Amit Yogesh Satwara Vs Incred Financial Services Limited (NCLAT Delhi)
Financial Creditor had the discretion to invoke the pledge – IBC application can be admitted despite appellant’s ongoing attempts at settlement
The National Company Law Appellate Tribunal (NCLAT) recently dismissed an appeal filed by Amit Yogesh Satwara, the suspended director of a corporate debtor (CD), challenging the order of the National Company Law Tribunal (NCLT), Mumbai, which admitted a Section 7 application filed by the Financial Creditor, Incred Financial Services Limited. The case revolves around a loan of Rs. 5 crores sanctioned in 2020, which the Corporate Debtor failed to repay, leading to the initiation of Corporate Insolvency Resolution Process (CIRP). Despite attempts at settlement, the NCLAT upheld the NCLT’s decision, finding no reason to interfere with the order.
The facts of the case indicate that the loan was sanctioned on 15.10.2020, followed by the execution of a Master Facility Agreement. However, by June 2022, the Financial Creditor issued a loan recall notice demanding payment of Rs. 4.61 crores. This led to the filing of the Section 7 application on 20.06.2022. Despite entering into a Memorandum of Understanding (MoU) and pledging shares in September 2022, the debtor failed to settle the amount owed. A pledge invocation notice was issued by the creditor in November 2022. The CD continued to default, which led to the admission of the Section 7 application by NCLT.
