State Bank Of India vs M/s Feeders Electric & Engineering Limited

The Corporate Debtor had availed working capital facilities (fund based and non-fund based) under consortium arrangement from a consortium comprising of State Bank of India, erstwhile State Bank of Patiala, State Bank of Bikaner & Jaipur, and State Bank of Hyderabad, including Central Bank, Axis Bank Limited, Standard Chartered Bank, Indusind Bank, Karnataka Bank Limited, Punjab National Bank, ICIC Bank Limited, HDFC Bank Limited and export Import Bank of India (collectively the "Consortium Lenders"), to the extent of Rs. 1435 Crores (Rupees One Thousand Four Hundred Thirty-Five Crores Only).

That out of the total sanctioned capital, Financial Creditor's share which includes State Bank of India, erstwhile State Bank of Patiala, State Bank of Bikaner & Jaipur and State Bank of Hyderabad, is of Rs. 730 Crores ( Rupees Seven Hundred Thirty Crores Only).

Sh. Narinder Kumar Sharma is working as Assistant General Manager (Grade V Officer) with the State Bank of India at BO at stressed Assets Management Branch 1 at 12nd Floor, Jawahar Vyapar Bhawan, 1, Tolstoy Marg, New Delhi, 110001 and is entitled to present this petition and he is also conversant with the facts of the case. He is also competent to sign and verify all type of pleadings, Vakalatnama, affidavit, execution and various other applications and to do all acts necessary for the proper conduct of legal proceedings filed by and on behalf of the Financial Creditor in view of the provisions of State Bank of India Act, 1955 read with State Bank of India Regulation 76 and 77 framed by Reserve Bank of India under Section 50 of the State Bank of India Act, 1955 and Gazette Notification published in Gazette of India in this regard on 02.05.1987.

In respect of the loan facility advanced to the Corporate Debtor by the Financial Creditor, the Corporate Debtor has created security on first Pari Passu charge basis hypothecation of whole of the current assets of the Corporate Debtor namely stocks of raw material, stock in process, semi-finished and finished goods, stores and spares not relating to plant and machinery (consumable stores and spares), bills receivable, book debts and all other movables both present and future whether now laying loose or in cases or which are now lying or stored in or about or shall hereinafter from time to time during the continuance of security of these presents be brought into or upon or be stored or be in or about of the Corporate Debtor's factories, premises and godowns situated at various places or wherever else the same may be or be held by any party to the order or disposition of the Corporate Debtor or in the course of transit or in high seas or on order or delivery, howsoever and whosesoever in possession of the Corporate Debtor and either by way of substitution or addition vide Joint Deed of Hypothecation dated 30.06.2014.

Sh. Brij Raj Punj stood guarantor to the aforesaid loan granted to Corporate Debtor and executed a personal guarantee deed in favour of the Consortium Lenders vide deed of guarantee dated 30.06.2014.

That the Corporate Debtor in terms of the resolution of its board of directors passed on 13.08.2014, agreed to create mortgage of properties in favour of the Consortium Lenders on Pari Passu second charge basis. Subsequently, in terms of the resolution passed by the Board of Directors of Corporate Debtor on 02.10.2015, Corporate Debtor agreed to create mortgage of the two more properties also in favour of the Consortium Lenders on second Pari Pasu charge basis, the first charge being in favour of the term lenders.

Corporate Debtor signed and executed balance confirmation letter/s dated 31.03.2016, 05.04.2017, 25.04.2017 and 11.04.2018 in favour of Consortium Lenders in acceptance of the correctness of the loan account and the outstanding therein as on 31.03.2016, 31.03.2017, and 31.03.2018.

The Corporate Debtor is indebted to the Applicant, in an aggregate of Rs. 451,16,45,659.18 (Rupees Four Hundred Fifty One Crores Sixteen Lakhs Forty Five Thousand Six Hundred Fifty Nine And Eighteen Paisa Only) as on 31.01.2019 in respect of working capital facilities sanctioned by it to the Corporate Debtor.

The Corporate Debtor defaulted in making payment of interest and other dues to the Applicant/Financial Creditor in terms of the loan documents and due to the repeated defaults and delays on the part of the Corporate Debtor in making the payments that had become due and payable to the Financial Creditor had classified the Corporate Debtor's account as non-performing assets on 11.07.2018.

The Financial Creditor/Applicants sent a legal demand notice dated 31.08.2018 and further on 14.09.2018 calling upon Corporate Debtor to pay the outstanding amount due and payable to the Financial Creditor, but despite receipt of the aforesaid legal demand notice, Corporate Debtor failed to liquidate the outstanding amount.

Hence, the amount claimed by the Financial Creditor as default against Corporate Debtor is Rs.451,16,45,659/- as on 31.01.2019.

The Copy of sanction letter dated of various dated is annexed as annexure P-5 of the application.

Applicant has also annexed the copy of the working capital consortium agreement dated, Inter-se agreement dated 30.06.2014 and undertaking cum Indemnity dated 15.10.2014 where the corporate debtor has acknowledged its liability towards applicant (Copy of letter is annexed as Annexure P6 of the Application)

Further, the corporate debtor has annexed the certificate as per Bankers Book Evidence Act.(True Copy of certificate is annexed as Annexure P27 of the Application).

The institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgement, 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(54 of 2002);

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

The supply of essential goods or services to the corporate debtor as may be specified shall not be terminated or suspended or interrupted during the moratorium period

The provision of sub-section (1) shall not apply to such transaction as may be notified by the Central Government in consultation with any financial sector regulator.