NCLT orders insolvency proceedings against Dhoot
The National Company Law Tribunal (NCLT) has directed the initiation of insolvency proceedings against Videocon’s former chairman and MD Venugopal Dhoot for defaulting on loans of Rs 6,157.57 crore, as a personal guarantor of two group companies. Admitting a plea from State Bank of India (SBI), NCLT said Venugopal Dhoot has “committed defaults in repayment of loan amount” granted by the financial creditor.
“Venugopal Nandlal Dhoot, personal guarantor to Videocon Industries Ltd and Videocon Telecommunications Ltd, has also committed default in repayment of the loan facility demanded by the financial creditor after invocation of the personal guarantee,” said an order passed by NCLT on April 8, uploaded on April 13 evening.
The Mumbai bench of the insolvency tribunal has also appointed Asish Narayan as a resolution professional and directed him to issue a public notice within seven days of passing this order on the website of the NCLT.
“The Resolution Professional shall submit the repayment plan along with his report on the plan to this authority within a period of 21 days from the last date of submission of claims, as provided under Section 106,” said NCLT.
Under Section 95 of the Insolvency & Bankruptcy Code (IBC), insolvency proceedings are initiated against a person, after being “satisfied that Corporate Debtor (Videocon) has committed default in repayment of the loan amount granted by the financial creditor and personal guarantors have committed default in repayment of the loan facility”.
Two other Dhoot brothers - Rajkumar Nandlal Dhoot and Pradeep Nandlal Dhoot - are already facing insolvency proceedings after they failed to pay a demand notice of Rs 5,353.78 crore over defaults by Videocon Industries, the principal borrower, for which they were the personal guarantors.
Both had appealed the NCLT order passed in June last year before the National Company Law Appellate Tribunal (NCLAT), which had declined to stay it.
Two group entities — Videocon Telecommunications Ltd (VTL) and Videocon Industries Ltd (VIL) - had entered into Rupee Term Loan Agreement, Rupee Facility Agreement, among others, for which Dhoot had guaranteed due repayment through several deeds of guarantees. Both the group companies defaulted in repayment of the loan facilities, following which SBI moved NCLT, which, in June 2018, directed the initiation of insolvency proceedings against VIL and VTL.
Later, NCLT on August 8, 2019, decided to consolidate the corporate insolvency resolution process of VIL with 12 other Videocon group companies VTL, Electroworld, Value, Techno Kart, Applicomp, Sky, Techno, Millennium, Century, Evans Fraser, PE and CE India, which is still pending before it.
Later, a demand notice was also issued to the personal guarantor under the provisions of the IBC. As Dhoot failed to pay the default amount within 14 days of receipt of the IBC Demand Notice, SBI filed a plea for personal insolvency against Venugopal Dhoot.
Dhoot had contended that no reliance should be placed on the report of the RP since the Deed of Guarantee was entered between him and SBICAP Trustee Company, whereas the present application has been filed by the State Bank of India.
He also contended that the debt claimed by them is barred by the law of limitation as the present application was filed on September 1, 2020, whereas the first cause of action to invoke the Personal Guarantee arose on the first date of default by the principal borrower on May 1, 2016, and not from being NPA from non-payment of interest in January 2017.
Rejecting it, NCLT said the period of limitation for initiating proceedings against a Personal Guarantor commences from the date of default in discharge of the guarantee obligation, and not from the date of default by the Principal Borrower.
“Accordingly, the present petition has been filed well within the prescribed period of limitation,” it said while allowing the plea moved by SBI.
Over SBICAP, NCLT said it was acting “onshore security trustee” on behalf of the lenders, one of whom is SBI.
“Considering the above facts and circumstances and upon perusal of the documents on record viz. the demand notices, proof of service, guarantee deeds, joint deed of guarantee, etc... filed under Section 95 of the IBC, 2016, is hereby admitted and the Insolvency Resolution Process stands initiated against Venugopal Nandlal Dhoot,” said the April 8 NCLT order.
