Page 669 - IBC Orders us 7-CA Mukesh Mohan

Order Passed Under Sec 7
By Hon’ble NCLT Mumbai Bench

corporate debtor as well; this fact has not been disputed by this corporate debtor. This principal borrower,
to acquire shares of its group Indian company namely Varun Shipping Company Limited (VSCL), availed
USD 30million loan from this Mauritius Bank situated in Mauritius Country by entering into Facility

Agreement dated 2.12.2008. This Corporate Debtor Company, being holding company of RPML,
executed corporate guarantee for the aforesaid amount of USD 30 million to secure repayment of the

outstanding dues in the event of default in repayment by the principal borrower, i.e. RPML. The aforesaid
Sumegh Mody, being common director of RPML and the Corporate Debtor, signed the Facility
Agreement on behalf of RPML and Corporate Guarantee Agreement on this Corporate Debtor as well.

Before execution of this Corporate Guarantee by this Debtor, it had passed a Board Resolution on
2.12.2008 agreeing to give corporate guarantee to the aforesaid loan taken by

RPML from the Financial Creditor (Board Resolution at Page 122 of CP). In furtherance of it, on
26.3.2009, the Debtor Company, through Mr. Sumegh Mody, executed an irrevocable and unconditional
corporate guarantee in favour of the Creditor for full repayment of all monies as agreed by RPML in the

event RPMI defaulted in making repayment of USD 30million availed through Facility Agreement.

3. This guarantee agreement executed in favour of a Foreign Bank located in Mauritius having

fallen within the ambit of FDI through automatic route, since the debtor company is under an obligation
to make post facto intimation of the same to RBI, this debtor company on 26.3.2009 forwarded the copy
of this corporate guarantee to its dealer Bank, namely Bank of Baroda along with k-)rm ODI to enable the

Bank to send it to RBI. This fact is also not denied by the corporate debtor. Interesting part is, even the
letter written to the Bank of Baroda is signed by the same Mr. Sumegh Mody as director of the Debtor

Company. To prove that FDI guidelines have been complied with, this Corporate Debtor, by its letter
dated 1.4.2009 sent the letter acknowledged by the Bank of Baroda, dealer Bank along with this guarantee
agreement to the creditor as well, this was done perhaps to impress upon the Creditor Bank that the

Corporate Debtor completed whatever formalities to be followed in availing facility for getting Foreign
Direct Investment. Somewhere in the 2012, when RPML defaulted in its payment obligations under
Facility Agreement after payment of instalments, this Facility Agreement was amended on 2.4.2012 and

the loan was restructured. Besides this, in the auditor's report of RPML as of 31q' March, 2009, it has
been reflected that this Bank loan of USD 30 million has been secured and has been guaranteed by the
Varun Corporate Limited (corporate debtor), the holding company. By looking at the Annual Report of

the Corporate Debtor for the period of 15 months ended 30th June 2009, it has been reflected under the
head of contingent liabilities as follows:

"Contingent Liabilities:

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