Foreign Oil & Gas Assets Deemed VIL Property for CIRP; Section 14 Applies

The Tribunal held that the foreign oil and gas assets held through Respondent Nos. 2 to 5 are considered the property of VIL for the ongoing Corporate Insolvency Resolution Process (CIRP). Consequently, Section 14 of the Insolvency and Bankruptcy Code applies to these assets, prohibiting actions to enforce security interests. The Tribunal also found that the criteria for consolidating the CIRP were met, emphasizing the importance of treating these assets as part of VIL's resolution process to protect stakeholders' rights and interests. The Tribunal granted relief sought in MA 2385/2019, directing the inclusion of these assets in VIL's CIRP timeline.

---

---

Issues Involved:
1. Whether the foreign oil and gas assets and properties, including any claim, interest therein, of Videocon Group held through Respondent Nos.2 to 5 can be said to be the property of Respondent No. 1, the present Corporate Debtor/ VIL for the purpose of the present CIRP.
2. Whether the provision of Section 14 of the Code would apply to the said foreign oil and gas assets and properties, including any claim, interest therein.
3. Whether the criteria for consolidation of CIRP as propounded in the Judgment of 08.08.2019 are met in this case.

Detailed Analysis:

Issue 1: Ownership of Foreign Oil and Gas Assets
The Tribunal examined the acquisition and financing documents related to the foreign oil and gas assets. It was established that the CHA business was funded through the RTL Agreement, while the foreign oil and gas business was funded through the LOC/SBLC Facility Agreement. Despite amendments, Respondent No. 1 (VIL) was never absolved from its original liability of repayment. The financial creditors lodged claims amounting to Rs. 23,120.90 Crores in the ongoing CIRP of VIL plus 12 companies. The Tribunal noted that the acquisition documents such as the Share Sale Agreement and the Quotaholder Agreement still listed VIL as the purchaser, and there was no legal transfer of these rights to Respondent Nos. 2 to 5. The Tribunal concluded that the foreign oil and gas assets held through Respondent Nos. 2 to 5 were indeed the property of VIL for the purpose of the present CIRP.

Issue 2: Application of Section 14 of the Code
The Tribunal held that since the foreign oil and gas assets were considered the property of VIL, the provisions of Section 14 of the Insolvency and Bankruptcy Code, which pertains to the moratorium, would apply. This means that any action to foreclose, recover, or enforce any security interest created by the corporate debtor in respect of its property, including the foreign oil and gas assets, would be prohibited.

Issue 3: Criteria for Consolidation of CIRP
The Tribunal reviewed whether the criteria for consolidation as outlined in the Judgment of 08.08.2019 were met. The criteria included common control, common directors, common assets, common liabilities, inter-dependence, interlacing of finance, pooling of resources, co-existence for survival, intricate link of subsidiaries, intertwined accounts, inter-looping of debts, singleness of economics of units, and common financial creditors. The Tribunal found that all these criteria were satisfied in this case. The Tribunal emphasized that treating the foreign oil and gas assets separately would compromise the rights and interests of stakeholders and jeopardize the resolution process.

Conclusion:
The Tribunal concluded that the foreign oil and gas assets and properties, including any claim, interest therein, held through Respondent Nos. 2 to 5, are to be considered the property of VIL for the purpose of the present CIRP. Consequently, the provisions of Section 14 of the Insolvency and Bankruptcy Code would apply to these assets. The Tribunal allowed MA 2385/2019 to the extent of the relief sought, directing that these assets be included in the CIRP of VIL. The time spent in deciding the application was added to the permitted timeline for the completion of the ongoing CIRP.

---