Ratnakar Sharma vs Aditya Birla Finance Limited And Anr

IN THE MATTER OF: Ratnakar Sharma ...Appellant Versus Aditya Birla Finance Ltd. & Anr. ...Respondents

Present: For Appellant : Mr. Vishesh Kalra and Mr. Hardik Khatri, Advocates.

For Respondent : Mr. Saurav Agarwal, Mr. Debarshi Dutta, Ms. Manvi Adlakha, Ms. Anusha Sinha and Mr. Ajay Sharma, Advocates.

ORDER

(Hybrid Mode)

02.08.2024 : Heard Counsel for the Parties.

2. This Appeal has been filed against an Order dated 31.10.2023 passed

by the Learned Adjudicating Authority (National Company Law Tribunal,

Court-IV) in C.P. (IB) No.- 685/2022, by which Order Section 7 Application

filed on behalf of the Financial Creditor, Aditya Birla Finance Limited has been

admitted.

3. The Appellant come up with the Prayer that the Appellant is ready to

pay all defaulted EMIs along with the payable interest within two weeks.

4. Considering the said submission that the Interim Order was passed by

this Tribunal on 10.11.2023 directing that in the meantime, in pursuance of

the Impugned Order, CoC may not be constituted. Subsequently, the

Appellant failed to deposit the amount and the Interim Order was vacated by

this Tribunal.

5. Learned Counsel for the Appellant challenging the Order submits that

the Loan Recall Notice which was issued by the Financial Creditor itself was invalid since it was not in accordance with Loan Agreement and there was no

event of default. He has referred to Clause 19.5 of the Loan Agreement. It is

submitted that Financial Creditor was well aware about the defaults of the co-

borrower which was in default with several Financial Creditors hence the

ground taken in the Loan Recall Notice is not a valid ground for initiation of

Section 7 Proceeding.

6. Learned Counsel for the Respondent refuting the submission contends

that Schedule IV which is existing financial indebtedness of SNL was only

refer to financial indebtedness of the SNL and does not contain any admission

of default. It is submitted that the co-borrower of the Corporate Debtor itself

has sent a letter to the National Stock Exchange of India Limited on

02.01.2022 containing the disclosure which clearly mentions the term loan

outstanding and loan defaults which is admission of the Corporate Debtor

itself. It is submitted that the Loan Recall Notice issued by the Financial

Creditor on 24.05.2022 clearly makes out event of default for Loan Recall and

that is the basis of Section 7 Application.

7. After having heard the Counsel for the Parties, we are of the view that

when there is a clear admission of the co-borrower of the Corporate Debtor by

letter dated 02.01.2022 which is disclosure to the National Stock Exchange

of the default we fail to see that on what basis it can be contended that there

was no event of default for Recall Notice by the Financial Creditor.

8. We do not find any error in the Notice for Recall issued by the Financial

Creditor on the Loan, hence the Application under Section 7 cannot be said

to be unfounded as contended by the Counsel for the Appellant.

Comp. App. (AT) (Ins.) No. 1468 & 1469 of 2023 2 of 3

9. Learned Counsel for the Respondent further submits that to the Loan

Recall Notice, there was no response given by the Corporate Debtor.

We thus do not find any ground to interfere with the Order of the

Adjudicating Authority admitting Section 7 Application debt and default

having been found proved. The Appeal is dismissed.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical)

[Arun Baroka] Member (Technical) himanshu/nn

Comp. App. (AT) (Ins.) No. 1468 & 1469 of 2023 3 of 3