Punjab National Bank vs Shree Ambika Sugars Limited

The Financial Creditor counsel further states that the Corporate Debtor executed Memorandum of Title Deeds on 14.02.2013 and the same was registered as Doc. No.645/2013, SRO, Virudhachalam to cover the credit facilities of Term Loan of ₹60 crores extended by the Financial Creditor. The Corporate Debtor gave consent to the Financial Creditor to continue to hold and retain the existing title deeds as security on the company's immovable property together with buildings and structures, plant and machinery situated at Kanadhukandan village, Virudhachalam Taluk, Cuddalore District on 1st charge basis to Corporation Bank of its Term Loan of ₹40 crores and on 2nd charge basis to L&T Infrastructure Finance Company Ltd, Punjab National Bank, Canara Bank, Union Bank of India, State Bank of India, Andhra Bank, Indian Bank and Lakshmi Vilas Bank. Further, the Corporate Debtor had executed revival letter on 26.12.2014 to cover the total fund-based exposure of ₹ 200 crores and non-fund based exposure of ₹ 28.35 crores in favour of Creditor Bank.

The Financial Creditor counsel submits that since the Corporate Debtor was not in a position to service the liability, the Industrial Finance Corporation of India Ltd (IFCI Ltd) had formed a Joint Lenders Forum in order to identify incipient stress in the account of the Corporate Debtor and classified the account as 'Special Mention Account (SMA)' in terms of guidelines issued by Reserve Bank of India. In a bid to tide over the business operation, the Corporate Debtor sought for sanction of Export Performance Bank Guarantee (EPBG) facility vide loan application dated 10.01.2015. In consideration of the grant of aforesaid EPBG facility, the Corporate Debtor had offered collateral security of 1st paripassu charge on all present and future fixed assets of the company (excluding current assets of distillery and co-generation division). On the request of Corporate Debtor vide letter dated 19.10.2015 for release of undisbursed amount against the EPBG facility of USD 43 million, non-fund based facilities aggregating to USD 95.91 million equivalent to about ₹595.08 crores was sanctioned for which Corporate Debtor executed loan security documents and general counter indemnity on 04.06.2015.

To support their claim, the Financial Creditor filed dates and events disclosing existence of debt and occurrence of default, which are as follows:

Looking at the dates and events as well as the annexures to the Application, we hereby hold that the Creditor Bank has furnished material disclosing the Creditor Bank having provided credit facilities as mentioned above, and the Corporate Debtor had defaulted in repaying the same.

The Financial Creditor's counsel further states that despite nursing the unit of the Corporate Debtor by extending aforesaid credit facilities, yet it could not achieve the target resulting in the loan accounts becoming NPA on the following dates:

The Financial Creditor counsel submits that all the original documents are deposited with security trustee namely, IDBI Trusteeship Services Limited. Since the loan accounts had become NPA, the demand notice sent through security trustee on 05.11.2018 evoked no response and the Financial Creditor also caused on 11.02.2019 to the Corporate Debtor but for no avail. Since the Corporate Debtor has not come forward to repay the loan amount, the Financial Creditor and other banks have jointly filed OA. No.262 of 2019 for recovery of ₹643,10,31,414.99 crores as on 14.01.2019 before DRT-II Chennai and it is pending for adjudication.

I. That Moratorium is hereby declared prohibiting all of the following actions, namely,

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 of law, tribunal, arbitration panel or other authority;

transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein;

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 Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002;

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

II. The supply of essential goods or services of the Corporate Debtor shall not be terminated or suspended or interrupted during moratorium period.

III. That the provisions of Sub-section (1) of Section 14 of IBC shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator.

IV. That the order of moratorium shall have effect from the date of issue of order till the completion of the Corporate Insolvency Resolution Process (CIRP) or until this Bench approves the resolution plan under sub-section (1) of Section 31 of IBC or passes an order for liquidation of Corporate Debtor under section 33 of IBC, as the case may be.

V. That the public announcement of the Corporate Insolvency Resolution Process shall be made immediately as specified under section 13 of IBC.

VI. That this Bench hereby appoints Mr. Anurag Goel, having Reg.No. [IBBI/IPA-001/IP-P00876/2017-2018/11460], 10/349 1st Floor, Sunder Vihar, Paschim Vihar, New Delhi - 110087, E-Mail: [email protected], Mobile No.9212117008, Land Line : 011-48 666 888 as Interim Resolution Professional (IRP) to carry out the functions as mentioned under IBC. Fee payable to IRP/RP shall be in compliance with the IBBI Regulations/Circulars/ Directions issued in this regard.