ALLAHABAD BANK Vs. SAI INFOSYSTEM (INDIA) LTD

JUDGEMENT

(1.) Allahabad Bank, through Shri Laxmichand Batra, Assistant General Manager filed this Application under Section 7 of the Insolvency and Bankruptcy Code, 2016 ["IB Code" for short] read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, ("IB Rules" for short) against M/s. Sai Infosystem (India) Limited, with a request to initiate Corporate Insolvency Resolution Process treating it as 'Corporate Debtor'. 1.1. The Chief Manager of the Applicant Bank has by letter - dated 25.8.2017 authorised the Assistant General Manager, SP Nagar Branch to refer the case to NCLT under IBC on immediate basis.

(2.) Respondent Corporate Debtor is a Public Limited Company having its Registered Office at Ahmedabad. The Authorised Capital of the Respondent Company is Rs. 32,00,00,000/-. The Paid-up Share Capital of the Respondent Company is Rs. 9,42,93,580/-. The main object and other objects for which the Respondent Company was incorporated are as set out in the Memorandum and Articles of Association filed with the Registrar of Companies, Gujarat.

(3.) It is the case of the Applicant that the Respondent was sanctioned a Fresh Term Loan of Rs. 50.00 Crores (out of Total TL requirement of Rs. 160.00 Crores) vide sanction letter dated 18/19.4.2011 to part finance the Internet Data Centre (IDC) project in association with BSNL for four locations, namely, Bangalore, Hyderabad, Ranchi and Ernakulam at a total project cost of Rs. 240.00 under the consortium lead by State Bank of India. The Applicant Bank also issued a Sanction Letter dated 18.9.2012 in favour of the Respondent at Annexure A/8 with terms and conditions. The Applicant also issued a Sanction Letter dated 20.4.2013 vide Annexure A/10 to the Respondent with terms and conditions. The Respondent executed various documents in favour of the Applicant Bank. The Applicant granted fund-based facilities and non-fund based facilities as per Annexure A5 (collectively) which were accepted by the Respondent vide its letter dated 20.5.2011. The Respondent Company had executed a Demand Promissory Note I dated 24.5.2011 for Rs. 60.00 Crores and General Letter of Hypothecation dated 24.5.2011 for Rs. 60 Crores in favour of the Applicant Bank. Thereafter the Respondent approached the Applicant Bank in the year 2012 and proposed to review the account and requested for renewal of the Credit Facilities, i.e. Cash Credit at Rs. 25 Crores and Term Loan at Rs. 31.76 Crore on the existing terms and conditions. The Applicant renewed the same and executed r t various security documents. The Respondent again approached the Applicant in the year 2013 and review and renewal of the credit facilities, i.e. Cash Credit limit at existing level at Rs. 25 Crores and Term Loan outstanding of Rs. 26.89 crores under the consortium lead by State Bank of India, sanction of Cash Credit (ad-hoc limit) of Rs. 2.50 Crores (10% of existing Cash Credit Limit) for a period of 90 days @ BR plus 3.50% p.a. for meeting the working capital gap of the i - Company under the Consortium led by the State Bank of India; Sanction of fresh One Time Performance Bank Guarantee Limit of Rs. 69.89 Crores for a period of 6 years for executing the order issued by the Home Department, Govt, of Maharashtra for execution of certain projects. The Respondent Company had accepted all the terms and conditions of the sanction letter No. AB/SPN/ADV/SIS/2013-14/081 dated 20.4.2013.