Tribunal Approves JNPT's Dighi Port Plan with Modifications

The Tribunal approved the resolution plan submitted by Jawaharlal Nehru Port Trust (JNPT) for Dighi Port Limited, with modifications. Veritas' objections were rejected, emphasizing due process for agreement terminations. Adani Ports and Special Economic Zone Ltd.'s objections were also dismissed, noting CoC's discretion and JNPT's sovereign guarantee. JNPT's requested reliefs were not granted, but it was allowed to seek exemptions as per law. The moratorium ended, records were to be sent to the Insolvency and Bankruptcy Board of India, and the resolution applicant had to accept the plan's conditional approval. Further proceedings were scheduled for 27.05.2019.

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Issues Involved:
1. Approval of the resolution plan under Section 31 of the Insolvency and Bankruptcy Code (IBC), 2016.
2. Claims and objections raised by Veritas (India) Limited and its affiliates.
3. Objections raised by Adani Ports and Special Economic Zone Ltd. (APSEZ).

Issue-wise Detailed Analysis:

1. Approval of the Resolution Plan:
The resolution plan was filed under Section 31 of the IBC, 2016, seeking approval for the Corporate Debtor, Dighi Port Limited. The plan was submitted by Jawaharlal Nehru Port Trust (JNPT) and was approved by the Committee of Creditors (CoC) with a 99.38% majority. The plan included provisions for the payment of insolvency resolution process costs, debts of operational creditors, and management of the Corporate Debtor's affairs. The plan proposed the reconstitution of the Corporate Debtor's Board and the appointment of a monitoring committee. The Tribunal observed that the resolution plan of JNPT was more than 85% of the average liquidation value and higher than the average fair value determined by the registered valuers.

2. Claims and Objections by Veritas:
Veritas (India) Limited and its affiliates filed MA 1147/2019, seeking to intervene in the proceedings and reject or modify the resolution plan to protect their rights as sub-lessees and sub-concessionaires. Veritas argued that their agreements with the Corporate Debtor were bona fide and should not be unilaterally terminated without due process. The Tribunal noted that the resolution plan proposed the termination of Veritas agreements due to their onerous terms. However, the Tribunal held that the resolution applicant could not unilaterally terminate legally binding agreements without following due process. The Tribunal directed that any termination must adhere to applicable laws, and Veritas was not entitled to a copy of the resolution plan. Consequently, MA 1147/2019 was rejected.

3. Objections by Adani Ports and Special Economic Zone Ltd. (APSEZ):
APSEZ filed MA 761/2019, challenging the CIRP process and the approval of JNPT's resolution plan. APSEZ raised several points, including the alleged unfair exclusion from the process, non-compliance with the Swiss Challenge process, and non-submission of a performance guarantee by JNPT. The Tribunal noted that the CoC had the discretion to adopt or withdraw the Swiss Challenge process and that APSEZ had been given sufficient opportunities to present and improve its resolution plan. The Tribunal also observed that JNPT, as a government entity, had a sovereign guarantee, which was considered sufficient in lieu of a performance guarantee. The Tribunal emphasized that it could not interfere with the commercial wisdom of the CoC, which had approved JNPT's plan with a 99.38% majority. Consequently, MA 761/2019 was rejected.

Reliefs and Concessions Sought by JNPT:
JNPT sought various reliefs and concessions, including waivers of stamp duty, taxes, and compliance with certain laws. The Tribunal did not grant these reliefs but allowed JNPT to apply to relevant regulatory authorities for exemptions as per law. The Tribunal emphasized that any resolution applicant must take over the Corporate Debtor with all its assets and liabilities and comply with all applicable laws.

Conclusion:
The Tribunal approved the resolution plan submitted by JNPT with modifications, emphasizing that any termination of agreements must follow due process. The moratorium under Section 14 ceased, and the resolution professional was directed to forward all records to the Insolvency and Bankruptcy Board of India (IBBI). The resolution applicant was required to file an affidavit accepting the conditional approval of the resolution plan. The matter was listed for further proceedings on 27.05.2019.

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