INDIAN BANK LTD Vs. VARUN RESOURCES LTD

JUDGEMENT

(1.) Indian Bank filed this Company Petition u/s. 7 of The Insolvency and Bankruptcy Code, 2016 against a Corporate Debtor viz. Varun Resources Ltd. on the ground that this Corporate Debtor failed to repay Rs. 31,28,56,661/- along with interest at the rate of 13% per annum and a monthly rest till the payment of the dues, claiming default date as 1.5.2014. In view thereof, this financial creditor filed this Financial Creditor application seeking initiation of Corporate Insolvency Resolution Process against the Corporate Debtor company.

(2.) This applicant submits that Varun Shipping Company Ltd. (herein after called Varun Shipping) was primarily engaged in shipping business, in pursuance thereof, this company availed term loan of Rs. 50 crores, vide sanction letter dated 30.6.2010 from the applicant Bank by agreeing that Varun Shipping would repay the loan in 16 quarterly instalments of Rs. 3,12,50,000/- commencing after a moratorium period of 12 months. Apart from the document executed for sanctioning of this loan, Varun Shipping had also executed a statutory mortgage of their vessel "Maharishi Mahatreya" creating a second charge on the said vessel in favour of the applicant bank. And then Varun Shipping acknowledged its indebtedness as on 26.6.2013 to be of Rs. 28,99,63,706/- towards the term loan of Rs. 50 croreS/now it has become Rs. 31,28,56,661/-. Soon after Scheme of Arrangement of Amalgamation was approved by Hon'ble Bombay High Court vide order dated 19.3.2015, Varun Resources Ltd. i.e., debtor company took over the shipping business of Varun Shipping as a resultant company and the former became the demerged company of such amalgamation with effect from the date of appointment, by which, all the assets and liabilities of Varun Shipping Company Ltd., including this liability, stood transferred to the Debtor Company. Since the company started defaulting making repayment, this account was classified in the Books of the Financial Creditor as NPA on 1.5.2014.

(3.) The applicant company further submits this Debtor Company, as per the data available on the MCA Website, has availed huge facilities from various other lender banks with an exposure of Rs. 3866,74,90,000/-. When this debtor company failed to make repayments, a joint lenders' forum was formed under the leadership of SBI with 12 banks as members, in the said consortium, when the lead Bank SBI while restructuring loans announced that the Applicant Bank had to follow them by infusion of another Rs. 6 crores into the Debtor Company, but this applicant Bank, not being agreeable to this proposal for further funding, since RBI had given an option to the member bank to exit provided a new lender or any of the exiting lenders took over the Applicant Bank's component, to safeguard the interest of it, the Bank tried to exit by transferring this loan to any of the consortium, when that effort also failed to work, this Applicant has filed a suit of recovery before Debt Recovery Tribunal Mumbai under RRDBFI Act, 1993.