TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Appeals allowed, orders set aside. Tribunal consolidates CIRPs of intertwined companies to maximize asset value.</h1> <h3>Giriraj Enterprises Versus Regen Powertech Private Limited, ReGen Infrastructure and Services Private Limited</h3> Giriraj Enterprises Versus Regen Powertech Private Limited, ReGen Infrastructure and Services Private Limited - TMI Issues Involved:1. Whether the Appellants qualify as 'Operational Creditors'.2. Whether the businesses of RPPL and RISPL are intertwined and integrated.3. Whether the criteria for 'Consolidation' of CIRPs is met.4. Whether the 'Adjudicating Authority' has the jurisdiction to order consolidation of CIRPs.Summary:1. Qualification as 'Operational Creditors':The Hon'ble Apex Court in 'Consolidated Construction Consortium Limited Vs. Hitro Energy Solutions Pvt. Ltd.' established that an 'Operational Debt' includes a claim arising from a contract in relation to the supply of goods and services from the Corporate Debtor. The appellants, being purchasers of goods and services from RPPL and RISPL, fall within the ambit of 'Operational Creditors' as defined under Section 5(20) of the Code.2. Intertwining and Integration of Businesses:RPPL is the holding company, and RISPL is its wholly-owned subsidiary, created for operational convenience. RISPL is dependent on RPPL for servicing generators and funds. The businesses are integrated, with RPPL retaining technology and manufacturing capabilities while RISPL handles operations and maintenance. The Ministry of New and Renewable Energy mandates that manufacturers provide O&M services, reinforcing the interconnectedness of the two companies.3. Criteria for 'Consolidation' of CIRPs:The criteria for consolidation, as established in 'State Bank of India vs. Videocon Industries Ltd.' and 'Radico Khaitan Ltd. vs. BT & FC Pvt. Ltd.', include common control, common directors, common assets, common liabilities, interdependence, and intricate links. The businesses of RPPL and RISPL meet these criteria, as evidenced by shared directors, intertwined finances, and integrated operations. The Mediator's report also supported a single resolution plan for both companies to maximize value.4. Jurisdiction to Order Consolidation:Sections 60(2) and 60(5) of the IBC provide the 'Adjudicating Authority' with the jurisdiction to entertain and dispose of any application or proceeding by or against the corporate debtor or its subsidiaries. The inherent powers under Rule 11 of the NCLT Rules, 2016, allow the Tribunal to make necessary orders to meet the ends of justice. The Tribunal concluded that consolidation is not an exercise of 'Equity Jurisdiction' but a legal principle intended to maximize asset value and ensure a viable resolution.Conclusion:The appeals are allowed, and the 'Adjudicating Authority's' order dated 01/11/2021 is set aside. The Tribunal directed the consolidation of the CIRPs of RPPL and RISPL, emphasizing the scope and objective of the IBC, 2016, to maximize asset value and ensure a viable resolution.
TaxTMI 
TaxTMI 
