TaxTMI 
TaxTMI 
2025 (9) TMI 878
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.... Authority finding that the Corporate Debtor has committed debt and default and dues of more than Rs. 100 Crores are due on the Corporate Debtor, has admitted Section 7 application and appointed IRP, aggrieved by which order, this Appeal has been filed. 2. Brief background facts necessary to be noticed for deciding the Appeal are:- 2.1. The Corporate Debtor- 'Shri Tradco Deesan Private Limited' is engaged in manufacturing of Maize Based Food, Feed and Industrial Derivatives Products. The Corporate Debtor was sanctioned credit facilities by the State Bank of India by sanction letter dated 25.10.2012 for Rs. 56.50 Crores which was renewed from time to time. On the request of the Corporate Debtor in the year 2019, facilities were increased with cash credit of Rs. 55 Crore and two term loans totalling Rs. 105.62 Crore. In the year 2019 onwards, Corporate Debtor was facing shortage of raw materials and there were many irregularities in the operation of the account. Default was committed by the Corporate Debtor and hence, the account was declared as NPA by the State Bank of India on 26.08.2019. Notice under Section 13(2) was issued on 03.06.2021. A loan recall notice was issued on ....
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....oposal and certain correspondence has taken place between the Appellant and the Bank and Appellant is waiting for reply of the Bank for the expected amount and the manner of deposit. Learned Counsel for the Appellant submits that Appellant shall endeavor to enter into settlement and try to liquidate the debt as per decision of the Bank. 2. Issue Notice. Learned Counsel for the Bank accepts notice and allowed three weeks' time to file Reply. Appellant may also file Rejoinder within two weeks, thereafter. List this Appeal "For Admission" on 11th April, 2023. In the meantime, in pursuance of the Impugned Order, IRP shall not constitute the Committee of Creditors and he shall not take further steps except collation and verification of the claim." 2.2. Appellant further took adjournment in the Appeal. The Appeal was taken up on 01.09.2023 where this Tribunal noticed that an OTS submitted by the Appellant was rejected. Noticing the aforesaid, interim order was vacated. Following order was passed on 01.09.2023:- "01.09.2023: This appeal has been filed against the order dated 15.02.2023 by which order Section 7 application filed by the State Bank of India has ....
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....ontinue the interim order any further. The interim order dated 28.02.2023 is vacated. 7. Let the appeal be listed on 11.09.2023." 2.3. After 01.09.2023, Appeal was listed on several occasions and was heard on 20.08.2025 on which date judgment was reserved. 3. We have heard Shri Abhijeet Sinha, Learned Senior Counsel for the Appellant, Shri Sanjiv Sen, Learned Senior Counsel for the State Bank of India and Shri Animesh Khandelwal, Learned Counsel for the Respondent No.2. 4. Counsel for the Appellant challenging the order submits that the State Bank of India has failed to prove debt and default. It is submitted that although Adjudicating Authority has held that the Corporate Debtor is in default of Rs. 100 Crores but neither any evidence has been referred to nor any reasons have been given. NeSL Report which is relied is not conclusive proof of evidence. Statement of account which was filed by the State Bank of India before the Adjudicating Authority in pursuance of the direction issued by the Adjudicating Authority was incomplete and contained various discrepancies. The statement of account submitted by State Bank of India was wholly unreliable and refers to variou....
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....d that in the Appeal, Appellant came with a case that they have submitted OTS proposal to the Bank. OTS proposal submitted by the Corporate Debtor was never accepted and Appellant had been only buying time and did not argue the Appeal and obtained various adjournments. The claim of the receivables by the Corporate Debtor cannot be accepted. The Corporate Debtor was not eligible to receive various subsidies and receivables as claimed it having not fulfilled the necessary eligibilities. Default by the Corporate Debtor being of more than Rs. 100 Crores as has been found by the Adjudicating Authority, there is no error in the order passed by the Adjudicating Authority admitting Section 7 application. 6. We have considered the submissions of the parties and perused the record. 7. Part IV of Section 7 application gives the details of the facilities, total amount in default and the date of default. Serial No.2 of Part IV of Section 7 application is as follows:- 2. AMOUNT CLAIMED TO BE IN DEFAULT AND THE DATE ON WHICH THE DEFAULT OCCURRED (ATTACH THE WORKINGS FOR COMPUTATION OF AMOUNT AND DAYS OF DEFAULT IN TABULAR FORM) The total amount in default and payable by the Corpora....
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.... Borrowers Name- SHRI TRADCO DEESAN PVT LTD CLAIM STATEMENT Facility Principal O/S Unapplied interest upto 31.08.2021 Total Dues Term Loan A/C 33547263623 126,570,272.00 61,194,863.72 187,765,135.72 Term Loan-II A/C 34828763601 227,460,215.00 109,861,195.86 337,321,410.86 SLC 32754528253 77,949,410.00 37,642,544.92 115,591,954.92 Cash Credit 32622172772 569,933,129.00 268,003,239.93 837,936,368.93 Total 1,001,913,026.00 476,701,844.43 1,478,614,870.43 9. Appellant in this Appeal has come up with the case that it has entered into a Product Purchase Agreement with CARGILL India Private Limited on 12.07.2019. It is further pleaded that however, the Bank did not give its no-objection. It is pleaded that CARGILL Group is ready and willing to invest goods and money in the Corporate Debtor. From the record, it appears that the Corporate Debtor was unable to run the factory and committed default in servicing its various credit facilities. On default committed by the Corporate Debtor, Section 13(2) notice was issued on 03.06.2021 which Section 13(2) no....
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....unt as submitted by the State Bank of India which statement of account dated 22.09.2022 is brought on the record as Annexure A-32 to the Appeal. The said statement indicates that the statement has been provided from 01.01.2019 to 30.06.2019. The statement of account indicates that the statement of account captured all transactions. Counsel for the Appellant during submission submitted that the statement indicates that there is scoring out of entry against the column 'brought forward' which creates the doubt about the correctness of the statement. It is true that in some of the pages of the statement of account against the entry 'brought forward', there is scoring by hand but the said scoring is not on each and every statement rather some of the entries have been scored out by hand but other entries of the statement captures all transactions which shows outstanding balance on the part of the Corporate Debtor. Furthermore, as noted above, along with Section 7 application statement of account of all facilities were already mentioned giving their details of outstanding. It is not the case of the Appellant that there was no outstanding on the relevant date as claimed by the State Bank o....
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....0. The balance confirmation has been issued by the Corporate Debtor. It is not open for the Corporate Debtor to contend that there were no dues at the relevant time. It is also relevant to notice that the CIRP against the Corporate Debtor has commenced on the application filed by the Operational Creditor in the year 2020 in which CIRP, bank has filed its claim and IRP has admitted the claim to the extent of Rs. 120,17,10,548/- which CIRP was subsequently set aside by this Tribunal. 14. Counsel for the Appellant has also referred to various receivables by the Corporate Debtor. There is no proof of any receivables by the Corporate Debtor nor there is any material to indicate that receivables were received by the Corporate Debtor due to which it can be said that no default committed by the Corporate Debtor. 15. We have also noticed that when this Appeal came for consideration Appellant made a statement on 28.02.2023 that it is submitting an OTS proposal with the bank. The statement of the Appellant is that Appellant endeavours to enter into settlement and try to liquidate the debt itself indicate that understanding of the Appellant that Corporate Debtor was in debt and default f....