National Steel and Agro Industries : CIRP - others

National Steel & Agro Industries Ltd

April 12, 2022

Ref No.: NSAII/SEC/2022-23

To,
Corporate Relationship Department,	Listing Department,
BSE Limited	National Stock Exchange of India Limited
1st Floor, New Trading Ring,	Exchange Plaza', C-1, Block G,
Rotunda Building, P J Towers,	Bandra - Kurla Complex,
Dalal Street, Fort,	Bandra (E)
Mumbai- 400001.	Mumbai - 400051.

To,

Sub: Initiation of Corporate Insolvency Resolution Process (CIRP) - Copy of NCLT Order dated April 11, 2022.

Ref: Regulation 30 of Securities and Exchange Board of India (Listing Obligations and

Disclosure Requirements) Regulations, 2015.

This is in continuation to our letter dated April 11, 2022 wherein it was informed that Hon'ble

.

National Company Law Tribunal (NCLT), Mumbai Bench has pronounced Order regarding admission of application for initiation of Corporate Insolvency Resolution Process in respect of National Steel and Agro Industries Limited. In this regard, a copy of NCLT Order dated April 11, 2022 is enclosed herewith.

You are requested to kindly take the same on record and acknowledge the receipt.

Thanking you,

Yours sincerely,

For National Steel and Agro Industries Limited

End: as above

Regd. Office: 621, Tulsiani Chambers, Nariman Point, Mumbai - 400021. Ph. : +91 2222043080,22882949, CIN : L27100MH1985PLC140379 Admn. Office: 401, Mahakosh House, 7/5 South Tukoganj, Nath Mandir Road, Indore - 452 001, M.P., India, Web:www.nsail.com

Ph: [phone],4017409, Fax: +91 731,2516714

IN THE NATIONAL COMPANY LAW TRIBUNAL

MUMBAI BENCH, COURT - I

Item 9 of Cause list dt 10.03.22

CP (IB) 2067/MB/2019

U/S 7 of the Insolvency and Bankruptcy Code, 2016 read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016

In the matter of

JM Financial Asset Reconstruction Co Ltd 7th Floor, Cnergy, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400025.

..…Financial Creditor

Vs

National Steel & Agro Industries Ltd (CIN: L27100MH1985PLC140379) 621, Tulsiani Chambers, Nariman Point, Mumbai - 400021.

…..Corporate Debtor

Order Delivered on :- 11.04.2022

Coram:

Hon'ble Member (Judicial) : Justice P.N. Deshmukh (Retd.) Hon'ble Member (Technical): K.K. Vohra

Appearances:

For the Financial Creditor: - Mr. Ravi Kadam, Sr. Adv a/w Adv

Rohit Gupta, Adv. Prakhar Tandon i/b Adv Agam H Maloo

For the Respondent: -Devesh Juvekar a/w Dikshat Mehra i/b Rajani Associates, Advocates.

ORDER

Per:- K.K. Vohra, Member (Technical)

1.

This is a Company Petition originally filed by Bank of India, Financial Creditor (hereinafter referred to as the Original Lender) u/s 7 of the Insolvency and Bankruptcy Code, 2016 (the Code) seeking to initiate Corporate Insolvency Resolution Process (CIRP) against National Steel & Agro Industries Ltd., the Corporate Debtor (hereinafter referred to as CD) for non-payment of outstanding dues by the CD. Pending the said Company Petition against the CD, the original FC entered into an Assignment Agreement dated 29.09.2021 with JM Financial Asset Reconstruction Company Ltd. (hereinafter referred to as the FC). By virtue of the said Assignment Agreement, this Tribunal permitted substitution of JM Financial Asset Reconstruction Company Limited in place of Original Lender Bank of India on 21.01.2022 whereby all the rights and title of its financial assets including the financial debt owed by the CD were assigned to the FC.

Submissions of FC are as follow:

• 2. On 26.05.2014, an Inter Se Agreement for credit facilities was executed among IDBI Bank Ltd, State Bank of India, State Bank of Travancore, Bank of Maharashtra, United Bank of India, Andhra Bank, Oriental Bank of Commerce, State Bank of Patiala, Central Bank India, Punjab National Bank, Bank of India (hereinafter referred to as the IDBI Bank Limited Consortium) and CD.

• 3. The IDBI Bank Ltd Consortium had sanctioned Rs. 1431,05,00,000 to the CD in which the Original Lender sanctioned Rs. 125,00,00,000.

• 4. The amount claimed to be in default as on the date of classifying the

  Debt as Non-Performing Asset (NPA) is Rs. 116.91 crores as principal amount (Part IV, Pg 5 of CP). The Account was classified as NPA on 30.09.2018. CD admitted that an amount of Rs 114.34 crores as principal amount was in default as on 02.07.2018 in its Balance Sheet as on 31.03.2020 (pg 323 of Compilation of Documents).

• 5. Working Capital Consortium Agreement dated 26.05.2014 was executed between IDBI Bank Ltd Consortium including Bank of India (original lender) and the CD for extending credit facilities by Original lender to CD (pg 201 of Petition). The credit facilities were duly secured by joint hypothecation deed dated 26.05.2014. The Deed of Guarantee was executed by Mr. Santosh Shahra in favour of IDBI Bank Limited Consortium who also guaranteed the repayment of the said credit facilities.

• 6. CD breached the terms of loan agreement hence the loan account of was classified as NPA. The total dues as on 30.05.2019 is Rs. 127,80,95,977 with further interest and expenses.

• 7. The report of Central Repository of Information on large Credits dated 13.05.2019 is annexed to the Petition (pg 297 to 299). The Statements of Accounts for the period 2014 onwards have been produced on record in order to corroborate the claim filed by the FC.

• 8. Hence, the petitioner submits that the petition is complete in all respects, the default has been corroborated by substantial evidences, therefore, the petition ought to be admitted and CIRP to be initiated.

Submissions of CD are as follows:

9. CD filed Reply on 28.08.2019 opposing on the grounds of maintainability. CD alleged that the signatory to the Petition is not an authorised person to initiate the CIRP against the CD. FC also failed to provide any document to show that the signatory is authorised to act on behalf of the FC to institute the present Petition. CD also stated that the documents on which FC had relied upon were insufficiently stamped. CD also stated that the Statements of Account as provided by FC were not certified as per the provisions of the Banker's Book of Evidence Act, 1891.

10.CD stated that it had submitted OTS proposal to the IDBI Bank Ltd

Consortium and was in constant negotiation for settlement. CD stated that if the present petition is admitted, the business of CD will have a negative impact and also the vendors/customers will stop dealing with the Company and the activities of the CD will come to a standstill.

11.CD vide Affidavit dated 26.11.2019 stated that CD had initially submitted a Onetime Proposal (OTS) to the IDBI Bank Limited Consortium for an amount of Rs. 375,00,00,000. Later, the said proposal was revised to Rs. 430,00,00,000. The CD further submitted that the OTS proposal was to be placed before the competent authority.

12.Further, the CD through its another Affidavit dated 16.01.2020 stated that CD had already advanced its efforts to settle the dues. CD had already deposited amount of Rs. 15.85 Crores to the Consortium Banks. CD submitted that as the OTS is at an advance stage, in the