Mr. Anand Singh vs Harshad Shamkant Deshpande & Ors

(Arising out of the Order dated 02.03.2022 passed by the National Company Law Tribunal, Mumbai Bench, Court - III in C.P (IB) No. 3650/MB/2018)

IN THE MATTER OF:

Mr. Anand Singh Adult Indian Inhabitant, Having his office At Sr. No. 170, Plot No. D-1, Chakan Talegaon Highway, MIDC Chakan, Kalumbre, Pune 410501 ...Appellant Versus

1. Harshad Shamkant Deshpande, Interim Resolution Professional for Transport Solutions Private Limited Having his office at Shop No.2 SumedhaApts, Sutar Path, Shivtirtha Nagar, Paud Road, Kothrud, Pune, 411 038. ...Respondent No. 1

2. Bank of Maharashtra, A company incorporated under the Companies Act, 1956 and licensed by the Reserve Bank of India under the Banking Regulation Act, 1949 and having its head office at Lokmangal, 1501, Shivajinagar, Pune 411005. ...Respondent No. 2

3. Transport Solutions Private Limited A company incorporated under the Companies Act, 1956 and having its Registered office at Sr. No.170, Plot No. D-1, Chakan Talegaon Highway, MIDC Chakan, Kalumbre, Pune 410501 ...Respondent No. 3 Present

For Appellant: Mr. Rahul Chitnis, Mr. Hersh Desai, Ms. ShwetalShepal, Mr. Aditya Khanna & Mr. Aaditya Pande, Advocates. -2- Comp. App. (AT) (Ins.) No. 339 of 2022

For Respondents: Mr. Swapan Pradhan & Mr. Harshad S Deshpande, for R- 1 & 3. Mr. Ankur Mittal & Mr. Bhaskar, for R-2.

JUDGEMENT

(22.08.2024)

NARESH SALECHA, MEMBER (TECHNICAL)

1. The present appeal has been filed by Mr. Anand Singh, who is Appellant

herein and Erstwhile Director of Respondent No. 3 ('Corporate Debtor') under

Section 61 of the Insolvency and Bankruptcy Code, 2016 ('Code') against the

Impugned Order dated 02.03.2022 passed by National Company Law Tribunal,

Mumbai Bench, Court-III ('Adjudicating Authority') in C.P. (IB)

No. 3650/MB/2018 whereby Section 7 application initiated by the Bank of

Maharashtra ('Financial Creditor') for Rs. 24,24,42,995/- has been admitted.

2. Mr. Harshad Shamkant Deshpande was appointed as Resolution

Professional vide Impugned Order dated 02.03.2022 who is Respondent No. 1

herein, Bank of Maharashtra the Financial Creditor is the Respondent No. 2 and

Transport Solution Private Limited ('Corporate Debtor') is Respondent No. 3

herein.

3. Heard the Counsel for the Parties and perused the records made available

including the cited judgements.

-3-

Comp. App. (AT) (Ins.) No. 339 of 2022

4. It is the case of the Appellant that in March, 2013 the Corporate Debtor

availed cash credit facility of Rs. 20 Crores from the Respondent No. 2 and

Corporate Debtor was servicing regular financial debt till March, 2015. The

Appellant alleged that on 01.04.2015, the Respondent No. 2, made drawing

power of the Corporate Debtor as 'zero' without giving any reason. The

Appellant further alleged that the Respondent No. 2 did not follow RBI

Guidelines with only intention to put the Corporate Debtor into CIRP.

5. The Appellant brought out that on 01.07.2015, followed by reminder on

26.07.2015, the Corporate Debtor requested the Respondent No. 2 to allow the

Corporate Debtor to operate the account, however, no response was given and in

March, 2016 the Respondent No. 2 through its Advocate directly issued the

recall notice, inter-alia, stating that account of the Corporate Debtor was

declared as NPA. The Appellant stated that the Respondent No. 2 on 21.03.2016

also filed an application before the Debt Recovery Tribunal ('DRT') for

recovery of alleged dues vide Original Application bearing OA No. 176 of 2016

for claim of Rs. 22, 57,65, 097/-.

6. The Appellant brought out that the Respondent No. 2 approached the

Corporate Debtor under MAHAMUKTI Scheme ('Mahamukti OTS') for

settling of alleged dues of the Corporate Debtor on payment of Rs. 16.97 Crores

as OTS amount and the Corporate Debtor deposited 10% of the OTS amount

(approx.. Rs. 1.65 Crores) with Respondent No. 2 in January, 2018 itself but the -4- Comp. App. (AT) (Ins.) No. 339 of 2022

Respondent No. 2 issued the OTS approval letter only on 17.03.2018 valid up to

31.03.2018 and demanded the Corporate Debtor to pay remaining 90% balance

amount within 10 working days. The Appellant submitted that till that time the

Corporate Debtor had already paid Rs. 5.5 Crores under the said scheme but due

to such stringent and unrealistic time frame, the Corporate Debtor could not pay

the remaining balance amount.

7. The Appellant submitted that the Corporate Debtor has all genuine

intentions to settle the matter and therefore between 01.04.2018 to 19.10.2018

the Corporate Debtor wrote several letters to the Respondent No. 2 for seeking

extension of time for depositing balance amount of OTS which was not granted

by the Respondent No. 2.

8. It has been brought out that on 11.09.2018, the Respondent No. 2 filed

Company Petition No. 3650/IBC/MB/2018 before the Adjudicating Authority

under Section 7 of the Code r/w Rule 4 of Insolvency and Bankruptcy

(application to Adjudicating Authority) Rules, 2016 which was admitted by the

Adjudicating Authority vide Impugned Order dated 02.03.2022.

9. The Appellant alleged that even after filing an application under Section 7

of the Code before the Adjudicating Authority, the Respondent No. 2 once again

approached the Corporate Debtor with a new MAHARIYAYT OTS Scheme

('Mahariyayat OTS') for Rs. 12 Crores and the Corporate Debtor deposited 10%

of the same with the Respondent No. 2. The Corporate Debtor submitted that the -5- Comp. App. (AT) (Ins.) No. 339 of 2022

account was illegally declared as NPA by the Respondent No. 2 without

following RBI Guidelines.

10. The Appellant brought out that on 23.02.2019, the Respondent No. 2

issued the OTS approval letter under Mahariyayat OTS Scheme but unilaterally

increased the amount of OTS from Rs. 12 to Rs. 14 Crores which was opposed

by the Corporate Debtor and wanted the Respondent No. 2 to refund money

paid by the Corporate Debtor. However, no action was taken by the Respondent

No. 2.

11. The Appellant assailed the Impugned Order which ignored vital facts of

the case, genuine intentions of the Corporate Debtor and initiated CIRP

proceedings against the Corporate Debtor vide Impugned Order dated

02.03.2022. The Appellant pointed out that no date of default has been

mentioned in part IV of the application filed under Section 7 and as such on this

account only, the Impugned Order need to be rejected.

12. The Appellant brought out that the NPA date has been shown as

18.05.2015, however, on this date, the account was standard account. The

Appellant reiterated that his sanction limit was Rs. 20 Crores and stated that the

account could have been declared as NPA only if the sanction limit got

exceeded which is not the case.

13. In this regard he referred to ledger accounts highlighting that his account

always remained in sanction unit of Rs. 20 Crores.

-6-

Comp. App. (AT) (Ins.) No. 339 of 2022

14. Concluding his arguments, the Appellant stated that all records shows

clearly that the account of the Corporate Debtor could not have been declared

NPA as the Corporate Debtor never exceeded Rs. 20 Crores sanctioned limit.

15. Per contra, Respondent No. 2 the Contesting Respondent, denied all the

averments made by the Appellant treating these as misleading and malicious

16. The Respondent No. 2 submitted that the Corporate Debtor through

Erstwhile Directors approached the bank in January, 2013 for grant of cash

credit Rs. 20 Crores as working capital facility for business purpose along with

sub limit of Rs. 7.5 Crores as letter of credit cum bank guarantee. The

Respondent No. 2 stated that on 18.03.2013 the bank sanctioned these credit

facilities and subsequent to which the Erstwhile Directors and the Corporate

Debtor executed certain financing and security documents in favour of

Respondent No. 2 on 25.03.2013.

17. The Respondent No. 2 bank mentioned that the Corporate Debtor agreed

to get review from the Respondent No. 2, the said financing facilities every year

till the same is terminated, however, the Corporate Debtor failed to adhere to the

terms and conditions laid down in the sanction letter and also failed to pay the

interest on time. The Respondent No. 2 submitted that they advised the

Corporate Debtor on 02.08.2014 that credit facilities availed by the Corporate

Debtor are over due for review/ renewal and due to non renewal of credit

facilities, penal interest is being charged w.e.f. March, 2014. -7-

Comp. App. (AT) (Ins.) No. 339 of 2022

18. The Respondent No. 2 bank submitted that in the letter dated 02.08.2014,

the Respondent No. 2 bank requested the Corporate Debtor to furnish audited

balance sheet as on 31.03.2014, CMA Data, Net worth Certificate of Directors/

partners and cautioned the Corporate Debtor that in absence of submission of

these documents along with the review/ renewal request for facility, drawing

power of cash credit account will become 'zero' and cheque issued by the

Corporate Debtor will not be honoured by the Respondent No. 2.

19. The Respondent No. 2 reiterated that he brought to the notice of the

Corporate Debtor that the cash credit account of Rs. 20 Crores sanctioned on

15.03.2013 has already become over due for review/ renewal for which despite

official communication by the Respondent No. 2 to the Corporate Debtor no

request has been received from the Corporate Debtor.

20. The Respondent No. 2 also brought to the notice of this Appellate

Tribunal that in the letter dated 21.08.2014, major irregularities noticed by the

Respondent No. 2 were brought to the notice of the Corporate Debtor namely,

1.) Non-Execution of registered mortgage of the Properties. i.e. property

comprising Land, Building, Plant & Machinery at S. No. 170, Plot NO. D-1,

Chakan-Telegaon Highway, Khalunmber, Chakan-MIDC, P:Une, 2.) Non -

Registering charge of mortgage with ROC and 3.) Non-Submission of Tripartite

agreement with MIDC.

-8-

Comp. App. (AT) (Ins.) No. 339 of 2022

21. The Respondent No. 2 bank brought out that despite their best efforts, the

Corporate Debtor failed to adhere to the terms and conditions of financial

facilities and did not pay the interest on time which became over due and

therefore, the Respondent No. 2 had to declare the account of Corporate Debtor

as NPA in accordance with then prevalent RBI Guidelines dated 18.05.2015 and

subsequent to which the Respondent No. 2 bank issued recall notice to the

Corporate Debtor and erstwhile directors the Corporate Debtor on 01.03.2016.

22. The Respondent No. 2 denied allegations regarding bank putting the

Corporate Debtor into CIRP and submitted that the Respondent No. 2 bank on

its own encouraged the Corporate Debtor to avail the OTS as per Government

Schemes like Mahamukti and Mahariyayat OTS Scheme, however, despite

issuing the sanction letters under these schemes, the Corporate Debtor failed to

meet the terms and conditions.

23. The Respondent No. 2 bank stated that the Corporate Debtor has been

continuously acknowledging the dues and thus the debt is established without

any doubt. Similarly, very fact that the Corporate Debtor could not pay in time

and offered to make the payment under OTS also signifies the default and as

such there is nothing wrong in the Impugned Order, since the Adjudicating

Authority was only required to establish debt and default under Section 7 of the

Code and these conditions were met in the present case, therefore the Impugned

Order was passed correctly by the Adjudicating Authority. -9-

Comp. App. (AT) (Ins.) No. 339 of 2022

24. The Respondent No. 2 bank brought to the notice of this Appellate

Tribunal that sanction limit of the cash credit facility is one aspect and another

aspect of such cash credit facility is the drawing power. According to approval,

the Corporate Debtor was required to maintain his account standard and submit

the documentary evidence from time to time and also initiate to get credit

facility reviewed/ renewal before expiry of one year. The Respondent No. 2

bank reiterated that despite their continuous reminders and persuasions, the

Corporate Debtor did not full fill the terms and conditions and did not take any

action for renewal of cash credit facilities as such the Respondent No. 2 had to

make the drawing power as 'zero' and due to non payment of interest on time

the same became overdue and thus the account of the Corporate Debtor was

declared as NPA in accordance with the RBI Guidelines.

25. The Respondent No. 2 bank brought out duly that they conveyed their

approval of the offer put forth by the Appellant and had asked the Corporate

Debtor to pay in terms of the OTS Scheme before 31.03.2018 which was the

deadline for the OTS Scheme. However, the Corporate Debtor failed to do so, as

such the Respondent No. 2 could not grant the extension of time asked by the

Corporate Debtor as the OTS Scheme expired at the end of the financial year

i.e., 31.03.2018.

26. The Respondent No. 2 bank submitted that despite filing the Section 7

Application before the Adjudicating Authority, the Respondent No. 2, in order -10- Comp. App. (AT) (Ins.) No. 339 of 2022

to provide one last opportunity to the Corporate Debtor, approached the

Corporate Debtor and sent letter dated 29.10.2018 to the Corporate Debtor

stating that once the Appellant conveys his willingness along with a deposit of

10% of the OTS amount, the sanction letter will be issued and the OTS amount

was to be paid before the end of the financial year i.e., 31.03. 2019, which the

Corporate Debtor failed to do with regard.

27. The Respondent No. 2 concluded his pleadings with request to this

Appellate Tribunal to dismiss the appeal with exemplary costs.

Findings

28. We note that cash credit facilities were sanctioned in favour of to the

Corporate Debtor in 2013 and loan documents were executed by the Corporate

Debtor through its erstwhile directors in order to secure those facilities which

proves of the financial debt. The said financial facilities were required to be

renewed yearly as per sanction letter. We also note that the Corporate Debtor

failed to pay the interest that was accruing on the loan account and thus, the

amount became overdue. We take into consideration that since the Corporate

Debtor failed to pay the amount due and payable, the Respondent No. 2 Bank

classified the account of the Corporate Debtor as NPA and issued a recall notice

in order to recover the outstanding from the Corporate Debtor and subsequently

the Respondent No. 2 filed an application in accordance with Section 7 of the -11- Comp. App. (AT) (Ins.) No. 339 of 2022

Code to initiate the Corporate Insolvency Resolution Process ('CIRP') against

the Corporate Debtor.

29. The only point which is to be decided in the present appeal is whether

there was any default, since, the debt is undisputed fact and has not been

agitated by either of the parties.

30. It is the case of the Appellant that since his sanction limit never exceeded

and remained under Rs. 20 Crores approved by the Respondent No. 2, there

could not be any chance of declaring his account as NPA and thus the alleged

default is wrong and the Impugned Order is illegal. On the other hand, the

Respondent No. 2 bank pleaded that the sanction letter was subject to drawing

limit. In this connection, we would like to look into the sanction letter which

reads as under :-

-12-

Comp. App. (AT) (Ins.) No. 339 of 2022 -13- Comp. App. (AT) (Ins.) No. 339 of 2022 -14- Comp. App. (AT) (Ins.) No. 339 of 2022 -15- Comp. App. (AT) (Ins.) No. 339 of 2022

**** -16- Comp. App. (AT) (Ins.) No. 339 of 2022 -17- Comp. App. (AT) (Ins.) No. 339 of 2022 -18- Comp. App. (AT) (Ins.) No. 339 of 2022 -19- Comp. App. (AT) (Ins.) No. 339 of 2022

***

(Emphasis Supplied)

31. From the above sanctioned letter, we note that the sanction limit was Rs.

20 Crores for cash credit facilities and it is significant to note that "review was

to be done within a year". Similarly, letter of bank/ bank guarantee also

sanctioned of Rs. 7.5 Crores within overall total CC limit of Rs. 20 Crore for

procurement of raw material and the same was also required to be renewed

within a year. Drawing power under CC including sub limit proposed for

LC/BG sub limit was not to exceed Rs. 20 Crore at any time including

outstanding payment under LC/BG.

32. We note that the sanction limit also includes " other terms and condition

as per enclosed sheet" and condition No. 6 is relevant to the present case which

is reiterated as under for clarity :-

"6. The sanction for CC limit is valid for one year. The limit should be got reviewed before completion of one year. The sanctioning authority of existing facilities on being satisfied about the genuineness of the request may allow extension maximum 3 months from the due date of review pending -20- Comp. App. (AT) (Ins.) No. 339 of 2022

regular review/renewal with specific stipulation that the borrower shall submit proposal on full review based on audited financial statement before the expiry of this extension. (else 1% extra interest will be charged)"

22. In case of default in repayment of any loan instalment and/ or servicing of interest in any loan account (Includes working capital) for any month, it is credit rating may be adversely affected resulting in higher rate of interest.

23. If the default continues subsequently the asset class of the borrower may also be adversely affected and the bank will reserve its right to recall the entire advance.

(Emphasis Supplied)

33. We would like to take into consideration the intimation sent by the

Respondent No. 2 bank to the Corporate Debtor regarding the requirement of

review/renewal of credit facilities vide letter dated 02.08.2014 and 21.08.2014

which reads as under :-

-21-

Comp. App. (AT) (Ins.) No. 339 of 2022 -22- Comp. App. (AT) (Ins.) No. 339 of 2022 -23- Comp. App. (AT) (Ins.) No. 339 of 2022 -24- Comp. App. (AT) (Ins.) No. 339 of 2022

34. We observe that the intention the Respondent No. 2 seems to help the

Corporate Debtor to complete the formalities. We further observe that the

Respondent No. 2 also sent their team to the Corporate Debtor on 19.11.2014

for verification of assets and follow up of the review/ renewal of credit facilities

and brought to the notice of Corporate Debtor to submit the review/ renewal

urgently and as the review of the account was due since March, 2014. The visit

report reads as under :-

-25-

Comp. App. (AT) (Ins.) No. 339 of 2022

35. We also note that the Respondent No. 2 bank informed the Corporate

Debtor to renew the credit facilities through its Advocate K. Ashar and company

who vide letter dated 27.05.2015 who advised the Corporate Debtor to complete

the formalities.

36. Thus, we come to conclusion that the sanction letter of Respondent No. 2

specifically contained clauses for review/ renewal before expiry of one year.

This review/ renewal was to be done by Bank based on Annual Audited

Financial Statements and other documentary evidence to be submitted by the

Corporate Debtor along with request letter which the Corporate Debtor did not

furnish.

37. It will be worthwhile to understand as to what is the need for such review/

renewal of cash credit facilities by banks at the request of the Corporate Debtor.

It is noted that banks require such renewal regularly to ensure that the credit

facilities and terms on which these facilities were granted, remains in sync with

risk profile and credit worthiness of the Corporate Debtor so that such financial

facilities remain healthy. By regular reviews, banks monitor financial

performances of the borrowers, assessing that the business of the Corporate

Debtor remains viable so as to meet the repayment schedule of the banks.

Similarly, banks also would like to ascertain and reassess the risk profile of the

Corporate Debtor which may change from time to time on several micro and -26- Comp. App. (AT) (Ins.) No. 339 of 2022

macro factors including business performance by the Corporate Debtor due to

technological and economical changes.

38. Bank also take this opportunity during annual renewal to ensure with the

Corporate Debtor is meeting the stipulated conditions of sanction of facilities

and thus through monitoring ensure compliance.

39. Yet another important aspect for review is to adjust credit limits, which

can be adjusted depending upon business growth and challenges and keeping in

mind with the increase or decrease requirement of funds by the Corporate

Debtor as well as their capacity to repay the same. This occasion provide

opportunity to banks to revisit the sanction limit as well as drawing power

linked to such sanction.

40. We understand that although the sanction limit may remain the same, yet

drawing power may be increased or reduced depending upon the result of such

review/ renewed. In case such facilities are not requested to be reviewed or

renewal by the Corporate Debtor, bank may contain clause regarding

implication of non renewal, inter-alia, including making the drawing power of

the Corporate Debtor as "zero" and not honoring the cheques issued by the

Corporate Debtor. Due to higher risk profile consequent to non renewal of such

facilities, the interest is also generally increased by banks. -27-

Comp. App. (AT) (Ins.) No. 339 of 2022

41. We understand that if bank do not follow such standard practice of

review/ renewal of financial facilities of the borrowers on regular basis, the bank

itself may attract adverse non compliance risk from the regulator i.e., RBI.

42. Thus, the regular review/ renew of cash credit facilities is considered to

be critical and vital for risk management, compliance and maintaining the

account of the Corporate Debtor as standard account and failing of which such

accounts are liable to be declared as an NPA with drawing power as "zero".

43. We also observe that despite several attempts made by the bank i.e.,

writing letter, followed by reminder, letter by bank's advocate and team visit to

the Corporate Debtor by bank to pursue Corporate Debtor to complete

formalities of review/ renew, the Corporate Debtor failed to do so. Thus, one of

material stipulated condition of sanction letter was breached by the Corporate

Debtor and as intimated by bank to the Corporate Debtor in advance that

drawing power would become zero, which bank did. We do not find any

irregularities in it. There was also case of non payment of interest payment, thus

the account of the Corporate Debtor became NPA. We find that the Corporate

Debtor committed default and there is no error in the Impugned Order on this

account.

44. As regard allegation of the Appellant about non disclosure of date of

default in part IV of the Section 7 application by the Respondent No. 2, we note

that in part IV the amount has been mentioned as Rs. 24,24,42,995/- and the -28- Comp. App. (AT) (Ins.) No. 339 of 2022

detailed working for the same was attached as the enclosure marked as

Appendix A given all the details. As such the allegation of the Appellant is not

found to be true.

45. We will now like to refer to then prevailing RBI Guidelines dated

01.07.2014 under caption "Master Circular No. DBOD No.

BP.BC.1/21.04.048/2013-14 dated July 1, 2013".

46. The relevant portion of the RBI Guidelines applicable to the present case

is contained in Para 2.1 and 2.2 which reads as under :-

2. DEFINITIONS 2.1 Non performing Assets 2.1.1 An asset, including a leased asset, becomes non performing when it ceases to generate income for the bank. 2.1.2 A non performing asset (NPA) is a loan or an advance where;

i. interest and/ or instalment of principal remain overdue for a period of more than 90 days in respect of a term loan, ii. the account remains 'out of order' as indicated at paragraph 2.2 below, in respect of an Overdraft/Cash Credit (OD/CC),*** 2.2 'Out of Order' status An account should be treated as 'out of order' if the outstanding balance remains continuously in excess of the sanctioned limit/drawing power. In cases where the outstanding balance in the principal operating account is less than the sanctioned limit/drawing power, but there are no credits continuously for 90 days as on the date of Balance Sheet or credits are not enough to cover the interest debited during the same period, these accounts should be treated as 'out of order'.

(Emphasis Supplied) -29- Comp. App. (AT) (Ins.) No. 339 of 2022

47. From the above it is seen that the account becomes "out of order in terms

of Para 2.2 of RBI Circular dated 01.07.2013 for cash credit facilities if the

outstanding balance remains continuously in excess of sanction limit/ drawing

power.

48. We note that although the outstanding balance in the account of the

Corporate Debtor may be less than sanction limit yet the account will be treated

as "out of order". If the following conditions are met :-

(i) No credit occurs continuously for 90 days as on date of balance sheet

(ii) Credit are not enough to recover the interest debited during the sale

period

(iii) The account become in excess of sanction limit or drawing power.

49. We put a pointed query to both the parties to seek clarification regarding

word used sanction limit/ drawing power in the RBI Circular i.e., whether such

sanction limit and drawing powers are to be read as :-

(i) sanction limit and drawing power

or

(ii) sanction limit or drawing power.

or

(iii) Sanction limit and/or drawing power.

50. The Respondent No. 2 bank clarified that account of the Corporate Debtor

remains in order till both the conditions i.e., sanction limit as well as drawing -30- Comp. App. (AT) (Ins.) No. 339 of 2022

power are met. The Respondent No. 2 bank further clarified that it is possible to

have sanction limit at higher value and to have the drawing power at a lower

value which will depend upon several factors from time to time.

51. We also note that as per sanction letter, the drawing power was to become

'zero' in cases the terms and conditions of sanction are not met which included

the application on the part of the Corporate Debtor to get it reviewed/renewed

within the time before expiry of the cash credit facility approval.

52. We have already noted that the Respondent No. 2 bank has written two

official letters to the Corporate Debtor to get it reviewed/ renewed which was

followed by yet another letter by the banks advocate to Corporate Debtor and

followed by personal visit by bank officials for the same. Despite these

opportunities, the Corporate Debtor could not get its cash credit facilities

account review/ renewal.

53. It is a fact that the Corporate Debtor could not get its accounts reviewed/

renewed in time and also could not take action to rectify regularities pointed out

that banks (as noted earlier), as such the Respondent No. 2 was within its right

in declaring the account of Corporate Debtor as NPA and initiate Section 7

application.

54. The submission made by the Appellant that the sanction limit was always

less than Rs. 20 Crores, does not seem to be make any impact in this case.

Although, the Corporate Debtor might have drawn or utilized the CC limit less -31- Comp. App. (AT) (Ins.) No. 339 of 2022

than sanction limit of Rs. 20 Crores that the Corporate Debtor ignored the fact

that interest became due which was not paid on time and became over due

which made the account of the Corporate Debtor as "out of order" along with

the conditions regarding non review/ non renewal of the cash credit facilities by

the Corporate Debtor.

55. In view of above detailed observations, we find that the Adjudicating

Authority has correctly passed the Impugned Order.

56. In fine the appeal devoid of any merit, fails and stands rejected. No cost.

IA, if any, are closed.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Mr. Naresh Salecha] Member (Technical)

[Mr. Indevar Pandey] Member (Technical)

Sim