In the National Company Law Tribunal

Division Bench, (Court-I), Kolkata

CP(IB) No. 241/KB/2023

An application under Section 7 of the Insolvency & Bankruptcy Code, 2016

and read with Rule 4 of the Insolvency and Bankruptcy (Application to
Adjudicating Authority) Rules, 2016.

In the Matter of:

Unity Small Finance Bank Limited

....Applicant / Financial Creditor

Vs.
Soham Shipping Private Limited
…. Corporate Debtor / Respondent

Date of Pronouncement of order: 18.12.2024

Coram:

Smt. Bidisha Banerjee : Member (Judicial)

Shri Balraj Joshi : Member (Technical)

Counsel appeared physically / through video Conferencing

Ms. Manju Bhuteria, Adv. ] For the Financial Creditor

Ms. Nimisha Agarwal, Adv. ]

Mr. Shaunak Mitra, Adv. ] For the Corporate Debtor

Mr. Chandrachur Chatterjee, Adv. ]

ORDER

Per Bidisha Banerjee, Member (Judicial):

1. The Court convened through hybrid mode.

2. Ld. Sr. Counsel /Counsels for the parties were heard at length.
 In the National Company Law Tribunal
Division Bench, (Court-I), Kolkata
CP(IB) No. 241/KB/2023

3. This Petition has been preferred by the Petitioner / Unity Small Finance

Bank Limited (The Financial Creditor / FC) seeking initiation of

Corporate Insolvency Resolution Process (“CIRP”) in respect of the

Respondent / Soham Shipping Private Limited (the Corporate Debtor /

CD) under Section 7 of the Insolvency and Bankruptcy Code, 2016 (the

Code”) regarding an outstanding debt of INR 6,65,98,454.78/-(Rupees

Six Crore Sixty-five Lakhs Ninety-eight Thousand Four Hundred Fifty-

four and Paisa Seventy-eight only).

4. Ld. Counsel appearing for the Financial Creditor would contend as under:

4.1. The Corporate Debtor approached the bank for term loan facility

which was sanctioned vide letter dated 27.02.2018 for a sum of Rs. 8

Crores and an amended sanction Letter dated 20.03.2018 was issued.

4.2. The Financial Creditor had disbursed the following payments

which were detailed below:

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4.3. The Corporate Debtor to secure due repayment of the said

amount, the Corporate Debtor executed a facility agreement dated

21.03.2018 along with following documents:

4.3.1. Two (2) Letters of Hypothecation dated 21.03.2018.

4.3.2. Deed of Promissory Notes for Rs. 8,00,00,000/- dated

21.03.2018.

4.3.3. Deed of Personal Guarantee dated 21.03.2018 of Rs. 8 Crores

executed by Mr. Subrata Hazra and Soham Hazra in favour of the

Applicant.

4.3.4. Deed of Mortgage dated 23.03.2018.

4.3.5. General Power of Attorney dated 24.03.2018.

4.3.6. Escrow Agreement dated 07.05.2018.

4.4. In furtherance of the disbursement of the term Loan Facility,

the original Lender issued a Restructured Sanction letter dated

30.06.2021 for an amount of Rs. 7,06,07,859/- (Rupees Seven Crores

Six Lakhs Seven Thousand Eight Hundred and Fifty-nine only) in

place of Rs. 8,00,00,000/- (Rupees Eight Crores only).

4.5. The Corporate Debtor having failed to repay the loan was

declared NPA as per RBI Guidelines dated 29.08.2022 and follow up

issuance of Notice under Section 13(2) of SARFAESI Act was issued.

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The details of NPA and outstanding amounts are depicted by way of a

chart which is as under:

Account No. Data of NPA

MUM201000030 29/08/2022

Outstanding Details

Principle Outstanding Rs.5,95,41,484.00

Overdue Interest Amount Rs. 64,46,715.78

Others (Additional Interest / Rs. 6,10,364.00

Bounce Charges / Penal

Charges

Total Outstanding as on Rs. 6,65,98,545.78

30.09.2023

4.6. The Ld. Counsel therefore would submit that the Corporate

Debtor to the Financial Creditor is liable to repay a sum of Rs.

6,65,98,545.78 (Rupees Six Crore Sixty-five Lakhs Ninety-eight

Thousand Five Hundred Forty-five and Seventy-eight Paisa only)

together with further interest @ 13% per annum till payment and / or

realisation of cost / expenses incurred or to be incurred for

preservation and enforcement of the security and realisation of the

amounts due from the defendants. Financial Creditor is thus entitled

and has preferred this application under Section 7 of IBC, 2016.

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4.7. In support of the contentions, the following documents have

been placed on record:

4.7.1. Sanction Letter dated 27.02.2018 and the same is marked with

the Petition as Annexure -B.

4.7.2. Amended Sanction Letter dated 23.03.2018 and the same is

marked with the Petition as Annexure -C.

4.7.3. Facility Agreement dated 21.03.2018 and the same is marked

with the Petition as Annexure -D.

4.7.4. Letter of Continuity for Demand Promissory Note and the same

is marked with the Petition as Annexure -E.

4.7.5. Restructured Sanction Letter dated 30.06.2021 and the same is

marked with the Petition as Annexure -L.

4.7.6. Demand Notice dated 01.09.2022 and the same is marked with

the Petition as Annexure -M.

4.8. The Date of Default has been marked to be 29.08.2022 and the

amount marked to in Default for a sum of Rs. 6,65,98,545.78.

5. Per contra Ld. Counsel Mr. Shaunak Mitra appearing for the Corporate

Debtor would submit as under:

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Division Bench, (Court-I), Kolkata
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5.1. That the Petition is not maintainable as the person who has

signed application on behalf of the Financial Creditor, has not been

authorized by a proper Board Resolution to initiate any action on the

part of the Financial Creditor or to appoint any Professional in the

matter.

5.2. The Financial Creditor has failed to show that it had necessary

approval or Board Resolution before disbursement of the alleged loan.

5.3. The Loan does not fall within the definition of the financial debt

under IBC, 2016. Payment of TDS cannot be taken as a proof of any

financial debt in absence of any document evincing the disbursement

of the alleged Loan by the financial creditor.

5.4. The Financial Creditor has failed to make out a case of default

and in absence of Default, no application under Section 7 can be

admitted.

5.5. The financial creditor did not recall the said loan or terminated

the said facility agreement.

5.6. After declaring the Loan account as NPA, the Financial Creditor

by a sanction Letter dated 30.06.2021, restructured the said Loan,

the account of the corporate debtor had not been declared NPA by the

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financial creditor, as such there does not exist any debt and the

Corporate Debtor has not committed any default.

5.7. The Financial Creditor having preferred an application under

Section 19 of the Securitisation and Reconstruction of Financial

Assets and Enforcement of Security Interest Act, 2002 (for short

"SARFAESI Act, 2002") before the Debt Recovery Tribunal (for short

"DRT"), and cannot resort to a double recovery from the Corporate

Debtor.

5.8. It is not the object of IBC to penalise solvent companies.

5.9. The Form No. 1 is incomplete. Hence, the Petition should be

dismissed.

6. In rebuttal, Ld. Counsel Ms. Manju Bhuteria appearing for the Financial

Creditor would submit as under:

6.1. That the Board Resolution authorising the person who has

signed the Petition on behalf of the Financial Creditor is available. Ms.

Bhuteria would refute the statement made by the Ld. Counsel

appearing for the Corporate Debtor.

6.2. Annexure -A of the Petition discloses that Mr. Vijay Kumar,

Senior Vice President of Financial Creditor has duly authorized Mr.

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Birendra Kumar Samanta, Vice President to act and appear on behalf

of the Financial Creditor before this Adjudicating Authority.

6.3. The statements of accounts have been duly annexed to the

application which confirms the “debt” and “default”.

6.4. The Demand Notice dated 01.09.2022 has been annexed as

Annexure M which is self-explanatory and therefore, the allegation

that no demand notice was served is baseless.

6.5. The claim that sanction letter dated 20.06.2021 was issued to

restructure the loan therefore, debt does not exist anymore is denied.

Thereafter, the Corporate Debtor was declared as NPA again on

29.08.2022 and simultaneously on 01.09.2022. The Demand Notice

was issued, therefore, the claim made by the Corporate Debtor is not

true.

6.6. It is vehemently denied that there is no documentary evidence

to substantiate the claim of the Financial Creditor or that the

Financial Creditor has failed to make out a case for initiation of CIR

Process of the Corporate Debtor.

7. Analysis and findings:

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7.1. It is evident that the Centrum Finance Services Limited had

entered into a Business Transfer Agreement with Unity Small Finance

Bank, the present Financial Creditor or the new lender on 26th

October, 2021 pursuant to which the Financial Creditor had acquired

entire business of Centrum Financial Services Limited by way of

slump sale in accordance with the terms and conditions contained in

the Business Transfer Agreement.

7.2. Such Transfer with the knowledge of Corporate Debtor as would

be evident from the signatures appearing at page 7 of the rejoinder.

Signatures appearing at the letter dated 01.12.2021 as contained in

Annexure – B at page 7 of the rejoinder.

7.3. It is also evident that on 15.03.2024, the Ld. Counsel appearing

for the Corporate Debtor submitted that the Corporate Debtor intends

to settle this matter with the Financial Creditor. The order records as

under:

“1. Ld. Counsel for the parties present.

2. Reply Affidavit has been filed. Ld. Counsel for the Corporate

Debtor states that the Corporate Debtor intends to settle this

matter with the Financial Creditor.

3. In view of the statement, post this matter for reporting

settlement on 11.05.2024. It is made clear if the matter is not

settled, this petition will be heard on its merits.”

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7.4. Therefore, there is no gainsaying that “Debt” and “Default” is

admitted by the Corporate Debtor.

7.5. On the question whether debt gets extinguished upon

restructuring of the Loan, we would note that by a sanction letter

dated 30.06.2021, Financial Creditor restructured the loan account

of the Corporate Debtor. The Corporate Debtor’s account was again

declared as NPA on 29.08.2022. The Demand Notice was sent on

01.09.2022.

7.6. Whether proceedings under IBC and SARFAESI amounts to

double recovery from the Corporate Debtor. It is noted that both

proceedings under IBC as well as SARFAESI a parallel proceedings

while IBC addresses broader Insolvency situation with different

threshold amount and SARFAESI focuses on asset recovery. The

choice between SARFAESI Act and IBC depends upon a nature of

debt as per specific circumstances of the case. For example for

secured asset / backed recoveries; SARFAESI offers speedy and fast

recovery through assets liquidation whereas for more complex cases

involving corporate restructuring unsecured creditors, IBC provides a

more holistic and inclusive approach and is a better choices.

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7.7. Section 238 of the IBC has a non-obstante provision which

takes precedence over any other law or instrument that conflicts with

it. Hence, it is wrong to say or suggest that proceedings under IBC as

well as under SARFAESI Act are not maintainable.

7.8. Moreover, upon admission of Section 7 application interim

moratorium kicks in.

8. We have considered the rival contentions of and perused the records.

9. Whether the Petition has been preferred by an authorised person of

Financial Creditor:

9.1. We also perused the Power of Attorney granted on 14.06.2022

by the Unity Small Finance Bank Limited to Mr. Vijay Kumar in the

capacity as Senior Vice President to act to appear and represent the

subject bank before this Adjudicating Authority or any other Tribunal

or any Appellate Authority.

9.2. It is duly supported by a resolution passed at the meeting of

Board of Directors of Unity Small Finance Bank Limited holding of

19.05.2022. Therefore, there is no gain saying that Sr. Vice President

Mr. Vijay Kumar is not authorised to act on behalf of the Financial

Creditor.

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9.3. In the present case, “disbursement” of sum as loan which is

essentially against “consideration for time value of money” is

adequately met. Thus “debt” that is due to “Financial Creditor” and

“default” by the Corporate Debtor is satisfied.

10. In view of the above, we hold that the “debt” and “default” on the part

of the Corporate Debtor stands admitted, the Petition is maintainable, it

is not hit by limitation, threshold is met and accordingly, the Petition

deserves to be admitted.

11. Further, we are fortified in our views by the following decisions of the

Hon’ble Apex Court which succinctly clarifies what a “Financial Debt”

would be that would justify initiation of Corporate Insolvency Resolution

process:

11.1. In Pioneer Urban Land and Infrastructure Ltd. v. Union of

India reported in (2019) 8 SCC 416, it was held that:

“any debt to be treated as financial debt, there must happen

disbursal of money to the borrower for utilization by the borrower

and that the disbursal must be against consideration for time

value of money.”

(Emphasis added)

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11.2. Anuj Jain, Interim Resolution Professional for Jaypee

Infratech Ltd. v. Axis Bank Limited reported in (2020) 8 SCC 401,

that:

“the essential condition of financial debt is disbursement against

the consideration for time value of money.”

(Emphasis added)

11.3. Indus Biotech Private Limited v. Kotak India Venture

(Offshore) Fund reported in (2021) 6 SCC 436:

MANU/SC/0231/2021 (para 14) that:

“14. … in order to trigger an application, there should be in

existence four factors: (i) there should be a 'debt' (ii) 'default'

should have occurred (iii) debt should be due to 'financial creditor'

and (iv) such default which has occurred should be by a

'corporate debtor…”

(Emphasis added)

12. In terms of the foregoing discussions, we ALLOW the application

bearing Company Petition (IB) No. 241/KB/2023 filed under Section 7

of the I&B Code, and accordingly, we order the initiation of Corporate

Insolvency Resolution Process (CIR Process) in respect of the Corporate

Debtor and pass the following Orders:

(a) This application being C.P.(IB)/241(KB)2023 filed by Unity

Small Finance Bank Limited, the Financial Creditor, under

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section 7 of the Code read with rule 4(1) of the Insolvency &

Bankruptcy (Application to Adjudicating Authority) Rules, 2016

for initiating CIRP against Soham Shipping Private Limited,

the Corporate Debtor, is admitted. ``

(b) There shall be a moratorium and the moratorium shall have

effect under Section 14 of the IBC from the date of this order till

the completion of the CIRP or until this Adjudicating Authority

approves the resolution plan under sub-section (1) of section 31

of the IBC or passes an order for liquidation of Corporate Debtor

under section 33 of the IBC.

(c) Public announcement of the CIRP shall be made immediately as

specified under Section 13 of the Code read with regulation 6 of

the Insolvency & Bankruptcy Board of India (Insolvency

Resolution Process for Corporate Persons) Regulations, 2016.

(d) Mr. Sanjay Kumar Poddar, having registration number

IBBI/IPA-001/IP-P018025/2019-2020/12759 is hereby

appointed as Interim Resolution Professional (IRP) of the

Corporate Debtor to carry out the functions as per the Code

subject to submission of a valid Authorisation of Assignment in

terms of regulation 7A of the Insolvency and Bankruptcy Board

of India (Insolvency Professional) Regulations, 2016. The fee

payable to IRP or the RP shall be compliant with such

Regulations, Circulars and Directions as may be issued by the

Insolvency & Bankruptcy Board of India (IBBI). The IRP shall

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carry out his functions as contemplated by sections 15, 17, 18,

19, 20 and 21 of the Code.

(e) During the CIRP period, the management of the Corporate

Debtor shall vest in the IRP or the RP in terms of section 17 of

the IBC. The officers and managers of the Corporate Debtor

shall provide all documents in their possession and furnish

every information in their knowledge to the IRP within one week

from the date of receipt of this Order, in default of which

coercive steps will follow. No separate notice for cooperation by

the suspended management should be expected.

(f) The IRP/RP shall submit to this Adjudicating Authority

periodical report about the progress of the CIRP in respect of the

Corporate Debtor.

(g) The Financial Creditor shall deposit a sum of Rs. 3,00,000/-

(Rupees Three Lakh only) with the IRP to meet the expenses

arising out of issuing public notice and inviting claims. These

expenses are subject to approval by the Committee of Creditors

(CoC).

(h) In terms of section 7(5)(a) of the Code, Court Officer of this

Court is hereby directed to communicate this Order to the

Financial Creditor, the Corporate Debtor and the IRP by Speed

Post and email immediately, and in any case, not later than two

days from the date of this Order.

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(i) Additionally, the Financial Creditor shall serve a copy of this

Order on the IRP and on the Registrar of Companies, West

Bengal, Kolkata by all available means for updating the Master

Data of the Corporate Debtor. The said Registrar of Companies

shall send a compliance report in this regard to the Registry of

this Court within seven days from the date of receipt of a copy of

this Order.

13. C.P.(IB)/241(KB)2023 to come up on 17.01.2025 for filing the

progress report.

14. The Registry is directed to send e-mail copies of the Order forthwith to

all the parties and their Ld. Counsel for information and for taking

necessary steps.

15. Urgent certified copies of this Order, if applied for with the Registry of

this Adjudicating Authority, be supplied to the parties upon compliance

with all requisite formalities.

Balraj Joshi Bidisha Banerjee,

Member (Technical) Member (Judicial)

Signed on this, the 18th day of December, 2024

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M. Jana (P.S.)

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