NATIONAL COMPANY LAW TRIBUNAL

NEW DELHI BENCH (COURT-II)

Company Petition No. (IB)-545(ND)/2023

IN THE MATTER OF:

Federal Bank Limited
Registered Office:
Federal Tower
LCRD Division, West Patel Nagar,
New Delhi – 110008 ... Petitioner/
Financial Creditors
VERSUS

M/s Feedback Infra Private Limited

Registered Office at:
311, 3rd Floor, Vardhaman Plaza,
Pocekt-7, Plot No.6, Sector-12,
Dwarka, New Delhi-110078 … Respondent/
Corporate Debtor

Order Delivered on: 11.01.2024

Under Section: 7 of IBC, 2016

CORAM:
SH. ASHOK KUMAR BHARDWAJ, HON’BLE MEMBER (J)
SH. L. N. GUPTA, HON’BLE MEMBER (T)

PRESENT:
For the Petitioner : Mr. Brijesh Kumar Tamber and Mr. Prateek
Kushwaha
For the Respondent : Sr. Adv. P Nagesh, Adv. Vipul Wadhwa, Adv.
Kashika Gera and Adv. Akshay Sharma

(IB)-545/(ND)/2023
Federal Bank Limited vs. Feedback Infra Pvt. Ltd.
Page 1 of 18
 ORDER

PER: SH. ASHOK KUMAR BHARDWAJ, MEMBER (J)

As can be gathered from the contents of the application filed on behalf

of the applicant, the applicant (hereinafter referred to as FC) provided various

credit facilities to the Corporate Debtor including term loan and cash credit

facilities. The Corporate Debtor had executed the Corporate Guarantee in

favour of the applicant to facilitate the principal barrower viz., MS feedback

energy distribution Company Ltd. to secure loan from the applicant. As per

Board Resolution/power attorney dated 07.09.2009, issued by the Board of

Director of the FC, all officials of the FC are authorised to file necessary

application/affidavit etc. before this Tribunal, and Hon’ble NCLAT qua the

proceedings under the provisions of IBC 2016.

2. The present application has been preferred by Mr. Vineeth PP, currently

posted as Deputy Vice-I, loan collection & Recovery Department, located at

New Delhi who was duly authorised by the applicant to prefer the same. The

copy of the Board Resolution/power of attorney dated 07.09.2009 is enclosed

as Annexure A-1 to the application.

3. The Corporate Debtor was incorporated on 27.06.1990, in terms of

provisions of Companies Act and registered with Registrar of Company Delhi.

It provided multiple Corporate Guarantees to the Financial Creditor agreeing

to take responsibility for the obligation of the principal barrower (Debtor) viz.

M/S feedback energy distribution Company Ltd. obligation for re-paying the

loan taken by it.

(IB)-545/(ND)/2023
Federal Bank Limited vs. Feedback Infra Pvt. Ltd.
Page 2 of 18
4. The present application is preferred under Section 7 of IBC 2016

(hereinafter referred to IBC) seeking initiation of CIRP qua the Corporate

Debtor i.e., M/s Feeback Infra Private Limited. The CD defaulted in repayment

of the Credit facilities availed by it from the FC. It also defaulted in repaying

the credit facilities availed by M/s. Feeback Energy Distribution Company

Limited, for which it stood as Corporate Guarantor.

5. The Corporate Debtor approached the Financial Creditor to avail

financial assistance in the shape of Term Loan of Rs. 40,00,00,000/-. The FC

sanctioned the loan amount in terms of sanction letter dated 22.08.2019, in

terms of the conditions contained in the letter, which were duly accepted by

the Corporate Debtor. Copy of sanction letter is available on record as

Annexure A-4 to the application. The Corporate Debtor through its Director,

duly authorised in terms of the Resolution passed by it on 20.08.2019

executed the various loan and security documents in favour of the Financial

Creditor to avail the loan facility on 26.08.2019. Copies of Board Resolution

dated 20.08.2019 and Term Loan Agreement, Security Delivery Letter,

Demand Promissory Note, Undertaking, Letter of Set-Off and Letter for

Disbursement, all dated 26.08.2019 are enclosed as Annexures A-5 to A-11

to the application. Copy of agreement for pledge of shares held in

dematerialised form, dated 26.08.2019 is enclosed as Annexure A-12 to

application.

6. To secure the loan and advance availed by the CD, its Directors agreed

to stand and stood as Personal Guarantor and executed Guarantee Agreement

dated 26.08.2019 in favour of the Financial Creditor. A copy of Guarantee

(IB)-545/(ND)/2023
Federal Bank Limited vs. Feedback Infra Pvt. Ltd.
Page 3 of 18
Agreement dated 26.08.2019 is on record as Annexure A-13 to the

application. M/s. Mission Holdings Pvt. Ltd. having its registered office at 311,

3rd Floor, Vardhman Plaza, Pocket No. 7, Plot No. 6, Sector 12, Dwarka, New

Delhi-110078 through its directors authorised in terms of the resolution

passed by it, agreed to stand and stood as Guarantor in favour of the FC for

the loan sanctioned by it to the Corporate Debtor. The Corporate Guarantee

executed and signed by the said Corporate Guarantor on 26.08.2019 is

enclosed as Annexure A-14 to the application.

7. The aforementioned loan amount disbursed by the Financial Creditor

was credited in the term loan account no. 15287100001375 and was utilised

by the CD as for its need and requirement.

8. Yet again, the CD through its director requested the FC to accord

another loan facility i.e. Working Capital/Term Loan for a sum of Rs. 10

Crores and the Financial Creditor considered the demand and sanctioned the

said Working Loan Limit/demand loan for a sum of Rs. 10,00,00,000/-

(Rupees Ten Crores Only) vide sanction letter dated 18.02.2020 on the terms

and condition as stipulated therein which were duly accepted by the

Corporate Debtor. A copy of sanction letter dated 18.02.2020 is placed on

record as Annexure A-15 to the application. Through its Director, duly

authorised in terms of the resolution dated 19.02.2020, the Corporate Debtor

executed various loan and security documents in favour of the Financial

Creditor on 19.02.2020 to avail the aforementioned loan facility. A copy of the

Board Resolution is on record as Annexure A-16 to the application. The copies

of Agreement for Clean Demand Loan, Letter to DPN, Demand Promissory

(IB)-545/(ND)/2023
Federal Bank Limited vs. Feedback Infra Pvt. Ltd.
Page 4 of 18
Note, Undertaking Letter and Letter of Set-Off, all dated 19.02.2020 are on

record as Annexure A-17 to A-21 to the application. The Directors qua the CD

as also M/s. Mission Holding Pvt. Ltd., stood as Personal and Corporate

Guarantor in favour of the Financial Creditor and accepted obligation to repay

the loan sanctioned to the Corporate Debtor. Copies of Guarantee Agreement

dated 19.02.2020 are enclosed as Annexures A-22 and A-23 to the

application.

9. The loan amount (ibid) disbursed by the Financial Creditor was credited

in Demand Loan Account No. 15287100001417 and was utilised by the CD

as per its needs and requirements.

10. Further, again the Corporate Debtor through its Director requested the

FC for another loan facility i.e. Working Capital/Cash Credit Limit for a sum

of Rs. 5 Crores. The FC sanctioned the loan amount vide sanction letter dated

30.04.2020 on the terms of condition as stipulated therein, which were duly

accepted by the Corporate Debtor. Copy of sanction letter is on record as

Annexure A-24 to the application. All the necessary documents required to be

executed for sanction of the loan amount were duly executed and signed on

behalf of the CD. The Directors qua the CD and M/s. Mission Holdings Pvt.

Ltd. stood as Personal and Corporate Guarantors for the loan amount. The

amount disbursed by the Financial Creditor was disbursed in Demand Loan

Account No. 15285300001104 and was utilised by the CD as per its need and

requirement.

(IB)-545/(ND)/2023
Federal Bank Limited vs. Feedback Infra Pvt. Ltd.
Page 5 of 18
11. Even also thereafter, the Financial Creditor sanctioned further loan of

Rs. 11,60,00,000/- to the CD under Emergency Guarantee Credit Line

(GECL)/Term Loan introduced by the Government of India through Ministry

of Finance, on 17.12.2020. All requisite formalities in this regard were

completed by the CD and the required documents were executed.

12. The loan amount was disbursed by the Financial Creditor in

GECL/Term Loan Account No.15286900000140 and was utilised by the CD

as per its needs and requirements. The Corporate Debtor also maintained the

Current Account No. 15280200003664 with the Financial Creditor which got

overdue as the Corporate Debtor could not pay the interest in the Demand

Loan Account, therefore interest had to be debited from the Current Account

of the CD. The development was well within the knowledge of the Corporate

Debtor.

13. M/s. Feedback Energy Distribution Company Limited (Principal

Borrower) availed multiple loan facilities from the Financial Creditor. Several

loan and security documents were executed by the Principal borrower in

favour of the Financial Creditor. The Corporate Debtor executed multiple

Corporate Guarantee in favour of the Financial Creditor. The details of

multiple loans availed by the Principal borrower viz. M/s. Feedback Energy

Distribution Limited are given in para 26 of the written synopsis filed by the

Applicant. The number of total loans sanctioned by FC to the Principal

borrower is eight. The details of disbursement of loan to the CD as given in

para 55 of the written synopsis reads thus: -

(IB)-545/(ND)/2023
Federal Bank Limited vs. Feedback Infra Pvt. Ltd.
Page 6 of 18
14. The Financial Creditor had disbursed the funds to the Principal

borrower on the dates mentioned in 2nd table of para 56of the synopsis which

reads thus: -

15. To secure the loan facility availed from the Financial Creditor, the

Corporate Debtor created security interest of the Financial Creditor qua the

assets mentioned in para 55 of the written synopsis (property schedules A, B

and C). The schedules read thus: -

A. “Property Schedule 'A' :

Hypothecated Machinery etc. stored in or about at borrower's godowns
or premises stored at:

(IB)-545/(ND)/2023
Federal Bank Limited vs. Feedback Infra Pvt. Ltd.
Page 7 of 18
 (i) 15th Floor, Tower 9B, DLF Cyber City, Phase-Ill, Gurugram
122022
(ii) 3rd floor. Gala Impacca, Next to Marrot Courtyard Hotel,
Jitendra Estate, AndheriKurla Road, Andheri East, Mumbai
400059.
(iii) 4th Floor, Haveli Extension above radhe Sweets, sector 11,
Gandhinagar 382011 Gujrat
(iv) First Floor, Langford Avenue No. -14, Langford Garden Lalbagh
Road (Near Richmond Road) Banglore 560025.
(v) 5th Floor, Jss Tower Infocity Area, Plot No.-E-11/1, E-11/2,
Bhubaneswar-751023 Odisha India.

B. Property Schedule 'B' :

First Pari-Pasu Charge over Current & movable fixed assets (both
present & Future) of the Corporate Debtor.

C. Property Schedule 'C :

Pledge of 30% of FEDCO shares owned by the Corporate Debtor.”

16. The Principal borrower, Corporate Debtor and Guarantors, to secure

the loan facilities availed by the Principal borrower from the Financial Creditor

also created security interest on the assets mentioned in para 58 of the

synopsis. The details of the assets reads thus :-

“a. Term Loan: Paripassu first charge on the entire movable fixed
assets of the Principal borrower both present and future

b. Cash credit; Paripassu first charge on the entire current assets of

the Principal borrower both present and future

c. Term Loan: Paripassu first charge on entire current assets of the

Principal borrower, both present and future.

(IB)-545/(ND)/2023
Federal Bank Limited vs. Feedback Infra Pvt. Ltd.
Page 8 of 18
 d. Cash credit: Paripassu first charge on the entire movable fixed
assets of the Principal borrower both present and future.

e. Hypothecate all the stock lying at any premises of the Principal

borrower/anywhere in India, including stock in transit and stock
which accrue in future on paripassu basis;

f. Hypothecate the present and future receivable/book debts of the

Principal borrower and all rights and accruals thereto and if
necessary, to give power of attorney to collect the receivable/book
debts to the bank on paripassu basis;

g. Hypothecate all the present and future movable fixed assets of the
Principal borrower at any premises of the Principal
borrower/anywhere in transit on paripassu basis;

h. Other such assets as may be agreed between the Principal

borrower and the Financial Creditor and to request the Corporate
Debtor to provide corporate guarantee for the facility of Rs.46 Crore.

i. Paripassu charge on entire current assets of the Principal borrower

both present and future with margin of 25%.

j. Paripassu second charge on the entire movable fixed assets of the

Principal borrower both present and future.

k. OD: Paripassu first charge on the current assets relating to the work
contracts awarded by Odisha Small Industries Corporation
Limited.

l. BG: 10% cash margin and extension of charges on the current assets
related to the EPC contracts awarded by Odisha Small Industries
Corporation Limited.

m. OD: Paripassu second charge on the entire movable fixed assets of

the Principal borrower both present and future, with RBL bank Ltd.”

(IB)-545/(ND)/2023
Federal Bank Limited vs. Feedback Infra Pvt. Ltd.
Page 9 of 18
17. Besides the above, to secure the loan facilities availed by the Principal

borrower, following Bank Guarantee Agreements were executed: -

• “Personal Guarantees of Directors of the Corporate Debtor being

Mr.VinayakChaterjee, Mr.Rayaprolu Sambamoorthi
Ramasubramaniam and Mrs. Rumjhum Chatterjee dated
26.08.2019, 19.02.2020 and 12.05.2020.

• Corporate Guarantee of M/s. Feedback Infra Pvt. Ltd./ the

Corporate Debtor dated 04.07.2014, 19.07.2015, 29.03.2016,
11.07.2017, 11.01.2019 and 20.06.2020.

• Corporate Guarantee executed by M/s. Mission Holdings Pvt. Ltd.

for the loan facilities availed by the Corporate Debtor as well as
loan availed by the Principal Borrower.”

18. As the Corporate Debtor failed to maintain the financial discipline, its

loan account was classified as Non-Performing Asset (NPA) by the Financial

Creditor on 28.05.2021. The Financial Creditor has taken the plea that the

date of NPA may be considered as date of default for the purpose of present

application. Besides, since the Principal borrower also failed to maintain the

Financial discipline, its loan amount was also classified as Non-Performing

Asset (NPA) by the Financial Creditor on 19.11.2022. It is again the plea raised

by the Applicant that the said date may also be perceived as date of default

for the purpose of present proceedings.

19. Regarding the loan/credit facility availed by the CD, the Financial

Creditor issued Demand Notice under Section 13(2) of the SARFAESI ACT,

2002, on 23.09.2021, but the CD failed to repay the loan amount. A copy of

SARFAESI Notice (ibid) is on record as Annexure A-136 of the application.

(IB)-545/(ND)/2023
Federal Bank Limited vs. Feedback Infra Pvt. Ltd.
Page 10 of 18
20. As a result, the Financial Creditor filed O.A. No. 386 of 2022/TA No.

400/2022 for the recovery of dues from the Principal borrower and the

Corporate Debtor.

21. The Financial Creditor recalled the entire loan facilities granted to the

Principal borrower vide recall notice dated 31.01.2023. The Principal borrower

failed to make payment in terms of the recall notice. As despite service of the

recall notice, the Principal borrower did not give any heed to the notices and

did not act upon the same, the Financial Creditor filed an application viz. O.A.

Diary No. 609 of 2023 for the recovery of dues from Principal borrower and

the Corporate Debtor on 30.04.2023. The Corporate Debtor acknowledged the

debt by signing the letter of acknowledgement of debt dated 12.05.2020. A

copy of the letter of acknowledgement of debt is on record as Annexure A-138

to the application. The Principal borrower also acknowledge the debt by

signing the letter of Acknowledgement of Debt dated 25.02.2021. The letter is

enclosed as Annexure A-139 to the application. The Principal borrower also

signed a letter of acknowledgement dated 17.11.2021. Neither the account of

CD nor that of Principal borrower are regularised as yet. Para 70 and 71 of

the synopsis filed by the FC reads thus: -

(IB)-545/(ND)/2023
Federal Bank Limited vs. Feedback Infra Pvt. Ltd.
Page 11 of 18
21. The Part-IV (2) of the application which contains the total amount of

disbursed loan and dates of default reads thus: -

(IB)-545/(ND)/2023
Federal Bank Limited vs. Feedback Infra Pvt. Ltd.
Page 12 of 18
(IB)-545/(ND)/2023
Federal Bank Limited vs. Feedback Infra Pvt. Ltd.
Page 13 of 18
22. In the reply filed on behalf of the Corporate Debtor, the salient plea

raised on behalf of the CD are: - (i) there is no default committed by the CD

in repayment of loan; (ii) there is no debt due and payable within the meaning

of Section 3(12) of the Code; (iii) the Application is barred by Section 10A of

the Code, as there was a moratorium period of 6 months on repayment of the

term loans facility. As the moratorium, expired only on 27.02.2020, the

repayment was to be made quarterly w.e.f. 31.05.2020. Thus, if there was

default, in repayment of the loan, it was committed on 31.05.2020. According

to the CD, the Application is not maintainable, as the date of default falls

during the period covered by Section 10A of IBC, 2016. According to it,

regarding the default in payment of interest for emergency credit loan facility,

the default was dated 28.02.2021 i.e. again covered by the period mentioned

in Section 10A of IBC, 2016. (iv) Corporate Guarantee for the loan taken by

FEDCO was invoked by the Applicant vide loan recall notice 31.01.2023 which

remains unpaid. Since the Applicant could club the recall notice with the loan

(IB)-545/(ND)/2023
Federal Bank Limited vs. Feedback Infra Pvt. Ltd.
Page 14 of 18
amount defaulted to be paid during the period covered by Section 10A of IBC,

2016, the Application is not maintainable.

23. As can be seen from the Reply filed by it, the CD has taken self-

contradictory stand. On the one hand, it has taken the plea that the CD has

not committed any default, as there was no debt due and payable by it and

on the other hand, it has pleaded that the default was committed during the

period mentioned in Section 10A of IBC, 2016, thus no application under

Section 7 could be filed by the Applicant in this regard. As can be seen from

Part IV (2) of the Application, the dates of default mentioned by the Applicant

are 28.05.2021 and 19.11.2022, when the account of the CD and Principal

Borrower were declared as NPA. As far as the present Application is

concerned, the account of Principal Borrower was classified as NPA on

19.09.2023 and the Corporate Guarantee given by the CD was invoked only

on 31.01.2023. Thus, the Date of Default qua the amount of Rs

16,13,49,069.81/- is the date of invocation of Bank Guarantee i.e.

31.01.2023. Till the declaration of the account of Principal Borrower as NPA,

the Corporate Guarantee could not have been invoked. It is not the case of

the CD that the Corporate Guarantee was not invoked prior to 30.01.2023.

The CD has also not raised the plea that the account of Principal Borrower is

not declared as NPA. The plea regarding filing of the joint application qua

default in payment of different amounts of debt is noted only to be rejected.

As can be seen from Section 7 of the Code, a Financial Creditor may either

itself or jointly with other Financial Creditors or any other person on behalf

of the Financial Creditor may file an Application under Section 7 of IBC, 2016.

(IB)-545/(ND)/2023
Federal Bank Limited vs. Feedback Infra Pvt. Ltd.
Page 15 of 18
It is also clear from the Explanation given below Third Proviso to Section 7(1),

a default includes not only the default in respect of a financial debt qua the

Applicant Financial Creditor but also regarding any other Financial Creditor

of the CD. Thus, while considering an application under Section 7 of IBC,

2016, what we need to see is only that a debt of Rs. 1 crore was disbursed to

the CD and it defaulted in payment of the same. Such conditions are satisfied

in the present case. It is also seen from Part-V (3) that the FC had reported

the debt and default to NeSL on 09.05.2023 and the Corporate Debtor had

authenticated the same on 11.06.2023. The Part-V (3) of the Application reads

thus: -

24. In view of the aforementioned, we are left with no option but to admit

the present Application. Ordered accordingly. Ergo, the CIRP commences

qua the CD.

25. In the wake, moratorium as provided under Section 14 of IBC, 2016

is declared qua the CD and as a necessary consequence thereof the following

prohibitions are imposed, which must be followed by all and sundry:

(a) The institution of suits or continuation of pending suits or

proceedings against the Respondent including execution of any

judgment, decree or order in any court of law, tribunal, arbitration

panel or other authority;

(IB)-545/(ND)/2023
Federal Bank Limited vs. Feedback Infra Pvt. Ltd.
Page 16 of 18
 (b) Transferring, encumbering, alienating or disposing of by the

Respondent any of its assets or any legal right or beneficial

interest therein;

(c) Any action to foreclose, recover or enforce any security interest

created by the Respondent in respect of its property including any

action under the Securitization and Reconstruction of Financial

Assets and Enforcement of Security Interest Act, 2002;

(d) The recovery of any property by an owner or lessor, where such

property is occupied by or in the possession of the Respondent.

26. As proposed by the Petitioner, Mr. Rajneesh Kumar Aggarwal, having

Registration No. IBBI/IPA-001/IP-P00886/2017-18/11483 (e-mail id:

ca@arkadvisors.in) is appointed as IRP, subject to the condition that no

disciplinary proceeding is pending against him and disclosures as required

under IBBI Regulations, 2016 are made by him within a period of one week

from this Order. It is further ordered that Mr. Rajneesh Kumar Aggarwal,

having Registration No. IBBI/IPA-001/IP-P00886/2017-18/11483 (e-mail id:

ca@arkadvisors.in) shall take charge of the CIRP of the Corporate Debtor with

immediate effect and would take steps as mandated under the IBC specifically

under Section 15, 17, 18, 20 and 21 of IBC, 2016 read with extend provisions

of IBBI (Insolvency Resolution of Corporate Persons) Regulations, 2016.

27. The Petitioner is directed to deposit Rs. 2,00,000/- only with the IRP to

meet the immediate expenses. The amount, however, will be subject to

(IB)-545/(ND)/2023
Federal Bank Limited vs. Feedback Infra Pvt. Ltd.
Page 17 of 18
adjustment by the Committee of Creditors as accounted for by Interim

Resolution Professional and shall be paid back to the Financial Creditor.

28. A copy of this Order shall immediately be communicated by the

Registry/Court Officer of this Tribunal to the Petitioner /Financial Creditor,

the Respondent/Corporate Debtor and the IRP mentioned above.

29. In addition, a copy of this Order shall also be forwarded by the

Registry/Court Officer of this Tribunal to the IBBI for their records.

Sd/- Sd/-
(L. N. GUPTA) (ASHOK KUMAR BHARDWAJ)
MEMBER (T) MEMBER (J)

(IB)-545/(ND)/2023
Federal Bank Limited vs. Feedback Infra Pvt. Ltd.
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