The National Company Law Tribunal ("NCLT"), Mumbai Bench, comprising of Justice P.N. Deshmukh (Judicial Member) and Shri Shyam Babu Gautam (Technical Member), while adjudicating a petition filed in Bank of Baroda v Topworth Urja & Metals Limited, has initiated Corporate Insolvency Resolution Process ("CIRP") against Topworth Urja & Metals Ltd. over a default of Rs. 218,14,20,222.95/- and has appointed Mr. Alok Kailash Saksena as the Interim Resolution Professional.
Topworth Urja & Metals Limited ("Corporate Debtor") is a company promoted by Mr. Abhay Lodha and belongs to the Topworth Group of companies, engaged in the iron and steel sector business. From 2015 onwards, the Bank of Baroda ("Financial Creditor") had disbursed term loan and working capital facilities to the Corporate Debtor, which were restructured by executing a Master Restructuring Agreement ("MRA") dated 30.03.2015. The Corporate Debtor failed to meet its payment obligations and had acknowledged a debt of Rs.1,51,96,40,085/- as an "Amount Outstanding as on 31.03.2018" towards the Financial Creditor in its Standalone Financial Statements for the period of 01.04.2017 to 31.03.2018.
On 01.02.2016, the Financial Creditor had issued a recall notice calling upon the Corporate Debtor to pay Rs.174.61 crores, however, the payments were not received. Therefore, in 2018 the Financial Creditor filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 ("IBC") before NCLT, Mumbai Bench, seeking initiation of Corporate Insolvency Resolution Process ("CIRP") against the Corporate Debtor, for a default of Rs.218,14,20,222.95/- as on 30.04.2018.
Contentions Of The Corporate Debtor
The Corporate Debtor argued that the Petition has been filed on the basis of an incorrect date of default and the alleged amount claimed was not due and payable. It was contended that the default in the petition was based on the MRA, which stood revoked on 01.06.2016. Hence, as per the clauses of the MRA, after revocation the rights and liabilities of the parties fell back to the original facility agreements which were already declared NPA by the Financial Creditor.
Decision Of The Adjudicating Authority
The Adjudicating Authority opined that there was nothing on record to show that the MRA was revoked and hence a debt was admittedly due and payable. The Bench admitted the petition, initiated CIRP and appointed Mr. Alok Kailash Saksena as the Interim Resolution Professional.
Case Title: Bank of Baroda v Topworth Urja & Metals Limited, CP (IB) 1807/MB/C-I/2018
Counsel For Financial Creditor: Mr. Anush Mathkar, Counsel.
Counsel For Corporate Debtor: Ms. Eshna Kumar, Counsel.