Insolvency application dismissed due to failure to establish default as debts were not yet due.

ORDER

Per: Manoj Kumar Dubey, Member (Technical)

1. The present petition is filed on 29.06.2021, by Vistra ITCL (India) Limited(hereinafter referred as ‘Financial Creditor/Petitioner’), under section 7of the Insolvency and Bankruptcy Code, 2016 (for brevity ‘IBC’/Code), r/w. Rule 4 of the I&B (Application to Adjudicating Authority) Rules 2016, inter alia, seeking to initiate Corporate Insolvency Resolution Process in respect of M/s Excel Dwellings India Private Limited(hereinafter referred as ‘Corporate Debtor/Respondent’) for a total outstanding default amount of Rs. 87,97,46,671/- (Rupees Eighty-Seven crores Ninety-Seven Lakhs Forty-Six Thousand Six Hundred and Seventy-One Only) as on 31.05.2021, as per Part IV of Form No. 1. The Date of default has been mentioned as 16.04.2021. The working as been given as under:

2. The facts of the case are discussed below:

a. It is submitted that the corporate debtor viz M/s Excel Dwellings India Private Limited and M/s Excel Dwellings Oxigen Private Limited and the Financial Creditor vizVistra ITCL (India) Limited (the Debenture Trustee, representing all the Debenture Holders), have executed the Debenture Trust Deed dated 05.07.2016 amended vide the Deed of Amendment dated 24.11.2016 and the Deed of Amendment dated 14.10.2020 inter alia by and between Excel Dwellings India Private Limited, Excel Dwellings Oxigen Private Limited, Promoters, Pebble Creek Landowners and Vistra ITCL (India) Limited. Debentures valued at an amount of Rs. 400,000,000/- was issued by the Corporate debtors vide the aforementioned transaction documents.

b. Further, the Guarantors have executed irrevocable and unconditional Personal Guarantee dated 05.07.2016 and Deed of Amendment to Deed of Irrevocable and Unconditional Personal Guarantee dated 24.11.2016 with the Financial Creditors vizVistra ITCL (India) Limited in favour of the Financial Creditor. However, the Corporate Debtors failed to adhere to the agreed Business Plan in relation to the Project Oxigen Phase II and Phase III and there have been defaults in the servicing of other financial obligations undertaken by Guarantors in the Transaction Documents which have materially and adversely affected the interest of the Petitioner. Further, there has also been repetitive instances of causing/permitting damage to be caused to the Mortgage Properties by failing to control acts of vandalism by the contractor, namely Mr. Hari Arunagiri on 24.10.2020 and the same was brought to the notice of the corporate debtor vide letter dated 26.10.2020. Moreover, the instance of vandalism and property damage was not rectified despite the notice and the said action constituted as an ‘Event of Default’ under various provisions of the Transaction Documents and under Clause 12.2 (a), (e ) and (l) of the Debenture Trust Deed in particular as the events that had occurred resulted in Material Adverse Effect thus leading to an Event of Default.

c. The Corporate Debtor was issued notice dated 07.01.2021 for the said Event of Default to rectify/remedy the ‘event of default’ forthwith and within not later than 14 days from the date of receipt of the notice. Thereafter, a Demand Certificate dated 14.04.2021 was issued to the Guarantors viz. Mr. Sivaram Krishna Reddy Allu, Mr. Vivekananda R and Mr. Mohammed Meraj under clause 3 of the Deed of Irrevocable and Unconditional Personal Guarantee dated 05.07.2016 and Deed of Amendment to Deed of Irrevocable and Unconditional Personal Guarantee dated 24.11.2016 for the payment of the outstanding principal amount und