TaxTMI 
TaxTMI 
2019 (1) TMI 2036
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....al with unclean hands and urges this Tribunal to direct the Corporate Debtor to furnish all the details regarding the Bank Guarantees and Letter of Creditors and their invocation by the beneficiaries and utilization of amounts by Corporate Debtor. 3. I have heard the Counsel for Applicant and PCS for Respondent / Corporate Debtor. The Applicant is Indian Overseas Bank / Respondent No.2 in the main Petition. This Application is filed seeking directions to Corporate Debtor to furnish all the details regarding the Bank Guarantees and Letter of Credits and their invocation by the beneficiaries and utilization of amounts by Corporate Debtor. 4. The case of Applicant, Corporate Applicant availed loans under various credit facilities to an extent of Rs. 105 crores, out of which Rs. 95 crores constitute various bank guarantees and Rs. 10 crores constitute CC limits and at present the total outstanding balance is Rs. 77,21,49,330/-. The case of Applicant/Financial Creditor that Corporate Applicant filed the main petition under Section 10 of IBC without disclosing the details of utilization of loan amount especially covered by bank guarantees. 5. The main petition is filed by Corporate Ap....
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....es and due to delay in obtaining ROW clearances, frequent disruptions by Maoist Group, delays in releasing running bills, disruption of work due to unseasonal rains etc., which led to cancellation of projects, thereby resulting in invocation of Bank Guarantees by the Customers. (3) Further, it is the case of Corporate Debtor that factors like economic slowdown coupled with delayed realization of receivables hampered the Corporate Debtor's working capital cycle, which resulted in a cash gap, following which the Corporate Debtor started defaulting in meeting its financial obligations not only to the Financial Creditors, but also to its Operational Creditors. It is averred the delay in realization of receivables led to default in meeting its commitments. As such, Corporate Debtor's accounts with Indian Overseas Bank and Andhra Bank were classified as 'Non-Performing Assets' during Jan '17. Subsequently both these banks and one NBFC have initiated recovery proceedings, although Corporate Debtor is a 'Going Concern' and is executing orders worth Rs. 1196.09 Cr. It is further case of Corporate Debtor/Petitioner that the Corporate Debtor has Orders worth Rs. 1....
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.... executed various documents on 13.11.2009. (4) Again the Board of Directors of Corporate Debtor vide resolution dated 30.09.2010 resolved to borrow Sanctioned / renewed SOD (against real estate) limit of Rs. 4.00 crores and BG limit of Rs. 27.00 crores subject to the terms and conditions mentioned in the sanction letter dated 18.09.2010, for which the Corporate Debtor executed various documents on 22.10.2010. (5) It is the case of Respondent No.1 that Board of Directors of Corporate Debtor vide resolution dated 04.05.2011 resolved to borrow / renew SOD (against real estate to contractors) limit of Rs. 6 crores (enhanced from Rs. 4 crores), BG limit of Rs. 66 crores (enhanced from Rs. 27.00 crores) subject to the terms and conditions mentioned in the sanction letter dated 03.05.2011, for which Corporate Debtor executed various documents on 04.05.2011. (6) It is averred that when Corporate Debtor failed to repay the liabilities, it approached Respondent No.1 in 2015 for re-scheduling the liabilities and for conversion of the overdue liability as Working Capital Term Loan limit of Rs. 17.00 crores and Funded Interest Term Loan of Rs. 1.71 crores; to reduce the BG limit from Rs. ....
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.... It also avers that as per amended provision of Section 14 (3) (b) of IBC, moratorium is not applicable to the guarantors properties and that Respondent No.1 is only proceeding against the third party Guarantors properties because there is no bar under Section 14 (c) of IBC to proceed against the property of the Guarantor and the said guarantor has not challenged the auction by Respondent No.1 under SARFAESI Act, 2002. 4. Counter is filed by Respondent No.2 / Indian Overseas Bank to the averments made in the Petition. Averments in brief are:- (1) It is averred Corporate Debtor availed Financial facility to the tune of Rs. 105 Crores under various credit facilities viz Bank guarantee and cash Credit facilities from the year 2013 onwards from Respondent No.2 and is liable to pay Rs. 77,71,49,330/- (as on 31.10.2018) plus interest and other incidental charges. (2) It is averred, when the Corporate Debtor failed to make payment of the dues, Respondent No.2 herein classified the loan account of the Corporate Debtor as non-performing asset (NPA) on 30.06.2016 and initiated proceedings under SARFAESI Act, 2002 and issued demand notice dated 17.01.2017 for Rs. 69,95,59,835/- and also ....
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.... the judgement of Hon'ble NCLAT in the case of Leo Duct Engineers & Consultants Limited Vs Canara Bank & Standard Chartered Bank in Company Appeal (AT) Insolvency No. 100 of 2017. (4) It is further averred that in the above decision, it was also held that if any action has been taken by a Financial Creditor u/s 13 (4) of SARFAESI Act, 2002 against a Corporate Debtor or a suit is pending against the Corporate Debtor U/s of the DRT Act, 1993 before a Debt Recovery Tribunal or appeal pending before the DRAT cannot be a ground to reject an application U/s 10 if the application is complete. (5) It is the case of Corporate Debtor that it fulfils the conditions /criteria for admission of its Petition filed u/s 10 of the Code. 6. I have heard the PCS for Petitioner/Corporate Debtor and Counsel for Financial Creditors / Respondents No. 1 & 2. The Corporate Applicant filed this Petition under Section 10 of IBC, 2016 to initiate CIRP against the Corporate Applicant. It is the case of Corporate Applicant that it has availed loans from the Respondents and that it has committed default. The Corporate Applicant is alleging that default occurred due to various reasons. The total debt in d....
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....he Code, with following directions:- (1) The Bench hereby prohibits the institution of suits or continuation of pending suits or proceedings against the Corporate Debtor including execution of any judgment, decree or order in any court of law, Tribunal, arbitration panel or other authority; Transferring. encumbering, alienating or disposing of by the Corporate Debtor any of its assets or any legal right or beneficial interest therein; any action to foreclose, recover or enforce any security interest created by the Corporate Debtor in respect of its property including any action under Securitization and Reconstruction of Financial Assets and Enforcement of Security interest Act, 2002 (54 of 2002); the recovery of any property by an owner or lessor where such property is occupied by or in possession of the corporate Debtor. (2) That the supply of essential goods or services to the Corporate Debtor, if continuing, shall not be terminated or suspended or interrupted during moratorium period. (3) That the provisions of sub-section (1) of Section 14 shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator.....
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....se of operations of the Applicant and also defeat the very purpose for which the Applicant has filed Section 10 petition. 4. Counter is filed by Respondent No.1 / Andhra Bank. It is contended that Applicant has filed SA No.371/2018 before the Debts Recovery Tribunal-ll, Hyderabad-II challenging the proceedings initiated by Respondents including the sale notice dated 24.09.2018 fixing the date of auction as 30.10.2018. It is averred, Hon'ble DRT vide orders dated 29.10.2018 has not inclined to stay the auction scheduled on 30.10.2018, but confirmation of sale was stayed subject to deposit of Rs. 12 crores, out of which Rs. 4 crores to be paid within a period of one week from the date of order and balance Rs. 8 crores within a period of 4 weeks thereafter. 5. It is contended that the Applicant failed to comply the interim orders passed by DRT-II and Respondent Banks conducted auction in respect of certain properties belonging to Guarantors and confirmed the same. 6. Further Respondent No.1/Financial Creditor states that it has not issued any sale notice in respect of the property belonging to the Corporate Debtor but issued notice only in respect of properties of Guarantor. 7....