JUDGEMENT

Per: Justice Rakesh Kumar Jain: This order shall dispose of two appeals i.e. CA (AT) (Ins) No. 1527 of 2022 titled as Mohan Nathuram Sakpal Vs. State Bank of India & Anr. (In short ‘first appeal’) and CA (AT) (Ins) No. 1526 of 2022 titled as Sundar Nagar Co-operative Housing Societies Union Limited Vs. State Bank of India & Anr. (In short ‘2nd appeal’) as both the appeals have been filed against the same impugned order dated 06.12.2022 by which an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (in short ‘Code’) r/w Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (in short ‘Rules’) by State Bank of India (Financial Creditor) against A A Estates Private Limited (Corporate Debtor) for the resolution of an unresolved financial debt of Rs. 1,35,26,12,129/- inclusive of interest and penal interest has been admitted.

2. The first appeal has been filed by a shareholder/director of the Corporate Debtor whereas 2nd appeal has been filed by a federal society comprising of nine societies incorporated under the provisions of Maharashtra Co-operative Societies Act, 1960.

3. The brief facts of this case are that the Corporate Debtor is a company, which is incorporated under the Companies Act, 1956 on 17.07.1996 engaged in the business of real estate construction and development and is working on multiple residential and commercial real estate projects.

4. The Corporate Debtor vide an application dated 30.09.2011 approached the Financial Creditor for sanction of credit facilities. The Commercial Branch, Vile Parle East, Mumbai of the Financial Creditor granted cash credit facilities of Rs. 70,00,00,000/- vide sanction letter dated 18.02.2012. The Corporate Debtor agreed to pay interest @4.50 bps over base rate with monthly interest in respect of the cash credit facility, including levy of penal interest, on account of non-compliance of sanction conditions.

5. The cash credit facility was secured by the Corporate Debtor by creating a pari passu charge of the flats of the project ‘RNA Address’, entered into escrow agreement and loan cum hypothecation agreement both dated 18.02.2012. The said cash credit facilities were further secured by way of mortgage of land, owned by RNA Corp. Pvt. Ltd., vide deed of mortgage dated 18.02.2012 and personal guarantee was provided by Anil Kumar Agarwal, Saranga A Agarwal, Anubhav A. Agarwal and Gokul A Agarwal vide guarantee agreement dated 18.02.2012 and Corporate Guarantee was provided by RNA Corp. Pvt. Ltd. vide guarantee agreement dated 18.02.2012.

6. The Corporate Debtor failed to maintain its account and defaulted on 31.03.2014. The Financial Creditor requested the Corporate Debtor to regularise its account. The Corporate Debtor addressed a revival letter dated 18.03.2014 and acknowledged the outstanding debt. The Financial Creditor vide letter of arrangement dated 18.03.2014 informed the Corporate Debtor that it had sanctioned shifting the Date of Commencement of Commercial Operation (DCCO) by 12 months from June 2013 to June 2014 and shifting of repayment schedule of the then outstanding amount of Rs. 59.33 Crores for a period of one year from September, 2014 to 2015. A Rectification deed dated 21.03.2014 was executed for mortgage of development rights of saleable area of the project alongwith saleable area of the building to be constructed on the land bearing CTS No. 4853, 4853/1 to 85, 87, 88, Village Kolekalyan, Sundernagar, Kalina, Santacruz (East), Mumbai having total saleable area of 6,28,080.07 sq. ft. However, since the DCCO did not occur on 30.06.2014 i.e. twelve months from the original DCCO, the account of the Corporate Debtor was classified as NPA on 30.06.2014, in terms of the guidelines issued by the Reserve Bank of India. The Financial Creditor issued a legal demand notice dated 02.03.2015 to the Corporate Debtor and the personal guarantors under Section 13(2) of the Securitisation and Reconstruct