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2024 Supreme(Online)(NCLT) 2429
NATIONAL COMPANY LAW TRIBUNAL
V. G. Bisht (Retd.), Member (Judicial), Sh. Prabhat Kumar, Member (Technical)
Canara Bank – Appellant
Versus
Indira Container Terminal Private Limited – Respondent
Corporate Insolvency Resolution Process - CP (IB)/261 (MB)/2023
For the Financial Creditor:Mr. Ishtiaq Ali, Advocate
For the Corporate Debtor:Mr. Aman Kacheria, Advocate
The Financial Creditor's application for Corporate Insolvency Resolution Process was admitted as financial debt was in default, confirming the acknowledgment of debt extends limitation.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 7 - Initiation of Corporate Insolvency Resolution Process (CIRP) - Financial Creditor can file for CIRP if financial debt is in default. The Respondent is in default of a financial debt due and payable to the Financial Creditor, amounting to over ₹312 Crores. Findings indicate the application is within the limitation period and that acknowledgment of debt exists despite the Respondent's claims of limitation. (Paras 44, 45, 46, 48)
(B) Interpretation of agreements - Terms of Concession Agreement are binding; without Government approval for any modification, not possible to restructure or resolve under IBC. The Court emphasized that despite the Respondent being an SPV with limited assets, the Financial Creditor's rights to pursue CIRP are upheld barring exceptional circumstances (Paras 46, 48)
Facts of the case:
The Financial Creditor initiated CIRP against the Corporate Debtor due to the default of ₹312,52,46,977.95 in repayments on a loan of ₹210 Crores sanctioned in 2008, later declared NPA. The Corporate Debtor’s claims of delays from the Government impede its ability to repay.
Findings of Court:
Application is admitted based on existing financial debt and default; CIRP is to proceed with the interim resolution professional appointed.
Issues: Whether the application is barred by limitation and if the Government's involvement is needed for proceedings.
Ratio Decidendi: Monthly payments from the trust account continue the limitation period, and acknowledgment letters from the Corporate Debtor confirm existing debts. The Tribunal found no grounds to deny the application for CIRP.
Result: Petition admitted and CIRP commenced.
| Table of Content |
|---|
| 1. application of section 7 of ibc for initiating cirp against corporate debtor. (Para 1 , 2 , 3) |
| 2. respondent's defense regarding limitations and project financing disputes. (Para 14 , 15) |
| 3. existence of financial debt and default established; admission accepted. (Para 44 , 45 , 48) |
| 4. cirp admitted with moratorium declared. (Para 51 , 52) |
ORDER
Per: Justice V. G. Bisht (Retd.), Member (Judicial)
Brief Facts:
1. This Company Petition is filed under section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) by Canara Bank ("hereinafter referred to as the Financial Creditor/Applicant"), seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Indira Container Terminal Pvt. Ltd. ("hereinafter referred to as the Corporate Debtor/Respondent/ICTPL").
2. The Applicant is a body corporate constituted under the Banking Companies (Acquisition and transfer of Undertaking) Act, 1970 having PAN:AAACC6106G with its head office at 112, J.C. Road, Bangalore - 560002.
3. The Respondent is constituted under the Companies Act, 1956 having Company Identification no. U63032MH2007PTC174100 with its head office at ICT Office, Indira Dock, Green Gate, Mumbai Port, Mumbai, Maharashtra - 400038. Its authorized share capital is Rs. 1,20,00,00,000/- and Paid up share Capital is Rs. 1,01,56,60,000/-. It is engaged in the business of operating and managing including development, modifications, and augmentation of the Ballard Pier Station Container Terminal and also development, constructions, and management of the Offshore Container Terminal in Mumbai Harbour.
4. The Applicant sanctioned the Term Loan of Rs. 210 Crore and communicated the same by its sanction letter dated 07.11.2008 stating the terms and conditions therein. The terms said terms and conditions were duly accepted.
5. As per the sanction letter of the said facility, the Corporate Debtor executed the following documents;
i. Common Loan Agreement dated 14th November 2008.
ii. Indenture of Mortgage dated 18th December 2008.
iii. Lenders Agent Agreement dated 14th November 2008.
iv. Security Trusteeship Agreement dated 14th November 2008.
v. Inter-Creditor Agreement dated 14th November 2008.
vi. Trust and Retention Account Agreement dated 14th November 2008.
vii. The Corporate Debtor also filed the necessary changes before it secured Loan.
6. The account of the Corporate Debtor was classified as the Special Mentioned Account in accordance with the guidelines of the Reserve Bank of India ("RBI") vide Master Joint Lenders Agreement dated 2nd July 2014 since Financial Creditor observed financial stress in the account of the Corporate Debtor.
7. The Corporate Debtor approached the Petitioner on 29.12.2014 for restructuring of the Credit Facility availed by the Petitioner and Petitioner considered the request of the Corporate debtor and executed the Debt Restructuring Agreement dated 29.12.2014. However, the Regulatory timeline for the restructuring was lapsed on 31.03.2015 and the restructuring could not be implemented by the Corporate debtor.
8. The Applicant vide several letters to the Corporate Debtor had requested to regularize the accounts. Owing to the default in payment of interest and principal amount the account of Corporate Debtor slipped to NPA on 03.12.2013 in the Books of Applicant in 2013 in terms of guidelines issued by the RBI from time to time. Since the account had been classified as NPA, the Financial Creditor issued Demand Notice under Section 13(2) of the SARFAESI ACT, 2013 by letter dated 07.11.2008.
9. Corporate Debtor by the Revival Letter dated 6th June 2011, 13th August 2013, 1st December 2015, and 02nd January 2018 acknowledged the debt as well as the execution of loan and security documents by it for the purpose of Section 18 of Limitation Act, 1963. The Financial Creditor has filed recovery application before the Hon'ble Debt Recovery Tribunal Mumbai ("DRT-1"), having suit number 51/2020 on February 8, 2019, which is pending.
10. The Corporate Debtor ha
