Uttam Galva Steel on Tuesday challenged Deutsche Bank‘s application at the National Company Law Tribunal (NCLT) for the recovery of $20 million (Rs 142 crore).
The Singapore branch of Deutsche Bank had given a $20 million credit facility to Uttam Galva on May 2, 2013.
Uttam Galva has raised two contentions opposing the petition — one that the debt was time-barred and the other that the loan agreement was not stamped.
Since the document is not stamped in Maharashtra, Deutsche’s claim cannot be enforced, argued Khaitan Legal Associates, the law firm representing Uttam Galva at the NCLT.
As per a recent judgement by the Supreme Court on the Limitations Act 1963, winding up of a company shall be deemed to commence at the time of the presentation of a petition, its counsel said. Therefore, according to the counsel, even for the debt the relevant date to be taken will be the date of filing the petition, which is today. The debt amount cannot be recovered if the time period exceeds three years from the date of lending, he argued, claiming the debt to be time-barred.
The bank’s counsel said it had sent timely notices to Uttam Galva reminding the payment and that the company had failed to repay the amount except for some of the interest.
Jerome Merchant, the law firm representing Deutsche Bank, pointed out that treating the bank as an operational creditor in the books of Uttam Galva was wrong and that it had to be considered as a financial creditor.
Uttam Galva, against which the central bank had asked lenders to initiate corrective actions, has yet to come up with a resolution plan, after State Bank of India withdrew an insolvency petition it had filed in November 2018. The associate companies of Uttam Galva — Uttam Value Steel and Uttam Galva Metallics — were acquired by a consortium of US-based company CarVal and Asset Reconstruction Company of India in April last year.
A Mumbai bench of the NCLT, comprising Bhaskara Pantula Mohan and Rajesh Sharma, adjourned the hearing in the case to January 30.
Source: Economic Times