TaxTMI 
TaxTMI 
2025 (5) TMI 166
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....g authority (National Company Law Tribunal, Division Bench, Court-II, Kolkata) in CP (IB) No.308/KB/2022, admitting Section 7 application filed by the financial creditor, Pegasus Asset Reconstruction Company Private Ltd. (hereinafter referred to as 'Pegasus'). Aggrieved by the order admitting Section 7 application, the appellant suspended director of the corporate debtor has come up in this appeal. 2. Brief facts necessary to be noticed for deciding this appeal are: i. The corporate debtor M/s. Fairdeal Supplies Limited had obtained financial facilities from Allahabad Bank in the year 2010 for an amount of Rs.34.50 crore to purchase a property at Coimbatore through auction sale conducted in the High Court of Judicature at Madras through official liquidator. ii. Sanction letter dated 05.03.2010 was issued by the Allahabad Bank sanctioning the loan. Under the sanction letter, corporate debtor was to repay the loan amount to 16 equal instalments at Rs.2.16 crore. iii. On request of the corporate debtor by letter dated 30.03.2011, repayment schedule was restructured. iv. The bank declared account NPA on 30.09.2011. v. On 27.09.2013, Allah....
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....P) and declared the moratorium. xiv. When the appeal was heard on 08.04.2024, appellant sought opportunity from this Tribunal to approach the financial creditor with revised and enhanced offer and interim order was passed on 08.04.2024, directing the Resolution Professional (RP) not to constitute the Committee of Creditors (CoC), however, RP was to continue to verify the claim received. Appeal came for consideration on 28.05.2024, on which date, the appellant offered to deposit the total principal amount of Rs.22,02,51,721/- as reflected in Part IV of Section 7 application. Appellant was permitted to deposit the amount before 10.07.2024. Interim order was continued. It was noticed by this Court on 10.07.2024, that appellant has deposited the amount as directed. Interim order was passed, directing the IRP not to take any further steps in the Corporate Insolvency Resolution Process (CIRP). 3. We have heard learned sr. counsels, Mr. Krishnendu Dutta and Mr. Abhijeet Sinha appearing for the appellants. Learned senior counsel Mr. Amar Dave and learned counsel Mr. Dinkar Singh has appeared for the Respondent No. 1. Learned counsel, Mr. Gaurav H. Sethi has appeared for the IRP....
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....ection 7 application can be admitted when the adjudicating authority is satisfied with regard to debt and default. Adjudicating authority has given sufficient reason for admitting Section 7 application. Learned counsel for the respondent has also relied on the record of default issued by NeSL. It is submitted that debt is acknowledged in the balance sheets of the corporate debtor from financial year 2013-14 till financial year 2019-20, application was well within limitation. By assignment deed dated 27.09.2013 executed at Kolkata, the assignment transfer multiple debt on defaulting borrowers to the assignee for consideration along with the underlying security detailed in schedules attached to the deed of assignment. Dominant purpose of assignment agreement was to transfer/ assign the financial assets along with the underlying security, entitling the assignee to demand receive and recover the debt with its own name and right. The debt is purely an intangible property. 6. Learned counsel for the respondent submits that even if it is accepted that any document relating to the immovable assets situated at Coimbatore was required to be registered at the office of sub-registrar within....
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....amounting to Rs.56.70 crore. The corporate debtor also stood guarantor for facilities extended to Formal Export Private Limited & Frontline Corporation Limited to the extent of Rs.80 crore. The Punjab and Sind Bank have filed their claim in the CIRP to the IRP amounting to Rs.605,80,89,017/-. 9. We have considered the submissions of the counsel for the parties and perused the records. 10. From the submissions of learned counsel for the parties and the materials on record, following three questions, arise for consideration : I. Whether assignment agreement dated 27.09.2023, executed by Allahabad Bank in favour of Pegasus is void on the strength of Section 28 of the Registration Act, 1908 as substituted by state of Tamil Nadu by Act No.19/1997? II. Whether the application filed by Pegasus under Section 7 on 18.08.2022 was barred by limitation? III. Whether by depositing the principal amount as mentioned in Part IV of Section 7 application by the appellant in the order of this Tribunal dated 28.05.2024, it can be said that debt of financial creditor stand discharged? Question No. I 11. The assignment agreement dated 27.09.2013 is a registered doc....
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....unts Due. including the right to file a suit or institute such other recovery proceedings and take such other action as may be required for the purpose of recovery of the Loans, in its own name and right and as an assignee, and not as a representative or agent of the Assignor and to exercise all other rights of the Assignor in relation thereto. 2.1.2 The Assignor hereby further assigns in favour of the Assignee, all its rights, title and interest in the Financing Documents, all agreements, deeds and documents related thereto and all collateral and underlying Security Interests and/or pledges created to secure, and/or guarantees issued in respect of, the repayment of the Loans, which the Assignor is entitled to. The Assignee shall have the right to enforce such Security Interests, pledges and/or guarantees and appropriate the amounts realized therefrom towards the repayment of the Loans and to exercise all other rights of the Assignor in relation to such Security Interests, pledges and/or guarantees. The Assignor shall transfer/deliver or cause to be transferred / delivered or hold for and on behalf of the Assignee, all such original documents, deeds and/or writings, includ....
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.... 1. Equitable mortgage of 253.89 Acres of land and building at Coimbatore acquired by the corporate debtor through auction sale from the Official Liquidator, High Court at Judicature at Madras. (Honb'ble DRT, Kolkata) vide its order Dated 24.12.2019 has upheld that applicant has saleable interest in the property). 2. Hypothecation on the plant and machineries including scrape lying at the said property at Coimbatore. 3. 12 Vestas make Wind Energy Generators (WEGs with generating capacity of 500 KW each, 1) 4 WEG along with Land ad-measuring 16.075 Acres situates at land survey Nos. 196/2, 497/8,446/2A,496/2, DAI 487 (part), 450 (part), 368/2 (part)and 368/1A (part), 452 (part). 440art), 440/3,465 situated at village Tenkasi, Taluka Tenkasi, District Tirunelveli, State Tamil Nadu and land ad-measuring 0.50 Acres in Land survey no 60 situated in Pattakurechi Village, Taluk Tenkasi, District Tirunelvelli in the State of Tamil Nadu 2) 7 WEG along with Land ad-measuring of 8.095 Acres situated at Land survey Nos 100/4,102/4,102/5 (part), 101/1, 117/1,117/2, 78/2, 78/1, 102/6 situated at Village Ayikudi, Taluka Tenkasi, District Tirunelveli, State Tamil Nadu, and 3)....
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....) and (cc) of section 18, shall be presented for registration in the office of a Sub-Registrar within whose sub district the whole some portion of the property to which such document relates is situate in the State of Tamil Nadu: and (b) any document registered outside the State of Tamil Nadu in contravention of the provisions of clause (2) shall be deemed to be null and void." 18. The above provisions which is applicable in the state of Tamil Nadu on the strength of presidential assent dated 27.03.2007 shall be applicable for the state of Tamil Nadu by virtue of Article 264 of the Constitution of India. Thus, place for registering any document relating to land situated in state of Tamil Nadu has to be registered in the office of sub registrar within whose sub-district, the whole or some portion of property is situated. 19. Learned counsel for the appellant has given emphasis on Section 28(b) as applicable in the state of Tamil Nadu, which provides that any document registered outside the state of Tamil Nadu in contravention of the provision of Clause (a) shall be deemed to be null and void. Learned counsel for the appellant has relied on the Division Bench judgment ....
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....st the petitioners in pursuant to the said deed of assignment dated 25.05.2011, was not entitled to initiate the proceedings before the second respondent under the SARFAESI Act, which has resulted in passing the impugned order by the second respondent under Section 14(3) of the SARFAESI Act." 20. In the said Writ Petition challenge to the proceeding initiated under SARFAESI Act, 2002 under Section 14(1) SARFAEI Act for possession of the assets situated in the state of Tamil Nadu. 21. The question to be considered in the present case is as to whether on the basis of assignment agreement 27.09.2013 application under Section 7 could not have been filed, the said assignment being void by virtue of Section 28(b) of Indian Registration Act as applicable in the state of Tamil Nadu. We have noticed above that a suit has been filed by the appellant challenging the assignment in the year 2017, which is said to be pending. Challenge to assignment agreement could not have been directly raised in Section 7 application. However, in the present case, we need to consider the effect and consequence of Section 28(b) as applicable in the state of Tamil Nadu. Section 28 deals with the registerin....
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....le in the state of Tamil Nadu, can be accepted to the extent that on the basis of assignment, no rights can be claimed by financial creditor qua the assets situated in Coimbatore since the assignment agreement insofar as creating any mortgage or any other interest in the immovable assets is void. However, the entire assignment cannot be declared as null and void on the said ground. 24. Learned counsel for the respondent has also relied on the judgment of the Hon'ble Supreme Court in 'Mattapalli Chelamayya' Vs. 'Mattapalli Venkataratnam' reported in (1972) 3 SCC 799. In the above issue question arose with regard to award made by an arbitrator which award was required to be registered by Section 17(1)(b) of the Indian Registration Act and was not registered. Hon'ble Supreme Court noticed that award contained two parts; one part did not affect or relate to any immovable property and contained a personal liability. Hon'ble Supreme Court held two part; severable transaction and it was held that second transaction with regard to the charge being a severable transaction can be validly ignored. In paragraph 11 of the judgment on Hon'ble Supreme Court stated as follows: "11. The....
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....is hit by Section 28(b) is severable from the entire assignment agreement and assignment agreement has to be held to be void to that extent only. Question No. II 26. The second question is regarding bar of limitation in respect to the Section 7 application filed by the financial creditor. The account was declared NPA on 30.09.2011, which is clearly pleaded in Part IV of the application. Part IV column 2 is as follows: "PART IV PARTICULARS OF THE FINANCIAL DEBT 2 Amount claimed to be in default and the date an which the default occurred (Working fur computation of amount and days of default in tabular form) 1. The account was declared as a Non Performing Asset (NPA) on As such the date of default is 30.09.2011. However, the corporate debtor has continuously admitted and acknowledged its default in its Financial statements for the financial year 2013-2014, 2015-2015, 2016-2017, 2015-2016, 2017-2018, 2018-2019, 2019-2020. 2. Allahabad Bank in the year 2012 preferred an application under Section 19 of The Recovery of Debts Due to Banks and Financial Institutions Act 1993 for recovery of money and advance with interest, cost and expenses and other reliefs valued ....
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....undisputed fact that the Corporate Debtor had availed the loan facility undisputedly from KBL, the original Financial Creditor. This debt had also been clearly acknowledged by the Appellant on 06.09.2013 in their reply to the SARFAESI notice. The balance sheets of the Appellant/Corporate Debtor for the years 2014-15 and subsequently in 2017-18 and 2018-19 as placed at pages 303-328 of the APB also clearly depicts an acknowledgment of financial debt. It is, however, the case of the Appellant that the financial debt in the balance sheet is reflected qua KBL, the original Financial Creditor and not to the Respondent No.1. Be that as it may, it is an undisputed fact that the OTS proposal had been sent by the Appellant not to KBL but to the Respondent No.1 on 21.10.2016. This constitutes sufficient evidence that they were very much aware that assignment of the debt in favour of Respondent No.1 was already in place. From this OTS proposal, it can be safely inferred that the Corporate Debtor had acknowledged their liability to pay to the Respondent No. 1. The acknowledgment of debt in the present facts of the case is therefore clear and unambiguous. 17. The balance sheets also re....
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....l the Financial Year 2019- 2020. In all these balance sheets, debts have been acknowledged as due to Allahabad Bank and not to the applicant. There is no whisper in any of the balance sheets about the assignment deed executed in favour of the applicant herein for the reasons best known to the Corporate Debtor. After the execution of assignment on 27.09.2013, Allahabad Bank has no locus standi to continue as a financial creditor and the bank is not even claiming to be so. 42. When that being the case the applicant is legally entitled to become the financial creditor of the corporate debtor in terms of the said assignment. Merely, because the balance sheet does not record the name of the applicant herein as a financial creditor from the Financial Year 2013-2014 to 2019-2020 will not take away the fact that the applicant has become a financial creditor, by virtue of the assignment deed executed." 31. We, thus are satisfied that application filed by the financial creditor was not barred by time. Question No. III 32. Coming to Question No. III, Part IV of the application, column 2 (4) mentions the outstanding amount as Rs.145,74,059,265/- as on 04.08.2022. Part IV, Ite....