Allowed

Life Insurance Corporation of India v. Essel Infraprojects Limited

DRT20 Nov 2023OA/40/2022

Case brief

AI extract

What is this about?

DRT allowed the applicant's recovery application against the primary borrower for a defaulted loan of Rs.603 crore., directed payment, asset recovery, and issued a recovery certificate.

What did the court decide?

Defendant directed to pay Rs.603,66,36,364/- with interest within 60 days; asset recovery permitted; recovery certificate issued.

Life Insurance Corporation of India versus Essel… — Contract and Commercial Disputes | DRT (2023)

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OA No.40 of 2022

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Decided on: 20.11.2023

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Registered on: 01.02.2022

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IN THE DEBT RECOVERY TRIBUNAL-I MUMBAI ORIGINAL APPLICATION NO.40 of 2022

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LIFE INSURANCE CORPORATION OF

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INDIA a statutory corporation established under the LIC Act, 1956 (Act XXXI of 1956) and having its Central Office at Yogakshema Building, Jeevan Bima Marg, Mumbai-400021 represented by its authorized signatory Mrs. Amarjeet Kaur Matharu, Assistant Secretary being the authorized officer of the Applicant.

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…APPLICANT

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VERSUS

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1. ESSEL INFRAPROJECTS LIMITED, A Company within the meaning of the Companies Act, 2013 and having its registered office at 513/A, 5^th Floor, Kohinoor City, Kirol Road Kurla (West), Mumbai, Maharashtra-400070

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2. BANK OF MAHARASHTRA, Asset Recovery Branch, Jan Mangal, Mumbai Samachar Marg., Fort, Mumbai400023

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3. STATE BANK OF INDIA, SAM Branch, Ground Floor, Raheja Chambers, B- Wing, Free Press Journal Marg, Nariman Point, Mumbai-400021

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4. INDUSTRIAL FINANCIAL CORPORATION OF INDIA LIMITED, Earnest House, 9^th Floor, NCPA Marg, Nariman Point, Mumbai-400021

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OA No.40 of 2022

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5. YES BANK, 26^th Floor, YES Bank, Tower IFC2, Senapati Bapat Marg, Elphinstone Road (W), Mumbai400013

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6. ICICI BANK, Corporate Banking Group, North Tower, West Ring, 4^th Floor, ICICI Bank Towers, Bandra Kurla Complex, Mumbai-400051

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7. JAMMU AND KASHMIR BANK, Suyog Sadan Building, Mahakali Caves Road, Andheri (E), Mumbai-400093

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8. PUNJAB NATIONAL BANK, Large Corporate Park, Tolstoy House, New Delhi-110001

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9. RBL BANK, One India Bulls Centre, Tower 2B, Level 6, 841, Senapati Bapat Marg, Lower Parel, Mumbai-400013

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…DEFENDANTS

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Counsel for Applicant : Advocate Aafreen Noor i/b Khaitan & Co. Counsel for the Defendant No.1 : Adv. Kushal Sawant Counsel for the Defendant No.5 : Adv. Kushal Boolchandani i/b Induslaw

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Counsel for Defendant No.2-4, 6-9: Ex-parte

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OA No.40 of 2022

J U D G M E N T

The present OA has been filed by the Applicant for recovery of Rs.603,66,36,364/- (Rupees Six Hundred Three Crores Sixty Six Lakhs Thirty Six Thousand Three Hundred Sixty Four only) as on 15.12.2020 from the Defendant No.1, along with further interest, additional interest, default interest, liquidated damages and other applicable charges as per the loan agreement till the date of payment and/or realization.

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Facts as succinctly set out in the OA are that the Defendant No.1 is the borrower company and Defendant No.2 to 9 are the lenders to the Defendant No.1 Company and arrayed as proforma Defendants. The Applicant is not seeking any relief against the Defendant No.2 to 9.

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It is stated that in or around 2014, the Defendant No.1 approached the Applicant for credit facilities for the repayment of existing facilities availed by the Defendant No.1 and investments in its subsidiaries for incurring capital expenditure. Accordingly, the Applicant issued a letter of intent (LOI) dated 17.04.2014 to the Defendant No.1 and conveyed the sanction of rupee term loan for an amount of Rs.550 crores. By letter dated 19.04.2014, the Defendant No.1 accepted all terms and conditions set out in the LOI and requested to proceed with documentation for the loan. Thereafter, the Applicant and Defendant No.1 executed a Loan Agreement dated 30.06.2014 under the terms of which the Applicant interalia granted a rupee term loan aggregating to Rs.550 crores to the Defendant No.1.

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OA No.40 of 2022

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It is further stated that the facility is a tenor of 10 years and as per the Loan Agreement, the said loan was required to be repaid in 7 (seven) equal installments commencing at the end of the fourth year from the date of first disbursement. Further, interest at the rate of 12.25% p.a. payable at monthly rests was chargeable on the facility.

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It is further stated that the due repayment of all outstanding amounts under the facility was secured by (i) first pari passu charge on all the current and moveable assets of the Defendant No.1 pursuant to a Deed of Hypothecation dated 30.06.2014 executed by the Defendant No.1 in favour of the Applicant (ii) first pari passu charge over land located at Survey No.269 (admeasuring 450.39 acres), Gorai Village, adjacent to Essel World, Borivali, Mumbai, pursuant to a deed of mortgage dated 30.06.2014 executed by the Defendant No.1.

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It is also stated that on 08.07.2014, the entire facility amount of Rs.550 crores was disbursed by the Applicant to the Defendant No.1.

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However, the Defendant No.1 failed to adhere the financial discipline and defaulted in making payment in terms of the loan agreement. The Applicant sent various letters and reminders to the Defendant No.1 to make the payment of the defaulted amounts but no response was received from the Defendant No.1 thus, the loan account of the Defendant No.1 was classified as NPA on 30.04.2019. Thereafter, a legal notice dated 07.09.2019 issued by the Applicant through their Advocate and called upon the Defendant No.1 to make the payment of the outstanding dues but the Defendant No.1 failed to pay the dues. Further, recall notice dated 19.10.2020 and notice under Section

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OA No.40 of 2022

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13(2) of the SARFAESI Act, 2002 dated 12.11.2020 were issued by the Applicant to the Defendant No.1 but to no avail. Hence, the present OA has been filed.

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Notices were issued to the Defendants. Despite service, none appeared for the Defendant No.2 to 4 and 6 to 9 thus, they were proceeded ex-parte vide order dated 15.09.2022. Defendant No.5 put its appearance however, no WS has been filed by the Defendant No.5.

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Record reveals that Defendant No.1 also put its appearance through counsel on 04.07.2022 and on 29.07.2022 however, no WS has been filed and thereafter, none appeared for the Defendant No.1 thus, it was proceeded ex-parte vide order dated 15.09.2022. Subsequently, the Defendant No.1 moved applications i.e. IA No.1299/2022 & 1300/2022, for setting aside the ex-parte order and take on record the WS. This Tribunal vide order dated 31.10.2022 set aside the ex-parte order and allowed the Defendant No.1 to advance his submissions orally and Application for take on record the written statement was declined.

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The Applicant has proved all the loaning and security documents and other relevant documents filed alongwith the OA, by their Claim Affidavit filed through Assistant Secretary, Mrs. Amarjeet Kaur.

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I have heard the Ld. Counsel for the Applicant and Defendant No.5. Despite opportunity allowed vide order dated 31.10.2022, the Defendant No.1 did not advance his submission. Perused the record.

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OA No.40 of 2022

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The witness of the Applicant has fully corroborated the averments made in the OA, even otherwise the whole case of the Applicant is based on documents and the witness has duly proved all these documents as against the Defendant No.1. In my view there is no question of disbelieving the evidence led by the Applicant and the Applicant has proved its case beyond reasonable doubt against Defendant No.1.

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In the light of above discussions, the Original Application filed by the Applicants deserves to be allowed against Defendant No.1. No relief is claimed against the Defendant No.2 to 9 in the present OA.

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O R D E R

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(i) The present OA is hereby allowed and Defendant No.1 is hereby directed to pay to the Applicant, within a period of 60 days, a sum of Rs.603,66,36,364/- (Rupees Six Hundred Three Crores Sixty Six Lakhs Thirty Six Thousand Three Hundred Sixty Four only) as on 15.12.2020, along with further interest as per particulars of claim/statement of account (Exb-P of Completion of Documents of the present OA), till payment and/or realization.

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(ii) Failing which the aforesaid amount shall be recovered from the sale of mortgaged property, hypothecated assets as well as other personal moveable and immoveable assets of the Defendant No.1.

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OA No.40 of 2022

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(iii) Defendant No.1 is hereby directed not to deal with their properties till further direction of the Ld. Recovery Officer.

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(iv) Defendant No.1 shall also pay the cost and expenses of the OA.

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(v) Recovery Certificate be issued forthwith and be sent to the Ld. Recovery Officer of this Tribunal.

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Copy of this order be sent to the parties as per rules.

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File be consigned to record.

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Place: Mumbai. (Dr. Rekha G. Dhakar) Dated: 20.11.2023 Presiding Officer, DRT-1, Mumbai

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Life Insurance Corporation of India v. Essel Infraprojects Limited

Case brief

What is this about?

What did the court decide?

Life Insurance Corporation of India v. Essel Infraprojects Limited

Case brief

What is this about?

What did the court decide?

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