Vacc Synbiotech vs Bank Of India & Anr

Vacc-Synbiotech ...Appellant

Versus

Bank of India & Anr. ...Respondents

For Appellant: Shri Hattarkar Siddharameshwar, Advocate

For Respondents: None ORDER

03.06.2020 Heard Counsel for Appellant. The Respondent - Bank of

India filed CP (IB) No.2947/MB/2019 before the National Company Law

Tribunal, Court No.1, Mumbai Bench (NCLT - Adjudicating Authority)

against the Appellant - Corporate Debtor claiming that the bank had

extended term loan to the Corporate Debtor on 30th March, 2015 for amount

of Rs.20,50,00,000/- which was reviewed and reduced to Rs.18,95,00,000/

on - 08.01.2018. The necessary security documents were got executed and

the goods were also hypothecated. Respondent bank claimed that there were

outstanding dues and the account of the Corporate Debtor was classified as

NPA. The Bank relied on acknowledgement of debt letter dated 5th March,

2018 before the Adjudicating Authority. The Bank claimed that there were

dues outstanding against the Corporate Debtor and sought initiation of the

Corporate Insolvency Resolution Process, as Financial Creditor.

2. The Impugned Order shows that the Company Petition was listed for

hearing on 29th August, 2019 and Notice was issued. The Financial Creditor

filed Affidavit of Service of Notice on Corporate Debtor on 24th September, 2

2019. Impugned Order shows that when the matter came up on 27th

September, 2019, Counsel for Corporate Debtor appeared and took time to

file Vakalatnama. The Order states that the Corporate Debtor later did not

file Vakalatnama or the Reply and nobody appeared. After hearing the Bank,

the Adjudicating Authority admitted the Application under Section 7 and

CIRP was initiated.

3. The learned Counsel for the Appellant - Shri Hattarkar

Siddharameshwar is submitting that there were various issues between the

Bank and the Corporate Debtor. It is stated that although as per sanction,

Rs.20,50,00,000/- were to be disbursed but actually only 18,95,000,00/-

were disbursed. It is stated that the Bank was collecting higher EMI instead

of actual interest rate on the loan which had been disbursed. Due to

overcharging of interest and not releasing amounts and collecting higher

EMI, the Bank had on 30th December, 2017 reversed the over charged

interest and credited Rs.71,46,859/-. Counsel claims that in spite of this,

the tag of NPA which was shown as 28.09.2016 (30.09.2016) was not

removed. Counsel refers to documents to claim that at different places

different dates are mentioned of NPA. The Counsel states that there were

such issues between the bank and the Corporate Debtor but the same could

not be put up to Adjudicating Authority. The Bank also issued Notice under

Section 13(2) of SARFAESI Act (Annexure A-19) and also moved DRT

(Annexure A- 27). The Counsel states that the Bank is claiming more than

Rs.24 Crores while according to the learned Counsel, the Corporate Debtor

has outstanding dues only of Rupees Twenty Crores and Thirty Lakhs.

Company Appeal (AT) (Ins) No.507 of 2020 3

According to the learned Counsel, all these issues were required to be looked

into.

4. The Counsel states that the Advocate for Appellant appeared before

the Adjudicating Authority on 5th December, 2019 and sought time and the

matter was adjourned to 4th February, 2020 and on the same day i.e. on 5th

December, 2019, Advocate for Appellant had filed Vakalatnama. The

Counsel states that on the adjourned date of 4th February, 2020, the

Advocate remained under the impression that the matter is actually on 4th

March, 2020 and under this misconception, the Advocate did not appear.

The Counsel states that for this reason, the above issues could not be

placed before Adjudicating Authority and for fault of Advocate, the party

should not suffer and the Appeal should be admitted.

5. Having heard the learned Counsel for the Appellant and going through

the record, what we find is that even if the Counsel for Appellant had

attended the proceeding, the case which the Appellant is trying to put up is

regarding what amount should have been released but was not released and

non-release of amounts on time and the dispute regarding collecting higher

EMI and subsequently, bank depositing the particular amount instead of

what the Appellant claims should have been deposited. Issue of date of NPA

is also raised. We find that in proceeding under IBC, the Adjudicating

Authority is not required to go into such issues when the question is of

admission of Application under section 7 of IBC. For the purpose of Section

7 of IBC, Adjudicating Authority has rightly considered that the Respondent

bank is Financial Creditor and that it had extended term loan which is in

Company Appeal (AT) (Ins) No.507 of 2020 4

default. The amount in default admittedly being more than Rs.1 lakh when

Application was filed, which is due and in default, we do not think that the

Adjudicating Authority erred while admitting the Application. On being

asked, Counsel for the Appellant states that he has not filed before us copy

of the Application under section 7. Copy of the acknowledgement of debt

letter dated 5th March, 2018 which is referred in the impugned order is also

not filed. There is no reason why relevant documents are not filed. It is not

the case that Acknowledgement as referred by Adjudicating Authority was

not issued. Considering the impugned order as it is, and the record put up

and submissions, there is no difficulty that the term loan was sanctioned

somewhere around 30th March, 2015 and the acknowledgement of debt

being of 5th march, 2018, the Application filed under Section 7 on 29th

August, 2019 cannot be faulted with. Date of NPA and other issues raised

would not be necessary to decide. No question of limitation is raised before

us. Remanding matter will not be helpful. For such reasons, we do not find

any reason to entertain this Appeal.

The Appeal is dismissed at the stage of admission. No costs.

[Justice A.I.S. Cheema] Member (Judicial)

[Alok Srivastava] Member (Technical)

/rs/md

Company Appeal (AT) (Ins) No.507 of 2020