JUDGEMENT

DR. ASHOK KUMAR MISHRA, TECHNICAL MEMBER

1. The appeal has been filed by the ‘Appellant' – ‘JM Financial Asset Reconstruction Company Limited’ under Section 61 of the ‘Insolvency and Bankruptcy Code, 2016’ (in short ‘Code’) against the impugned order dated 04.10.2021 passed by the ‘Adjudicating Authority’ (National Company Law Tribunal), Ahmedabad Bench in IA No.118 (AHM) of 2021 in CP(IB) No. 305 of 2018. Debtor (CD) together with all the underlying ‘Security interest’ created, with all the rights, title & interest therein were assigned in favour of the Appellant under the provisions of the ‘Securitization And Reconstruction Of Financial Assets And Enforcement Of Security Interest Act, 2002’ (SARFAESI Act, 2002) under an ‘Assignment Agreement’ dated 28.03.2016 by ‘Karur Vysya Bank Limited’ as ‘Assignor’ and thereby the Appellant has become the ‘Secured Financial Creditor’ to the ‘Pacific Pipe Systems Pvt. Ltd’ (CD). The CD availed financial assistance from ‘Karur Vysya Bank Limited’ etc. in terms of ‘Sanction Letter’ dated 11.06.2008 (Annexure A-2 appearing at page 31 of the Appeal Paper Book) and further enhanced the ‘credit facilities’ vide its letter dated 04.03.2014 (Annexure A-3 appearing at page 38 of the Appeal paper Book). The Appellant is aggrieved that it should have been paid at the interest of 19.40% in terms of 2015 circular issued by the Bank page 2 para 2.ii. wherein maximum lending rate were defined as 19.75% p.a whereas it has been paid at the ‘Cash Credit’ rate applicable to the utilization of the Cash Credit facilities and accordingly, seeking the relief of setting aside the impugned order dated 04.10.2021 passed by the ‘Adjudicating Authority’ in the IA and CP as stated above and is also asking the direction to ‘admit’ the entire claim at higher rate of interest, has filed by the Appellant in the ‘Liquidation Process’ of the CD etc.

3. The Ld. Counsel for the Appellant has submitted that the CD has availed the financial facilities from the said bank which has been assigned to the Appellant by an ‘Assignment Agreement’ dated 28.03.2016 and the same is at Annexure A-5 appearing at page 65 of the Appeal Paper Book. The ‘Corporate Insolvency Resolution Process’ (CIRP) was initiated on 18.12.2019 by the ‘Adjudicating Authority’ vide its order in CP(IB) No. 305 of 2018. The IRP appointed by the Adjudicating Authority, was changed in the 1st meeting of the Committee of Creditors (COC) of the CD on 03rd February, 2020 and Mr. Pradeep Kumar Kabra was appointed as ‘Resolution Professional’ (RP) during CIRP, the Appellant filed its claim of Rs. 51,50,74,531/- and the RP admitted an amount of Rs. 31,56,84,503/-. The Appellant being aggrieved approached the ‘Adjudicating Authority’ for reduction in the claim. However, in the 6th meeting of the CoC of the CD held on 10th September, 2020, the CoC resolved by 100% vote to liquidate the CD as no resolution plan was received by the RP in the CIRP of CD. The liquidation process of the CD was allowed by the ‘Adjudicating Authority’ vide its order dated 04th November, 2020 and appointed the same RP – Mr.

Pradeep Kumar Kabra as ‘Liquidator’ of the CD. The Appellant filed its further enhanced claim of Rs.58,39,13,336/- as on 04th November, 2020 to the ‘Liquidator’ and the ‘Liquidator’ of the CD informed the Appellant on 29th December, 2020 that the claim of the Appellant to the tune of Rs.48,36,69,967/- has been accepted out of the total claim so filed as stated above. The Appellant sought clarification for rejection of partial claim by the ‘Liquidator’ vide email dated 04th January, 2021 (appearing at page 136 Annexure A- 11 of the Appeal Paper book). The ‘Liquidator’ submitted the details of reduction of claim, particularly, charging of interest rate of 20% plus penal interest (a very higher rate of interest) on over due for developed ‘Letter of Credit’ (LC). The ‘Liquidator’ has admitted the claim based on working capital loan plus penal interest (appea