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Axis Trustee Services Limited vs Brij Bhushan Singal & Anr on 16 April, 2021

Author: Jayant Nath

Bench: Jayant Nath

                          $~OS-6
                          *     IN THE HIGH COURT OF DELHI AT NEW DELHI
                          +     CS(COMM) 8/2021
                                AXIS TRUSTEE SERVICES LIMITED                 ..... Plaintiff
                                                   Through     Ms.Misha, Adv.
                                                   versus
                                BRIJ BHUSHAN SINGAL & ANR.                 ..... Defendants
                                                   Through     Ms.Ranjana Roy, Adv.
                                CORAM:
                                HON'BLE MR. JUSTICE JAYANT NATH
                                            ORDER

% 16.04.2021 This hearing is conducted through video-conferencing. IA Nos. 234-235/2021 (exemption) The applications are allowed subject to all just exceptions. IA No. 236/2021 (seeking extension to pay the court fees) The court fees be paid within two weeks.

The application is disposed of.

CS(COMM) 8/2021 Let the plaint be registered as a summary suit. Issue summons.

Learned counsel for defendants No. 1 and 2 enters appearance and states the defendant No. 2 has initiated proceedings under Section 95 of the IBC and hence, the present suit cannot proceed.

Let necessary details be placed on record.

Defendant No. 1 may file written statement within 30 days from today. Reapplication be filed within 30 days thereafter.

List on 17.08.2021.

1. This application filed for interim relief wrongly states that it is filed under Order 34 and Rules 1 and 2 CPC whereas it has actually been filed under Order 39 Rules 1 and 2 CPC. The applicant/plaintiff seeks to restrain the defendants from alienating, transferring, encumbering or selling any of their assets or properties.

2. It is the case of the plaintiff DZ Bank AG Deutesche Zentaral- Genossenschaftsbank had made available to Bhushan Steel Ltd. an external commercial borrowing facility of EUR 180,999,281 vide a Facility Agreement Dated 14.04.2011. The plaintiff was appointed as a Security Agent pursuant to the terms of the Security Agent Agreement dated 18.05.2011. It is stated that defendants No. 1 and 2 executed an unconditional irrevocable, co-extensive and continuing deed of personal guarantee dated 19.05.2011 in favour of the Security Agent for the benefit of the financial creditor. The borrower defaulted in repayment of the principal instalments from 30.04.2015 onwards. On 08.11.2017, the plaintiff in its capacity as the Security Agent, acting for the benefit of the financial creditor issued Invocation Notice upon the guarantors demanding payment of EUR156,929,177.43 due as on 26.07.2017 within 30 business days.

3. In the meantime, NCLT issued Corporate Insolvency Resolution in respect of the borrower on 26.07.2017. The resolution plan was subsequently approved for the principal borrower by NCLT.

4. Learned counsel for the plaintiff also relies upon the order passed against the same defendants in CS(COMM) 20/2021 dated 15.01.2021 to plead that a similar relief may be granted in this suit.

5. Learned counsel for the defendants opposes the present application.

She states that as far as defendant No. 2 is concerned on account of the proceedings pending before the NCLT, no interim orders can be passed and the suit cannot proceed against defendant No. 2. She states that before NCLT the plaintiff/principal borrower has entered into a settlement and the plaintiff's dues have been satisfied under the resolution plan. Hence, a novation agreement has taken place.

6. Learned counsel for the plaintiff denies the above submission. She states that only partial settlement took place. She also relies upon the terms and conditions of the guarantee deed which clearly provide that in case of a settlement with the principal borrower, liability of the guarantors continues to exist.

7. In these circumstances, as this court has already passed order on 15.01.2021 in CS(COMM) 20/2021, let defendant No.1 maintain status quo regarding his immovable properties till further orders.

8. No orders for the time being are passed against defendant No. 2 as presumably the assets of defendant No. 2 shall be dealt with as per the statutory provisions.

9. Issue Notice.

10. Learned counsel for defendants No. 1 and 2 accepts notice.

11. Reply be filed within four weeks. Rejoinder, if any, be filed within four weeks thereafter.

12. List on 17.08.2021.

IA No. 5554/2021 (u/O 7 R 11 (d) CPC) List on 17.08.2021.

JAYANT NATH, J APRIL 16, 2021/rb Signature Not Verified Digitally Signed By:RADHA BISHT Signing Date:22.04.2021 16:38:23