IFCI Limited vs Glofyne Ventrues AND Holding Pvt Ltd GVHPL on 31 December 2024

FINAL ORDER

This original application has been filed by the applicant bank, on 02.02.20t3 through Shri Zachariah Jacob, Manager of the applicant bank, under Section 19 of the RDB Act, 1993 against the defendants for total recovery of a sum of \s.7y',47,24,2231- in respect 6-t 1, ;

of Corporate Loan-l of Rs. 26,80,U,5831- together with cost, charges and pendentellite and future interest @ L7o/o P.0., Corporate Loan-2 of Rs.20,29,05,219/- together with cost, charges and pendentellite and future interest @ L7o/o p.a. and Corporate Loan-3 of Rs.25,37,54,42L1- together with cost, charges and pendentellite and future interest @ L7.50o/o p.a. from date of filing of this O.A. till the realization in full.

2. The brief facts of the case are that the Defendant No. 2 and 3 are Promoter and Directors of Defendant No. 1 and the Glodyne Group comprising several group companies including Defendant Nos. 4 to 9. Defendant No.2 and 3 are Promoters of Glodyne Group and as Pledgers and Guarantors. Defendant No.2 and 3 are Promoters and/or Pledgers and Guarantors. It is submitted that Glodyne Technoserve Ltd i.e. Defendant No. 4 is a company promoted by Defendant No.2 and Defendant No.3. Defendant No. 4 is in the business of providing technology infrastructure management seruices and Application Software Services for technology projects and technology maintenance and management seruices. The Defendant No, 4 is one of the group company of Glodyne group and having utilized part of the loans sanctioned by the Applicant and is liable to be paid to the Applicant. Defendant No. 5 is a company promoted by Defendant No.2 and Defendant No.3, incorporated in the United States of America having its principal place of business. Defendant No. 5 is a wholly owned subsidiary of Defendant No. 4. The Defendant No. 5 is one of the group company of Glodyne group and having utilized paft of the loans CA

sanctioned by the Applicant and is liable to be paid to the Applicant. Defendant No. 6 is a company promoted by Defendant No.2 and Defendant No.3, incorporated in the United States of America having its principal place of business. Defendant No. 6 is a wholly owned subsidiary of Defendant No. 5 and is having business of providing IT related services. The Defendant No. 6 is one of the group company of Glodyne group and having utilized paft of the loans sanctioned by the Applicant and liable to be paid to the Applicant. Defendant No. 7 is a company promoted by Defendant No.2 and Defendant No.3, incorporated under Companies Act, 1956, having its Registered Office at Mumbai. Defendant No. 7 is in the business of setting up IT Parks. The Defendant No. 7 is one of the group company of Glodyne group and having utilized part of the loans sanctioned by the Applicant and liable to be paid to the Applicant. The Defendant No. 8 is a company promoted by Defendant No.2 and Defendant No.3, incorporated under Companies Act, 1956. It has its Registered Office at Mumbai. The Defendant No. 8 is one of the group company of Glodyne group and having utilized part of the loans sanctioned by the Applicant and liable to be paid to the Applicant. Defendant No. 9 is a company promoted by the Defendant No.2 and Defendant No.3, wholly owned subsidiary of Defendant No 4, incorporated under Companies Act, 1958. It has its Registered Office at Mumbai. The Defendant No. 9 is one of the group company of Glodyne group and having utilized part of the loans sanctioned by the Applicant and liable to be paid to the Applicant. Defendant No. 10 is a scheduled co-operative Bank having its Registered Office,g!-pne and its Mumbai I l I I i I I ]' i I I ' L I il

Regional Office at Dadar (West), Mumbai. The Defendant No. 10 is made as a pafi to the OA being the lender of the Defendant No.7 and this Applicant is claiming certain relief against the assets mortgaged to Defendant No.10 by the Defendant No.7.

3. It is submitted that Defendant No. 1 to 9 comprises Glodyne group which is based in India and abroad, promoted by Defendant No.2 and Defendant No.3 having business in the areas of technology integration activities including technology management service, turnkey solutions for technology deployment, release and integration of hardware/system software, database, networking products, softtruare services etc. to the government and private entities. The Glodyne group operates in four geographies viz. USA, Singapore, Europe and India. The Defendant No. 4 is the Flagship company of the Glodyne Group through which the main business activities of the group are being carried out. In the year 2010, Glodyne Technoserve Ltd., through its wholly owned US arm of Glodyne Technoserve Inc, have acquired US based Decision One Corp. i.e. Defendant No. 6 for a total acquisition cost of USD 104 million. The said acquisition was mainly funded by way of borrowings in India and abroad through th-' various group companies and by channelizing and routing the funds raised by the Glodyne Group. It is submitted that Glodyne group availed financial assistance from various banks and financial institutions in India and abroad for its business activities on the basis of the financial strength of the Glodyne group as a whole especially the financials of the Defendant No. 4 and Defendant No.6. In thevpr 2010 the promoters *-

of Glodyne group being Defendant No.2 and Defendant No.3 approached the Applicant and sought financial assistance from the Applicant for the purpose of the business activities of the group, including the repayment of the loan availed by the Defendant No.5 for the purpose of acquisition of Defendant No. 6, by way of unsecured loans/advances from Defendant No. 1 to Glodyne Group. The promoters fufther informed that the financial assistance sanctioned by the Applicant would be availed through Defendant No. 1 and will be invested in Defendant No.4, which in turn will be invested in Defendant No.6 for repayment of the loans availed from banks abroad for acquisition of Defendant No.7 as also will be utilized for the corporate purpose of the other Group companies. The Applicant FI has filed the present OA for certain relief against Defendant No.1 to Defendant No.9 in view of the fact that the loans availed from the Applicant was used by the promoters for the business activities of the Glodyne group. The Glodyne Group promoted by Defendant No. 2 and Defendant No. 3, includes Gladyne Technoserve Ltd./Defendant No. 4, Glodyne Global Pvt. Ltd./Defendant No. 8, Glodyne Peoplepower Ltd., Smaartech tut. Ltd./ Defendant No. g, Compulink USA Inc., Compulink Europe Ltd., Glodyne Technoserue Inc./Defendant No' 5, Compulink Software h/t. Ltd., GlodyneTechnoserve East Inc., Frontoffice Techno Inc., Decisionone Corp./ Defendant No. 6. There are other companies in the group. The aforementioned companies have got well linked business relations and flow of money from one company to the other either by way of unsecured loans or advances or investment in equity through subscription of share warrqnts gr shares and creeping 9A i.

acquisition. Therefore, though all these companies are different juristic personalities, it is to be considered as a single business group promoted by Defendant No.2 and Defendant No.3. At the request of the Defendant No.1, the applicant sanctioned Corporate Loan of Rs.50 crore on the terms and conditions of the Agreement dated 18.06.2010 entered into between the Defendant No.1 and the Applicant. The loan amount was to be utilised for the purpose of various business initiatives of the Glodyne Group as stated above in the form of unsecured loans and advances to Glodyne Group Companies. The Applicant considered the request and sanctioned the Loan of Rs.50 crore on the terms and conditions contained in the Sanction Letter dated 16.06.2010 and Loan Agreement dated 18.06.2010. The loan was secured by way of Deed of Guarantee dated 18.06.2010 executed by Defendant No.2 and 3 in favor of the Applicant, Power of Attorney executed by Defendant No. 2 & 3 dated 18.06.2010 in favor of the Applicant, Irrevocable Power of Attorney was also executed by Defendant No. 2 & 3 dated 18.06.2010 in favor of Applicant and Promissory note dated 18.06.2010 executed by Defendant No.2 under which the Defendant No.2 unconditionally promised to pay to the lender or order at their office the sum of Rs. 50 Crores with interest thereon at the applicable interest rate, together with all other amounts payable under the Finance documents for value received. To further secure the Corporate Loan the defendants also pledged the shares of Glodyne Technoserve Ltd. giving a security cover of 2.5 times the loan amount. A share pledge Agreement was thus entered into between Defendant No. 2-3, ARRlicant :gl Defendant No.1. It EA

TANO.2t57 of2022

is submitted that the Corporate Loan of Rs.50 Crore had a tenure of 3 years and was repayable in 8 quarterly installments starting from 15.09.2011' The first four installments were of Rs. 5.00 crore each, while the next four of Rs. 7.50 crore each. It is stated that Defendant is in default towards repayment of principal through installment of Rs. 7.50 crores each since 15.09.20L2 and every month thereafter. In pursuant to execution of the documents and creation of security, the applicant, upon the request of Defendant No. 1 dated 18.06.2010, has disbursed the said First Corporate Loan of Rs.50 Crore to the Defendant No. 1 on 08.07.2010 in a separate No lien Account opened with Corporation Bank, Hill Road, Bandra (West), Branch for utilization of the said amount for the purpose envisaged in First Sanction Letter and the First Loan Agreement. The said First Corporate Loan was to be utilized for various business initiatives of the Glodyne group in the form of unsecured loans/advances to Glodyne group Companies. It is submitted that at the request of Defendant No. 1, the Applicant snctiond Corporate Loan of Rs.25 Crores on the terms and conditions of the Agreement dated 01.10.2010 entered into between the Defendant No.1 and the Applicant. The loan was secured by way of Deed of Guarantee dated 8.10.2010 executed by Defendant No.2 in favor of the Applicant, a Power of Attorney executed by Defendant No. 2 & 3 dated 18.06.2010 in favor of the Applicant, Irrevocable Power of attorney was also executed by Defendant No. 2 & 3 dated 8.10.2010, 01.10.210 in favor of Applicant and Promissory note dated 01.10.2010 executed by Defendant No.2 under which the Defendant No.2 unconditionally promised to pay to e) i l I I I I

the lender or order at their office the sum of Rs.25 crores with interest thereon at the applicable interest rate, together with all other amounts payable under the finance documents for value received. To further secure the Corporate Loan the defendants also pledged the shares of Glodyne Technoserve Ltd giving a security cover of 2.5 times the loan amount. A share pledge Agreement was thus entered into between Defendant no.2-3, Applicant and Defendant No.1. It is submitted that the Corporate Loan of Rs. 25 crore had a tenure of 3 years and was repayable in 8 quarterly installments starting from 15.01.2012. The first four installments were of Rs. 2.50 Crores each, while the next four of Rs.3.75 Crores each. It is stated that Defendant No. t has repaid only Rs. 5.00 Crore of the principal amount and is in default towards two installments of Rs.5.00 Crores each due since L5.07.20L2 and thereafter every month. Pursuant to execution of the documents and creation of security the Applicant has disbursed the said Second Corporate Loan of Rs. 25 Crore to the Defendant No. 1 on 11.10.2010 in a separate no lien account opened with Corporation Bank for utilization for the purpose envisaged in First sanction letter and the First Corporate loan Agreement. The said First Corporate loan was to be utilized for various business initiatives of Glodyne group in the form of unsecured loans/advances to Glodyne group Companies. It is submitted that at the request of the Defendant No.1, the Applicant further sanctioned Corporate Loan of Rs.25 Crore on the terms and mnditions of the Agreement dated 11.05.2011 entened into between the Defendant No.1 and the Applicant. The loan was of Deed of Guarantee dated -/.ra secured by way

11.05.2011 executed by Defendant No.2 & 3 in favor of the Applicant, Irrevocable Power of Attorney was also executed by Defendant No. 2 & 3 dated 11.05.2011 in favor of Applicant. To further secure the Corporate Loan the Defendants also pledged the shares of Glodyne Technoserue Ltd giving a security cover of 2.5 times the loan amount. A share pledge Agreement was thus entered into between Defendant No. 2-3, Applicant and Defendant No.1. It is submitted that the Corporate Loan of Rs. 25 Crore had a tenure of 3 years and is repayable in 8 quafterly installments starting from 15.08.2012. The first four installments were of Rs. 2.50 crore each, while the next four of Rs.3.75 each. It is submitted that the Defendant No. 1 is in default towards repayment of principal amount to be paid in installment of Rs.2.50 Crores each since 15.08.2012 and subsequent months thereafter. In terms of the said Third Sanction Letter, Defendant No. 1 agreed to pay interest 15.50o/o per annum payable monthly on 15th day of every month. Further, it is stipulated in case of default in payment of interest and principals on the due dates, Defendant No. t has to pay defaulted interest @ 18.50o/o. Fufther, it is stipulated the Defendant No.1 has to pay liquidated damages @ 2o/o per annum on the interest and principal overdue amounts. Pursuant to the execution of the documents and creation of security the Applicant, upon the request of Defendant No. 1, the Applicant has disbursed the said Third Corporcte Loan of Rs.25 Crore to the Defendant No. 1 on 16.05.2011 in a separate No Lien Account opened with Corporation Bank, Hill Road branch, Bandra (West), Mumbai for utilization for the purpose envisaged in the Third Sanction Letter and therllird Loan Agreement' q

l0 The said Third Corporate Loan was utilized for various business initiatives of the Glodyne group in the form of unsecured loans/advances to various Glodyne group companies. It is submifted that in terms of the loan agreements and security documents, the Defendants were required to ensure that the share value of the pledged shares at no point of time falls by more than 40o/o from the share price on the first drawdown date. However, there was a heavy fall in the share price since 25.07.20L2. As a result the security cover fell and an event of default in terms of the Financing Documents occurred. Several notices were sent to either top up the shares with further shares of an equivalent value or provide sufficient cash margin in terms of the Loan agreement and other security documents. However, the Defendants failed to do the same and allowed the event of default to continue. Hence the Applicant was constrained to sell the shares in terms of the Financing Documents to recover its outstanding dues.

4. It is submitted that due to the fall in the security cover in terms of the Share Pledge Agreement the defendants were directed to deposit the cash margin. The Applicant FI sent communications dated LLlr2l2O72, 22lt0l20t} and 711212012 to the defendants recording an event of default due to fall in the price of the pledged shares and requested to deposit the cash margin deficit of Rs.27.53 crore in respect of Corporate Loan 1. Rs.18.81 crore in respect of Corporate Loan 2 and Rs.23.14 in respect of Corporate Loan 3. The Defendants despite the above notices have failed to deposit the cash margin deficits in terms of the security documents and continued to SJ

I I commit default in other terms and conditions of the security documents. The Defendant No.1 failed to pay the installments of interest as well as the Principal loan amounts, which became due and payable. The Defendant No 1 requested Applicant for the rescheduling the repayment of the outstanding debts and applicant FI vide lefter dated 21.08'2012. It is submitted that as per the terms of said rescheduling the defendant were supposed to pay an amount aggregating to Rs.5.47 crore as installments fallen due on 01.01.2013 in respect of the aforesaid three loans, which the defendants failed to pay in spite of demand. It is submitted that the Defendant has failed to clear the outstanding dues and has also committed breach of various terms and conditions of said rescheduling of corporate Loans. It is further submitted that the First Corporate Loan and Second Corporate Loan availed by Defendants No. 1 from this Applicant between July 2010 and October 2010 appears to have been utilised by Defendant No. 1 for loans and advances to Defendant No. 2 and 3, Defendant No. 8 including other group companies of the Glodyne Group. The Annual Report and audited Balance Sheet of Defendant No. 1 for the financial year 2010-11 indicate that an aggregate amount of Rs'164 crore was paid as Loans and advances during the said financial year in the said manner' The said advance received by Defendant No.8 from Defendant No. l was used by Defendant No. 8 for the purpose of subscription of shares of Defendant No. 4 to the tune of Rs. 15 crore comprising share warrants at the rate Rs. 400 per warrant. The funds, as said above availed/routed by Defendant No.8 in Defendant No. 4 in respect of the First Corporate Loan and Second g\ I i i I I I I I I

Corporate Loan appears to have been further utilised for the purpose of Loans and advances to Defendant No. 5. The Defendant No 4 has granted loans to seven of its subsidiaries in the said financial year, involving an aggregate amount of Rs.190.83 crore. The said aggregate amount includes the amount routed from the Defendant No.1 via Defendant No. B and the seven subsidiaries include Defendant No.5. That the said amount appears to have been given to Defendant No. 5 for the purpose of servicing of the loans 'availed by Defendant No. 5 for the acquisition of Defendant No. 6' Therefore, it shall be stated without doubt that the part of the First Corporate Loan and Second Corpomte Loan availed by Defendant No. 1 was used for the acquisition of Defendant No. 6 and the business activities of the other group companies. The third Corporate Loan availed by Defendant No. 1 during May 2011 from the Applicant was utilised by Defendant No. 1 for loans and advances to Defendant No. 8. The Defendant No.8 used a paft of the said advance-for conversion of share warrants subscribed by Defendant No.8 to the shares of Defendant No. 4. The Third Corporate Loan was fufther utilised for the purpose of investment and Loans and advances to the Defendant No. 5 and other subsidiaries. The said part amounts appears to be given to Defendant No. 5 for the purpose of servicing of the loans availed by Defendant No. 5 for the acquisition of Defendant No' 6. It is seen further from the cash flow statement of Defendant No' 4 an amount of Rs. 106.69 crore was given as loan to subsidiaries and an amount of Rs. 35.50 crore has been further invested in the subsidiaries by way of equity. As seen from the fi2ncial statements of e4

Defendant No. 1 for the year ended 31.03'2011, Defendant No. t has extended loans and advances to Defendant No. 7 l.e during the period when the Defendant No.1 availed the first and second corporate loans from the Applicant and it has to be inferred the said advance includes part of these loans availed from the Applicant. Defendant No. 7 appears to have utilised the said loans and advances for its corporate purposes. Therefore, Defendant No. 7 is also under an obligation to service the Loan availed by the first defendant. Defendant No. 7 is understood to have availed facilities aggregating to Rs.39 crore from Defendant No. 10. It is submitted that as seen from the financial statement and records furnished to the Applicant by the Defendant the Corporate Loans sanctioned by the Applicant were used partly for the purpose of creeping acquisition of shares of Defendant No. 4 by Defendants, subscription of share warrants of Defendant No. 4 and conversion of share warrants of Defendant No. 4 and partly utilised for the corporate purposes by way of loan and advances to the Glodyne Group. It is submitted that for the purpose of securing the Three Corporate Loans, the Defendant Nos. 2 and 3, from time to time, pledged a total aggregate number of 69,87,L65 number of shares with the Applicant. At the time of creation of pledge in respect of the Third Corporate Loan of Rs. 25 crore, the shares of Defundant No. 4 were trading at National Stock Exchange (NSE) and BSE approximately at a price of Rs.382 per share, Therefore, the Corporate Loans were having adequate security cover in terms of the Sanction Letters giving sufficient comfolt to the Applicant to disburse of the loans. However, the said share price of Rs. 382 per_ share gradually started s)

l4 falling and Defendant No. 1 started committing default in payment of interest as stipulated in the Corporate Loan Agreements. The Defendant No' 1 vide letters dated 22106120t2 and 2510612012 requested the Applicant, taking advantage of the provisions of the financing documents, to release excess shares pledged with the Applicant considering the requisite cover of security available with the Applicant was more than stipulated in terms of the Sanction. The shares of Defendant No. 4 were trading at a price of approximately Rs. 425 pr share in NSE at the time when the Applicant considered the last request of Defendant No. 1 and released the shares keeping the security cover more than stipulated. Accordingly, mnsidering the request of Defendant No. 1 and Defendant Nos. 2 and 3, the Applicant had released on four occasions, shares aggregating to 42.94 lakh, of which the last one was on 28.06.2012. At the time of making the request, Defendant Nos' 2 and 3 orally informed that the shares released by the Applicant, will be re-pledged for availing financial assistance from some other source for pre- payment/repayment of the Corporate Loans availed from this Applicant. However, inspite of getting the shares released as above, the Defendant Nos. 1, 2 and 3 failed to pre-pay/ repay the Corporate Loans availed from this Applicant. Subsequently, Defendant No. 1 gradually started making delay in making the payment of interest on the due dates as stipulated in the sanction letters inspite of repeated requests ultimately forcing the Applicant to sell paft of the pledged shares of Defendant No. 4. Accordingly, the Applicant had recovered an amount aggregating to Rs'2.11 crore from the part sale of the pledged shares. It is # : l I I I + I I

I

submitted that the price of the shares pledged by Defendant No. 2 and Defendant No. 3 started falling drastically and as on date the shares are trading at approximately Rs.34 per share at NSE and BSE, thereby reducing the security cover to 0.21 times against the stipulated cover of 2.50 times each for the First Corporate Loan and Second Corporate Loan and 2.25 times for the Third Corporate Loan, thereby causing the loans disbursed by the Applicant to be inadequately secured. Therefore, the Applicant, by no stretch of imagination will be in a position to recover its loans by invocation of the entire shares pledged with the Applicant. Further, as seen from the certified net-wofth statements furnished by the guarantors, also the applicant will not be in a position to recover its Loans from Defendant Nos. 1 to 3, compelling the Applicant to proceed against Defendant No. 4, Defendant No. 6 and other Glodyne group companies to recover its Loans. The Applicant FI, by way of various letters to Defendant No. 1 and discussions and meetings with the Promoters, attempted to save the situation and to protect the interest of the Applicant and requested the promoters to secure the loans adequately with pledge of additional shares or cash margin or mortgage of property or else to pre-pay the obligations since there was a default in repayment as also various other defaults in compliance with fte terms and conditions of the provisions of the financing documents which the defendants deliberately neglected. Therefore, the present T.A. is preferred by the applicant bank to recover its dues.

5. On notice by this Tribunal, defendants put appearance and defendant no. 2, 3, 5 & 7 to 9 flied the written statement. + - TA NO. 2157 of ?.022

6. In the written statement nbd bY defendant no.2 & 3 it is submitted that Mr. Zachariah Jacob of the Applicant FI does not have the authority to institute and maintain the present Application Proceedings. It is submitted that as per the information available with the present defendants, the Applicant has not recalled the loans advanced by it to the Defendant No. 1 Company and no notice regarding recall of the said loan facilities has been issued by the Applicant. It is submitted that the shares which were pledged to the Applicant as a security were 2.5 Umes the value of the loan amounts advanced. It is submitted that the shares were doing well in the market in terms of their price, and the price had even increased, to an extent that the Applicant had returned the excess shares back to the Defendant Nos. 2 & 3 on various occasions including 15 lac shares in June, 20t2. It is also submitted that whenever there was a fall in the price of the shares pledged an appropriate number of shares where pledged / re-pledged to the Applicant in order to keep the security intact at 2.5 times of the loan amounts at various time. It is submitted that the Applicant had sold 2,38,500 shares belonging to the Defendant No'2 on or about 09.05.20t2 by which an amount of Rs.9.93 crores approximately was recovered by the Applicant. It is. submitted that on 26.07.2012 there was a steep fall in the stock prices of about 18 Mid Cap Companies including the Defendant No'4 Company. It is submitted that on the said date the price of the Defendant No'4 Company's Stock fell from Rs.343 to Rs.274, thereby triggering an 'Event of Defaulf under the abovementicned Loan Agreements' It is submitted that despite lhe fid fall, the security of 9\

the pledged shares as provided to the Applicant was still much more than the outstanding loan amount. It is submitted that even after the fall of the price of the said shares the value of the pledged shares available with the ApplicanV IFCI approximately was Rs.155 crores as against the outstanding loan amount of Rs.75 crores approximately. It is submifted that on the fall of the prices of the said stocks, the present Defendants had orally requested Applicant/ to sel/liquidate the pledged shares to the extent necessary to recover the outstanding loan amount however, the Applicant did not sell the pledged shares thereby causing a grave loss to the present Defendants in a falling market. It is submitted that the Applicanfl IFCI eventually sold some of the said shares pledged to it only on and after

27. L0.2012 at a much lower price than in July which caused a huge loss to the Defendants. It is submitted that a wrong impression that has been sought to be created in the present application is that the loan amounts advanced to the Defendant No. 1 Company were used to acquire the Defendant No. 6 Company. The said statement is totally incorrect in as much as the Defendant No. 6 Company was acquired primarily through a loan advanced by ICICI BanK by issuing Equity shares of the Defendant No.4 Company and from internal accruals of the Company. That a total of USD 114 million was utilised in the acquisition of Defendant No. 6 Company, out of which USD 88 million was lent by the ICICI Bank to the Defendant No. 5 Company and the remaining USD 23 million (Rs.t,04,44,44,4641-) was generated by the Defendant No.4 Company by issuing iE L4,53,22L shares on preferential basis a.p USD 3 million from f,\ l I I t i

internal accruals of the Defendant No 4. This issue of shares was approved by shareholders of the Company vide its resolution passed at the Extra Ordinary General Meeting held 10.06'2010 and pursuant to the said approval, on a Resolution passed by the Managing Committee of the Board of Directors of the present Defendant Company dated 23.06.2010, which contains the details of the allottees and also the number of shares allotted to each allottee. It is submitted that the entire case of the Applicant is based on surmises and conjectures and not actual facts and figures. It is submitted that the Original Application is also not maintainable on the ground of misjoinder of parties inabmuch as Defendant Nos. 4-10 are neither necessary nor proper parties to the present Application. It is submifted that no cause of action can ever arise against the Defendant Nos. 4-10 as it is an admitted position that they are not parties to the three loans agreements dated 18.06.2010, 01.10'2010, and 11.05.2011 which form the basis of the present Application. It is submitted that the statement of account filed by the Applicant is incorrect and erroneous. It is submitted that the said Statement of Account is not in accordance with the Bankers Book Evidence Act and thus not admissible in evidence. It is submitted that the present Original Application is liable to be rejected as the same is premature in nature. It is submitted that as per the information available with the Defendants, the Applicant / IFCI has not recalled the loans advanced by it to the Defendant No'1 Company and no notice regarding recall of the said loan facilities has been issued by the Applicant / IrcI. It is submitted that without giving such notice of recall, the present Application is-Premature in nature eA

and ought to be rejected on this ground alone. It is submitted that "Purpose" of the loan as mentioned in the Term Sheet of the said loan (Page 54 of the List of Documents filed along with the OA) clearly state that the loan amounts are to be utilized for various business initiatives of the Glodyne group in form of unsecured loans/advances to Giodyne group Companies. However, as mentioned above none of the other Companies of the said Group Companies of the said group including the present Defendants were made parties to the said loan agreements and none of the assets of the present Defendant Companies have been offered as a security for the said loans. It is submitted that every individual company has a separate legal entity and that the assets and liabiliUes of another company cannot be fastened upon on another company even if the two companies belong to the same group. It is submitted that the Defendant No.4 Company is a Public Limited Listed Company and the Defendant Nos. 7-9 are Private Limited Companies and as such their identities can never be merged as is sought to be done by the Applicant. It is further submitted that the Defendant No.4 Company being a Public Limited Listed Company and Defendant Nos. 7- 9 being Private Limited Companies are completely different species and as such cannot be clubbed together as 'group companies inasmuch as such a proposition is completely unknown to the principles of Company Law and hence untenable. Therefore, it is humbly prayed to this Hon'ble Tribunal to kindly dismiss the present proceedings at the threshold with exemplary costs. The Ld. Counsel for defendant no. 2 & 3 has relied upon the judgements Apple Valley Resort Vs. H.P.State Electricit1 Board and Another c,\ I I I

I i I I I I I ! I I I l I i l i I I I

(2003) SCC Online HP 45) and Cox and Kings Limited Vs. SAP India Private Limited and Another (2022) I SCCI.

7. In the written statement filed by the defendant no. 7 to 9 it is submitted that defendant no. 7 to 9 are not pafties to the three loan agreement dated 18.06.2010, 01.10.2010 and 11.05.2011 which form the basis of present application. It is submitted that the assets/shares of the present defendants of which attachment is being sought were never offered as securities for the said loan amounts. It is submitted that it is a well settled principle of law that in incorporated company has a separate and distinct legal entity from that of its shareholde(s) even if the shareholder(s) own practically the 100o/o of the said company. The assets and liabilities of once group company cannot be treated as the assets and liabilities of another group company. Therefore, the present OA is not maintainable against the present defendants. It is submitted that there is no expression as group companies either in the Companies Act, 1956 or the RDB Act that various companies part of the same group of companies cannot be made liable for the defaults/liabilities of each other as it is settled principle of law that every company has a separate and independent juristic and legal entity and that a company cannot be held liable for any of the obligations/liabilities arising out of agreements to which it is not a party. It is further submitted that the Defendant No.4 Company being a Public Limited Listed Company and Defendant Nos. 7-9 being Private Limited Companies are completely different species and as such cannot be clubbed together as 'group companies' in as much3s.Xh a proposition is <I

completely unknown to the principles of Company Law and hence untenable. It is submitted that the statement of account filed by the applicant FI is not in accordance with the Bankers Book Evidence Act and thus not admissible in evidence. Therefore, it is humbly prayed that the prayer sought against defendant no.7 to 9 is not maintainable and devoid of any merit. Therefore, the OA of the applicant is liable to be dismiss with exemplary costs,

8. The documentary evidence filed by way of the affidavit of Mr. Anupam Alo( Assistant Manager (Law) by applicant bank as Annexure AW-l to Annexure AW-

34.

9. Heard the Ld. Counsel of applicant FI and Ld. Counsel of Defendant no. 2 & 3 and perused the record.

10. The first contention of the Ld. counsel of the defendant no.2 & 3 is that the original application has not been instituted by the authorized representative of the applicant and therefore, the OA is not maintainable. It is submitted that as per provisions contained in Rule 4 and Rule 9(3) of the DRT Procedure Rules the original application has to be presented by the applicant who is the authorized officer of the bank. It is further submitted that the Board Resolution does not authorize Shri Zachariah Jacob, Manager to institute the Suit and the Board Resolution is general in nature delegating signing powers by the IFCI.It is submitted that as per judgement passed by the Hontle Himanchal Pradesh High Court in case of Apple Valley Resort Vs. H.P.State Electricity Board and Another (2003) SCC Online HP 45) it has been held that power to institute e}'

an action on behalf of comPany can be conferred on a director or any other officer of the said company only by the Board of Directors by way of resolution and that such power has to be specifically conferred on that officer. On the other hand the Ld. counsel for the applicant has submitted that Board Resolution has authorized the Manager to institute the Suit and present the OA before Tribunal. It is submitted that there is no necessity of giving any power by name. In this regard I have perused the relevant provisions and also perused the above mentioned judgement. From perusal of the provisions it is clear that the original application may be presented by the authorized representative of the flnancial institution. In the present matter the Board Resolution dated 17.04.20t2 has given power to institute the Suit or file the original application to all the Managers and other mentioned officers of the company. Therefore, it is deemed that Shri Zachariah Jacob who is the manager has power to file the present OA. There is no necessity in the provisions of the Rules that the authorization must be by name. It may be given in general to all the persons who are holding a particular post. Therefore, on this ground the OA cannot be dismissed.

11. The next contention of the defendant no.2 & 3 is that the recall notice has not been issued and the same has not been served upon the defendants. It is submitted that recall notice has been issued to the defendants on 22.L0.20t2, 07.12.2012 and It.12.20t2. But these notices does not constitute a recall notice and only pertains to the events of default and directions to provide cash margin for fall in security in cover. Therefore, it is submitted that the S\

OA is liable to be dismissed' In this regard I have perused the documents annexed with the OA. From perusal of the notices it is clear that these notices can be deemed to be recall notice and the contention of the defendants that these notices cannot be deemed to be recall notices cannot be accepted. There is no proforma of the recall noUce. From perusal of these notices it is clear that in these notices the defendants were directed to pay the dues' More over these notices have been communicated to defendants. Therefore, on this ground the present OA cannot be dismissed.

12. The next contention of the Ld. counsel of the defendant no.2 & 3 is that the defendant no.4 to 10 are not necessary pafi and there is no privity of contract between the applicant and defendant no. 4 to

10. It is submitted that defendant no.1 to 9 are not a single enilty and therefore, no action can be taken against defendant no.4 to 10. In this regard I have gone through the record. From perusal of the record it is clear that defendant no.4 to 10 has not filed any evidence in this regard and no one is representing defendant no. 4 to 10. More over from perusal of the record it is clear that the defendant no' 1 to 9 are part of a single entity being Glodyne Group. In arbitration proceedings it has been recognized, therefore, the contention of the defendants cannot be accepted' The Ld. counsel of defendant no.2 and 3 has filed the judgement passed by the Honble Supreme Court in case of Cox and Kings Limited Vs. SAP India Private Limited and Another (2022) I SCC1. I have perused the above judgement. From perusal of the judgement it is clear that the facts of the above Glse are totally different ftom the present -eQse. From perusal of the r I l i I I i I I I i i I I I I I : I :

entire record it is clear that in the present case the defendant no.1 to 9 are single entity which is clear from the evidence flled by the applicant. Therefore, the contention of the defendants cannot be accepted.

13. The next contention of the Ld. counsel of defendant no.2 & 3 is that the applicant bank failed to invoke the pledge of shares of defendant no.4. It is submitted that the corporate loan was secured by the pledge of shares of M/s Glodyne Technoserve Limited/defendant no.4. It is submitted that on 26.07.2012 the stock prices of the defendant no.4 drastically fell along with the stocks of certain other midcap companies and the fall in the stocks was Rs.343 to Rs.274.It is submitted that even after such drastic fall the value of these shares was such that the dues of Rs.196 Crores may be recovered by selling these shares. It is submitted that defendant no.2 & 3 has orally requested the applicant to liquidate the shares and recover the outstanding amount but the applicant has failed to sell the shares and recover the amount and therefore, it was the conduct of the applicant by which the applicant failed to recover the dues of the defendant no.l. It is submitted that due to this act, the liabilities of defendant no.2 & 3 shall be released. In this regard I have perused the record. From perusal of the record it is clear that the corporate loan was taken by pledging the shares of the defendant no.4 company and also secured by the mortgage executed by the defendant no.3 & 4. In the mortgage deed it has not been mentioned that the applicant has to fast recover the dues from the sell of the pledged share and only then if there is any shortfallthe mortgage may be enforced. The pledge of the share and the mortgl_e is co-extensive. Even if cA

the applicant has failed to sell the shares of the defendant no.4 company, the liability of the defendant no.2 & 3 cannot be deemed to be extinguished. From perusal of the record it is clear that the borrower failed to repay the entire dues and therefore, the same can be recovered from the borrower as well as guarantors. The liability of the guarantors is joint and several with the borrower. Therefore, the fact that the applicant has failed to sell the pledged share in time and has failed to recover the same by selling the shares, the original application against the defendant no.2 & 3 cannot be dismissed.

14. From perusal of the record it is clear that the applicant has proved his entire case by filing concrete evidence and proving the same by filing the evidence. Therefore, the present TA deserues to be allowed.

ORDER

1) I hereby allow this T.A. of the Applicant Bank and direct the defendant nos. 2,3,5,6,7 & 9 to pay jointly and severally to the applicant bank within 30 days from today, a sum of k.72,47,24,2231- along with cost, expenses and interest @ t7o/o from the date of filing of this O.A. which has become T.A. till the date of realization. Defendant no.1,4 & 8 are under liquidation and the liabilities of defendant no.1,4 & 8 shall be decided by the Official Liquidator.

2) In case of failure to deposit the above amount within the stipulated period, the same shall be recovered from the sale of the moftgaged propefi being (i) Property of bearing no. A-3-215 situated at, Sector-1, Millenium Business l"!, Mahape, Navi €)

Mumbai 4OO7O} and having built up arei of 344 Sq. Mts. (ii), Property having built up area 10,502 Sq. Mts situated at Kshitij, Plot No. 38, Rajeev Gandhi Infotech Park, Hinjewadi, Pune 4LL057 (iii). Property admeasuring 6096 Sq. Ft (Total) situated at Compulink House, situated at Plot no. 168, bearing survey no. 90, Hissa No. 18 of Village Kothrud, Taluka Haveli, Dist - Pune - 411038 (iv). Property admeasuring 125 Sq. Ft. & 125 Sq. Ft. (Carpet) situated at 5312476, Radheshyam Bldg., Gandhi Nagar, Bandra (E), Mumbai-400051 (v). Property admeasuring 1350 Sq. Ft Flat No 3, Mrugank, Rajpath Co-Op Society, Near Vanaz Paud Road, Pune - a11038 (vi). Property admeasuring 992 Sq. Ft situated at Meghmalhar Co-op Society, Near Vanaz Paud Road, Pune - 411038 (vii). Property admeasuring 1750 Sq. Ft (8f' Fbor) 105 Sq. ft each - 2 Storage Spaces (9th floor) 5285 Sq.ft Open Space situated at 801 Balaram, BandraKurla Complex, Bandra (E), Mumbai-400051 (viii). Propefi of Annand Sarnaaik admeasuring 1000 sq ft. situated at Flat No 401, Jairaj CHS Limited, Bandra (E), Mumbai - 400051

(ix) . Propefi of Diwyani A. Sarnaaik admeasuring 1000 sq ft situated at Flat No 402, Jair{ CHS Limited, Bandra (E), Mumbai-z+00051 (x). Property of Paradyne Infoservices hrt. Limited admeasuring 550 Sq. ft carpet area & 550 Sq. ft carpet area situated at A-001 & 4-301, Lodha CHS Ltd.. Kalina CST Road, Behind Nityanad Hotel, Santacruz (E), Mumbai - 98 (xi). Property admeasuring A-12 1988 Sq Mtrs, A-13 1887 Sq. Mts. W 192 (D) 1100 Sq. Mts. Situated at No. A- t2lt3 & W-192(D), of the Trans Thane Creek Industrial Area, Khairane, Thane, Belapur Road, Thane, Navi Mumbai. In case of short fall, the same shall be recovered from the i"J"_E personal movable $

t

and immovable assets of the defendant no. 2,3,5,6,7 &.9.

3) Recovery Certificate be issued forthwith and be sent to Recovery Officer, Debts Recovery Tribunal-Il, Delhi.

4) The registry of this Tribunal is hereby directed to issue free copy of the order and send the same to both the parties.

5) Parties are directed to appear before the Ld. Recovery Officer, DRT-II, Delhi on 28.02.2025. Pending IAs, if any, stand disposed of. File be consigned to records. Date:3t.12.2024 EA (SUSHIL KUMAR RASTOGI) PRESIDING OFRCER DRT-II, Delhi This judgement has been signed, dated and pronounced in open court. E-\ v, Date : 31.12.2024 (susHrl KUMAR RASTOGI) PRESIDING OFFICER DRT-II, Delhi m : I I : c