (a), (b) and (c) is as follows: "8.1(a) If there is a default in payment of any of interest or principal for two consecutive months; or b) If there is any breach or violation of any of the terms of sanction of the said Loan; or c) Any default in the performance of any covenants, conditions or agreements on the part of the Borrower under this agreement or any other agreement or document/ security documents executed/ to be executed between the Borrower/ Mortgagors and DHFL pursuant to this Agreement and such default shall have continued over a period of 30 days after notice thereof shall have been given to the Borrower by DHFL; or" 10. Clause 8.3, on which reliance has been placed by the Appellant, provides as follows: "8.3. If any event of default or any event which, after the notice or lapse of time or both would constitute an....
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....eriod was expiring during the aforesaid period of 15 March 2020 to 28 February 2022, a period of 90 days or the balance period of limitation (after exclusion of the aforesaid period), whichever is greater, would be available from 1 March 2022." 12. The Adjudicating Authority in the impugned order has clearly noticed the dates of default committed by the Corporate Debtor, which is not refuted by the Appellant. Paragraph 1.3 of the impugned order passed by the Adjudicating Authority is as follows: "1.3 The date of Default is stated as "In terms of the loan agreement, the first instalment of the preequated monthly instalment interest was required to be paid by the Corporate Debtor on 30.06.2018. However, the Corporate Debtor and/or the Co- Borrower have failed to honour their obligations in respect of the instalment due on 30.06.2018. In the event of failure to make payment of pre-equated monthly instalments interest, a cure period of 10 days is provided under the loan agreement. Accordingly, the Corporate Debtor first defaulted in its payment of PEMI/interest on 11.07.2018." Thereafter, the Corporate Debtor has committed default of its payment obligations toward....
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....n account of Section 10A. Section 10A of the Code is as follows: "10A. Suspension of initiation of corporate insolvency resolution process. Notwithstanding anything contained in sections 7, 9 and 10, no application for initiation of corporate insolvency resolution process of a corporate debtor shall be filed, for any default arising on or after 25th March, 2020 for a period of six months or such further period, not exceeding one year from such date, as may be notified in this behalf: Provided that no application shall ever be filed for initiation of corporate insolvency resolution process of a corporate debtor for the said default occurring during the said period. Explanation. - For the removal of doubts, it is hereby clarified that the provisions of this section shall not apply to any default committed under the said sections before 25th March, 2020." 14. When we look into the date of default as mentioned in paragraph 1.3 of the impugned order, it is clear from the Table that till February 2020, admitted amount in default was Rs.10,51,94,998/-. The emphasis made by learned Counsel for the Appellant is on the notice dated 28.08.2020, which is ....
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....) (Ins.) No.294 of 2023 decided on 18.08.2023 where after noticing the Section 10A and the judgment of the Hon'ble Supreme Court in Ramesh Kymal v. siemens Gamesa Renewable - Civil Appeal No.4050 of 2020, following has been observed in paragraph 8, 9 and 10: "8. The object and purpose of Section 10A has been explained in the ordinance by which Section 10A was brought on record as well as the Hon'ble Supreme Court in the Judgment of "Ramesh Kymal vs. M/s Siemens Gamesa Renewable [Civil Appeal No. 4050 of 2020]". In the Judgment delivered today by this Tribunal on 18.08.2023 in Company Appeal (AT) (Ins.) No. 914 of 2023, we have occasion to notice the object of Section 10A. We have referred to the objects and reason as given in the ordinance in paragraph 8 of the Judgment which is as follows: "8. In Ramesh Kymal's Case, the Appellant had filed an Application under Section 9 on 11th May, 2020 on the ground of default. The ordinance No. 09/2020 was promulgated by the President of India on 05th June, 2020 by which Section 10A was inserted into the I&B Code, 2016. An Application was filed by the Corporate Debtor for dismissal of Section 9 Application, the Section 9 Appl....