Court dismisses ICICI Bank's intervention bid, orders payment of exemplary costs

The court dismissed ICICI Bank's application for intervention and modification of court orders, citing it as premature, unjustified, and lacking bona fides. The court exercised discretion under Section 557 judiciously, emphasizing the importance of candour and fidelity to facts. ICICI Bank was ordered to pay exemplary costs for its mala fide application, with a directive to pay Rs.2.5 lakhs each to BNYM and GOL Offshore within four weeks.

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Issues Involved:
1. ICICI Bank's application for intervention and modification of court orders.
2. Validity of ICICI Bank's claim over Rig V-351.
3. The court's discretion under Section 557 of the Companies Act, 1956.
4. Costs and consequences of ICICI Bank's application.

Detailed Analysis:

1. ICICI Bank's Application for Intervention and Modification of Court Orders:
ICICI Bank sought to be impleaded as a respondent to the Company Application filed by BNYM, or alternatively, leave to intervene. Additionally, ICICI Bank requested a modification of the order dated 11th December 2013, seeking security over Rig V-351 and prioritization of sale proceeds for repayment of amounts due to ICICI Bank. The court, after hearing the arguments, was not persuaded to grant any reliefs. It found that ICICI Bank was attempting to create an additional security over Rig V-351 without any pre-existing security and that ICICI Bank's claim was premature and unjustified.

2. Validity of ICICI Bank's Claim Over Rig V-351:
BNYM had filed a Company Application seeking various reliefs concerning Rig V-351. The court had passed orders on 28th October 2013, 29th November 2013, and 11th December 2013, including an injunction against GOL Offshore from disposing of the rig. GOL Offshore had committed to paying BNYM US$ 45.2 million from the sale proceeds of the rig. ICICI Bank's claim was based on a clause in the Short Term Loan Facility Agreement, which required prepayment from the proceeds of any rig sale. However, the court noted that ICICI Bank had no security over Rig V-351, which belonged to a subsidiary of GOL Offshore, and ICICI Bank was otherwise fully secured.

3. The Court's Discretion Under Section 557 of the Companies Act, 1956:
ICICI Bank argued for intervention based on Section 557, which allows the court to consider the wishes of creditors in winding-up matters. The court referred to precedents, emphasizing that the discretion to allow intervention must be exercised judiciously. The court found ICICI Bank's application to be self-serving, lacking candour, and based on incorrect statements and deliberate distortions of facts. Therefore, it did not exercise discretion in favour of ICICI Bank, as the application was not bona fide.

4. Costs and Consequences of ICICI Bank's Application:
The court noted that ICICI Bank's application was not merely misguided but a deliberate action by a financial behemoth with ample legal resources. The application proceeded on a distorted version of facts. Consequently, the court dismissed the application and imposed exemplary costs on ICICI Bank, ordering it to pay Rs.2.5 lakhs each to BNYM and GOL Offshore within four weeks.

Conclusion:
The court dismissed ICICI Bank's application for intervention and modification of the court orders, finding it premature, unjustified, and lacking bona fides. The court exercised its discretion under Section 557 judiciously, emphasizing the need for candour and fidelity to facts. ICICI Bank was ordered to pay exemplary costs for its mala fide application.

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