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TaxTMI 
TaxTMI 
TaxTMI 
2024 (11) TMI 550
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....r Products Limited has been filed challenging the Order dated 26.09.2024 passed by the Learned Adjudicating Authority (National Company Law Tribunal, Mumbai Bench, Court - III), by which Order, Application under Section 7 filed by the Financial Creditor, Respondent herein has been admitted. 2. Brief facts of the case necessary to be noticed for deciding the Appeal are: i. Corporate Debtor, KLT Automotive and Tabular Products Limited availed various credit facilities from Bank of India between 2005-11. In 2011, Corporate Debtor availed financial facility from Corporation Bank (now Union Bank of India) which included working capital facilities, comprising of fund based limit and non-fund based limit aggregating to a sum of Rs.61 Crores. ii. On 24.08.2012, Corporate Debtor, availed additional credit facility from Bank of India to the tune of Rs.126 Crores. iii. Account of Corporate Debtor was declared as NPA by Bank of India on 31.03.2015. iv. On 28.09.2015, a Facility Agreement was executed between the Corporate Debtor and KKR Financial Services Limited for availing Term Loan Facility of INR 195 Crores. v. On 31.03.2016, Corporate Debto....
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....h is due to the Corporate Debtor in the Order impugned finding has been returned that Corporate Debtor has proved existence of debt and default, which is excess of Rs.1 Crore, hence, Corporate Debtor was admitted to Insolvency by the Order dated 26.09.2024. xxii. This Appeal has been filed challenging the Order dated 26.09.2024. 3. We have heard Learned Sr. Counsels, Mr. Krishnendu Datta and Mr. Abhijeet Sinha appearing for the Appellants and Learned Sr. Counsel, Mr. Amar Dave appearing for the Respondent. 4. Learned Counsel for the Appellant challenging the Order of the Adjudicating Authority submits that admittedly, the loan facilities were recalled by the Respondent No. 1 vide notice dated 15.09.2020, which was during 10A period. The OA No. 201/2021 was filed by the Respondent No. 1 before the DRT on account of default committed by the Corporate Debtor in which Consent Decree passed on 29.08.2022. It is contended that Consent Decree having been passed on 29.08.2022, which was based on default committed by the Corporate Debtor during the 10A period, the Application filed by the Financial Creditor on 03.06.2023, under Section 7 is barred by Section 10A. The default ....
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....dred Sixty Eight Crores Twenty Lakhs Sixty Three Thousand Two Hundred Eighty Five Only) Date of Default - Recovery Certificate No. 53 of 2022 was issued on August 29, 2022. The Petitioner submits that issuance of the Recovery Certificate constitutes a fresh cause of action to file an Application under Section 7 of the IBC. Thus, the date of default in the present matter is August 29, 2022. Though the Corporate Debtor had agreed to amicably restructure the outstanding dues under a letter dated March 1, 2023, the Corporate Debtor defaulted on the same. Therefore, the Corporate Debtor continues to remain liable to pay the aforesaid amounts as per the Recovery Certificate No. 53 of 2023 (after adjusting the amounts paid after issuance of the said recovery certificate). The Petitioner submits that the date of default in respect of BOI Dues, KKR Dues, RSF Dues and CB Dues are set forth as above. The Petitioner submits that the Corporate Debtor has admitted to the debt as well as default in respect of the BOI Dues, KKR Dues, RSF Dues and CB Dues time and again, as detailed above." 8. Application under Section 7 was thus based on default, which was based on the Consent Decree dated 2....
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....hree years from the date of issuance of the Recovery Certificate." 34. The relevant excerpt of the Recovery Certificate dated 29.08.2022 reads as follows:- "In terms of final order dated 29th August, 2022 passed by this Tribunal in the above mentioned case, it is ordered that the Applicant Certificate Holder Bank is entitled to recover a sum of Rs.664,72,53,586.17/- together with further interest from 01.02.2021. a. At the rate of 15.45% at monthly rests and penal interest at the rate of 2% p.a. on a sum of Rs.265,66,94,089.18/- until payment and/or realization; and b. At the rate of 17% at monthly rests and penal interest at the rate of 2% p.a. on a sum of Rs. 269,94,12,458.51/- until payment and/or realization; and c. At the rate of 18% at monthly rests and penal interest at the rate of 2% p.a., on a sum of Rs. 36,53,33,398/-until payment and/or realization; and d. At the rate of 14.30% at monthly rests and penal interest at the rate of 2% p.a. on a sum, of Rs. 27,92,24,323.08/- until payment and/or realization and at the rate of 15.25% at monthly rests and penal interest at the rate of 2% p.a. on a sum of Rs. 64,65,89,317.40/....
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.... Only), with further interest thereon from February 1, 2021 till the date of payment and/or realization, calculated at the rate of (i) 14.30% p.a. at monthly rests and penal interest at the rate of 2% p.a., on Rs.27,92,24,323.08 (Rupees Twenty Seven Crores Ninety Two Lakhs Twenty Four Thousand Three Hundred and Twenty Three and Fight Paise Only) in respect of the Cash Credit Facility; and (ii) 15.25% p.a. at monthly rests and penal interest at the rate of 2% p.a., on Rs. 64,65,89,317.40 (Rupees Sixty Four Crores Sixty Five Lakhs Eighty Nine Thousand Three Hundred and Seventeen and Forty Paise Only) in respect of all the other facilities, in respect of the debt assigned by CB ("CB Assigned Dues"). 4. The parties hereto agree, admit, confirm and declare that the parties have arrived at an amicable settlement of the Debt Claim. Accordingly, the parties hereto (alongwith various other stakeholders) have duly executed and filed Consent Terms dated August 29, 2022 in Original Application No. 201 of 2021 before the Debts Recovery Tribunal - I, Mumbai (DRT Consent Terms). A copy of the DRT Consent Terms is hereto annexed as Annexure A. 5. ⁠The parties hereto agree, ....
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.... Debtor was declared by Lenders as NPA. Assignment was made in favour of the Financial Creditor in the Year 2019. Financial Creditor agreed to settle and restructure the dues of the Corporate Debtor on 26.04.2019, which was also not honoured and, hence the default was also committed prior to 10A period. 15. In any view of the matter, Section 7 Application having been founded on the basis of default committed after Consent Decree dated 29.08.2022 was passed, Default cannot be pegged on 10A period when Application under Section 7 is founded on the basis of Consent Decree dated 29.08.2022. 16. We have already extracted Part IV, Column 2 of the Section 7 Application, which clearly mention that default has been committed on 29.08.2022. The NeSL Certificate which was also attached along with the Section 7 Application, record of default with the information utility was attached with Section 7 Application, which is clear from Part V Item No. 3. Adjudicating Authority in the Impugned Order has also noted the default as reflected in NeSL Certificate. 17. Learned Counsel for the Appellant in support of his submission that Application under Section 7 is barred by 10A period has relied....
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....ot alter or disturb the status of the party concerned - in the present case of allottees as financial creditors. Furthermore, Section 238 IBC contains a non obstante clause which gives overriding effect to its provisions. Consequently its provisions acquire primacy, and cannot be read as subordinate to the RERA Act. In any case, the distinction made by the RP is artificial; it amounts to "hyper-classification" and falls afoul of Article 14. Such an interpretation cannot therefore, be countenanced." 19. The above Judgment was considering the status of Homebuyers and it held that those Allottees who had obtained decree from RERA are also Allottees and their nature of debt i.e., Financial Debt shall not be changed merely because of decree obtained by RERA. The above Judgment is clearly distinguishable and has no applicability in the facts of the present case. 20. Learned Counsel for the Appellant has also relied on the Judgment of this Tribunal in the matter of `Manish Kumar Singh' Vs. `State Bank of India & Ors.' reported in 2024 SCC OnLine NCLAT 614 which was a case where Section 7 Application was admitted, which Order was challenged by a Suspended Director of the Corporate De....
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....time settlement proposal submitted by the corporate debtor was clearly an acknowledgment of debt and the benefit of section 18 of the Limitation Act, shall be available to the financial creditor. Further, admittedly consent decree was passed by the Debts Recovery Tribunal on April 26, 2022 and from the date of decree of the Debts Recovery Tribunal, there shall be further period of three years for filing application which has been held by the hon'ble Supreme Court in Kotak Mahindra Bank Ltd. v. A. Balakrishnan [(2022) 19 Comp Cas-OL 230 (SC); (2022) 9 SCC 186; (2022) 4 SCC (Civ) 548.] ." 22. The above Judgment in no manner supports the submission of the Appellant rather clearly reject the argument of Section 10A which was relying on Settlement Letter dated 05.09.2020. 23. Another Judgment which has been relied by the Counsel for the Appellant is in the matter of `Samrat Restaurant' Vs. `Brewcrafts Micro Brewing Pvt. Ltd.' in Comp. App. (AT) Ins. No. 1409/2024 & I.A. No. 5117 of 2024, where this Tribunal had occasion to consider the argument on 10A. In the above case, Section 9 Application filed by the Appellant was dismissed, it was held that portion of a debt claimed by t....