IL&FS Financial Services Limited Vs Adhunik Meghalaya Steels Private Limited (NCLT Guwahati)
Summary: The National Company Law Tribunal, Guwahati Bench, considered a petition filed by IL&FS Financial Services Limited under Section 7 of the Insolvency and Bankruptcy Code, 2016 read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, seeking initiation of Corporate Insolvency Resolution Process against Adhunik Meghalaya Steels Private Limited. The Financial Creditor claimed an unresolved financial debt of Rs. 55,45,97,395/- as on 15.11.2023 arising from a term loan facility sanctioned up to Rs. 30 crore under a Loan Agreement dated 27.02.2015, of which Rs. 24,44,44,456/- was disbursed on 17.03.2015 after adjustment of upfront interest.
The Corporate Debtor had failed to repay the quarterly instalments. Its account was classified as NPA on 01.03.2018, followed by an Event of Default Notice dated 10.07.2018 and a Recall Facility Notice dated 10.08.2018. The Information Utility record reflected 01.03.2018 as the date of default. The Financial Creditor also relied on acknowledgments in the Corporate Debtor’s audited financial statements, including the financial statement approved on 12.08.2020, and on the Supreme Court’s orders concerning exclusion of the period from 15.03.2020 to 28.02.2022 for limitation purposes.
The Corporate Debtor opposed the petition, principally contending that it was barred by limitation and that the Financial Creditor had failed to properly realise pledged securities. It asserted that 2,52,17,391 shares of Adhunik Metaliks Limited had been pledged, with an approximate value of Rs. 50 crore at the time of pledge, and that the Financial Creditor had realised Rs. 8,30,61,278/- from invocation of pledged shares while continuing to hold 78,86,958 shares. It alleged that the recoveries had been appropriated substantially towards interest rather than principal and that the Financial Creditor’s conduct amounted to misconduct and abuse of the insolvency process.
