TaxTMI 
TaxTMI 
2021 (10) TMI 1472
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....presentative Mr. Pankaj Maroo, duly authorised power of attorney holder of the applicant and also the Vice President of DBS Bank Limited through its Board Resolution/Power of Attorney dated 09/01/2020 (hereinafter referred to as the Financial Creditor) seeking initiation of corporate insolvency resolution process in respect of the Hindusthan National Glass & Industries Limited, CIN L26109WB1946PLC013294, another corporate entity, having its Registered office at 2 Red Cross Place Kolkata, West Bengal-700001 (hereinafter referred as the Corporate Debtor). 3. It is submitted in the application that the Corporate Debtor has an authorised share capital of Rs. 511, 50, 00,000 and paid-up share capital of Rs. 17,91,07,130 (Rupees Seventeen Crore Ninety-One Lakh Seven Thousand One Hundred Thirty Only). It is further submitted that the financials of financial year 2019 of the Corporate Debtor mentioned the following details about the Corporate Debtor;- (i) Assets: INR 3,178.75 crore (ii) Income: INR 2403.52 crore (iii) Amount of Debt: INR 2609.79 crore (iv) Category of Corporate persons: manufacturing Company. 4. It is submitted in the Par....
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....r all present and future moveable properties of the borrowers including its moveable plant and machinery, furniture and fittings, equipments, computer hardware, computer software, machinery spares and accessories 4. It is further submitted that the financial creditor has placed on record the following documents:- i. A copy of Facility Offer Letter dated 17th August, 2011 is annexed as Annexure-A ii. A copy of Facility Offer Letter dated 21st March 2012 is annexed as Annexure-B. iii. Facility amendment letter dated 8th June 2015 is annexed as Annexure -C iv. Facility amendment letter dated 9th June 2015 is annexed as Annexure-D. v. Facility Agreement dated September 28, 2011 is annexed as Annexure- E. vi. Facility Agreement dated 7th May 2012 is annexed as Annexure-F. vii. Deed of Hypothecation dated 3rd October 2012 is annexed as Annexure-G. viii. Memorandum of Entry dated 9th July 2014 is annexed as Annexure - H. ix. Amendment and Restatement Agreement dated 13th October, 2015 along with Borrowers' Certificate is annexed as Annexure-I. x. Personal Guarantee by Mr. Sanjay Somany dated 11th ....
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....r the purpose of part financing capital expenditure of the Borrower/ Corporate Debtor herein, in compliance with RBIs External Commercial Borrowing guidelines. (ECB guidelines). It is further submitted that the security offered by the Corporate Debtor was pari passu first charge on Fixed Assets (Moveable Immovable Assets) of the borrower both present and future. With an asset cover of 1.25x and the creation of charge to be completed within 6 months from drawdown date and the facility was provided with a period of 7 years from drawdown date and the availability period mentioned therein 180 days from the Facility Agreement and it was further specifically mentioned therein that any portion of the facility that remains un-drawn at the expiry of the availability period would be deemed cancelled and become unavailable for drawing. It was further mentioned in the said letter that the Facility shall be drawn in a minimum amount of US Dollar 5 million or in any multiple of US dollar 1 million in excess thereof and the applicable LIBOR plus 2.45% p.a. It was made clear that all interest payments shall be made in arrears at the end of each interest period (Interest Payment Date) and calculate....
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....the interest payments shall be made in arrears at the end of each Interest Period (Interest Payment Date) and calculated on the basis of the actual number of days elapsed in a year of 360 days. All interest payments shall be made in arrears at the end of each Interest Period (Interest Payment Date) and calculated on the basis of the actual number of days elapsed in a year of 360 days. 9. Similarly, vide letter dated 8th June, 2015 the Financial Creditor wrote to the Corporate Debtor as under:- Ref. : CDT/ADMIN/431/2015 : 8th June 2015 Hindusthan National Glass & Industries Ltd. 2, Red Cross Place Kolkata- 700001 Kind Attn: Mr. Mukul Somany, Vice Chairman & MD Dear Sir, Re: Amendment in ECB Loan Facility of USD 40 Million BORROWER : Hindusthan National Glass & Industries Ltd. LENDER: DBS Bank Ltd., Singapore ("DBS") ARRANGER : DBS Bank Ltd., Kolkata Branch (DBS Kolkata/ Arranger) FACILITY Bilateral Loan Facility of USD 40,000,000(Facility) Further to our offer letter CDT/ADMIN/396/2011 dated 17th August 2011 for sanctioning ECB Loan Facility duly accepted by the company, we are pleased to offer th....
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.... 2011 and as amended from time to time. Kindly accept and save the changes specified above and sign a duplicate copy of this letter in token of your confirmation and acceptance of the above contents. We look forward to a continuing long and mutually beneficial relationship with your company. Should you require any clarification, please do not hesitate to contact Mr. Atul Choudhury (Mobile # + 91 8017333136 or at e-mail -atulchoudhury @ dbs.com). Yours faithfully Authorised Signatory I/We confirm and accept the above amendment in the terms, conditions and contents mentioned above and the STANDARD TERMS AND CONDITIONS APPLICABLE TO BANKING FACILITIES and confirm that the documents and the information submitted/ to be submitted and the documents that are executed/ to be executed by me/us in your favour to secure the banking facilities are/ shall be true, accurate, complete and correct. For Hindusthan National Glass & Industries Limited Vice- Chairman & Managing Director ________________ Name : Designation: Date: (to be signed by Authorised Signatory of the Borrower with affix....
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....rward to a continuing long and mutually beneficial relationship with your company. Should you require any clarification, please do not hesitate to contact Mr. Atul Choudhury (Mobile # + 91 8017333136 or at e-mail -atulchoudhury @ dbs.com). Yours faithfully Authorised Signatory I/We confirm and accept the above amendment in the terms, conditions and contents mentioned above and the STANDARD TERMS AND CONDITIONS APPLICABLE TO BANKING FACILITIES and confirm that the documents and the information submitted/ to be submitted and the documents that are executed/ to be executed by me/us in your favour to secure the banking facilities are/ shall be true, accurate, complete and correct. For Hindusthan National Glass & Industries Limited Vice- Chairman & Managing Director ________________ Name : Designation: Date: 27/7/15 (to be signed by Authorised Signatory of the Borrower with affixing Borrower's stamp and date) 10. The Financial Creditor has placed on record agreement September 28,2011 between (1) HINDUSTHAN NATIONAL GLASS & INDUSTRIES LIMITED as borrower (the Bor....
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....me is liable to be dismissed. 13. It is further submitted by the Corporate Debtor that the legislative intent behind the enactment of the Code is not to force corporate persons into liquidation to reorganize and resolve the corporate persons. It is submitted that the Financial Creditor is already pursuing an alternative mode and manner of resolution of the Corporate Debtor. The instant purported application is nothing but an abuse of the process of law. 14. It is submitted that the Financial Creditor is one of the lenders of a consortium comprising 12 Bankers/Lenders, who lent and advanced money and granted loan facility to the Corporate Debtor under diverse loan Agreements executed from time to time and upon execution of other banking documents and instruments in usual course of business. It is submitted that the State Bank of India is the leading bank to all other members of the Consortium, including the Financial Creditor. It is submitted that Corporate Debtor continued to be in distress both commercially and financially for last few years and could not service its debt obligation towards its lenders, as a result of which gradually its loan accounts with all the lenders be....
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....ng, whichever is lower. The Borrower shall issue/ cause to be issued/transferred 90 lakh equity shares (Face Value Rs. 2/- per share) of HNGIL in favour of Secured Creditors. Allocation of Equity shares to be based on the total fund-based exposure. Any Non-Fund based outstanding at the end of 3 months (90 days) period to be repaid or covered by 100% cash margin. 16. It is further submitted that on November 13, 2018 a meeting was held amongst the Corporate Debtor, all the said lenders and the said "Lotus". The Financial Creditor being the Lead Bank was in supervision of the said meeting. In course of the said meeting, it was informed to the said lenders that the said Lotus would not be in a position to invest funds until all lenders approved the Resolution plan in writing. Upon receipt of such approvals, the said Lotus can apply for obtaining statutory approvals from all statutory and other authorities inter alia including the Competition Commission of India and Securities and Exchange Board of India to give effect to its investment in the Corporate Debtor. No copy of the Minutes of the Meeting dated November 13,2018 has been handed over to the Corporate Debtor till date. ....
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....d the said CCPS Agreement with the said Lotus. The said Lotus also proceeded on the basis of such understanding and accepted the same. Immediately after execution of the said CCPS Agreement, the said Lotus duly applied before the Competition of India for obtaining its necessary permission and/or approval to become a strategic investor in the Corporate Debtor. 21. It is further submitted that the Corporate Debtor had further negotiated with the two other Investors namely Goldman Sachs (India) Finance Private Limited and SSG Capital Management (Singapore) Pvt. Ltd. who had also agreed to finance the Corporate Debtor to clear off the necessary dues under the said Resolution Plan. In terms of the negotiation with the said two Investors, the exposure of the Corporate Debtor towards them would amount to about Rs. 1000 crores. The Corporate Debtor thereafter held its Board meeting on February 20, 2019 in which the Corporate Debtor had approved the infusion of funds through the said Goldman Sachs (India) Finance Private Limited an SSG Capital Management (Singapore) Pte Ltd. along with other consequential formalities. 22. It is further submitted that the Corporate Debtor at all m....
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....ny step or coercive steps or further steps in breach and/or in derogation of the said MOU and the Compromise & Settlement Agreement in any manner whatsoever. (f) Perpetual injunction restraining the defendant lenders and/or each of them and/ or their men, agents, servants and/or assigns from giving any effect or further effect to the Minutes of the meeting dated February 26, 2019 and the recordings thereunder and/or the terms and conditions thereof and/or part or portion thereof which are contrary to the Resolution Plan as extended from time to time in terms of and/or in furtherance of and/ or in continuation of the said MOU and Compromise & Settlement Agreement in any manner whatsoever. (g) Receiver, (h) Injunction, (i) Costs, (j) Attachment, (k) Such other relief or reliefs. 24. It is submitted that the Hon'ble Calcutta High Court passed the following order March 18,2019, which are as under: - ** "The Court: Affidavit of service filed in Court today be kept with the record. Admittedly monies are due from the petitioner company to the consortium of banks led by the State Bank of India. Mr. Mitra, L....
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....e matter four weeks hence under the heading 'Adjourned Motion'. Leave is granted to the learned advocate representing the respondent no.9 to file the Vakalatnama in the department after the description of the respondent no.9 in the cause title of the petition is corrected which shall be done in course of the day". 25. It is further submitted that the in the Lender's meeting held on June 4, 2019 and June 7, 2019 SBI as Lead Banker of the JLF asked the Corporate Debtor to deposit a sum of Rs. 100 crores to show its bona fide. The said two investors namely the said SSG Capital and the said Goldman also agreed to submit all the relevant documents and papers to fructify the settlement. 26. It is further submitted that by an email communication dated October 27, 2019, the Corporate Debtor immediately replied to the said communication dated October 25, 2019 requesting the Lead Bank not to appropriate the said sum of Rs. 100 Crores already paid by it on account of settlement and further informed that the Corporate Debtor had carried out all its obligations as were required to be done in terms of the requisitions made by the lenders. 27. It is submitted that the ....
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....l date. Out of the said sum, the Financial Creditor has received its pro-rata share of a sum of Rs. 70.33 crores. 31. It is submitted that the instant application is in breach of the understanding between the parties that the debt resolution will be through joint lenders meeting, especially the express assurance and understanding not to take any coercive action against the Corporate Debtor contained in the Minutes of Meeting dated November 17, 2020. It is submitted that the Corporate Debtor at all material times has acted in a bona fide manner and has taken all possible steps for resolution of the debts. REJOINDER: 32. The Financial Creditor in its rejoinder submitted that the Corporate Debtor has acknowledged and admitted its liability towards the Financial Creditor and submissions of the Corporate Debtor are liable to be rejected because they are based on false, frivolous and mischievous grounds. It is submitted that the application is complete in all respects. It is further submitted that even though the date of default has not been mentioned inadvertently at Column No. 6 of Part-IV of Form-A, but the defects can always be rectified within 7 days of receipt of....
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....disputed by the Financial Creditor. It is stated that only because the Lenders had initiated a business viability study does not mean that the members of the consortium have waived off their right to initiate proceeding for CIRP. It is stated that the settlement has been termed as failed due to the inability on the part of the Corporate Debtor to make payment of the OTS by adhering to the Timelines in spite of having been granted multiple extensions. The MOU clearly stated that in the event of default the settlement will cease to exist and the debt will be restored to the presettlement level and the amount paid in course of the settlement will be forfeited and adjusted against the outstanding dues. Therefore, the applicant is well within its right to proceed against the Corporate Debtor in accordance with law for recovery of the outstanding sums. It is denied in the rejoinder that any coercive steps are being taken by the lenders, or the Financial Creditor is acting in violation or derogation of its own promise not to take any coercive actions against the Corporate Debtor. It is denied by the Financial Creditor that the implementation of the repayment plan could not take place with....
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....djudicating Authority. Surprisingly, the financial institutions have also not cared to raise any objection for such repeated requests of time of extension and they do not seem to be very keen on pursuing the matter for reasons best known to them. It smacks of some sort of collusion between the parties, which is nothing but wasting the time of this Adjudicating Authority. 36. During the course of hearing, the Ld. Counsel for the Financial Creditor proposed to give further time to the Corporate Debtor without any written instructions from the financial creditor, which was against the pleadings placed on record by the Financial Creditor. In these circumstances, the Ld. Counsel for the Financial Creditor was asked to withdraw the application because as per the provisions of section 7 and other relevant provisions and, on going through the pleadings of both the parties, no further time could be granted and the petition deserves to be admitted. It is strange that on the one hand, the Financial Creditor filed application for initiation of CIRP against the Corporate Debtor and placed on record their rejoinder and other relevant documents for admission of the application but during the c....
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....vency & Bankruptcy Code, 2016 prohibits the following: a) 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; b) Transferring, encumbering, alienating or disposing of by the Corporate Debtor any of its assets or any legal right or beneficial interest therein; c) Any action to foreclose, recover or enforce any security interest created by the Corporate Debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002); d) The recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor. v) The supply of essential goods or services rendered to the corporate debtor as may be specified shall not be terminated, suspended, or interrupted during the moratorium period. vi) The provisions of sub-section (1) shall not apply to such transactions as may be notified by the Central Government in consultation wi....