Marine Firm’s ₹372 Crore Loan Default: NCLT Moves Against Guarantor

In connection with non-payment of loans amounting to Rs372.5 crore to State Bank of India by an offshore and marine vessel support firm, TAG Offshore Ltd, the National Company Law Tribunal (NCLT) will initiate the insolvency resolution process against Mamta Kishore Apparao, the firm’s suspended director who stood as personal guarantor.

TAG Offshore Ltd was declared a non-performing asset in 2017. The NCLT has appointed a resolution professional (RP) to issue a public notice, thereby calling up the claims from all the creditors of the company.

The NCLT has further directed Apparao to prepare a repayment plan, in consultation with the RP, with a proposal to the creditors to restructure the debts. The RS has been directed to submit it before the tribunal within 21 days.

As per the 19-page order copy, the petitioner bank, SBI, had filed an application under the insolvency resolution process against Apparao, as she had failed to repay the availed loan amount. The date of the default payment of over Rs372 crore was March 20, 2019. Tag Offshore has been under liquidation since September 2019. Apparao was the personal guarantor of the loans. 

The counsel for the bank submitted that Apparao didn’t honour the personal guarantee and continued to remain in default despite the demand notice. Apparao, however, opposed the bank’s application, stating that the deeds of guarantee were either not stamped or inadequately stamped, and therefore inadmissible.

The tribunal, however, came down heavily on Apparao’s contention. It held, “This is not a debt recovery forum where the court, before decreeing a suit or a proceeding against the debtor in favour of the creditor, has to examine the admissibility of documents. In our view, what is required to be seen at this stage is whether there is a default on the part of the personal guarantor.”