The phrase ‘debt has become due and payable’ means that the debt is payable at the present

moment.1 “Due” means payable unless interdicted by some law or has not yet become due in
the sense that it is payable at some future date.2
The only limited scope of argument before the NCLT by a corporate debtor is that the debt is
not due for any reason,3 the present application cannot be rejected.
Respondent
Moratorium means a legal authorization to a debtor to postpone payment for a certain time.4
Black’s Law Dictionary defines Waiver as “the voluntary relinquishment or abandonment
(express or implied) of a legal right or advantage.”5
Waiver is an agreement to release or not to assert a right.” 6 Where the waiver is not express it
may be implied from conduct which is inconsistent with the continuance of the right.7

2nd issue
Innoventive Industries Ltd. v. ICICI Bank and Ors.8 has held that:-
“The Tribunal has noticed that there is a failure on the part of Appellant to pay debts. The
Financial Creditor has attached different records in support of default of payment. Apart from
that it is not supposed to go beyond the question to see whether there is a failure on fulfilment
of obligation by the financial creditor under one or other agreement, including the Master
Restructuring Agreement. In that view of the matter, the Appellant cannot derive any
advantage of the Master Restructuring Agreement”9
In a recent judgment by the NCLT, Ahmedabad bench, the Tribunal while deciding the case
of ESSAR Steel Ltd. held that:-
“But the fact remains that except showing a little progress in the last financial year, there
appears to be no scope for the ESSAR to repay its debts till 25 years or in a span of 25 years.
1
  Krishna Kilaru and Another v. Maytas Properties Limited Rep., by its Managing Director, Hyderabad, C.P.
No.172 of 2010
2
Innoventive Industires Ltd. v. ICICI Bank and Ors., AIR 2017 SC 4084.
3
INNOVENTIVE INDUSTRIES, Supra, Note 8; ICICI Bank v. Eastern Gases Ltd., CP (IB) No.482/KB/2017.
4
S. Satyanarayana And Ors. v. Margadarsi Chit Funds Limited, 2006 (1) ALD 49.
5
Black's Law Dictionary, 10th  Edition.
6
Madamsetty Satyanarayana v. G. Yellogi Rao, 1965 SCR (2) 221.
7
M. Ramnarain Private Ltd. And Anr vs State Trading Corporation Of India, 1983 SCR (3).
8
INNOVENTIVE INDUSTRIES, Supra, Note 8.
9
Ibid.; Bank of Baroda v. Rotomac Global Pvt. Ltd. and Ors., CP Nos. (IB)70/ALD/2017; State Bank of India v.
Essar Steel Ltd., C.P (I.B) No. 40/7/NCLT/AHM/2017
Therefore the DRS which is going on for the last 2 years, may not be a factor not to enter into
IRP Therefore on the ground that when DRP is going on there is no need to commence the
IRP under the IBC does not hold field.”10
RESPONDENT
It is submitted that the RBI has issued guidelines for ‘Debt Restructuring’ under JLF vide its
circular ‘Guidelines on Joint Lenders Forum (JLF) and Corrective Action Plan (CAP)’ dated
February 26, 201411 for laying down clear principles which will govern Debt Restructuring
under JLF with a purpose to revitalize stressed assets.
It is submitted that, under the RBI guidelines, in a DRS under JLF:-
“3.2 The decisions agreed upon by a minimum of 75% of creditors by value and 60% of
creditors by number in the JLF would be considered as the basis for proceeding with the
restructuring of the account, and will be binding on all lenders under the terms of the ICA.”12

3rd issue
NCLT, Chandigarh in the Punjab National Bank and Ors. case has held that:-

“There is no indication in any provision of the Code or the Rules framed thereunder that

mere pendency of the suit or any litigation by or against the corporate debtor has any

bearing upon the proceeding of the application under the Code.”13

Unigreen global Pvt. Ltd. v. Punjab National Bank14 expressly held that:-
“If any action has been taken by a 'Financial Creditor' under Section 13(4) of the SARFAESI
Act, 2002 against the Corporate Debtor or a suit is pending against Corporate Debtor under
Section 19 of DRT Act, 1993 before a Debt Recovery Tribunal or appeal pending before the
Debt Recovery Appellate Tribunal cannot be a ground to reject an application under Section
10, if the application is complete.”.15

10
State Bank of India v. Essar Steel Ltd., C.P (I.B) No. 40/7/NCLT/AHM/2017; Edelweiss Asset
Reconstruction Co. Ltd. v. Murli Industries Limited, C.P. No. 66/I&BP/NCLT/MAH/2017.
11
Framework for Revitalising Distressed Assets in the Economy – Guidelines on Joint Lenders’ Forum (JLF)
and Corrective Action Plan (CAP) DBOD.BP.BC.No.97/21.04.132/2013-14.
12
(CAP) DBOD.BP.BC.No.97/21.04.132/2013-14.
13
Punjab National Bank v. M/S James Hotels Ltd., 2017 (4) TMI 1267
14
Unigreen global Pvt. Ltd. v. Punjab National Bank, CP/No/39/PB/2017/IBBI.
15
Edelweiss Reconstruction Company Ltd. v. Jalan Intercontinental Hotel Ltd. , C.P. No. IB 397/ KB/ 2017.
Brilliant Alloy Pvt. Ltd. case16
“If this argument is to be admitted, then a peculiar situation will be permitted where an
Adjudicating Authority exclusively created by the legislature to decide Insolvency matters
filed by the Financial Creditor would have to await decisions of other Courts/Tribunals thus
frustrating the very intent of the parliamentary intention of quick resolution of Insolvency
matters.”
The Code has been enacted to bring the Law of Insolvency under a single Umbrella 17, and
hence a non-obstante clause has been inserted in the Code. s. 238 of the Code provides a non-
obstante clause and reads:-‘The provisions of this Code shall have effect, notwithstanding
anything inconsistent therewith contained in any other law for the time being in force or any
instrument having effect by virtue of any such law.’ which in implication means that action
taken under SARFAESI Act or the RDDBFI Act cannot stand in the way of Corporate
Insolvency Resolution Process (“CIRP”) under the Code18 as it has an overriding effect.
RESPONDENT
Annapurna Infrastructure Private Ltd. and Ors. v. Soril Infra Resources Ltd.19 where
the Tribunal held that:-
“We are further of the view that already proceedings for the execution of the award have
been initiated. An effective remedy has been availed by the applicant. We have not been able
to accept that a party can invoke more than one remedy available. It is in fact against the
fundamental principles of judicial administration to allow a party to avail more than one
remedy. Ordinarily only one remedy at one time could be availed as is evident from the
fundamental principles laid down in Section 10 CPC. It would promote forum shopping
which is wholly impermissible in law. Therefore when an issue is already pending
adjudication between the same parties, in a Court having jurisdiction to adjudicate upon the
same, a subsequently instituted suit on the same issue between the same parties, cannot be
allowed to proceed.”
A petitioner cannot seek to avail multiple remedies in respect of the same cause of action and
thus cannot venture into forum shopping.20 It is not enough that one is eligible to file a

16
Brilliant Alloy Pvt. Ltd. CP/582/(IB)/CB/2017.
17
Banking Law Reforms Committee Report.
18
Supra, Innoventive.; Unigreen global Pvt. Ltd. v. Punjab National Bank CP No. 39-PB-2017 – IBBI.; ICICI
Bank Ltd. v. ABG Shipyard Ltd. C.P. (I.B.) No. 53/7/NCLT/AHM/2017
19
 Annapurna Infrastructure Private Ltd. and Ors. v. Soril Infra Resources Ltd, (2017) 4 CompLJ 385.
20
M/s Deem Rolltech Ltd. v. M/s R.L Steel & Energy Ltd., Company Application No. (I.B.) 24/PB/2017.
petition under IBC, 2016, but the other fundamental principles like approaching a judicial
forum with clean hands; not to resort to forum shopping; multiple litigation, not to
misuse/abuse judicial process etc are very well settled judicial principles which are required
to be fulfilled to maintain a petition, under the provisions of IBC 2016 too.21
Innoventive Industries Ltd. v. Kumar Motors Pvt. Ltd.22 held that:-
“If any party comes before NCLT under Insolvency and Bankruptcy Code, 2016 on the very
same claim between the same parties already pending before the Hon’ble High Court, it will
become nothing but forum shopping devised to frustrate the proceeding validly pending
before other competent forum.”

ISSUE 4
The words “directly and substantially in issue” are used in contra-distinction to the words
“incidentally or collaterally in issue.” Section 10 would apply only if there is identity of the
matter in issue in both the suits, meaning thereby, that the whole of subject-matter in both the
proceedings is identical.23
It is reverentially submitted that the doctrine of res sub judice meaning thereby is widely to
prevent two parallel trials on the same issue by two Courts and to avoid recording of
conflicting finding on issues which are directly and substantially in issue in previously
instituted suits.24 This principle has been incorporated under Section 10 of CPC. 25 The key
words in section 10 are “the matter in issue is directly and substantially in issue” in the
previous instituted suit.26

ISSUE 5
RBI Master Circular on Prudential norms on Income Recognition, Asset Classification and
Provisioning pertaining to Advances27 provides that-
21
Ameya Laboratories Limited v. Kotak Mahindra Bank Limited and Ors., CP(IB)/50/10/HDB/2017.
22
Innoventive Industries Ltd. v. Kumar Motors Pvt. Ltd, C.P. NO.1201./ I&BP/NCLT IllMB.
23
National Institute of M.H. & N.S. v. C. Parameshwara, AIR 2005 SC 242.
24
National Institute of Mental Health and Neuro Sciences v. C. Parameshwara, AIR 2005 SC 242.
25
Section 10, Code of Civil Procedure, 1908.
26
Rukmini Amma & Ors. v. Rajeswary (Dead) Through Lrs. & Ors, [2013] 5 S.C.R. 579; P.V. Shetty
v. B.S. Giridhar, AIR 1982 SC 83.
27
RBI/2015-16/101 DBR.No.BP.BC.2/21.04.048/2015-16.
“….2.1.2 A non performing asset (NPA) is a loan or an advance where;
i. interest and/ or installment of principal remain overdue for a period of more than 90 days
in respect of a term loan.”
The Master JLF agreement of the IBA28 provides that “...5.10…, if any SMA still turns into a
Non Performing Asset with any of the lender banks; all the other lender banks…..shall also
not sanction any facility/advance to the borrower except with the resolution of the JLF.”
“Banks may consider providing need based additional finance to the borrower, if considered
necessary. Further, additional financing is not provided with a view to ever-greening the
account.”29
State Bank of India and Ors. v. Kingfisher Airlines Limited and Ors. 30 wherein it was
observed-
“Lenders Liability cannot mean only lending, but will purely correspond proportionately
with the conduct of the borrower in discharging his own liability.”
RESPONDENT
looking into the viability of the project and the restructuring package is an important aspect
of Debt Restructuring which assists the bank in arriving at a plan conducive to maximization
of returns.31
‘Report of Working Group on Civil Aviation for formulation of Twelfth Year Plan (2012-17)’
which observed that-
“Three airline groups account for a large proportion of this debt and they need to raise
capital to boost equity and liquidity. Huge losses are being reported by Scheduled
Carriers…… The Indian air transportation industry is thus laden with very high costs ………
Aviation sector in India face many taxes on the inputs to production – fuel, aircraft leases,
airport charges, air passenger tickets, air navigation ……”

ISSUE 6
“21A. Rate of interest charged by banking companies not to be subject to scrutiny by
courts--Notwithstanding anything contained in the Usurious Loans Act, 1918 (10 of 1918),
or any other law relating to indebtedness in force in any State, a transaction between a

28
Indian Banks’Association Corporate & International Banking No. C&I/CIR/2013-14/9307.
29
RBI/2013-14/503 DBOD.BP.BC.No. 97/21.040132/2013-14.
30
State Bank of India and Ors. v. Kingfisher Airlines Limited and Ors. O.A 766/2013.
31
M/s. T.A. Infra Projects Ltd., rep by Its Chairman v.. Infrastructure Corporation of Andra Pradesh Ltd.;AIR
2014 AP 38; Raheja Universal Limited Vs. NRC Limited and Ors. ;AIR 2012 SC 1440.
banking company and its debtor shall not be reopened by any court on the ground that the
rate of interest charged by the banking company in respect of such transaction is excessive.”
RBI Master Circular on Interest Rates and Advances 32, interest rates have been deregulated
and banks have the discretion to determine their interest rate policy. It is therefore submitted
that the calculation of the interest at the agreed interest rate cannot be challenged.
‘The RBI Master Circular on Interest Rates and Advances’33
“…2.6.  Levying of penal rates of interest … to formulate a transparent policy for charging
penal interest with the approval of their Board of Directors…Penal interest can be levied for
reasons such as default in repayment, non-submission of financial statements, etc. However,
the policy on penal interest should be governed by well-accepted principles of transparency,
fairness, incentive to service the debt and due regard to genuine difficulties of customers.”
RESPONDENT
Central Bank of India v. Ravindra34 wherein it was held-
“Penal interest is an extraordinary liability incurred by a debtor on account of his being a
wrong-doer…Thus, while liability to pay interest is founded on the doctrine of compensation,
penal interest is a penalty founded on the doctrine of penal action. Penal interest …and
therefore cannot be permitted to be capitalised.”
‘Interest Rates and Advances’35 provides that-“…2.6.  Levying of penal rates of interest…
banks are permitted (with effect from October 10, 2000), to formulate a transparent policy
for charging penal interest with the approval of their Board of Directors…However, the
policy on penal interest should be governed by well-accepted principles of transparency,
fairness, incentive to service the debt and due regard to genuine difficulties of customers.”
It is a settled law, that where the amount of claims is disputed on the ground that the amount

claimed by the creditor is not genuine, the NCLT cannot go into the merits of the

dispute and should dismiss the insolvency petition.36 Even where the claim is alleged to

be doubtful and questionable in the facts of the case, the petition must be rejected.37

32
RBI/2014-15/65 DBOD. No.Dir.BC 13/13.03.00/2014-15
33
Supra, Note 63.
34
Central Bank of India v. Ravindra, AIR 2001 SC 3095.
35
RBI/2009-10/66; DBOD. No.Dir. BC 10/13.03.00/2009-10.
36
In Re: One Coat Plaster and Ors., [2017] 138 CLA 104 (01.03.2017, NCLT - Principal Bench).
37
M/s. VDS Plastics Pvt. Ltd. v. M/s. Pal Mohan Electronics Pvt. Ltd., CP No. (IB)-37(ND)/2017 (21.04.2017,
NCLT - New Delhi).