M/s. SREI Equipment Finance Limited vs M/s. VIOM Infra Ventures Limited

That SREI Equipment Finance Limited (Financial Creditor) extended a cumulative loan/principal amount of Rs.397,40,00,000/- (Rupees Three Hundred and Ninety Seven Crore and Forty Lakh only) to VIOM Infra Ventures Limited (Corporate Debtor) in pursuance of the following financial contracts:

RUPEE LOAN AGREEMENT FOR RUPEE TERM LOAN OF Rs.250,00,00,000/- dated 31^st August, 2017, executed by and between the two aforesaid parties whereby the Financial Creditor had agreed to provide the Corporate Debtor the Loan Facility for the purpose defined therein.

RUPEE FACILITY AGREEMENT/Rupee Loan Agreement for Rs.200,00,00,000/- dated 5^th February, 2020, executed by and between the two aforesaid parties whereby the Financial Creditor had agreed to provide the Corporate Debtor the said Facility for the purpose defined therein and other pertinent financing documents.

That all disbursements under the aforesaid two Rupee Facility Agreements were contractually contemplated to be made to the Corporate Debtor in consideration of payment of interest at specified rate(s), along with other charges as may be applicable, by the Financial Creditor.

That the Corporate Debtor had availed fifteen (15) separate disbursements by the Financial Creditor in terms of the Rupee Loan Agreement dated 31^st August, 2017, and eighteen (18) separate disbursements by the Financial Creditor in terms of the aforesaid Rupee Facility Agreement dated 5^th February, 2020, as fund based financial assistance which cumulatively amounted to Rs.397,40,00,000/- (Rupees Three Hundred and Ninety Seven Crore and Forty Lakh only).

That the key details of the aforesaid fifteen (15) separate disbursements by the Financial Creditor in terms of the Rupee Loan Agreement dated 31^st August, 2017, in favour of the Corporate Debtor as fund based financial assistance (Loan Facility) are tabulated as under:

That the key details of the aforesaid eighteen (18) separate disbursements by the Financial Creditor in terms of the Rupee Facility Agreement dated 5^th February, 2020, as fund based financial assistance in favour of the Corporate Debtor are tabulated as under:

That the Corporate Debtor had made some part payments initially but deliberately failed and/or neglected to perform its repayment obligations under the aforesaid loan contracts in full despite being reminded time and again.

That the Financial Creditor sent a final demand notice to the corporate debtor by way of a letter dated 31st March, 2021, that was delivered to the corporate debtor on 31st March, 2021, calling upon the Corporate Debtor to pay its unpaid financial debt arising from financial assistance availed by it under the aforementioned financial contracts dated 31st August, 2017 and 5th February, 2020. The Corporate Debtor did not fulfill its clear, admitted obligation to pay its unpaid financial debt despite receiving the aforesaid demand notice dated 31st March, 2021.

Total amount claimed to be in default as on 31.03.2021: Rs.424,24,97,150/- (Rupees Four Hundred and Twenty Four Crore Twenty Four Lakh Ninety Seven Thousand One Hundred and Fifty only).

In this connection, a chart/a calculation sheet showing inter alia, the constituent parts of the aforementioned total claimed amount of Rs.424,24,97,150/- and calculation of the interest component thereof along with pertinent audited annual financial statement of the Corporate Debtor acknowledging that it owes at least a cumulative amount of Rs.335,00,00,000/- (Rupees Three Hundred and Thirty Five Crore only) as a financial debt payable by it to the Financial Creditor as at 31st March, 2020, on account of long term and short term borrowings, has been filed.

That the Corporate Debtor had explicitly acknowledged/admitted that a loan (principal) amount of Rs.152,40,00,000/- (Rupees One Hundred and Fifty Two Crore forty Lakh only) is due and payable by it to the Financial Creditor as on 31st March, 2021, vide its reply dated 9th April, 2021, to the demand notice dated 31st March, 2021 issued by the Financial Creditor. The Corporate Debtor had confirmed through its Reply dated 9th April, 2021, that it had committed a default on its repayment commitments to the Financial Creditor under the aforesaid loan agreements.

That a specific authorization is required to initiate the Corporate Insolvency Resolution Process against the Corporate Debtor and in absence of a specific authorization, the Corporate Insolvency Resolution Process cannot be initiated against the Corporate Debtor. The Financial Creditor has failed to disclose a specific authorization, authorizing Mr. Dinesh Jhunjhunwala to initiate the Corporate Insolvency Resolution Process against the Corporate Debtor herein and on this ground alone this instant application is liable to be dismissed.

That it is a mandatory requirement under the Insolvency and Bankruptcy Code, 2016, ("IBC") for an application filed by a purported financial creditor against a purported corporate debtor under section 7 of the IBC to annex a true copy of relevant record of default with the pertinent Information Utility duly registered as such with the Insolvency and Bankruptcy Board of India ("IBBI") for it to be maintainable. In the instant case, the Financial Creditor has failed to disclose any such record of default with any Information Utility registered with the IBBI.

That to annex a true certified copy of bank account statements as certified strictly in accordance with section 2 and/or section 2A of the Bankers' Books Evidence Act, 1891, for it to be maintainable. In the instant case, the Financial Creditor has failed to disclose any such duly certified bank account statements in the Application filed by it.

That the purported Financial Creditor in the instant Application admittedly enjoys substantial securities that have duly secured the financial debt allegedly outstanding and payable by the Corporate Debtor as per the Application itself. In the instant case, the Financial Creditor has prematurely filed the instant Application without first taking any noticeable action whatsoever to enforce its security interests and recover the purported dues it claims is receivable by it from the Corporate Debtor.

That the purported Financial Creditor in the instant Application has annexed a record of default as available with the pertinent credit information company i.e. CIBIL report wherein the amount shown to be payable and outstanding does not bear exact fidelity to the total financial debt claimed to be in default in the Application itself. The Financial Creditor has sought to levy exorbitant penalties on the Corporate Debtor for the alleged default.

That the purported Financial Creditor did not extend to the Corporate Debtor the benefits receivable by it in terms of the various RBI Frameworks for Covid-19 related stress issued by it from time to time despite being intimated about the stress under which the Corporate Debtor has been operating on account of the pandemic. That the Financial Creditor is acting in a most unreasonable manner by straightaway filing the instant Application against the Corporate Debtor under Section 7 of the IBC. The Corporate Debtor is eligible to receive the benefits under the said Frameworks from the Financial Creditor but has been denied the same arbitrarily and maliciously.

That the Corporate Debtor is a solvent company at present as is borne out by the audited financial statements of the Corporate Debtor. It will be a travesty if the Corporate Debtor is forced into a corporate insolvency resolution process for commercial reasons beyond its control and which have affected the entire economy in a negative manner since 2020.

That the receipt of receivables by the Corporate Debtor through its own business activities have suffered for reasons beyond its control and it should not be penalized for the same. The Corporate Debtor is a reputable business entity dealing extensively with foreign entities. A sum of almost Rs.160.70 Crores is receivable by the Corporate Debtor from various foreign debtors as on 30th June, 2021, however the receipt of a substantial part thereof has been delayed for reasons beyond its control including the ongoing pandemic.

That the Corporate Debtor has duly and diligently pursued its claims against the said foreign debtors who have defaulted on their payment obligations by taking recourse to adjudicatory forum on certain occasions.

That the Corporate Debtor had issued the letter dated April 9, 2021, not intending it to be an acknowledgment of debt for the purpose of any legal proceeding inimical to its corporate wellbeing. The said letter dated April 9, 2021, cannot be construed to be any acknowledgment or admission of any liability whatsoever.

That the Corporate Debtor state that all claims canvassed against him by the Financial Creditor are barred by limitation.

That this instant application filed by the Financial Creditor against the Corporate Debtor is further not maintainable since there exists no proved debt between the Financial Creditor and the Corporate Debtor, hence, no question of default arises in the instant case, in order to unjustly enrich the Financial Creditor at the expense of the Corporate Debtor.

That this instant Application filed by the Financial Creditor be dismissed with exemplary costs.

a. The institution of suits or continuation of pending suits or proceedings against the Corporate Debtor including execution of any judgment, decree or order in any court or law, tribunal arbitration panel or other authority;

b. Transferring, encumbering, alienating or disposing of by the Corporate Debtor any of its assets or any legal rights or beneficial interest therein;

c. Any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002);

d. The recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor.

e. Notwithstanding anything contained in any other law for the time being in force, a license, permit, registration, quota, concession, clearances or a similar grant or right given by the Central Government, State Government, local authority, sectoral regulator or any other authority constituted under any other law for the time being in force, shall not be suspended or terminated on the grounds of insolvency, subject to the condition that there is no default in payment of current dues arising for the use or continuation of the license, permit, registration, quota, concessions, clearances or a similar grant or right during the moratorium period.