Document Fragment View

Matching Fragments

4. Under Clause 4.1 in consideration of Bibby paying EAPL the Maximum Prepayment Percentage of the receivables of EAPL, EAPL irrevocably and unconditionally agreed to sell, transfer and assign to Bibby the receivables due and payable from the Debtors. Under Clause 4.2 of the factoring agreement, it was provided that EAPL would serve a notice of assignment of the receivables and associated rights in favour of Bibby and shall provide a duly acknowledged copy thereof to Bibby with a request for prepayment of the receivables. EAPL further agreed that any sum realized by it directly from a debtor shall be the property of Bibby and EAPL shall forthwith deposit the same with Bibby. Till such deposit, EAPL was to hold such sum in trust.

d. in respect of the Receivables wherein the Debtor is insolvent;
Bibby may notify the Borrower on which Receivables Bibby intends to exercise its Recourse. Without prejudice to the foregoing, the Borrower agrees that Bibby's Recourse to the Borrower shall be automatic after the lapse of 30 day of the due date of the Receivable.
11.2 Upon Bibby exercising its Recourse in respect of any Receivable the Borrower shall be liable to pay Bibby the amount prepaid by Bibby plus any associated costs and charges in respect of the Receivable pursuant to clause 3 herein contained. The Borrower shall pay all such amounts on receipt of demand for payment from Bibby.

Without prejudice to the aforesaid, Bibby shall have a right to present the post dated/security cheques(s) furnished by the Borrower to Bibby in respect of the Receivable on which the Recourse is being exercised.

11.3 After exercising Recourse, Bibby will credit the Borrower or set off with all sums subsequently recovered by Bibby in respect of the Receivables or Associated Rights.

11.4 The Borrower agrees that the Receivable and Associated Rights in respect of which Recourse is being exercised shall, unless or otherwise determined by Bibby, remain vested in Bibby until the repurchase price been fully discharged, whether by payment to Bibby or by set off against an amount payable by Bibby to the Borrower under this Agreement.

11. On 3rd March 2010, a Debtor Letter was issued by Bibby to EAPL, giving the up-to-date details as regards KRIL. This was accepted and co- accepted by both EAPL and KRIL by countersigning the letter. A Letter of Guarantee was executed by Mr. Gagandeep Singh Sahni, the Director of EAPL and his father, Mr. Harminder Singh Sahni. Thirty one post-dated cheques (PDCs) drawn on Indian Overseas Bank, totalling Rs. 7.5 crores towards security were also issued.

12. Bibby's case is that defaults were committed by both KRIL and EAPL in making the payments. The PDCs dated 2nd November 2010 issued by EAPL in favour of Bibby when presented for payment were dishonoured with the remarks "funds insufficient". The photocopies of the said PDCs and the confirmation from ICICI Bank as regards their dishonour have been enclosed with the petition. As on 2nd July 2011, EAPL owed Bibby a sum of Rs. 8,98,80,162. A statutory notice of demand was issued on 30th June 2011 by Bibby to EAPL calling upon it to make the aforementioned payment along with the contractual charges within three weeks. With no reply forthcoming, the present petition was filed on 3rd August 2011.