TaxTMI 
TaxTMI 
2019 (3) TMI 981
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....Mr. Vikramjit Banerjee, ASG, Mr. Sanjay Kapur, Mr. Kauser Husain, Ms. Megha Karnwal, Mr. Bharath Gangadharan, Mr. Kauser Husain, Advocates for LIC & Ors., Mr. Sanjay Kapur, Ms. Megha Karnwal and Mr. Bharath Gangadharan, Advocates for Canara Bank & Ors, Mr. Sidharth Luthra, Senior Advocate with Mr. Sanjay Kapur, Mr. Megha Karnwal, Mr. Bharath Gangadharan, Mr. Kauser Husain, Advocates for UCO Bank & Ors, Mr. Anil K. Kher and Mr. Dushyant Dave, Senior Advocates with Ms. Dee pali Mittal, Mr. Praveen Kumar Mittal, Advocates For The LIC & Ors. : Mr. Vikramjit Banerjee, ASG, Mr. Sanjay Kapur, Mr. Kauser Husain, Ms. Megha Karnwal, Mr. Bharath Gangadharan, Mr. Kauser Husain, Advocates For The Canara Bank & Ors. : Mr. Sanjay Kapur, Ms. Megha Karnwal and Mr. Bharath Gangadharan, Advocates For The UCO Bank & Ors : Mr. Sidharth Luthra, Senior Advocate with Mr. Sanjay Kapur, Mr. Megha Karnwal, Mr. Bharath Gangadharan, Mr. Kauser Husain, Advocates For The JLF ECB Lenders : Mr. Amit Singh Chaddha, Senior Advocate with Mr. Shubh Chakraborti, Mr. Dhruv Malik and Ms. Shrishti Govil, Advocates JUDGMENT SUDHANSU JYOTI MUKHOPADHAYA, J. Pursuant to an application under Section 9 of t....
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....as beyond their control. In the meantime, Contempt Petition was filed by 'Ericsson India Private Limited'. The Hon'ble Supreme Court by the order dated 23rd October, 2018 extended the period upto 15th December, 2018 but allowed the 'Ericsson India Private Limited' to revive the Interlocutory Application for contempt, if payment is not being made. 6. Interlocutory Applications were also filed before this Appellate Tribunal for extension of time but in view of the pendency of the matter before the Hon'ble Supreme Court, those Interlocutory Applications were adjourned. 7. Subsequently, the Writ Petition (Civil) No. 845 of 2018 filed by 'Reliance Communication Limited & Ors.' was taken up along with Contempt Petition (Civil) Nos. 1838 of 2018, 55 of 2019 and 185 of 2019 by the Hon'ble Supreme Court. 8. In those Contempt Petitions, the Hon'ble Supreme Court by Judgment dated 20th February, 2019 held that these three Reliance Companies were guilty of contempt of the Hon'ble Supreme Court. However, with a view to allow the 'RCom Group' to purge the contempt of the Hon'ble Supreme Court it allowed payment to 'Ericsson India Private Limited' of a sum of Rs. 453 Crores within a peri....
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....n India Private Limited'. 13. It was submitted that the directions of this Appellate Tribunal stand superseded by the decision of the Hon'ble Supreme Court in any pre-existing contractual arrangement. As such the consent of the lenders for the release of the amounts in the three 'TRAs' is not required. 14. The grievance of the Appellants is that the respective Directors of the 'RCom Group' have filed applications for withdrawal of their Company Appeals against the orders dated 15th and 18th May, 2018 but the same have not been allowed to be withdrawn till date. It is submitted that despite 47 lenders meeting having taken place, the 'Asset Monetization Process' has been stalled. The consent of the 100% of the lenders has not been received on any issue due to lenders inter-se disagreement. In view of the said non-provision of NOCs/ Consents from the lenders, the intent of Asset Monetization Scheme to resolve the debt outside the scope of the 'I&B Code' has been defeated. Thus, according to the Appellants, the debt of the 'RCom Group' is contemplated to be resolved as per the IBC Process in the interest of all stakeholders, which will be stalled if the amount is not released for....
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....e Debtors' is not interlinked with the agreement reached between the lenders/ 'Financial Creditors' with the Appellants (the Directors of the 'Corporate Debtors'), therefore, no direction should be issued to the 'State Bank of India' or other lenders to release any amount for compliance of agreement between the Appellants and the 'Ericsson India Private Limited'. 20. Referring to the guidelines issued by the Reserve Bank of India and the agreement reached between the 'Corporate Debtors' and the 'Joint Lenders Forum', learned counsel for the 'State Bank of India' submitted that the amount deposited in three 'TRAs' cannot be withdrawn by the 'Corporate Debtors', therefore, no prayer can be made by them for payment out of the three 'TRAs' including the amount of Rs. 259.22 Crores deposited pursuant to refund of the Income Tax of the 'Corporate Debtors'. 21. Referring to the judgment of the Hon'ble Supreme Court dated 20th February, 2019, it was contended that the Hon'ble Supreme Court recognizes the independent nature of the two- sale of assets by Lenders and payment of Rs. 550 Crores by 'RCom Group' to 'Ericsson India Private Limited'. Reliance has been placed on different part....
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....urt in Central Bank of India v. Siriguppa Sugars & Chemicals Ltd. & Ors.− (2007) 8 SCC 353", wherein the Hon'ble Supreme Court held that rights of the Bank over the pawned sugar had precedence over the claims of the Cane Commissioner and that of the workmen. 29. Mr. Krishnan Venugopal, learned Senior Counsel appearing on behalf of the 'IDBI', 'Central Bank of India', 'Union Bank of India' and 'Corporation Bank' submitted that under Section 43 of the 'I&B Code', no preferential payments are permissible to any creditor. Reliance has been placed on the decision of the Hon'ble Supreme Court in "Swiss Ribbons v. Union of India− W.P. 99 of 2018" and "Chitra Sharma and Ors. v. Union of India and Ors.− Writ Petition (Civil) No. 744 of 2017" 30. In "Chitra Sharma and Ors. v. Union of India and Ors." (Supra), the Hon'ble Supreme Court by Judgment dated 9th August, 2018 while dealing with the case of home buyers, left the question open as to whether the home buyers are 'unsecured creditors' or 'secured creditors' and observed that directing disbursement of the amount of Rs. 750 Crores to the home buyers who seek refund would be manifestly improper and cause injustice t....
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....pported the stand taken by the learned Senior Counsel for the 'Joint Lenders Forum'. 6. Mr. Kapil Sibal, learned Senior Counsel appearing on behalf of the Appellants submitted that if the impugned order is stayed and/or set aside, the parties may settle the matter. 7. The case was taken up yesterday (29th May, 2018) and on the request of the parties, the case was adjourned to find out whether the Appellants and the 'Operational Creditors' can settle the matter. 8. Mr. Salman Khursid, Mr. Arun Kathpalia and Mr. Anil Kher, learned Senior Counsel appear on behalf of the 'Operational Creditors' in the respective cases. They submitted that the Respondent- 'Ericsson India Pvt. Ltd.'- ('Operational Creditor') has agreed to settle the matter if affront payment of Rs. 600 Crores (Rupees Six hundred Crores Only) is made by the Appellants/'Corporate Debtors'. 9. Mr. Kapil Sibal, learned Senior Counsel for the Appellants informed that the Appellants have agreed to pay a sum of Rs. 550 Crores (Rupees five hundred fifty Crores only) (jointly) in favor of 'Ericsson India Pvt. Ltd.'- ('Operational Creditor') and sought for 120 days' time to pay the total amount.....
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....sum of Rs. 550 Crores (Rupees Five Hundred Fifty Crores Only) (jointly) in favour of 'Ericsson India Pvt. Ltd.' within 120 days i.e. by 30th September, 2018. In case of non-payment of the amount and part of the same, the concerned appeal(s) may be dismissed and this Appellate Tribunal may direct to complete the 'Corporate Insolvency Resolution Process' and may pass appropriate order. The payment of Rs. 550 Crores (Rupees Five Hundred Fifty Crores Only) in favour of the 'Operational Creditor' shall be subject to the decision of these appeals. If the appeals are dismissed, the 'Operational Creditor' will pay back the amount to the 'Corporate Debtors'. 12. The Appellants and the 'Operational Creditors' are directed to file their respective affidavits of undertaking in terms of their statement as made and recorded above within 10 days. Let the appeals be listed 'for admission' on 3rd October, 2018. 13. In the meantime, it will be open to the parties to file Interlocutory Application if orders and directions given above are not complied. Interlocutory Application Nos. 701-702, 709-710 and 712-713 of 2018 stand disposed of with aforesaid observations and direct....
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....y other source of income to the three 'Corporate Debtors'. In this regard, the stand of the counsel for the 'State Bank of India' is that apart from the three 'Corporate Debtors' there are other six companies of the 'RCom Group' who may pay the amount or the Chairmen or the Directors may pay the amount to purge them from contempt. 36. The Hon'ble Supreme Court while passing judgment in Contempt cases on 20th February, 2019 noticed similar plea as taken by the 'State Bank of India' before this Appellate Tribunal, as quoted below: "5. Shri Neeraj Kishan Kaul, learned Senior Advocate appearing on behalf of the Chairman, SBI, has argued that the Joint Lenders' Forum, being allowed to sell assets outside of the corporate insolvency resolution process has nothing to do with the Ericsson transaction. According to him, prayers (c) and (j) of the Contempt Petition No. 185 of 2019 are not reliefs that can be given in a contempt petition. Also, it is wholly unnecessary to file an affidavit stating the total amount received from sale of assets of the corporate debtors post the settlement dated 30.05.2018. Equally, prayer (j), asking for a direction for SBI to bring in amounts due a....
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....ted to purge the contempt of this Court by payment to Ericsson of the sum of INR 453 crore within a period of four weeks from today. In default of such payment, the Chairmen who have given undertakings to this Court will suffer three months' imprisonment. In addition to the aforesaid sum being paid, a fine amounting to INR 1 crore for each Company must also be paid to the Registry of this Court within four weeks from today. This sum will be paid over to the Supreme Court Legal Services Committee. In default of payment of such fine, the Chairmen of these Companies will suffer one month's imprisonment. Contempt Petitions are disposed of, as aforesaid." 40. The offer and acceptance of payment of Rs. 550 Crores in 120 days emerged out of an agreement arrived at between 'Ericsson India Private Limited'- ('Operational Creditor') and the Appellants (the Directors of the 'Corporate Debtors') in terms of the order dated 30th May, 2018. The said order is not interlinked with one another who are third party, nor contingent on each other inasmuch as the sale of assets by the 'Lenders'/ 'Financial Creditors' was not connected with or affected by the condition of payment of Rs. 550 C....
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....unts of the 'Corporate Debtors'. 43. Admittedly, the 'Financial Creditors'/ 'Joint Lenders Forum' and other Banks have failed to recover any amount by selling the mortgaged properties of the 'Corporate Debtors' in spite of the interim order of stay passed on 30th May, 2018. We have also noticed that the 'Corporate Debtors'- 'Reliance Infratel Ltd.'; 'Reliance Telecom Ltd.' and 'Reliance Communications Ltd.' have failed to pay the total amount of Rs. 550 Crores (jointly) till today. As per the interim order, in case of non-payment of the amount and part of the same, the concerned appeal(s) may be dismissed and this Appellate Tribunal may direct to complete the 'Corporate Insolvency Resolution Process' and may pass appropriate order. The payment of Rs. 550 Crores in favour of 'Ericsson India Private Limited' is also subject to the decision of the appeals. 44. Learned counsel appearing on behalf of the 'State Bank of India' and other Banks informed that it is not possible for them to sell the assets and, therefore, suggested that the 'Corporate Insolvency Resolution Process' may continue. No specific reply has been given by the counsel appearing on behalf of the 'Ericsson India ....
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....य सà¥à¤Ÿà¥‡à¤Ÿ बैंक à¤à¤¾à¤°à¤¤à¥€à¤¯ सà¥à¤Ÿà¥‡à¤Ÿ बैंक STATE BANK OF INDIA SARG/GMothers/R Com/ dated 27.09.2018 We write with reference to the meeting of the lenders of Reliance Communications Limited ("RCom"), Reliance Telecom Limited ("RTL") and Reliance Infratel Limited ("RITL" and collectively with RCom and RTL, the "RCom Group") held on 23 May 2018 at SBI Bhavan, Nariman Point, Mumbai attended by majority of the Lenders of the RCom Group and executives of the RCom group. In the said meeting, it was informed to the Lenders that, RCom group already executed Master Agreement with RJlo for sale of 122 MHz of spectrum for consideration of Rs. 7,300 Cr over and above this, company also has 66.25 MHz of Spectrum in 800 MHz band under sharing agreement with R Jio in various circles. Mr. Ambani informed that company is in discussion with R jio for sale of this 66.25 MHz shared spectrum for a consideration of Rs. 975 Crore, which will be utilized towards aforesaid settlements without recourse to asset monetization proceeds. Under the ....