IN THE NATIONAL COMPANY LAW TRIBUNAL

MUMBAI BENCH, COURT-I

CP (IB) No. 291 of 2023

Under Section 7 of the Insolvency and
Bankruptcy Code, 2016

In the matter of
Omkara Asset Reconstruction Private
Limited
… Financial Creditor/Petitioner

Versus

Gstaad Hotels Private Limited

… Corporate Debtor/Respondent
Order Delivered On : 08.07.2025

Coram:

Hon’ble Member (Judicial) : Sh. Justice Virendrasingh G Bisht (Retd.)

Hon’ble Member (Technical) : Sh. Prabhat Kumar

Appearances:
For the Financial Creditor : Adv. Mr. Prateek Seskaria, Adv. Ryan
D'Souza a/w. Adv. Zaid Mansuri, Adv.
Prateek Kumar

For the Corporate Debtor : Adv. Aditya Joby, Adv. Ajesh Kumar
Shankar, Adv Shrihari S., Adv. Sunche
Bhandary
 IN THE NATIONAL COMPANY LAW TRIBUNAL

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C.P. (IB) No. 291/2023

ORDER

Brief Background
1. A Company Petition C.P. (IB) No. 291/2023 was filed on 09.03.2023
under Section 7 of the Insolvency and Bankruptcy Code, 2016
(“IBC/Code”) read with Rule 4 of the Insolvency and Bankruptcy
(Application to Adjudicating Authority) Rules, 2016 by Omkara Assets
Reconstruction Private Limited [CIN:U67100TZ2014PTC020363]
(“hereinafter referred to as Applicant/ Financial Creditor”), seeking
to initiate Corporate Insolvency Resolution Process (“CIRP”)
against M/s. Gstaad Hotels Private Limited
[CIN:U55101MH2003PTC143481] (“hereinafter referred to as
Respondent/Corporate Debtor”). This Application was filed by the
Financial Creditor, pursuant to rights in respect of the outstanding
amounts assigned in favour of the Financial Creditor by Piramal Capital
and Housing Finance Limited (“PCHFL”) and PHL Fininvest Private
Limited (later known as “Piramal Enterprises Limited” consequent
to Scheme of Arrangement approved vide Order dated 12.8.2022,
referred to as PEL/PHL) vide a Deed of Assignment dated 27.12.2022.
Prior to this, PCHFL had assigned its rights in respect of part of
outstandings due from Corporate Debtor in favour of PHL vide
Assignment Deed dated 22.3.2019.

1.1. This Tribunal admitted the Corporate Debtor into CIRP vide Order
dated 09.01.2024 and declaring the Moratorium u/s 14 of the Code.
This Order was challenged by Deepak Raheja, the shareholder of the
Corporate Debtor, before the Hon’ble National Company Law
Appellate Tribunal (“NCLAT”). The Hon’ble NCLAT, vide its
common Order dated 08.01.2025 passed in appeal against the
admission order in this Petition as well CP(IB) No. 290/2023,
allowed the appeal and issued following directions:

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“64. In view of the foregoing discussions and our conclusions, we

dispose of both the Appeal(s) in following manner:
(1) Company Appeal (AT) (Ins.) No. 165 of 2024 is allowed. The
impugned order dated 09.01.2024 passed in C.P.(IB)
No.291/MB/2023 is set aside.
(2) C.P.(IB) No.291/MB/2023 is revived to be considered afresh
after hearing the parties.
(3) Company Appeal (AT) (Ins.) No. 212 of 2024 is allowed. The
impugned order dated 09.01.2024 passed in C.P.(IB)
No.290/MB/2023 is set aside.
(4) C.P.(IB) No.290/MB/2023 is revived before the Adjudicating
Authority to be heard and decided afresh after hearing the parties.
(5) The IRP may utilize the amount, which is kept in the Fixed
Deposit by the IRP out of the Retention Account towards the
payment of the CIRP costs and rest of the amount received after
09.01.2024 be remitted to the Financial Creditors towards their debts
and dues.
65. We make it clear that while deciding these Appeal(s), we are not
expressing any conclusive opinion on any of the issues, which are yet
to be decided by the Adjudicating Authority consequent to this
remand order. Parties shall bear their own costs.”

1.2. Accordingly, this matter was taken up again by this Tribunal for
passing appropriate order(s) after hearing the parties. The Learned
Counsel for the both the parties made extensive arguments and both
the parties placed on record their additional pleadings as well.

2. Before we proceed further, it would be beneficial to state brief facts of

the case leading to filing of present Petition by the Financial Creditor
under Section 7 of the Code.

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C.P. (IB) No. 291/2023

2.1. Loan of Rs. 450 Crores :

2.1.1. Pursuant to a Loan Agreement, dated 26.12.2017, Piramal Finance
Limited, as it was then known (now known as Piramal Capital and
Housing Finance Limited and referred to as “PCHFL", consequent
to scheme of arrangement approved vide order dated 06.04.2018),
as lender, agreed to extend a rupee term loan facility amounting to
Rs. 600,00,00,000/- (Rupees Six Hundred Crore Only) to the
Corporate Debtor and Neo Capricorn Plaza Private Limited
(“Neo/NCPPL/Corporate Debtor in CP (IB) 290 of 2023”) as
borrowers (“Loan Agreement”) with certain terms and conditions.
Out of this, the Corporate Debtor was granted a term loan of
Rs. 450.00 Crores and a Rolling Credit Facility (“RCF”) of
Rs. 50.00 Crores.

2.1.2. A Security Trustee Agreement, dated 26.12.2017, was entered into

between the Corporate Debtor, Neo, PCHFL and IDBI Trusteeship
Services Limited (“IDBI”) appointing IDBI as Security Trustee in
respect of the Loans.

2.1.3. Subsequently, a Deed of Guarantee, dated 26.12.2017, was executed

by Mr. Deepak Raheja, Mrs. Anita Raheja, Mr. Aditya and Shiv
Raheja and Advantage Raheja Hotels Private Limited in favour of
IDBI guaranteeing repayment of the Loan.

2.1.4. Afterwards, on 26.12.2017, the Corporate Debtor and Neo executed

a Demand Promissory Note for an amount of Rs. 600,00,00,000/-
(Rupees Six Hundred Crore Only) in favour of Security Trustee.
Thereafter, on 22.03. 2019 and 24.06.2019, a part of the Loan was
assigned by PCHFL to PHL. On 01.02.2018, the Corporate Debtor
also created a mortgage over the land in Bangalore.

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2.1.5. A Cash Management Agreement dated 16.1.2018 (“CMA”) was

also entered into between PCHFL, Corporate Debtor and the Hotel
Operator.

2.2. ECLGS Scheme facility :

2.2.1. In addition to the Loan of Rs. 600 Crores, PHL also sanctioned two
loans to the Corporate Debtor under Emergency Credit Line
Guarantee Scheme (“ECLGS Scheme”); ECLGS Facility-1 and
ECLGS Facility-2. The Corporate Debtor availed ECLGS Facility-
1 and ECLGS Facility-2 on 29.12.2020, and 11.03.2022,
respectively.

2.2.2. In respect of the ECLGS Facility-1, dated 29.12.2020, the Corporate

Debtor, IDBI and PHL executed a Security Trustee Agreement
appointing IDBI as a Security Trustee and a Demand Promissory
Note for an amount of Rs. 98,00,00,000/- (Rupees Ninety-Eight
Crore only) in favour of IDBI. With regard to the ECLGS Facility-
2, the Corporate Debtor, executed a Demand Promissory Note,
dated 11.03.2022, for an amount of Rs. 65,00,00,000/- (Rupees
Sixty-Five Crore only) and also hypothecated certain movable
properties in favour of the Security Trustee.

2.3. Defaults
2.3.1. The Corporate Debtor, on 15.11.2022, defaulted in favour of the
ECLGS Facility-1 and ECLGS Facility-2. Consequent to the default
committed by the Corporate Debtor under the Loan Agreement,
ECLGS Facility-1 and ECLGS Facility-2, the Financial Creditor
issued a recall notice dated 15.02.2023, recalling the whole of
outstanding amounts and calling upon the Corporate Debtor to pay
an amount of Rs. 666,53,26,968/- (Rupees Six-Hundred and Sixty-
Six Crores Fifty Three Lakhs Twenty-Six Thousand Nine Hundred

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C.P. (IB) No. 291/2023

and Sixty-Eight Only) within 3 days from the date of receipt of such
notice.

2.3.2. The Petitioner claimed a default of total amount of

Rs. 665,74,77,237/- (Rupees Six Hundred and Sixty-Five Crores
Seventy Four Lakhs Seventy-Seven Thousand Two Hundred and
Thirty-Seven Only) as on 27.02.2023 in the Part IV of the Petition.
The date of default in respect of Loan, ECLGS facility -1 and
ECLGS facility -2 is stated to be 15.11.2022.

2.4. In addition, and without prejudice, it is also stated by the Petitioner

that the Corporate Debtor and Neo addressed two letters dated
23.12.2022 and 11.01.2023 to PCHFL and PEL pertaining to, inter-
alia, alleged non-disbursal of balance ECLGS amount and requesting
for consideration of an One-Time Settlement, which are stated to have
been responded by PCHFL and PEL vide their letter dated
14.02.2023.

3. Earlier, consequent to the default of Corporate Debtor in the month of

10.08.2021, IDBI Trusteeship Services Limited had filed a Company
Petition bearing CP (IB) No. 1292 of 2021 before this Tribunal seeking
initiation of CIRP and the same was subsequently withdrawn by it in
terms of order dated 13.12.2022. Column 2 of the Part IV of that
Application states “As on July 28, 2021, the total amount claimed to be in
default is Rs.510,82,73,829 (Rupees Five Hundred and Ten Crore, Eighty Two
Lakhs, Seventy Three Thousand, Eight Hundred and Twenty Nine Only) which
is due and payable. Date of Default is April 15, 2021, the date on which the
Corporate Debtor defaulted in payment of interest and default interest.
Subsequent default on May 15, 2021. The default amounts as computed at
Exhibit M of said Application is reproduced below :

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4. Before we proceed further to examine the matter, it is relevant to take

note of the observations of the Hon’ble NCLAT in its Order dated
8.1.2025 while setting aside the Order dated 09.01.2024 passed by
this Tribunal earlier-

a. In relation to validity of assignment agreement, it has been stated

that “The prayer of the Appellant before the High court having not been
accepted, questioning the assignment dated 27.12.2022, we are of the view
that no fault can be found in the assignment at this stage.”

b. On the issue of Res-judicata, it has been stated that “The default in

the aforesaid proceedings was default of Loan Agreement dated 27.12.2017.
Section 7 Application, which has given rise to present Appeal has been filed
alleging default of ECLGS-1 and ECLGS-2. In the earlier Section 7
Application initiated by IDBI Trusteeship Ltd., the ECLGS Facilities were
not subject of consideration, nor the Applications were founded on any
default under ECLGS Facility. Hence, we are of the view that the
Applications – CP(IB) No.291/MB/2023 and CP(IB)No.290/MB/2023,
cannot be held to be barred by the principle of res-judicata.” However, the
Hon’ble NCLAT observed that
“(i) Section 7 Application, which was filed by IDBI Trusteeship Ltd.
on behalf of the Lenders was withdrawn on 13.12.2022 and
22.12.2022 and it is to be presumed that on the date when
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Application was withdrawn, there was no need for insolvency

resolution process of the CD. It is to be noted that while withdrawing
Section 7 Application, neither any reasons have been given for
withdrawal, nor any liberty was given to file a fresh application.
(ii) Immediately after withdrawal of Section 7 Application, the debt
was assigned by Lenders to Omkara on 27.12.2022, who issued
recall notice on 15.02.2023 and filed Section 7 Application on
09.03.2023, claiming debt and default as on 15.11.2022, which date
was prior to withdrawal of Section 7 Application.”,

and has stated that “The above fact raises question on the object and motive
of Omkara to initiate CIRP against the CDs, which also needs
consideration.”

c. As regards Corporate Debtor being a solvent company, the Hon’ble

NCLAT has stated that “23. Be that as it may, the above facts clearly
support the submission that both the Hotels were running Hotels and earning
revenue and payments were made to the Lenders even during Covid-19
period and thereafter. The Lenders, who have given finances to the Corporate
Debtor for a Project, are also obliged to support the Corporate Debtor in
running the business and extend their helping hand to the Corporate Debtor.
The object of IBC is insolvency resolution. We, thus, find substance in the
submissions of the Appellant that JW Marriott Hotel and Crown Plaza
Hotel, which are run by the Corporate Debtors were profitable Companies,
earning substantial profits.”

d. As regards non-consideration of CMA Agreement, the Hon’ble

NCLAT has stated that “We are of the view that the Adjudicating
Authority is required to consider Section 7 Application afresh, after taking
into consideration various clauses of the CMA and consequently remittance
of the amount towards repayment of the loan in the Retention Account.”

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e. As regards the Debt Service Reserve Amount (“DSRA”) stipulated

in Clause 9 of Agreement dated 26.12.2017, the Hon’ble NCLAT
has stated that “The Lenders were obliged to maintain Debt Service
Reserve (“DSRA”) amount as per the Loan Agreement dated 26.12.2017,
which amount was required to be appropriated towards payment of principal
and interest due under the Loan Agreement.”

f. As regards contention of the Corporate Debtor that ECLGS credit

proceeds were used towards servicing of interest outstanding on the
Loan Account, the Hon’ble NCLAT has stated that “The amounts
sanctioned by Lenders under ECLGS-1 and ECLGS-2 of Rs.98 crores and
Rs.65 crores, whether the said amount was used by the Lenders for servicing
its own debts or dues, contrary to the Agreement dated 30.12.2020 and
21.03.2022, was required to be considered by the Adjudicating Authority
and the said argument raised on behalf of the CD, could not have been
brushed aside on the ground that end use Certificate was given by the CD.”

g. In relation to defaults under ECLGS-1 & 2 facility, the Hon’ble

NCLAT, after taking note of Review Report placed on record by the
Corporate Debtor vide Additional Affidavit thereafter, has stated
that “Thus, we are of the view that for determining the default even for
ECLGS Facility, the Adjudicating Authority has to consider all aspect of the
matter, including excess payment under Facility-1 and Facility-2 and
unused DSRA and only after considering all relevant facts, findings
regarding default of ECLGS could have been given. The findings of the
Adjudicating Authority with regard to default under ECLGS-1 has been
returned in paragraph-16 of the order. Except the observation
“54…….Nonetheless the default in relation to the outstanding loan and
ECLGS-I is clearly established”, neither there is any reason given, nor there
is consideration of any material facts on the record for coming to the said
finding. The finding returned by the Adjudicating Authority regarding
default, thus is without considering of the materials on the record and are
unsustainable. We have already held that DSRA was also required to be

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looked into, which has not even adverted to by the Adjudicating Authority.
We, thus, are of the view that the Adjudicating Authority is required to
consider the default of ECLGS and loan account, afresh, after considering
the relevant materials on record, including the observations as made in this
order.”

h. As regards proof of default under the Loan Agreement dated

26.12.2017 and the ECLGS-II sanctioned on 21.03.2022 “60. As
noted above, in Part-IV, except statement that default is committed towards
loan account, no details of default have been given and 15.11.2022 has been
mentioned as the date of default. Nothing in respect of what was the
outstanding amount under the Loan Agreement payable by the CD has been
mentioned. We, thus, are of the view that Adjudicating Authority is required
to consider the default under the loan account afresh. There being no finding
of default regarding ECLGS-2 by the Adjudicating Authority, no further
consideration is required with regard to ECLGS-2.”

5. In view of the aforesaid observations of the Hon’ble NCLAT, both the

parties were heard and allowed to file necessary documents before this
Tribunal in support of their contention. It is clear from the Appellate
Order that this Tribunal has been asked to consider the default of
ECLGS and loan account, afresh, after considering the relevant
materials on record, including the observations as made in this order,
after taking into effect of provisions under CMA and effect of DSRA
clause under the Loan Agreement, which is claimed to have resulted
into recall of the Loan amounts.

6. The debt in question, is admitted to be in existence in the Audited

Financial Statement of the Corporate Debtor for the year ended
31.03.2023, accordingly there is no dispute in relation to existence of
debt disbursed by the erstwhile lenders, though the Corporate Debtor
has disputed its obligation towards this debt qua the Financial Creditor

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herein by challenging the Assignment Agreement dated 27.12.2022

itself.

6.1. The issue in relation to Assignment Agreement has already been

decided by Hon’ble Karnataka High Court in favour of Financial
Creditor. It is relevant to note the observation of Hon’ble NCLAT in
its Order in relation also, which reads as “The prayer of the Appellant
before the High court having not been accepted, questioning the assignment
dated 27.12.2022, we are of the view that no fault can be found in the
assignment at this stage”. Further, since, the existence of a debt, per-se,
is not in dispute and the repayment of such debt is alleged to be in
default pursuant to agreements entered between Corporate Debtor
and Assignor lenders, we are also of considered view that the dispute,
in relation to assignment of such debt in favour of Financial Creditor
before us is not of much relevance at this stage particularly in the light
of clause 27.2 of the Loan agreement specifically providing that “The
consent of the Borrowers or any of the Obligors is not required for any
assignment, transfer, participation or sub-participation by an Existing Lender
of any of its obligations under the Finance Documents” and absolute right
to assign vested in lenders in terms of clause 27.1 of the Loan
Agreement. It is pertinent to note that the present Petition is for the
resolution of the Corporate Debtor’s financial stress and such stress is
dehors the person claiming the rights in such debt, and those rights
can also be decided at the time of admission of claim of the Financial
Creditor in CIRP, if it commences.

6.1.1. Before we deal with specific issues raised by Learned Counsel for the
Corporate Debtor in the light of appellate decision in the matter, it
is pertinent to first look into whether there is a default in discharge
of obligations under ECLGS facilities and Loan Account,
considering that the present application has been filed for default
amount of Rs. 6,65,74,77,237/- (stated to be due as on 27.02.2023)

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arising from the issuance of Recall Notice dated 15.02.2023,

whereby the Corporate Debtor was called upon to pay
Rs. 666,53,26,968/- within 3 days from the date of receipt of such
notice on account of default in respect of Loan, ECLGS facility -1
and ECLGS facility -2. The details of outstanding facilities as on
15.02.2023 are stated as below in the said notice.

6.1.2. In Section 2 of Part IV, the date of default in relation to default under
ECLGS facility -1 and ECLGS facility -2 is stated to be 15.11.2022.
It is also noted that the total outstanding has also been claimed in
default as on 27.02.2023 pursuant to recall notice. For this purpose,
it is pertinent to understand whether an event of default has taken
place in terms of the repayment obligations and the repayment
mechanism under the agreements entered into between the parties
in terms of relevant clauses under various agreements. The details of
total default in respect of each facility, as stated in Exhibit V of the
application, are as below:-

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6.2. The Lenders and Corporate Debtor had entered into a Loan
agreement dated 26.12.2017, which also contains an Escrow
Arrangement between the parties as Annexure 3 thereof. Further, a
Cash Management Agreement dated 17.1.2018 was entered into
amongst the Lenders, Corporate Debtor and Operator of the Hotel
Properties, which is defined in First Schedule to the Loan Agreement
to mean “the agreement executed on or about the date hereof between GHPL,
Marriott Hotels India Private Limited (as the operator), Global Hospitality
Licensing S.À R.L. (as GHL), Renaissance Services B.V. (as RSBV),
Marriott International Licensing Company B.V. (as Marriott) and the Lender
(as Financier) which sets out the cash management arrangement between the
parties thereto in relation to the JW Marriott Hotel together with the non-
disturbance agreement executed between the parties thereto.”

6.2.1. The clause 1 A & B of CMA provides that –

“A. The Parties agree that the operating profit which (after deduction of the
amounts payable to Marriott Companies under the Marriott Agreements)
would otherwise be distributed to Owner (as set out in the interim accounting
referred to in section 5.02 of the Operating Agreement) (“Owner Profit”) will
be deposited in the Retention Account (as defined below) for Financier to
repay the loan under the Facility Agreement.
B. To implement the arrangement in Section 1.A above, the parties agree
that, notwithstanding section 9.03 of the Operating Agreement, until there is
a Cash Management Default, the Hotel’s Gross Revenues in relation to each
Accounting Period shall be deposited and utilized in the following manner :
(i) Operator will deposit all Hotel’s Gross Revenues (including tax or similar
charges collected by the Hotel from patrons or guests, “Taxes”) on a daily
basis into an account established by Owner with Financier as revenue
account (“Revenue Account”);
(ii) On a daily basis, through an automatic transfer via standing instructions:
(a) Financier will transfer 66% of the Gross Revenues (including Taxes)
from the Revenue Account into a designated account at YES Bank

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(Account number : 02284000002912) which will be an expense account

(“Expense Account”). Operator will use the funds in the Expense
Account to pay for the operating expenses of the Hotel and Taxes; and
(b) Financier will transfer the remaining amount of the 34% of the Gross
Revenue in the Revenue Account (after transfer of the amount referred
to in section 1.B(ii)(a) above) into an account established by Owner with
Financier as retention account (“Retention Account”). Financier will
use the funds in the Retention Account to service the debt under the
Facility Agreement.

(iii) ………………………………

(iv) Within seven Business Days after the end of each Accounting
Period, Operator will provide a copy of the interim accounting referred
to in section 5.02 of the Operating Agreement to Owner and Financier
and a monthly reconciliation will be performed to ensure that only
amount constituting Owner’s Profit (including contribution to the
Repairs and Equipment Reserve) is deposited an/or retained in the
Retention Account for repayment of the loan under the Facility
Agreement. Accordingly,

(a) If : (1) the aggregate amounts which have been transferred from the
Revenue Account to the Retention account pursuant to section
1.B(ii)(b) above in the immediately preceding Accounting Period;
exceed (2) the owner Profit (including contribution to the Repairs
and Equipment Reserve) relating to the immediately preceding
Accounting Period, Financier and Owner will deposit the excess
amount into the Expense Account within ten Business Days after
Operator’s provision of the interim accounting to Owner and
Financier; and
(b) If : (1) the Owner Profit (including contribution to the Repairs and
Equipment Reserve) in relation to the immediately preceding
Accounting Period; exceed (2) aggregate amounts which have been
transferred from the Revenue Account to the Retention account

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pursuant to section 1.B(ii)(b) above in the immediately preceding

Accounting Period, Operator will deposit the excess amount into
the Retention Account within ten Business Days after Operator’s
provision of the interim accounting to Owner and Financier;

F. Owner will ensure Financier to comply with the terms of Section I of this
Agreement. Any breach by Owner or Financier of Section J of this Agreement
that Owner or Financier fails to rectify within 10 days after receiving a
written notice from Operator requesting for rectification will constitute a
“Cash Management Default“.

G. This Agreement does not relieve Owner’s obligation to advance additional

funds required to maintain Working Capital and Inventories at levels
determined by Operator to be necessary to satisfy the needs of the Hotel as Its
operation may from time to time require pursuant to section 7.01 of the
Operating Agreement. Owner will provide such funds to the Expense
Account upon Operator’s request.

H. The current split of 66% /34% ratio to allocate Hotel Gross Revenue into
the Expense Account and Retention Account on a daily basis pursuant to
Section l.A(ii) is determined:

(i) On the basis that the amount of Taxes collected by the Hotel will on
average constitute approximately 23.5% of the Gross Revenue collected
by the Hotel. If the relevant percentage of Taxes increases (e.g. due to
a change in tax laws or regulations), the split ratio will be adjusted to
increase the percentage of Gross Revenue to be deposited in the Expense
Account on a daily basis; and

(ii) Based on the percentage of Owner Profit (including contribution to

the Repairs and Equipment Reserve) to Gross Revenue in the budget
of the Hotel for year 2018. If there is significant change of such
percentage in the future budget which may result in the daily
allocation to the Expense Account becoming insufficient for the
operation of the Hotel, Financier and Operator will adjust the daily

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split ratio in writing to ensure there is sufficient funds for the operation
of the Hotel at the Expense Account.”

Notwithstanding any changes to the daily split ratio as described in this

Section 1.H above, the monthly adjustment pursuant to Section 1B(iv) will
remain unchanged.”

6.2.2. Further, Clause 2 of CMA provides for “Default” and consequence

thereof. It reads as under:

“2. DEFAULT

A. Upon the occurrence of a Cash Management Default, the provision set

out in Section 1.A of this Agreement will cease to apply and instead, the
following provisions will apply upon notice by Manager to Owner and
Financier:
(1) Operator will deposit all cash receipts derived from the operation of the
Hotel in the Expense Account, which will be exclusively controlled by
Operator in accordance with Section 1.B above; and
(2) on the date Operator provides Interim accounting to Owner pursuant to
section 5.02 of the Operating Agreement, Operator will transfer to the
Retention Account the operating profit which (after deduction of Working
Capital needs as reasonably determined by Operator) would otherwise be
distributed to Owner (as set out in the relevant interim accounting) in
relation to the immediately preceding Accounting Period.
B. Without prejudice to any other rights or remedies Operator may have
under the Operating Agreement and this Agreement, if Owner or Financier
fails to comply with its obligations under Section 1 of this Agreement, such
non-compliance will constitute an Event of Default by Owner under the
Operating Agreement which will entitle Operator to terminate the
Operating Agreement in accordance with section 16.02 of the Operating
Agreement.
C. If Operator fails to make the deposit to the Retention Account within the
timeframe as required under Scection1.B(iv)(b), Financier will notify

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Operator in writing of such failure and Operator will make the relevant
deposit within 5 Business Days of such notice, and if Operator fails to do
so, Financier is entitled to deduct the relevant amount from the amounts it
is required to transferred to the Expense Account under Section 1.B(li).”

6.2.3. In terms of the Clause 1, the CMA mandates deposit of entire

Revenue collected by Operator in a Revenue Account, wherefrom
the Lenders were to transfer 66% of such revenue in an Expense
Account with YES Bank and balance 34% of such revenue in a
Retention Account (to be opened by Corporate Debtor with the
Lenders) on a daily basis via standing instructions. The CMA further
contemplates a monthly reconciliation to ensure that only amount
constituting the Corporate Debtor’s Profit (including contribution to
the Repairs and Equipment Reserve) is deposited an/or retained in
the Retention Account for repayment of the loan under the Facility
Agreement. It further mandates the Operator to submit a copy of the
interim accounting within seven business days after end of each
accounting period to the Corporate Debtor and Lenders and further
provides that any excess transfer either to Expense Account or to the
Retention Account beyond the agreed percentage of Revenue shall
be transferred to Retention Account by Operator or to Expense
Account by Lenders immediately.

6.2.4. The Corporate Debtor has placed on record reconciliation for the
month of May, 2023 and April, 2023 on record to alleged that the
Financial Creditors has failed to deposit the excess amount of
Rs. 10,35,88,444/- drawn beyond 34% as determined in April 2023
monthly reconciliation in terms of Clause 1.B(iv)(a). On perusal of
the said clause, it is noted that the obligation to deposit such
overdrawn amount is casted upon both Financier and Owner.
Further Clause 2 provides for the occurrence of event of default in
such case, whereupon the Operator is vested a right to terminate the

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Operating Agreement, besides authorising Operator to deposit all

cash receipts derived from the operation of the Hotel in the Expense
Account, to be exclusively controlled by the Operator in accordance
with Section 1.B above. It is pertinent to note that such overdrawn
amounts have been appropriated towards the obligations of the
Corporate Debtor, which otherwise are required to be fulfilled by the
Corporate Debtor and/or Obligors out of other sources in terms of
Clause 18.39 of the Loan Agreement. It is not case of the Corporate
Debtor that this excess withdrawal has resulted into advance
payment against its obligation under the agreements, which
otherwise had not fallen due. Further, these overdraws do not
pertain to the period, in consideration in this application i.e.
November 2022 to February 2023. Nonetheless, had there been a
refund of any amount over withdrawn in terms of monthly
reconciliation for the period from November, 2022 to February,
2023 by the lenders, this would have further increased the amount
claimed to be in default on the relevant dates. It is also noted that no
precipitative action has been taken by the Operator in terms of
Clause 2 of CMA.

6.2.5. The said CMA authorises the Lenders to use the funds in the
Retention Account to service the debt under the Loan Agreement.
"Repayment Instalment" is defined in Schedule 1 to mean “the
instalment for repayment of the Loan, as set out in Part III of the Second
Schedule hereunder, which may be modified at the discretion of the Lender,
from time to time in the manner set out in clause 5.2”, and "Repayment
Date" to mean “the last date of a fiscal quarter on which a Repayment
Instalment shall be payable. Part III of the Second Schedule to the Loan
Agreement provides that “Entire Receivables lying to the credit of the
Escrow Accounts (post adjustment of the operating expenses and fees/reserve
as per the operator agreement/s executed inter-alia with the CP Hotel
Operator and/or JWM Hotel Operator) shall be first adjusted towards

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Interest payment and balance towards repayment of the principal Loan in

proportionate share for GHPL Loan, NCPPL Loan and RCF on the 15th
(fifteenth) of every Month”. Part III further provides that “Post
disbursement of all the GHPL Loan, NCPPL Loan and the RCF, the
maximum Outstanding Amounts in respect of the Loan at end of each year
during the loan tenure is as below:

6.2.6. Clause 18.39 of the Loan Agreement provides for Service of Loan
and reads as “The Borrowers agree and undertake that in the event the
funds lying and being in the Retention Account are not sufficient for the
repayment of the Loan or any part thereof (emphasis supplied), the
Borrowers and/or the Obligors shall ensure that the Loan and every part
thereof is repaid through such other funds as maybe necessary for this purpose
and acceptable to the Lender”. The clause 18.39 of the Agreement
makes it emphatically clear that the CMA and Escrow Arrangement
only put in place a mechanism to ensure agreed percentage of
revenue being made available to service the obligations of the
Corporate Debtor under the Loan Agreements. This arrangement,
in no way, can be said to be an exhaustive arrangement to fulfil the
obligations under the Loan Obligations so as to discharge the

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Corporate Debtor and Obligors from their service obligation under

the agreements, even if the funds available under the CMA falls
short of periodic obligations under the Agreement.

6.2.7. The first Disbursement to the Corporate Debtor took place on

28.12.2017 and five years therefrom expires on 27.12.2022.
Accordingly, the total principal outstanding of Loan and RCF due
from the Corporate Debtor and NCPPL should be Rs. 500 crores as
on that date. The break-up of the total outstanding placed at Exhibit
V of the Application shows principal outstanding of Rs. 486.29
Crores under Loan and RCF account due from Corporate Debtor.
Further, the Exhibit R of the Petition {CP(IB) No. 290 of 2023} filed
in relation to NCPPL shows a principal outstanding of Rs. 97.20
Crores as on 27.02.2023. Thus, the principal outstanding of Loan
and RCF due from Corporate Debtor and NCPPL aggregates to
Rs. 583.49 Crores as on 27.02.2023 i.e. even later than the date of
issue of recall notice. This clearly establishes the existence of default
in terms of repayment of principal amount of Loan as on date of
issuance of Recall notice.

6.2.8. It is also pertinent to note Clause 7.2.6 of the Agreement, which

provides that “Notwithstanding anything contrary contained herein, upon
completion of the 5th (fifth) anniversary of the first Disbursement Date of the
GHPL Loan and/or NCPPL Loan, as the case maybe, or upon completion
of the 10th (tenth) anniversary of the first Disbursement Date of the GHPL
Loan and/or NCPPL Loan, as the case maybe, the Lender at its discretion
shall have a right within 6 (six) months following such 5th (fifth) anniversary
or 10th (tenth) anniversary, as the case maybe, to call upon the Borrowers
and/or the Obligors or any of them to pay/ repay the entire Outstanding
Amounts or a portion thereof relating to the Loan. Upon exercise of such
option, the Outstanding Amounts as on the date of exercise of such option
shall become immediately due and repayable by the Borrowers and/or the

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Obligors. Any breach of this clause 7.2.6 by the Borrowers and/or the
Obligors or any of them shall constitute an Event of Default.” As stated
above, the first disbursement of Loan took place on 28.12.2017 and
five years expired on 27.12.2022, the right to recall the whole loan
facility also accrued in favour of Financial Creditor on 28.12.2017
dehors the default.

6.2.9. The Financial Creditor recalled the whole of outstanding facilities

in terms of notice dated 15.02.2023, Para 2 of said notice reads as
“……………As you are aware, as per the terms of the Loan Agreement and
ECLGS Loan Agreements, failure on the part of the Company to make
payment of any installment and Coupon constitutes an Event of Default and
on occurrence of an Event of Default, the lenders and/or the security trustee
is entitled to exercise all its rights under the Loan Agreement, ECLGS Loan
Agreements and related finance documents.” It is further stated in Para 4
that “In the above circumstances, and in accordance with our rights under
the Loan Agreement and ECLGS Loan Agreements, we hereby recall all the
Loans availed by Borrower - 1,…………”. In our considered view, the
words “in accordance with our rights under the Loan Agreement,
also includes the right in terms of clause 7.2.6 of the Agreement.

6.2.10. The Exhibit V of the Application also shows that there is an

outstanding of interest amounting to Rs. 10.51 crores and of penal
interest amounting to Rs. 3.57 crores under the Loan and RCF
facility as on 27.12.2023. As quoted above, Part III of the Second
Schedule to the Loan Agreement provides that the amounts lying to
the credit of the Retention Account shall be first adjusted towards
interest payment and balance towards principal amount. The
Corporate Debtor has contested the quantum of interest levied on
the Loan account by the Lenders and placed on record a “Review
Report on Commercial Loans Outstanding” submitted by B. K.
Ramadhyani & Co. LLP, Bangalore under UDIN:

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24215398BKFOJUB606 filed with Additional Reply dated

08.02.2025 filed by Corporate Debtor. The following observations
have been given in the said Report –
a. Piramal has not reset interest rates for 5 consecutive reset periods
(July 01, 2020; January 01, 2021; July 01, 2021; January 01, 2022;
July, 2022) upto the date of assignment. During this time, due to
the pandemic, the Repo rate, SBI Benchmark PLR and the cost
of borrowings of Piramal Enterprises Ltd. showed a downward
trend. Piramal kept the interest rate at 13.00% p.a. and 14.20%
p.a. for the Loan facilities. In our opinion, this has led to interest
being charged in excess and the excess interest charged during this
period can neither be sustainable nor conform to the normal
financial practice of the financial institution as per the Master
Circular – Fair Practice Code issued by the Reserve Bank of India
(DNBH(PD) CC. No. 054/03.10.110/2015-16).

b. GHPL has an unutilized balance of Rs. 3.00 Crores in its DSRA

as at 15.11.2022 (out of Rs. 8.00 Crores as set apart in the Para 9
of the Original Loan Agreement read with Eleventh Schedule
thereof) which was not utilised to offset any shortfall in interest
payments which is charged monthly on the principal outstanding
(monthly rest on every month as per Para 4.1 of the Agreement).
Piramal has failed to access the funds from the retention ledger
managed with HDFC Bank as per the Cash Management System
for the replenishment of DSRA which was disbursed on
09.12.2020, of Rs. 7 Crores though there were no defaults of
interest on the date of disbursement.

c. GHPL and NCPPL have availed the credits under ELGS of

Rs. 182.50 Crores in total for the purpose of operation of the
business during the pandemic. The disbursements under this
credit have been adjusted to the tune of Rs. 158.25 Crores by

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Piramal against the principal and interest outstanding instead of

working capital requirements of the Company.
d. Piramal has shown a claim of Rs. 3.52 Crores in the assignment
agreement with Omkara as default interest, which was not made
known to the borrowers. No basis was available for the
calculation of assigned default interest. The default interest/penal
interest charged by Omkara is not in alignment with the loan
agreement entered into by the borrower. Hence, in our opinion,
a default interest of Rs. 131.91 crores in total levied by Omkara is
not appropriate and tenable.

6.2.10.1. The said Review Report has also summarized the amounts
reflected in the lender’s statements based on interest charged by
the lenders, as reproduced below:

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6.2.10.2. The Hon’ble NCLAT, after noticing the aforesaid table, has
stated in its order that “Although, this Tribunal on 15.07.2024 had
granted time to Respondent to file reply to additional affidavit, but no
reply is on record of Respondent No.2. Thus, we are of the view that for
determining the default even for ECLGS Facility, the Adjudicating
Authority has to consider all aspect of the matter, including excess
payment under Facility-1 and Facility-2 and unused DSRA and only
after considering all relevant facts, findings regarding default of ECLGS
could have been given.” It is pertinent to note that the above
statement is on consolidated basis for both the accounts i.e.
Corporate Debtor and NCPPL.

6.2.10.3. Per-contra, the Financial Creditor has filed a report by Mukund

M. Chitale & Co., Chartered Accountants, Mumbai determining
the default position as under vide Annexure F to its report dated
15.03.2025.

6.2.10.4. Mukund M. Chitale & Co. has also placed on record loan account
statements for the period 28.12.2017 to 15.01.2025 for the
commercial loans availed by the Corporate Debtor and NCPPL
from PCHFL and PEL prepared on the basis of the statement of
account of the Corporate Debtor and NCPPL maintained by
PCHFL and PEL and the details of recoveries prepared and
provided by the Applicant Financial Creditor in spreadsheet
format.

6.2.10.5. The Corporate Debtor has submitted that the Corporate Debtor
has paid to the Financial Creditor a sum of Rs. 29,52,56,300/-

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between 09.10.2022 to 27.02.2023, accordingly if there was any

default the same was paid by it under the CMA. The Corporate
Debtor has also placed on record another Report dated
26.04.2025 titled as “Report on Review of Commercial Loan
Outstanding — 2” by BK Ramadhyani & Co. LLP, Chartered
Accountants Bangalore. In the said report, this firm has
commented on the report submitted by Mukund M. Chitale &
Co. and has given following review points:

a. For the re-computation of the loan overdues, the interest rate applied
to the loan accounts are as charged by Piramal up to 15.11.2022 and
13% after the said date. The interest rates charged by Piramal are
inappropriate as explained in our previous report and hence
considering the same rates may not.be correct.
b. Interest is computed on the entire balance outstanding and not on the
principal outstanding which may have a compounding effect.
c. The report furnished doesn’t consider the interest rate changes which
need to be passed on to the borrower.

6.2.10.6. The above comments on the report of Mukund M. Chitale & Co.
clearly show that BK Ramadhyani & Co. LLP has not found any
fault in the computation of the default amount, but has
questioned the quantum on the ground of inappropriateness in
the rate of interest applied by the Financial Creditor/Lenders.
These issues raised in the earlier Review Report are being dealt in
the following paras.

6.2.10.7. The Review Report has determined excess levy of interest on

Loan amounting to Rs. 95.37 Crores, of which a sum of Rs. 93.62
Crores has been determined as excess on the basis of Effective
Lending Rate (“ELR”) extrapolated on basis of computation of
Piramal PLR with reference to SBI Benchmark PLR. It is
admitted by the Corporate Debtor (as can be seen from the said

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Review Report) that the Lenders had communicated its PLR upto
10.07.2018 from time to time, even though the Said Review
Report has computed the chargeable interest on basis of such
derived ELR for those periods also. As regards rate of interest for
subsequent period, it is relevant to refer to Clause 3.2, which
provides for ‘Interest Reset’ and reads as - “In the event, the Lender
on account of any change/ revision in the Piramal Prime Lending Rate
revises the rate of Interest payable by the Borrowers to the Lender
(emphasis supplied) under the terms of this Agreement (the "Revised
Interest"), the said Revised Interest shall be applicable effective from
January 1 (where the revision is notified after July 2 of a calendar year
and before December 31 of the same calendar year) or July 1 (where the
revision is notified after January 2 of a calendar year and before June 30
of the same calendar year). Notwithstanding anything contrary contained
herein, the Revised Interest shall at no point be less than 9% p.a. (nine
percent per annum) in relation to the GHPL Loan and NCCPL Loan,
and 10.5% р.a. (ten point five percent per annum) in relation to the
RCF.” Further, Clause 4 of Part I of Second Schedule provides
for rate of interest chargeable on Loan and the relevant part
thereof in relation to reset of PLR reads as - “The current Piramal
Prime Lending Rate is 15.9% p.a. (fifteen point nine percent per annum).
Interest will be reset on a half-yearly basis from subsequent half year on
1st July and 1st January. Effective lending rate is Piramal Prime Lending
Rate minus 5.4% (five point four percent) for GHPL Loan and NCPPL
Loan.” The usage of the word “will” clearly signifies that the re-
set of Piramal PLR was not a mandatory exercise failing which
the borrower shall have option to reckon it with reference to
benchmark lending rate of any other Bank. The language used in
Clause 3.2 of the Agreement also makes it abundantly clear that
the only obligation on the lender was to notify any
change/revision in the rate of interest to the borrower to make it
enforceable against it.

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6.2.10.8. It is relevant to refer to the letter dated 23.12.2022 addressed to

PCHFL and PEL by the Corporate Debtor and NCPPL whereby
the Corporate Debtor has sought certain reliefs. The relevant part
reads as “We have managed to source an investor who is willing to take
over your loan. We have gone through an extremely tough period due to
the above facts. We request your good self to consider all the above points
and request your support. We request you to immediately release the
ECLGS amount. As your approach has been unfavourable, we would like
to settle the debt under a onetime settlement scheme by you considering
credit of the payment of INR 10 cr charged initially, revising the rate of
interest charged to 10.50% p.a. with retrospective effect and giving us a
lump sum discount of 20% on interest paid till date and thereby arriving
at the amount due. We agree to repay the amount in an agreed time
schedule, mutually acceptable”. In this letter, it is also stated that
“We have been charged 394.28 Cr. as interest from date of availing loan
till Dec 22. After taking the loan, interest rate went up to 13.00% for term
loan and 14.20% for revolving credit facility. We were shocked to find
these increases in interest rates in spite of being assured to the contrary. In
fact, when SBI PLR was going down drastically, your rates went up
substantially. Since availing the loan we have been charged 80 Cr excess
amount by way of increase in interest rates.” There is no other
communication placed on record by the Corporate Debtor
protesting against non-fixation of Piramal PLR. The letter dated
23.12.2022 does not signify any refusal to accept the liability on
account of applicable interest rates at that point, and it merely
seeks a favourable consideration on part of Financial Creditor to
address the concern in relation to high interest rates being charged
on the facilities.

6.2.10.9. It is also pertinent to refer to Fair Practice Code referred in the

said Review Report which provides at clause 2 as under –
(viii) Regulation of excessive interest charged by NBFCs

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(a) The Board of each NBFC shall adopt an interest rate model
taking into account relevant factors such as cost of funds, margin and
risk premium and determine the rate of interest to be charged for
loans and advances. The rate of interest and the approach for
gradations of risk and rationale for charging different rate of interest
to different categories of borrowers shall be disclosed to the borrower
or customer in the application form and communicated explicitly in
the sanction letter.

(b) The rates of interest and the approach for gradation of risks shall
also be made available on the web-site of the companies or published
in the relevant newspapers. The information published in the website
or otherwise published should be updated whenever there is a change
in the rates of interest.

(c) The rate of interest should be annualised rate so that the borrower
is aware of the exact rates that would be charged to the account.

(ix) Complaints about excessive interest charged by NBFCs

The Reserve Bank has been receiving several complaints regarding

levying of excessive interest and charges on certain loans and
advances by NBFCs. Though interest rates are not regulated by the
Bank, rates of interest beyond a certain level may be seen to be
excessive and can neither be sustainable nor be conforming to normal
financial practice. Boards of NBFCs are, therefore, advised to lay out
appropriate internal principles and procedures in determining
interest rates and processing and other charges. In this regard the
guidelines indicated in the Fair Practices Code about transparency
in respect of terms and conditions of the loans are to be kept in view.”

6.2.10.10. The Fair Practice Code only stipulates that the information
published in the website or otherwise published should be
updated whenever there is a change in the rates of interest and
does not contemplate periodical reset of PLR mandatorily.
Further, it also contemplates redressal mechanism for excessive
interest charged by NBFCs by mandating the Board of NBFCs
to lay out appropriate internal principles and procedures in
determining interest rates. Instead, Fair Practice Code gives
complete autonomy to the NBFCs to adopt an interest rate
model taking into account relevant factors such as cost of funds,

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margin and risk premium. Nonetheless, there is nothing on

record to suggest that the Corporate Debtor had taken any issue
with regard to non re-set of PLR by Lenders earlier and
registered their protest in relation to excess levy of interest,
except letter dated 23.12.2022. In our considered view, the rate
of interest is governed by the agreement between the parties,
which they agree at the time of sanction of loan and the
borrower cannot be allowed to have any grievance later on the
ground that other lender is offering lesser rate of interest. Here
it is pertinent to refer to Clause 7.1 & 7.2 of the Agreement
which allows the Corporate Debtor to repay the loan facility
prior to five year out of ‘Receivables, contributions from the
Obligors and/or part sale of the assets of the Projects’ and after
five years out of any source.

6.2.10.11. As regards observation in relation to non-appropriation of

DSRA balance of Rs. 3.00 Crores and further access to the funds
in the retention ledger to replenish the DSRA account, it seems
that the reviewer has failed to appreciate that (i) the balance in
DSRA account was never disbursed, accordingly no interest was
charged thereon; (ii) if the balance of Rs. 3.00 crores would have
been appropriated towards interest obligations under the Loan
account, it would have increased the Loan Principal
outstanding by corresponding amount, and it would have
bearing only on quantum of penal interest, as in that case
interest on Rs. 3.00 crores would have been chargeable as
outstanding under Loan Account; and (iii) the only source of
funds available with the Corporate Debtor was retention
account, which was appropriated towards the repayment
obligations under Loan/RCF/ELCG facilities, accordingly, if
DSRA account would have been replenished from the
Retention Account, that would have made the equivalent

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amount unavailable for discharge of obligations under

Loan/RCF/ELCG facilities. Accordingly, the determination
of Rs. 1.75 Crores being excess interest charged on Principal on
account of failure of such replenishment is devoid of any merit.

6.2.10.12. As regards utilisation of ECLGS facility to the extent of

Rs. 158.25 Crores by Piramal against the principal and interest
outstanding instead of working capital requirements of the
Company, it is to be understood that such utilisation of ECLGS
facility loan only resulted into reduction of interest and principal
obligations under the Loan Agreement. The Financial Creditor
has placed on record various disbursement request under
ECLGS facilities stating the details of retention account for
credit of disbursed money in that account. This clearly indicates
the voluntary consent of the Corporate Debtor to allow
appropriation of such disbursed sums under ECLGS facilities
for discharge of obligation under other outstanding credit
facilities to keep those facilities in order and avoid the obligation
of the Corporate Debtor/Obligors to otherwise service to those
obligation from their other sources as contemplated in clause
18.39 of the Agreement. Even if it is in contravention of the
Purpose for which the Loan was sanctioned, the said adjustment
has only helped the Corporate Debtor to stay float by being able
to honour its payments obligations under the Loan Agreement.
The ECLGS loan carried an interest @ 13% p.a. which is lower
than the interest chargeable under the Loan Agreement. It is
also noteworthy that the Corporate Debtor had not raised any
grievance in this relation at the time of such
adjustment/appropriations, which clearly indicate that such
adjustment/appropriation had taken place with the mutual
consent of the parties. Since the lending and borrowing
transaction is a contractual arrangement between the parties, we

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do not find any merit in this contention to deny obligations

under ECLGS facility on this count, as, in the absence of such
adjustment, the obligations under Loan/RCF facilities would
have remained unserved. Accordingly, such arrangement, even
if not in conformity with the terms of sanction, cannot be taken
as a ground to deny the obligations arising from disbursement
under ECLGS facility.

6.2.10.13. The Review Report has also raised an issue regarding

non-provision of details of outstanding default interest of
Rs. 3.52 Crores stated outstanding in the Assignment
Agreement with Omkara as default interest. In our considered
view, the Reviewer has flagged this issue on the ground that no
such interest was appearing in the account statement shared by
Piramal to them, however, the Reviewer has failed to
understand that the default interest is leviable, as agreed, and
can be levied by the Financial Creditor later on as well.
Nonetheless, such non-levy does not preclude the Reviewer to
determine the default interest, if any accrued, on the basis of
facts before him, as the Reviewer was obligated to determine
what actually is due under the agreement. It has also been stated
that a default interest of Rs. 131.91 crores in total levied by
Omkara is not appropriate and tenable as such interest has been
charged on total outstanding and not on the default amount for
the default period. The Reviewer has failed to take note of Recall
notice dated 15.2.2023, whereby whole of the outstanding has
become due and payable, accordingly, the default interest is
leviable on such whole of amount. It may be noted that "Default
Interest" is defined in First Schedule to mean “the interest payable
by the Borrowers on the Outstanding Amounts upon the occurrence of
an Event of Default and such other instances as set out herein, at the
rate stipulated in the Second Schedule hereunder”.

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6.2.10.14. Clause 19 of the Loan Agreement provides for Events of

Default and We may now refer to some of the relevant sub-
clauses, which reads as under :
19.1 The Borrowers or any of them fail to pay the Repayment
Instalment, the RCF and/or the Interest or any other amounts
payable under the Finance Documents on the due date.
19.14 Any shortfall in the DSRA is not replenished as per clause 9
above.
19.17.1 Any Financial Indebtedness of the Borrower/s, the
Obligor/s or any of its respective Affiliates or entities belonging to the
Group is not paid when due.
19.17.2 Any Financial Indebtedness of the Borrower/s, the
Obligor/s or any of its Affiliates or entities belonging to the Group is
declared to be or otherwise becomes due and payable prior to its
specified maturity as a result of an event of default (however
described).

6.2.10.15. Clause 20 provides for Consequence of Event of Default and

some of the relevant sub-clauses reads as under :
20.1.1. Cancel any undisbursed Loan;
20.1.2 Declare that all or part of the Loan, together with accrued
Interest, and all other amounts accrued or outstanding under the
Finance Documents are immediately due and payable

6.2.10.16. As noted above, the Corporate Debtor has failed to pay the
Repayment Instalment, the RCF and/or the Interest under the
Loan Agreement on the due date and there is also a right
available to the Financial Creditor under Clause 7.2.6 of the
Agreement, the event of default as stated in clause 20.1.2 has
arisen.

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6.2.10.17. Further, the Corporate Debtor has also failed to replenish the
DSRA balance in terms of clause 9.3 of the Agreement, which
provides that “9.3 In the event that any amount has been utílised out
of the DSRA, the same shall be deemed to be a Disbursement under the
Loan and the Borrowers shall, within 7 (seven) days of such
Disbursement Date, deposit such amounts of money into the Retention
Account such that the undisbursed portion of the DSRA together with
such monies deposited into the Escrow Accounts aggregate the
Minimum DSRA Balance. In the event the DSRA is disbursed to
service any Interest/ Principal Repayment, then the same will have to
be replenished by the Borrowers within 7 (seven) days and then the
amount shall be maintained in an fixed deposit with an exclusive lien
marked in favour of the Lender/ Security Trustee.” It is pertinent to
note that this clause casts an obligation on the Corporate Debtor
specifically to replenish the DSRA balance and the parties to the
Agreement had not contemplated such replenishment out of
Retention Account, consciously realising that such Retention
Account was to service obligations in relation to Interest and
Principal only. It is pertinent to note that "Minimum DSRA
Balance" is defined in First Schedule to “mean an amount
equivalent to 2 (two) month's Interest payment obligations under this
Agreement until the Final Maturity Date.” On perusal of Statement
of Accounts for period from 15.11.2022 to 30.4.2024 provided
by the Financial Creditor in respect of all facilities (placed by the
Corporate Debtor in Volume 1 of his Additional Reply), it is
noticed that the monthly interest obligations in respect of
Loan/RCF facilities alone for the month of December, 2022
amounts to Rs. 5.44 Crores. Accordingly, the Corporate Debtor
was required to maintain a balance of Rs. 10.88 Crores as
Minimum DSRA Balance under the Agreement, which it has
failed to do so, and thus it also constitutes event of default in
terms of clause 19.14 of the Agreement.

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6.2.11. We are conscious that the present Petition has been filed in relation
to default under ECLGS-1 and ECLGS-II facility and not in relation
to default in DSRA or Loan/RCF Obligations, however, amount
claimed in default as stated in Part IV is the whole of outstanding
under all facilities consequent upon recall of the all facilities, we
have dealt with the aspect of default in relation to DSRA as well as
Loan/RCF facility to ascertain whether all the facilities could have
been recalled.

6.2.12. In view of the foregoing, we are of the considered view that there is
a default in payment of Interest and Principal under Loan/RCF
Facility, accordingly, the recall notice dated 15.02.2023 recalling the
whole of outstanding due from Corporate Debtor was permissible
under the Agreement.

6.3. Now we will examine the alleged defaults in ECLGS facilities. The
Learned Counsel for the Corporate Debtor contended that present
Petition u/s 7 of the Code is filed by Financial Creditor only on the
basis of there being a default of the ECLGS-1 and it is significant to
note that ECLGS-2 was not payable till 05.04.2024. There could not
have been default in ECLGS facilities.

6.3.1. An amount of Rs. 98,00,00,000/- was sanctioned by PHL as

ECLGS Facility Loan I for the purpose of working capital
requirements. An Agreement dated 30.12.2020 was executed
between PHL and the Corporate Debtor; a Security Trustee
Agreement dated 30.12.2020 was executed amongst the Corporate
Debtor, IDBI and PHL appointing IDBI as a Security Trustee; and
a Demand Promissory Note was signed for an amount of Rs.
98,00,00,000/- in favour of IDBI on 30.12.2020. The obligations of
the Corporate Debtor under the said Agreement were secured by
creation of Security Interest in favour of the Petitioner by and until

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the Final Maturity Date. The ECLGS Facility Loan I is repayable

in 48 (forty-eight) instalments of Rs. 2,04,16,667/- each, payable on
5th of each calendar month, after a principal moratorium period of
12 (twelve) months from the date of first Disbursement of the Loan.
The first instalment fell due on 15.12.2021. The Loan carries a fixed
interest of 13% p.a. payable monthly. The CMA dated 17.01.2018
has been extended to this Loan as well in terms of definition of CMA
provided in First Schedule. The terms of the Escrow Agreement
dated 06.03.2020 shall prevail in this Loan Agreement.

6.3.2. An amount of Rs. 65,00,00,000/- was sanctioned by PHL as

ECLGS Facility Loan II under the Emergency Credit Line
Guarantee Scheme 3.0 issued by the Government of India for the
purpose of working capital requirements. An Agreement dated
11.03.2022 was executed between PHL and the Corporate Debtor.
The obligations of the Corporate Debtor under the said Agreement
were secured by creation of Security Interest in favour of the
Petitioner by and until the Final Maturity Date. The ECLGS
Facility Loan II is repayable in 48 (forty-eight) instalments of
Rs. 1,35,41,670/- each, payable on 5th of each calendar month, after
a principal moratorium period of 24 (twenty four) months from the
date of first Disbursement of the Loan. The first instalment fell due
on 05.04.2024. The Loan carries a fixed interest of 13% p.a. payable
monthly. CMA dated 17.1.2018 has been extended to this Loan as
well in terms of definition of CMA provided in First Schedule.
Escrow Agreement is defined to mean the Escrow Agreement dated
26.12.2017.

6.3.3. Part II of Second Schedule of both these Agreements provides that

“Entire Receivables lying to the credit of the Escrow Accounts (post
adjustment of the operating expenses and fees/reserve as per the operator
agreement/s executed inter-alia with the JWM Hotel Operator and Crown

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Płaza Hotel Operator) shall be first adjusted towards Interest payment and
balance towards repayment of the principal Loan in proportionate share for
GHPL Loan on the 15th (fifteenth) of every Month.” Clause 29 of
Agreement dated 26.12.2017 provides for appropriation of partial
payments as follows :
“29.1 If the Lender receives a payment from the Borrowers under the
Finance Documents, the Lender shall apply that payment towards the
obligations of the Borrowers under the Finance Documents in the
following order:
a) First, in or towards payment of any unpaid fees, costs and expenses
of the Lender or its agents under the Finance Documents;
b) Second, in or towards payment of Default Interest;
c) Third, in or towards payment to the Lender of any accrued Interest
towards the Loan;
d) Fourth, towards Repayment Instalments or the RCF; and
e) Fifth, in or towards payment to the Lender of any other sum due but
unpaid under the Finance Documents.

29.1.2 The Lender may at its sole discretion vary the order set out in
Clause 29.1.1.”

6.3.4. Accordingly, on combined reading of Clause 29.1 of the Agreement

dated 26.12.2017 and first Para of Part II of Second Schedule to
Agreement dated 30.12.2020 & 11.03.2022, it is clear that the money
lying to the credit of the Retention Account was to be first
appropriated towards interest in arrears, then towards period
interest, and thereafter towards principal repayment of all the
outstanding under each of four loan facilities i.e. Loan, RCF,
ECLGS-I & ECLGS-II on pro-rata basis.

6.3.5. The Financial Creditor has alleged an overdue interest of

Rs. 1,74,34,155/- and Rs. 96,75,960/- under ECLGS-1 & ECLGS-

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II as on date of issuance of Recall Notice dated 15.02.2023 as per

table of outstandings given in said Recall notice. As per Statement
of Account for period from 15.11.2022 to 30.04.2024 provided by
the Financial Creditor to the Corporate Debtor, (placed by the
Corporate Debtor in Additional Affidavit in Reply), the interest
outstanding as on 15.11.2022 under ECLGS-1 & ECLGS-II
facilities is stated to be Rs. 1,38,64,767/- and Rs. 1,14,59,589/-. The
said Statement of Account further reveals that the balance of
principal outstanding under ECGLS-I facility is Rs. 77,58,53,330/-,
which implies that the Corporate Debtor had paid 10 instalments of
Rs. 2,04,16,667/- each, aggregating to Rs. 20,41,66,670/- towards
repayment of principal, which was to commence from 15.12.2021.
As on 15.11.2022, 12 instalments had fallen due, meaning thereby,
2 instalments of Rs. 2,04,16,667/- aggregating to Rs. 4,08,33,334/-
under ECGLS-I facility are due for payment and not paid as on
15.11.2022. Accordingly, the total default under ECLGS-1 &
ECLGS-II facilities come to Rs. 5,46,98,101/- and Rs. 1,14,59,589/-
as on 15.11.2022.

6.3.6. It is pertinent to note that Clause 17.39 of the Agreement dated

30.12.2020 & 11.03.2022 provides that “The Borrower agrees and
undertakes that in the event the funds lying and being in the Retention
Account are not sufficient for the repayment of the Loan or any part thereof,
the Borrower and/or the Obligors shall ensure that the Loan and every part
thereof is repaid through such other funds as maybe necessary for this purpose
and acceptable to the Lender.” However, no payment has been made
by the Borrower, except Rs. 57,61,993/- and Rs. 48,27,448/-
appropriated from the Retention Account on 30.11.2022. It is also
relevant to note that the Corporate Debtor as well as other Obligors
had undertaken to pay the amounts, that fall short after
appropriation from the Retention Account. The Financial Creditor
was asked to place on record a statement showing outstanding under

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each account and the balance available in Retention Account as on

15.11.2022 and for subsequent periods. On perusal of such
statement as on 15.11.2022, it is noted that a sum of
Rs. 1,54,93,481.68 was lying in the retention account and the said
amount was appropriated on 24.11.2022 towards outstanding
obligations under Loan & RCF account. However, even after such
appropriations, the amounts due under ECLGS-1 & ECLGS-II
facilities remains in default.

6.3.7. As regards the contention of the Corporate Debtor that the Financial
Creditor ought to have utilised the undisbursed DSRA amount of
Rs. 3.00 Crore to have the overdue interest paid, it is noted from the
Statement of Account for period from 15.11.2022 to 30.4.2024
provided by Financial Creditor to the Corporate Debtor that the
total interest outstanding as on 15.11.2022 in respect of all credit
facilities, including ECLGS facility, aggregates to Rs. 9,87,30,348/-
, besides default interest under Loan/RCF facilities amounting to
Rs. 2,90,87,114/-. In terms of rules of appropriations agreed in terms
of Clause 29.1 of the Agreement dated 26.12.2017, any part payment
has to be adjusted on pro-rata basis, first towards default interest,
thereafter towards interest and thereafter towards principal
repayment. There is neither any provision in both ECLGS
Agreements in relation to DSRA nor do these Agreements extend
the DSRA Account under the Loan Agreement dated 26.12.2017 to
these facilities. Nonetheless, even if the undisbursed amount of
DSRA (which shall increase the Loan outstanding) has to be
appropriated towards outstanding interest, it has to be appropriated
under all the facilities in pro-rata. Even without considering the
appropriation of default interest at all, the total outstanding interest
under ECLGS facilities comes to Rs. 2,53,24,356/-, accordingly,
25.65% of Rs. 3,00,00,000/- i.e. Rs. 76,95,006/- can be appropriated
towards the outstanding interest under ECLGS facilities. This still

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leaves a default of Rs. 1,76,29,350/- in relation to interest under

ECLGS facilities as on 15.11.2022, besides default in payment of
principal amount of Rs. Rs. 4,08,33,334/-. Accordingly, we are of
considered view that the Corporate Debtor was in default as on
15.11.2022 in relation to its obligations under ECLGS facilities
taken together, as well as individually also.

6.3.8. Clause 18 of the Agreement dated 30.12.2020 & 11.03.2022 provides

that “Each of the events or circumstances set out in the following sub-clauses
of this Clause 18 is an Event of Default. It is hereby agreed to between the
Parties that the question as to whether or not an Event of Default has
occurred and is continuing or not, shall be at the sole discretion of the Lender
without any recourse to the Borrower and/or the Obligors, and that such
determination by the Lender shall be final, valid and binding:” The said
clause gives absolute right to the Lender to determine occurrence of
event of default if such event of default is listed in said clause. We
have already examined the occurrence of default in discharge of
obligations under ECLGS facilities in preceding paras.

6.3.9. In terms of clause 18, following constitutes an Event of Default –

“18.1. The Borrower fails to pay the Repayment Instalment, and/or the
Interest or any other amounts payable under the Finance Documents on
the due date.

18.11. Failure to abide by the Lender's directions to repay the Outstanding

Amounts

18.16.1. Any Financial Indebtedness of the Borrower, the Obligor/s or any

of its respective Affiliates or entities belonging to the Group is not paid when
due.

18.16.6. An event of default has occurred or is continuing under any of the

hotel operating contracts/ hotel management agreements/ any other
agreement in relation to operation and management of the Hotel.”

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6.3.10. As the default in payment of interest under both ECLGS facilities

and payment of principal under ECLGS-I has been found, the said
default constitutes an Event of Default in terms of clause 18.1 of both
the agreements. At this juncture, it is relevant to note Clause 2.1.23
of First Schedule to the Agreement, which reads as - “A Default (other
than an Event of Default) is continuing if it has not been remedied and an
Event of Default is continuing if it has not been waived.” It is not in dispute
that the event of default was not waived by the Financial Creditor.

6.3.11. Clause 19 of both these Agreements provides for Consequences of

an Event of Default and sub-clause 19.1.2 reads as - “Declare that all
or part of the Loan, together with accrued Interest, and all other amounts
accrued or outstanding under the Finance Documents are immediately due
and payable;” This clause unequivocally vests a right in favour of the
Financial Creditor to declare all or part of the Loan, together with
accrued Interest, and all other amounts accrued or outstanding
under these facilities as immediately due and payable. In relation to
Loan/RCF facility, it is pertinent to note that “Any Financial
Indebtedness of the Borrower/s, the Obligor/s or any of its respective
Affiliates or entities belonging to the Group is not paid when due.”
constitutes a default under Clause 19.17.1 of the Agreement dated
26.12.2017 and clause 20.1.2 of that Agreement contemplates
similar consequence. Accordingly, the recall notice dated 15.2.2023
calling upon Corporate Debtor to pay the whole of outstanding is
well within the terms of the Agreements entered into between the
parties, and in consequence thereof, the whole of outstanding as
claimed in default becomes due and payable, hence the Corporate
Debtor can be said to be in default in failure to pay the same as
claimed in Part IV of the Application.

6.3.12. Having said so, it is pertinent to examine the contention of

Corporate Debtor that it is a solvent company returning positive

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EBIDTA year on year. The Director’s Report attached Audited

Financial Statements for the year ended on 31.3.2023 of the
Corporate Debtor reflects the following:

6.3.13. It is also relevant to take note of computation of Owner’s Profit for

the period from January 2018 to December 2024 as provided in the
Review Report dated 26.04.2025. The relevant table is reproduced
below:

6.3.14. This clearly shows that the Corporate Debtor is having positive
EBIDTA, however, its pre-tax Cash Profits (before
depreciation/amortisation and tax) for the year ended on 31.3.2023
only amounts to Rs. 7,94,18,500/- (after reducing therefrom the
Finance Costs accounted by the Corporate Debtor in its books of
accounts during that year), while it had repayment obligations
amounting to Rs. 24.50 crores under ECLGS-I facility, availed from
the Financial Creditor, only leaving the other facility’s principal

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repayment. It is also pertinent to note the ratio analysis as given in

notes to accounts attached to the said Audited Financial Statements
reports ‘Debt Service Coverage Ratio’ of 0.12, which means that the
Corporate Debtor’s internal accruals were sufficient to meet only
12% of its debt obligations in the year 2022-23. It is also pertinent to
point out here that EBIDTA is only considered as indicator in
relation to Enterprise’s Profitability index, while the solvency of an
enterprise is measured by its capacity to service its obligations
towards various stakeholders i.e. Lenders and Investors, for which
Debt Service Coverage Ratio is considered as suitable indicator.

6.3.15. We further note from the statement of account of the Corporate

Debtor that a sum of Rs. 83,64,22,801/- is claimed to have accrued
on account of normal interest (without taking into account penal
interest) on the outstanding facilities in financial year 2023-24.
From the above table, it can be seen that the Reviewer had
determined the Owner’s Profits (amount available for appropriation
in terms of CMA and Escrow Agreement) to be Rs. 94.22 crores,
accordingly, the balance amount available towards repayment of
principal amount under Loan Account and ELCGS-I remains only
Rs. 10.60 Crores approx., which is far below the repayment
obligations of the Corporate Debtor during that year also. Further,
out of the interest accrued during FY 2023-24, a sum of
Rs. 62,70,74,891/- had been accrued from April 23 to December 23.
As against this, the total money available and appropriated from the
Retention Account towards service obligation under credit facility
amounted to Rs. 61,20,56,163/-, thus leaving the interest of
approximately Rs. 1.5 crores un-serviced besides the principal
obligation under ECLGS-1 and Loan Account. Similarly, a sum of
Rs. 27,51,82,855/- is claimed to have accrued on account of normal
interest on the outstanding facilities from December 22 to March 23.
As against this, the total money available and appropriated from the

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Retention Account towards service obligation under credit facility

amounted to Rs. 26,66,76,425/-, thus leaving the interest of
approximately Rs. 0.90 crores un-serviced besides the principal
obligation under ECLGS-1 and loan account.

6.3.16. These facts clearly belie the contention of the Corporate Debtor
being a solvent company merely on the ground of positive EBIDTA,
while the Corporate Debtor is clearly failing to service the normal
interest and principal repayment obligations on month on month
basis till December 2023 i.e. month prior to admission of Corporate
Debtor into CIRP in the earlier round. Accordingly, we are of the
considered view that there do not exist even exceptional
circumstances warranting exercise of discretion assuming such
discretion, if any, is vested in this Tribunal u/s 7 of the Code.

6.4. Further, the Note no. 4.7 to said Financial Statements states that
“Loan from Piramal group has been reduced on the basis of December 2022
SOA received by them on mail which has been recalled by Piramal Loan has
been transferred lo Omkara Asset Reconstruction Company which has been
challenged in Karnataka High Court & NCLT by the company. No SOA has
been received after Dec 2022 from Piramal group by the company hence the
amt paid has been adjusted as per normal accounting principle. Loan waived
off has been transferred to capital reserve. Any difference amount that would
arise on receipt of SOA from Piramal would be adjusted accordingly in
subsequent financial years,” The final Review Report dated 26.04.2025
has also stated in relation to this write off that - “In our opinion, based
on the communication regarding the write-off, we believe that the borrowers
are entitled to avail the credit for the same. This ensures that they benefit from
the adjustment, reflecting their accurate outstanding balances and fostering
transparency in financial dealings”. It can be seen from the Note no. 4.7
that Piramal had recalled the Statement of Accounts shared via e-mail
dated 15.01.2023. It is also pertinent to note that Piramal has assigned

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the said debt to the Financial Creditor in terms of Assignment

Agreement dated 27.12.2022 and any entry in the books of Piramal
settling the account of Corporate Debtor consequent upon such
assignment can not constitute a waiver of an obligation due to the
Financial Creditor from the Corporate Debtor. Further, it is trite law
that unilateral write off of a debt by a creditor does not discharge the
debtor from the obligation under such debt due from him.
Accordingly, we do not find any merit in the claim of the Corporate
Debtor to deny any liability in relation to the amount of write off, in
the absence of any communication from the assignee financial
creditor after assignment of debt or by Piramal prior to assignment of
debt.

6.5. The issue was also raised about suppression of CMA document by the
Financial Creditor. As noted above, Clause 1 & 2 of the CMA are
already forming part of the Escrow Agreement, which is placed along
with the Petition. Nothing more, in substance, is added in the CMA
so as to consider the suppression thereof a vital defect warranting
dismissal of this Petition. In relation to the DSRA balance
suppression, we have already explained in the preceding paras the
effect of such DSRA balance on the total amount in default. The
aspect of withdrawal of CP (IB) No. 1287 and 1292 of 2021 has
already been dealt with by Hon’ble NCLAT, accordingly nothing
remains therein. Nonetheless the present Petition has been filed for a
different cause of action.

6.6. As regard the allegation of multiple bank statements being

inconsistent with one another, we note that the amount collected by
the Financial Creditor/Lenders, the interest chargeable on the loans
as per the rate of interest agreed under the agreement and the amount
disbursed to the Corporate Debtor are not in dispute. The Corporate
Debtor has only challenged the applicable rate of interest and

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diversion of ECLGS facility disbursement for service of obligation

under Loan/RCF facility. These issues have already been dealt with
in the preceding paras, accordingly, there is no merit in this argument
as long as there exist a debt and a default in payment thereof
exceeding Rs. 1 crore. The Corporate Debtor has also raised the
contention that the present Petition has been filed for default of
Rs. 666 crores whereas the Financial Creditor has admitted default of
about Rs. 17 crores as on 15.11.2022. It is noted that a default of
Rs. 666 crores stated as on 27.02.2023 is arising from the recall of
whole facility subsequently on 15.02.2023, which the Corporate
Debtor has consciously been avoiding referring to. It was also
submitted by the learned Counsel for the Corporate Debtor that the
Corporate Debtor is ready to deposit the amount of default in ECLGS
facilities as on 15.11.2022 after appropriation of DSRA balance, if
allowed an opportunity to cure the said default. However, we find
that subsequent to 15.11.2022 the Financial Creditor has recalled the
whole of outstanding credit facilities as on 15.02.2023, accordingly a
question of curing the default as on 15.11.2022 does not arise.
Further, as we have noted above, the cash accruals available with the
Corporate Debtor till December 2023 have been insufficient to meet
the service obligation under the credit facilities, and there has also
been a default in subsequent period as well, even if the said recall of
the whole facilities is ignored.

6.7. In view of the above discussion and analysis, we are considered view
that there exists a financial debt, which is in default in relation to
ECLGS facilities as on 15.11.2022 as well as in relation to whole of
credit facilities having been recalled in terms of notice dated
15.12.2023. Having said so, we are conscious that the Hon’ble
NCLAT has also observed that “18. Even though, we have found that
Section 7 Application filed by Omkara is not barred by res-judicata, the issue
still needs to be considered is as to whether Section 7 Application filed by

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Omkara was for resolution of insolvency of the Corporate Debtor or was only
filed as recovery measure.” Accordingly, it has required us to consider
the following facts while answering the above issue stating that these
fact raises question on the object and motive of Omkara to initiate
CIRP against the CDs:
(i) Section 7 Application, which was filed by IDBI Trusteeship Ltd. on
behalf of the Lenders was withdrawn on 13.12.2022 and 22.12.2022 and
it is to be presumed that on the date when Application was withdrawn,
there was no need for insolvency resolution process of the CD. It is to be
noted that while withdrawing Section 7 Application, neither any reasons
have been given for withdrawal, nor any liberty was given to file a fresh
application.
(ii) Immediately after withdrawal of Section 7 Application, the debt was
assigned by Lenders to Omkara on 27.12.2022, who issued recall notice
on 15.02.2023 and filed Section 7 Application on 09.03.2023, claiming
debt and default as on 15.11.2022, which date was prior to withdrawal
of Section 7 Application”.

6.7.1. To examine this aspect, it is pertinent to note the rights vested in the
Financial Creditor under the Loan Agreement on occurrence of
event of default. Clause 20 of the Loan Agreement contemplates the
rights available to the Financial Creditor on occurrence of event of
default, besides filing an application for resolution of stress of the
Corporate Debtor in terms of the Code. In terms of Clause 20.1.3,
the Lender/FC had the right to take charge of or takeover the
Projects and Project Properties or any of them; in terms of Clause
20.1.7, the Lender/FC had the right to review the management set-
up and reconstitute and appoint directors on the Board of the
Borrowers, and/or require the Borrowers to restructure; in terms of
Clause 20.2, the Lender/FC had the right, without any further
consent of the Borrowers or the Obligors, to sell or concur with any
other person in selling the Secured Properties or any part thereof

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without the intervention of the court, either by public auction or

private contract; in terms of Clause 20.7.1, the Lender/FC had the
right to convert, at its option, the Outstanding Amounts, either in
part or full, and whether the same is due or not, into fully paid up
equity shares of the Borrowers, at such valuation as may be
determined by the Lender in accordance with the Strategic Debt
Restructuring Scheme.

6.7.2. We note that the aforementioned rights available to the Financial

Creditor can cause displacement of the current management
completely from the control of the Corporate Debtor, even if an
application under Insolvency and Bankruptcy Code is not filed by
the Financial Creditor before this Tribunal. The Scheme of the Code
contemplates the resolution of the Corporate Debtor and the
recovery to the Financial Creditor, though not a primary objective
behind the initiation of process of such resolution, is certainly an
incidental outcome of such resolution. The Scheme of Insolvency
Resolution Process under the Code contemplates the replacement of
existing management by an Insolvency Professional, assisted and
guided by the Committee of Creditors, in the resolution of the
financial stress of a Corporate Debtor. As we have noticed in the
preceding paras, the Corporate Debtor is not in a position to service
its periodic obligations in the present form, we are of the considered
view that the Corporate Debtor’s debt certainly requires either
resolution or restructuring. It is an admitted fact that the
restructuring binds only the parties to such restructuring process,
while the resolution process under the Code binds all stakeholders
so as to address the defaults qua other stakeholders as well.
Accordingly, we are of the considered view that the present Petition
deserves to be allowed so as to address the financial stress of the
Corporate Debtor.

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6.7.3. As regard the intent and objects of the Financial Creditor behind the
present Petition, it is noticed that the earlier Company Petition was
filed by IDBI on behalf of erstwhile Lenders and was withdrawn
prior to assignment of credit facilities in favour of the Financial
Creditor, which indicates that it was the erstwhile Lenders who had
moved the earlier Petition for recovery of the money and withdrew
it when it found its successor to provide it an exit. The Financial
Creditor has also placed on record certain e-mail communication in
month of April 2024 whereby one Angels Financial Services had
approached the Petitioner with a One Time Settlement offer and
enhancement thereafter as well. These proposals were turned down
by the Financial Creditor even though the earlier order of admission
was stayed by the Hon’ble NCLAT. This clearly indicates the intent
and object of the Financial Creditor in filing this Petition as not
being that of recovery. Accordingly, we are satisfied that the present
Petition is for the resolution of the Corporate Debtor, who requires
a resolution to address its financial stress.

7. In view of the foregoing discussion and analysis, we are of considered

view that present Petition, CP (IB) No. 291 of 2023 filed under Section
7 of the Insolvency and Bankruptcy Code, 2016 deserves to be
admitted/allowed.

8. We are of considered view that there exists a financial debt, exceeding

the threshold limit prescribed u/s 4 of IB Code and the same is in
default. The Petition is complete in all respects. Therefore, the Petition
bearing CP (IB) No. 291/2023 filed by Omkara Assets Reconstruction
Private Limited, the Financial Creditor, under Section 7 of the Code
read with rule 6(1) of the Insolvency & Bankruptcy (Application to
Adjudicating Authority) Rules, 2016 for initiating Corporate Insolvency
Resolution Process (CIRP) against Gstaad Hotels Private Limited, the
Corporate Debtor, is admitted/allowed.

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9. The Financial Creditor has proposed the name of Mr Jayesh Natvarlal

Sanghrajka, Registration No. IBBI/IPA-001/IP-P00216/2017-
2018/10416, as the Interim Resolution Professional of the Corporate
Debtor. He has filed his written communication in Form 2 as required
under rule 9(1) of the Insolvency and Bankruptcy (Application to
Adjudicating Authority) Rules, 2016.

10. It is, accordingly, hereby ordered as follows: -

(a) The petition bearing CP (IB) No. 291/(MB) 2023 filed by Omkara
Asset Reconstruction Private Limited, the Financial Creditor,
under Section 7 of the Code read with Rule 4 of the Insolvency and
Bankruptcy (Application to Adjudicating Authority) Rules, 2016
for initiating Corporate Insolvency Resolution Process (CIRP)
against GSTAAD Hotels Private Limited [CIN:
U55101MH2003PTC143481], the Corporate Debtor, is admitted.

(b) There shall be a moratorium under Section 14 of the Code, in

regard to the following:
(i) The institution of suits or continuation of pending suits or
proceedings against the Corporate Debtor including
execution of any judgment, decree or order in any court of
law, tribunal, arbitration panel or other authority;
(ii) Transferring, encumbering, alienating or disposing of by the
Corporate Debtor any of its assets or any legal right or
beneficial interest therein;
(iii) Any action to foreclose, recover or enforce any security
interest created by the Corporate Debtor in respect of its
property including any action under the Securitisation and
Reconstruction of Financial Assets and Enforcement of
Security Interest (SARFAESI) Act, 2002;

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(iv) The recovery of any property by an owner or lessor where

such property is occupied by or in possession of the Corporate
Debtor.

(c) Notwithstanding the above, during the period of moratorium: -

(i) The supply of essential goods or services to the corporate
debtor, if continuing, shall not be terminated or suspended or
interrupted during the moratorium period;
(ii) That the provisions of Sub-Section (1) of Section 14 of the
Code shall not apply to such transactions as may be notified
by the Central Government in consultation with any sectoral
regulator;

(d) The moratorium shall have effect from the date of this order till the
completion of the CIRP or until this Adjudicating Authority
approves the resolution plan under Sub-Section (1) of Section 31 of
the Code or passes an order for liquidation of Corporate Debtor
under Section 33 of the Code, as the case may be.

(e) Public announcement of the CIRP shall be made immediately as

specified under Section 13 of the Code read with Regulation 6 of
the Insolvency & Bankruptcy Board of India (Insolvency
Resolution Process for Corporate Persons) Regulations, 2016.

(f) Mr. Jayesh Natvarlal Sanghrajka, Registration No.

IBBI/IPA001/IP-P00216/2017-2018/10416, having registered
address at 405-407, Hind Rajasthan Building. Phalke Road, Dadar
East, Mumbai 400014 Email ID: jayesh@jsaandco.in is hereby
appointed as Interim Resolution Professional (“IRP”) of the
Corporate Debtor to carry out the functions as per the Code. The
fee payable to IRP or, as the case may be, the RP shall be compliant
with such Regulations, Circulars and Directions issued/as may be

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C.P. (IB) No. 291/2023

issued by the Insolvency & Bankruptcy Board of India (“IBBI”).

The IRP shall carry out his functions as contemplated by sections
15, 17, 18, 19, 20 and 21 of the Code.

(g) During the CIRP Period, the management of the Corporate Debtor
shall vest in the IRP or, as the case may be, the RP in terms of
Section 17 of the Code. The officers and managers of the
Corporate Debtor shall provide all documents in their possession
and furnish every information in their knowledge to the IRP within
a period of one week from the date of receipt of this Order, in
default of which coercive steps will follow.

(h) The Financial Creditor shall deposit a sum of Rs.3,00,000/-

(Rupees Three Lakhs only) with the IRP to meet the expenses
arising out of issuing public notice and inviting claims and such
amount shall be treated as Interim Finance. These expenses are
subject to approval by the Committee of Creditors (CoC).

(i) The Registry is directed to communicate this Order to the Financial

Creditor, the Corporate Debtor and the IRP by Speed Post and
email immediately, and in any case, not later than two days from
the date of this Order.

(j) The IRP is directed to send a copy of this Order to the Registrar of
Companies, Maharashtra, Mumbai, for updating the Master Data
of the Corporate Debtor. The said Registrar of Companies shall
send a compliance report in this regard to the Registry of this Court
within seven days from the date of receipt of a copy of this order.

Sd/- Sd/-
Prabhat Kumar Justice V.G. Bisht
Member (Technical) Member (Judicial)

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