AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (7) TMI 510
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....any Appeal (AT) (Ins.) No. 291 of 2019 With Company Appeal (AT) (Ins.) No. 292 of 2019 With Company Appeal (AT) (Ins.) No. 293 of 2019 With Company Appeal (AT) (Ins.) No. 300 of 2019 With Company Appeal (AT) (Ins.) Nos. 302-303 of 2019 With Company Appeal (AT) (Ins.) Nos. 304-305 of 2019 With Company Appeal (AT) (Ins.) Nos. 332-333 of 2019 With Company Appeal (AT) (Ins.) Nos. 337 of 2019 With Company Appeal (AT) (Ins.) Nos. 338 of 2019 With Company Appeal (AT) (Ins.) Nos. 345 of 2019 With Company Appeal (AT) (Ins.) Nos. 349 of 2019 With Company Appeal (AT) (Ins) No. 361 of 2019 With Company Appeal (AT) (Ins) No. 374 of 2019 With Company Appeal (AT) (Ins) No. 375 of 2019 With Company Appeal (AT) (Ins) No. 376 of 2019 With Company Appeal (AT) (Ins) No. 428 of 2019 Wiwith Company Appeal (AT) (Ins) No. 429 of 2019 With Company Appeal (AT) (Ins) No. 449 of 2019 With Company Appeal (AT) (Ins) No. 454 of 2019 04-07-2019 For The Appellant : Mr. Kapil Sibal, Sr. Advocate with Mr. Sandeep Singh, Mr. Gaurav Mathur, Ms. Anushree Kapadia, Mr. Adit Pujari and Mr. Raghav Tankha and Mr. Abhishek Shah, Advocates, Dr. U. K. Chaudhary, Sr. Advocate with Mr. Nakul Mohta, Mr. Johnson Subba and Mr....
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....he 'Operational Creditors' on the ground of discrimination or the modification of 'Resolution Plan' as suggested by the Adjudicating Authority. 6. For the reasons aforesaid, before deciding the issues whether distribution of amount amongst the 'Financial Creditors', 'Operational Creditors' and other stakeholders as shown in the impugned order dated 8th March, 2019 is discriminatory or not or whether the modification of plan as suggested by the Adjudicating Authority is proper or not, it is desirable to decide the issue as to 'whether 'ArcelorMittal India Pvt. Ltd.' is eligible to file 'Resolution Plan' or not as raised by Mr. Prashant Ruia, the promoter of 'Essar Steel India Limited' and one of its shareholders. Company Appeal (AT) (Insol.) No. 257 of 2019─ (Prashant Ruia v. State Bank of India & Ors.) 7. The grievance of the Appellant- Mr. Prashant Ruia is that though the Board of Directors were to take part in each meeting of the 'Committee of Creditors' and were to participate but the members of the Board of Directors were often either asked to leave the meeting room and/ or were invited to take part is some of the meeting, and were excluded from participating dur....
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....irector of 'ArcelorMittal India Pvt. Ltd.', executed at the behest of Mr. Lakshmi Mittal has also been enclosed, which were stated to have been placed before the 'Committee of Creditors' of 'Essar Steel India Limited', before acceptance of the 'Resolution Plan'. 13. Mr. Harin Rawal, learned Senior Counsel appears on behalf of Intervenor- 'Essar Steel Asia Holdings Limited'- one of the shareholder of 'Essar Steel India Limited'. 14. According to him, 'ArcelorMittal India Pvt. Ltd.' is ineligible in terms of Section 29A (c) read with Section 29A (j) of the 'I&B Code'. It is informed that Mr. L.N. Mittal held 10 shares in 'Navoday Consultants Ltd.'. As per the statutory filings, Mr. L.N. Mittal is classified as a person holding shares as a Promoter and as part of the Promoter Group. Under the provisions of 'I&B Code', there is no distinction between a Promoter and/ or Promoter Group. 15. Further, according to him, 'Navoday Consultants Limited' is a Promoter of 'GPI Textiles' and 'Gontermann Piepers'. Under the provisions of the 'I&B Code', a person stands ineligible irrespective of the quantum of association with a particular entity. 16. It was further submitted that neith....
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....efore, according to him, the 'Resolution Plan' is in violation of the decision of the Hon'ble Supreme Court in 'ArcelorMittal India Pvt. Ltd.'. 21. Mr. Harish Salve, learned Senior Counsel on behalf of 'ArcelorMittal India Pvt. Ltd.'- ('Successful Resolution Applicant') submitted that the issue relating to 'Navoday Consultants Limited' as raised in the application is one of the multiple mala fide attempts to derail the 'Corporate Insolvency Resolution Process' of the 'Corporate Debtor'. He referred the following attempts as made on behalf of the Promoters: a. First attempt: Immediately after the 'Reserve Bank of India' (RBI) referred ESIL for CIRP, ESIL filed a writ petition, being W.P No. 12424/2017 before the Hon'ble High Court of Gujrat, inter alia, seeking quashing of the Press Release dated 13.06.2017 of RBI and directions against the consortium of lenders to implement the alleged debt restructuring plan submitted by ESIL. b. Second attempt: As a part of the design to re-acquire ESIL, the promoters of ESIL submitted a Resolution Plan on 12.02.2018 in the name of Numetal Limited, which was later found ineligible by the Hon'ble Supreme Court under Sectio....
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....tempt: On 15.10.2018, Numetal wrote a letter to the Resolution Professional of GPI Textiles, inter alia, calling upon him to challenge the eligibility of AMIPL. At the instigation of Numetal, the Resolution Professional of GPI Textiles filed an application on 31.10.2018 before the Adjudicating Authority, Ahmedabad seeking declaration of AMIPL as an ineligible resolution applicant. Pertinently, each of the pleas/grounds (pertaining to GPI Textiles) being raised by the present Applicant, were raised by the Resolution Professional of GPI Textiles also. However, the said application was withdrawn on 07.03.2019. g. Seventh attempt: Prashant Ruia other suspended Board of Directors filed an application before the Adjudicating Authority bearing IA No. 64 of 2019 seeking rejection of the resolution plan of AMIPL for non-compliance of the judgment passed by Hon'ble Supreme Court of India in Vijay Kumar Jain v. Standard Chartered Bank & Others, Civil Appeal No. 8430 of 2018. The said Application was also rejected by the Adjudicating Authority vide its common Judgment dated 08.03.2019. The Company Appeal No. 257 of 2019 filed against such order is pending before this Hon&....
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.... held by Mr. L.N. Mittal in NCL. * The Application conveniently omits to mention that as per the shareholding pattern filed as part of the application itself, Mr. L.N. Mittal is alleged to have held 10 shares out of a total issued and outstanding share capital of 17,18,888 shares (i.e., 0.00058% of the total paid up capital). It is submitted and reiterated that Mr. L.N. Mittal does not hold any shares in the said companies and, in any case, a mere holding of 0.00058% of total paid up capital of NCL, cannot invite any ineligibility under Section 29A IBC. * The entire surmise of the Application is ill-conceived. Without prejudice to what has been stated above, it is pertinent to note that NCL holds only 0.91% of shareholding in Gontermann Peipers (and 11.61% in GPI Textiles). The Applicant has tried to allege since NCL is named as a promoter of GPI Textiles & Gontermann Peipers, Mr. L.N. Mittal can be called as promoter of GPI Textiles and Gontermann Peipers. This argument is not only fallacious but is an attempt to mislead this Appellate Tribunal. Even if the averments made in the present application are taken at its face value, Mr. L.N. Mittal cannot be called a p....
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....a belated stage. Also, the issue with regard to 'GPI Textiles' formed part of the submissions before the Hon'ble Supreme Court. This Application has now been made by the Applicant herein to re-agitate the very same issue which stands decided by the Hon'ble Supreme Court. Any attempt to reopen those issues would effectively amount to review or reconsideration of the order of the Hon'ble Supreme Court. The relevant extract of the judgment of the Hon'ble Supreme Court wherein aforesaid facts were noticed is reproduced below for ease of reference: "18...... Shri Rohatgi further argued that Shri Pramod Mittal, brother of Shri L. N. Mittal, is a connected person, which would trigger Section 29A(j). Shri Pramod Mittal is a promoter and director of one 'GontermannPiepers (India) Limited', which has also been declared an NPA, rendering Shri L. N. Mittal ineligible under Section 29A (j). Equally, Shri L. N. Mittal, Shri Pramod Mittal and other members of the Mittal family are promoters of one 'Ispat Profiles India Limited'. This company was ordered to be wound up by the BIFR, appeals from which have been dismissed by the AAIFR. Consequently, Shri L. N. Mittal, as a related party of ....
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....which is clearly barred by delays and laches has been filed to sabotage the 'Resolution Process'. 29. Apart from the aforesaid facts, we find that the 'Resolution Plan' was considered by the Adjudicating Authority in view of the decision and directions of the Hon'ble Supreme Court under Article 142 of the Constitution of India in "Arcelormittal India Private Limited" (Supra). Hence, at this stage, we are not inclined to re-open the question of eligibility or ineligibility of 'ArcelorMittal India Pvt. Ltd.', which stands closed in view of the decision and directions of the Hon'ble Supreme Court. 30. So far as the Appellant- Mr. Prashant Ruia's right of subrogration under Section 140 of the Contract Act and right to be indemnified under Section 145 of the said Act is concerned, the question of exercising such right does not arise in the present case. 31. The Appellant- Mr. Prashant Ruia has executed a 'Deed of Guarantee' between the lenders and the 'Corporate Debtor'. Such guarantee is with regard to clearance of debt. Once the debt payable by the 'Corporate Debtor' stands cleared in view of the approval of the plan by making payment in favour of the lenders ('Financial Cred....
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....not reflected their claims. Company Appeal (AT) (Insol.) No. 449 of 2019 (MSTC Limited) ('Operational Creditor') 35. The grievance of the Appellant- 'MSTC Limited' is that it supplied materials worth Rs. 29 Crores which is lying with the Company under bailment/pledge, but not been reflected and added in the 'Corporate Insolvency Resolution Process Costs'. Company Appeal (AT) (Insol.) No. 338 of 2019 (Global Transnational Trading FZE) ('Operational Creditor) 36. According to Appellant- 'Global Transnational Trading FZE', it supplied goods to the 'Corporate Debtor' amounting to Rs. 18,19,73,638/- and the 'Resolution Professional' accepted claim to the extent of Rs. 17,09,83,857/- but amount receivable by it has been notionally admitted at Re. 1/- only by the 'Resolution Professional'. Company Appeal (AT) (Insol.) No. 361 of 2019 (State Tax Officer (3)) ('Operational Creditor) 37. According to the Appellant, the 'State Tax Department' filed claim of Rs. 544 Crores approx., but it's claim has been notionally admitted at Re.1/- only by the 'Resolution Professional'. Company Appeal (AT) (Insol.) No. 374 of 2019 (Indian Oil Corporation Ltd.) ('Operational Creditor') ....
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....rovided the claim of the aforesaid 'Operational Creditors' and detailed below:- I.A. No. Name of Creditor Amount of claim (Rs.) as per I.A. as per pages 34-41 of NCLT Order 28/2018 Dakshin Gujarat Vij Co. Ltd. 313,23,33,224 446/2018 Dakshin Gujarat Vij Co. Ltd. 5882,28,00,000 467/2018 Dakshin Gujarat Vij Co. Ltd. 606,49,00,000 468/2018 State Tax Officer 544,00,00,000 443/2018 Gujarat Energy Transmission Corporation Ltd. 896,52,00,000 325/2018 Bharat Petroleum Corporation Limited 443,05,33,379 53/2018 Bharat Petroleum Corporation Limited 503,83,46,437 469/2018 Indian Oil Corporation Ltd. 3762,58,74,503 52/2019 MSTC Limited 813,30,00,000 438/2018 GAIL India Limited 2,47,26,000 470/2018 Global Transnational Trading FZE NA The order passed by the Adjudicating Authority in respect of claim of aforesaid 'Operational Creditors', we hold that the total amount aforesaid is to be added towards claim of the 'Operational Creditors'. Company Appeal (AT) (Insol.) Nos. 304-305 of 2019 (Subham Cargo Movers) 44. According to the counsel for the Appellant, the 'Resolution ....
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....as been adjudicated at Rs. 896.52 Crores, but 'NIL' amount (0%) is proposed to be paid in the 'Resolution Plan'. Company Appeal (AT) (Insol.) No. 290 & 292 of 2019 (Essar Bulk Terminal Limited) 52. The grievance of the Appellant is that though its claim of Rs. 703 Crores approx. is admitted, but 'NIL' amount (0%) is proposed to be paid against its admitted claim. Company Appeal (AT) (Insol.) No. 242 of 2019 (I.A No. 1266 of 2019) (Palco Recycle Industries Ltd.- (Operational Creditor) 53. The Appellant has supplied aluminium wire rod and aluminium wire as raw material under various purchases orders. It filed claim of Rs. 2,40,66,551/- of which Rs. 2,36,58,977/- (98.3%) admitted by the 'Resolution Professional'. However, 'NIL' amount (0%) has been allocated. Company Appeal (AT) (Insol.) No. 454 of 2019 (Oil and Natural Gas Corporation Limited) 54. In case of 'Oil and Natural Gas Corporation Limited' though the 'Resolution Professional' allowed the principal amount but no interest was allowed. In similar case of 'Indian Oil Corporation Limited', the Adjudicating Authority allowed the interest and ordered to accept the total claim. 55. In I.A. No. 14 of 2019 filed ....
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....0946 of 2009, the 'Corporate Debtor' was directed by the Hon'ble Gujarat High Court to deposit the amount of Rs. 612.79 Crores. Accordingly, instalments were granted to the 'Corporate Debtor' for complying with the said interim directions, out of the total claim of Rs. 1321.48 Crores. Thus, as on date the Appellants herein are entitled to Rs. 708.69 Crores towards Electricity Duty as well as Rs. 152.50 Crores towards Tax on Sale of Electricity totalling Rs. 861.19 Crores. 60. According to the Appellants, as per the required and statutory procedure the Appellants filed claim with proof on 14th August, 2017 persuant to Public Notice dated 5th August, 2017 issued by the 'Resolution Professional'. However, the claim has not been reflected by the 'Resolution Professional'. 61. Further, the case of the Appellants is that the 'Corporate Debtor' moved before the Hon'ble Supreme Court by Civil Appeal No. 4842 of 2017 which was not entertained. Thereafter, the 'Corporate Debtor' filed Review Petition (C) No. 2234 of 2017 in Civil Appeal No. 4842 of 2017 which was also dismissed by the Hon'ble Supreme Court on 5 th October, 2017. Thereafter, the Curative Petition No. 53 of 2018 was file....
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....Thermal Power Corporation Ltd.' ('NTPC Ltd.') is that it has preferred I.A. No. 62 of 2019 under Section 60(5) of the 'I&B Code' being aggrieved by partial rejection of its claim by the 'Resolution Professional'. It is contended that as per e-mail dated 22nd October, 2018, the 'Resolution Professional' has partly admitted the claim of NTPC only to the extent of Rs. 1,19,44,783/- and not allowed the rest of its claim of Rs. 9,25,55,481/- towards interest. Therefore, the Appellant challenged such decision. 68. The Adjudicating Authority by impugned order dated 8th March, 2019 partly allowed the I.A. No. 62 of 2019 and held that their interest as being 'Operational Creditor' can be adequately taken care at the time of dealing with main I.A. No. 431 of 2018, for judicious distribution/ apportionment of the amount receivable through the resolution plan among 'Financial/ Operational Creditors' and other stakeholders, in terms of Section 53 of the 'I&B Code'. 69. In view of the fact that the claim of the Appellant is similarly placed like 'Oil and Natural Gas Corporation Ltd.' and 'Gail India Limited' (in one of the appeal), we hold that the Appellant- 'NTPC Limited' is also entitle....
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....e requires a tripartite agreement entered into among the lender, the principal borrower and the guarantor. It is also alleged that the Appellant- 'L&T Infrastructure Finance Company Limited' filed its proof of claim before the 'Resolution Professional' (in Form-C) on 19th September, 2018, i.e. much after the expiry of statutory period of 270 days. 75. Taking into consideration the aforesaid facts, we hold that the Adjudicating Authority rightly held that 'L&T Infrastructure Finance Company Limited' cannot be classified as a 'Financial Creditor', there being no 'financial debt' payable by the 'Corporate Debtor' ('Essar Steel India Limited'). The record show that the cheques were issued by the 'Corporate Debtor' due to its payment obligation towards 'Bhander Power Limited' and not issued with a view to secure any payment obligation of principal borrower- ('EPGL'). 76. In view of the aforesaid position, we are not inclined to allow the prayer made in Company Appeal (AT) (Insol.) No. 181 of 2019 preferred by 'L&T Infrastructure Finance Company Limited'. The appeal is dismissed. Company Appeal (AT) (Insol.) No. 517 of 2019─ (Gail (India) Ltd.) 77. According to the Appe....
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....uenced by impugned order passed by the Adjudicating Authority or this Appellate Tribunal. Company Appeal (AT) (Insol.) No. 518 of 2019 (Gail (India) Limited) 82. This appeal preferred by Appellant- 'Gail (India) Ltd.' is in respect of claim amount arising out of 'Gail Sale Agreement' ('GSA') dated 27th May, 2009, executed between the Appellant's Ahmedabad Zonal Office and the 'Corporate Debtor'. In this case, the Appellant filed claim within time on 6th December, 2017 for Take or Pay obligation qua contract year 2016 amounting to Rs. 117.26 Crores plus Rs. 8.28 Crores. Another claim was made on 26th October, 2018 for Take or Pay obligation qua contract year 2017 amounting to Rs. 111.94 Crores plus Rs. 9.78 Crores apart from future claims as and when there will be a rise as per the agreement. 83. The Appellant's total claim was Rs. 247.26 Crores but only the claim dated 6th December, 2017 of 'Gail (India) Ltd.' amounting to Rs. 124.882 Crores was admitted by the 'Resolution Professional' against which 'NIL' amount has been proposed to be paid. 84. It appears that the claim amount of contract year 2017 made on 26th October, 2018 relates to 'Corporate Insolvency Resolution....
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....submitted its claims in Form C on 16th August, 2017 in respect of financial debts. On 29th August, 2017, the 'Resolution Professional' released a list of creditors of the 'Corporate Debtor' but the claim of the Appellants was not admitted due to lack of information and/ or supporting documents. Earlier, the Appellants received a communication dated 22nd August, 2017 from the 'Resolution Professional' seeking various details and documents including, ledger account, bank statements, annual report and TDS certificates, to which the Appellants responded to the same vide email dated 6th September, 2017. 90. The Appellants received a communication from the 'Resolution Professional' seeking various details and documents including confirmation whether the agreement is properly stamped as per Stamp Act and TDS certificates from 14th August, 2014 till 2nd August, 2017. The 'Resolution Professional' has not admitted their claim vide letter dated 23rd January, 2018 as agreement dated 14th August, 2014 seems insufficiently stamped. 91. It is stated that thereafter since 5th February, 2018, the Appellants provided the Form 26 AS certificate to the 'Resolution Professional'. The Form 26 AS ....
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....T) (Insol.) Nos. 242 & 243 of 2019- (Standard Chartered Bank) 96. The case of the Appellant- 'Standard Chartered Bank' is as follows:- The 'State Bank of Mysore' on 5th August, 2010 informed the 'Reserve Bank of India' of the intention of 'Essar Steel India Limited'- ('Corporate Debtor') to acquire 'M/s. Trinity Coal Corporation', USA (Trinity) through 'M/s. Essar Steel Offshore Limited', a wholly owned subsidiary of the 'Corporate Debtor'. It was also informed by the 'Corporate Debtor' to the 'Reserve Bank of India' on 5th August, 2010. 97. Having received the clearance, on the request of the 'Corporate Debtor' on 20th August, 2010, the Appellant- 'Standard Chartered Bank' advanced a loan of US$ 500,000,000 to 'M/s. Essar Steel Offshore Limited', a wholly owned subsidiary of the 'Corporate Debtor'. 98. On 18th November, 2013, the 'Corporate Debtor' informed the 'Steering Committee of lenders' including the 'State Bank of India' in respect of refinancing of the facility granted by the 'Standard Chartered Bank' and issuance of Corporate Guarantee. 99. The facility came to be refinanced to the tune of US$ 413,000,000 by way of an Agreement. Such refinancing became nece....
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....'Financial Creditors'. The Appellant has been provided with 1.74% of the claim amount on the ground that "it has no charge on project assets of the 'Corporate Debtor'". 105. So far as the claim relating to Rs. 70.34 Crores, the Appellant- 'Standard Chartered Bank' has been allowed 4.08% of the claim amount as 'Unsecured Financial Creditor'. Company Appeal (AT) (Insol.) No. 266 of 2019 (State Bank of India) 106. Like 'Standard Chartered Bank', similar grievance has been made by the 'State Bank of India. According to counsel for the 'State Bank of India', there is no justification for placing its claims on some different criteria than the 'Project Asset Secured Lenders'. Company Appeal (AT) (Insol.) No. 265 of 2019 ('Committee of Creditors') 107. The 'Committee of Creditors' of 'Essar Steel India Limited' has challenged part of the impugned order dated 8th March, 2019. Their limited grievance is that while approving the 'Resolution Plan', the Adjudicating Authority has proceeded to make some suggestions and observations and rendered advice which is not only without jurisdiction but also ultra vires to the 'I&B Code' and in contradiction of its own findings. As the 'Sta....
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....,936.25 2,701.01 91.99% Deutsche Bank 2,829.88 2,603.17 91.99% ICICI Bank 2,294.11 2,110.31 91.99% Union Bank of India 2,122.60 1,952.55 91.99% Bank of India 1,985.08 1,826.04 91.99% Corporation Bank 1,566.62 1,441.11 91.99% Syndicate Bank 967.91 890.37 91.99% SC Lowy 582.26 535.62 91.99% Exim Bank 556.26 511.70 91.99% Central Bank of India 510.04 469.18 91.99% Allahabad Bank 320.49 294.81 91.99% SREI Infrastructure Finance 175.28 161.24 91.99% Total(B1) 45,559.24 41,909.29 91.99% B2. Secured Financial Creditors (having no charge on project assets of the Corporate Debtor) Standard Chartered Bank 3,487.10 60.71 1.74% Total (B2) 3,487.10 60.71 1.74% Total (B1+B2) *49,046.34 41,970.00 As set out above at B1 and B2 C. ....
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....olution Professional and as reflected in the list of creditors updated as of 5 March, 2019. As per the observations issued by the Resolution Professional pursuant to the NCLT Order dated 8 March, 2019, the Resolution Professional has 'registered' further operational claims of approximately Rs. 13,767.76 crores and has further admitted notional amount of Rs. 1 for certain operational claims aggregating the approximately Rs. 2,722.50 crores subject to final outcome of the disputes pending with respect to such operational claims." 109. From the aforesaid distribution of amount as shown and approved on 25th October, 2018, we find that the 'Financial Creditors' have been categorised in four categories: (i) 'Secured Financial Creditors' (having charge on project assets of the 'Corporate Debtor'); (ii) 'Secured Financial Creditors' (having no charge on project assets of the 'Corporate Debtor'); (iii) 'Unsecured Financial Creditors' (with admitted claims less than Rs. 10,00,000); and (iv) 'Unsecured Financial Creditors' (with admitted claims equal to or above Rs. 10,00,000). 110. In so far as the 'Operational Creditors' are concerned, they have bee....
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....rcelorMittal India Pvt. Ltd.' before the Hon'ble Supreme Court of India vide Civil Appeal Nos. 9402-9405 of 2018 while the case was pending consideration before the Hon'ble Supreme Court, relevant of which reads as follows: 118. Learned Senior Counsel for the 'Standard Chartered Bank' also relied on an e-mail of Mr. Amit Kumar Kedia dated 26th September, 2018, whereby it was informed that Mr. Gopal Subramanium, Senior Advocate appearing on behalf of the 'Committee of Creditors' read out letter of 'ArcelorMittal India Pvt. Ltd.' and the offer submitted in the Court (the Hon'ble Supreme Court) and requested the Court that in view of the offer made by 'ArcelorMittal India Pvt. Ltd.', the same should be taken as undertaking before the Court to be a base value, in accordance with law. It was submitted that the 'Committee of Creditors' would be willing to accept the offer of simultaneous payment of amount of overdues along with the upfront amount as long as the said undertaking is given by 'ArcelorMittal India Pvt. Ltd.'. 119. Learned counsel appearing on behalf of 'Standard Chartered Bank' also referred to a letter dated 10th September, 2018 written by Mr. Sanjay Sharma of 'Arcelo....
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.... that such negotiations were required to be carried out as per clause 4.11.2 (e) of the Request of Proposal by the 'Committee of Creditors' to better the terms of the 'Resolution Plan'. Though, negotiation with a 'Resolution Applicant' on a 'Resolution Plan' is a substantive function of the 'Committee of Creditors' without affecting the rights of each/ all 'Financial Creditors' and other stakeholders. 124. Learned Senior Counsel for the 'Standard Chartered Bank' submitted that the 'Standard Chartered Bank' was deliberately excluded from the 'Sub Committee' and from participation in the purported "negotiations" as it would have derailed the true purpose for such secret negotiations, which was to deny the rights of the 'Standard Chartered Bank'. 125. From the record, it appears that 'Sub Committee' negotiated, accepted the offer of 'ArcelorMittal India Pvt. Ltd.' for upfront payment of Rs. 42,000 Crores. However, during such negotiations of the 'Sub Committee', for the reasons best known to 'Sub Committee', 'ArcelorMittal India Pvt. Ltd.' was asked to revise its plan in a manner, which shows 'ArcelorMittal India Pvt. Ltd.' has offered upfront payment of Rs. 39,500 Crores for pa....
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....on arises for consideration is whether the 'Sub Committee' or the 'Committee of Creditors' are empowered to distribute the amount amongst the 'Financial Creditors' and the 'Operational Creditors' and other Creditors. 130. A 'Sub-Committee or 'Core Committee' is unknown and against the provisions of the 'I&B Code'. There is no provision under 'I&B Code' which permits constitution of a 'Core Committee' or 'Sub-Committee' nor the 'I&B Code' or Regulations empowers the 'Committee of Creditors' to delegate the duties of the 'Committee of Creditors' to such 'Core Committee'/ 'Sub- Committee'. 131. Section 30 relates to "Submission of resolution plan", as follows: "30. Submission of resolution plan.─ (1) A resolution applicant may submit a resolution plan [along with an affidavit stating that he is eligible under section 29A] to the resolution professional prepared on the basis of the information memorandum. (2) The resolution professional shall examine each resolution plan received by him to confirm that each resolution plan - (a) provides for the payment of insolvency resolution process costs in a manner specified by the Board in priority to the [p....
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.... of section 12, and the corporate insolvency resolution process shall be completed within the period specified in that subsection]: [Provided also that the eligibility criteria in section 29A as amended by the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018 shall apply to the resolution applicant who has not submitted resolution plan as on the date of commencement of the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018.] (5) The resolution applicant may attend the meeting of the committee of creditors in which the resolution plan of the applicant is considered: Provided that the resolution applicant shall not have a right to vote at the meeting of the committee of creditors unless such resolution applicant is also a financial creditor. (6) The resolution professional shall submit the resolution plan as approved by the committee of creditors to the Adjudicating Authority." 132. From sub-clause (b) of sub-section (2) of Section 30, it is clear that the 'Resolution Professional' is required to notice whether the 'Resolution Plan' provides for the payment of the debts of the 'Operational Creditors' in such manner as may be specified by....
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....takeholders, including financial creditors and operational creditors, of the corporate debtor."] (2) A resolution plan shall provide: (a) the term of the plan and its implementation schedule; (b) the management and control of the business of the corporate debtor during its term; and (c) adequate means for supervising its implementation. (3) A resolution plan shall demonstrate that─ (a) it addresses the cause of default; (b) it is feasible and viable; (c) it has provisions for its effective implementation; (d) it has provisions for approvals required and the timeline for the same; and (e) the resolution applicant has the capability to implement the resolution plan.]" 136. From Regulation 38, particularly clause (1A), it is clear that 'Resolution Plan' must include a statement as to how it has dealt with the interests of all stakeholders, including 'Financial Creditors' and the 'Operational Creditors', of the 'Corporate Debtor'. Therefore, we hold that the distribution of amount to the 'Operational Creditors', 'Financial Creditors' and other stakeholders are to be made by the 'Resolution Applica....
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....place. In view of the aforesaid position of law, we hold that the 'Committee of Creditors' do not enjoy any authority to delegate to itself the role of the 'Resolution Applicant' including the manner of distribution of amount amongst the stakeholders, which is exclusively within the domain of the 'Resolution Applicant' and thereafter before the Adjudicating Authority, if found discriminatory. 141. Such being the position, the 'Committee of Creditors' cannot delegate its power to a 'Sub Committee' or 'Core Committee' for negotiating with the 'Resolution Applicant(s)'. 142. The negotiation by 'Sub Committee' has resulted in infirmity and because of 'Sub-Committee', the 'ArcelorMittal India Pvt. Ltd.' submitted revised/ modified 'Resolution Plan' on 22nd October, 2018. In Part VIII which deals with the treatment of various stakeholders (distribution of amount to the stakeholders), the 'ArcelorMittal India Pvt. Ltd.' proposes to pay to the 'Financial Creditors' Rs. 39,500 Crores and delegated the power to the 'Committee of Creditors' as recorded in Part VIII which states that: "The Resolution Applicant has empowered the Committee of Creditors to decide the manner in whic....
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....dified so that the operational creditors' rights are safeguarded. It may be seen that a resolution plan cannot pass muster under Section 30(2)(b) read with Section 31 unless a minimum payment is made to operational creditors, being not less than liquidation value. Further, on 05.10.2018, Regulation 38 has been amended. Prior to the amendment, Regulation 38 read as follows: "38. Mandatory contents of the resolution plan.- (1) A resolution plan shall identify specific sources of funds that will be used to pay the- (a) insolvency resolution process costs and provide that the [insolvency resolution process costs, to the extent unpaid, will be paid] in priority to any other creditor; (b) liquidation value due to operational creditors and provide for such payment in priority to any financial creditor which shall in any event be made before the expiry of thirty days after the approval of a resolution plan by the Adjudicating Authority; and (c) liquidation value due to dissenting financial creditors and provide that such payment is made before any recoveries are made by the financial creditors who voted in favour of the resolution plan." Pos....
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....dustries Pvt. Ltd.─ Company Appeal (AT) (Insol.) No. 327 of 2017", whereby this Appellate Tribunal held that in a particular case, what should be the percentage of claim amount payable to one or other 'Financial Creditor' or the 'Operational Creditor' or 'Secured Creditor' or 'Unsecured Creditor' can be looked into by the 'Committee of Creditors' based on facts and circumstances of each case. 151. However, the aforesaid decision is not applicable in the present case. In the present case, we have held that the 'Resolution Applicant' is required to decide the manner in which the distribution to be made amongst all the stakeholders including the 'Financial Creditors', 'Operational Creditors' and other Creditors. It is only when such distribution is found to be discriminatory, in such case, to remove such discrimination and to find out what should be the percentage of the claim amount payable to one or other 'Financial Creditors' or 'Operational Creditors', the 'Committee of Creditors' may negotiate and may ask the 'Resolution Applicant' to prepare revised chart re-distributing the amount in favour of Creditors' in a manner which is non-discriminatory by providing same treatme....
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....tes commercial aspects from judicial aspects and empowers and facilitates the 'Committee of Creditors' to take commercial decisions in a 'Corporate Insolvency Resolution Process'. The commercial decisions of the 'Committee of Creditors' are not ordinarily open to any analysis, evaluation or judicial review by the Adjudicating Authority or the Appellate Authority and hence not justiciable. 157. The 'I&B Code' envisages a 'Resolution Plan' for reorganisation of a defaulting 'Corporate Debtor'. The selection and approval of the best 'Resolution Plan' requires two abilities, namely, the ability to restructure the liabilities and the ability to take commercial decisions. In contrast with the 'Operational Creditors' who may pursue immediate realisation of their dues, the 'Financial Creditors' generally have the resilience to wait for realisation of their dues post reorganisation. They have also the ability to determine if a 'Resolution Plan' will achieve the objectives of the 'I&B Code'. In view of their abilities, the 'Committee of Creditors' comprises 'Financial Creditors'. The 'Committee of Creditors', therefore, has a duty to take commercial decisions which further the objectives ....
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....possibly address the failure by the 'Corporate Debtor'; what are parameters to assess the viability and feasibility of the 'Resolution Plans'; etc. to enable prospective 'Resolution Applicants' design and submit competing 'Resolution Plans' for reorganisation of the 'Corporate Debtor'. (c) The 'Committee of Creditors' must ensure that the 'Corporate Debtor' continues as a going concern and its value does not deteriorate during 'Corporate Insolvency Resolution Process'. For this purpose, it must appoint a competent IP who can run the business of the 'Corporate Debtor' as a going concern at its optimum potential, provide complete, correct and timely information about the 'Corporate Debtor' to resolution applicants for design of resolution plans, and safeguard the assets of the 'Corporate Debtor'. It must facilitate interim finance, and co-operate in detection of avoidance transactions, wherever required. It must expedite various tasks for closure of the 'Corporate Insolvency Resolution Process' at the earliest. (d) The Code envisages the 'Committee of Creditors' to consider only those 'Resolution Plans' which (i) have been received from credible and capable 'Resolut....
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....reasons. Permissibility of classification 161. Section 3(10) defines 'Creditor' means: "3. Definitions.─(10) "creditor" means any person to whom a debt is owed and includes a financial creditor, an operational creditor, a secured creditor, an unsecured creditor and a decree-holder" 162. Thus, it is apparent that the creditor includes a 'Financial Creditor', an 'Operational Creditor', a 'Secured Creditor', an 'Unsecured Creditor' and a decree-holder. 163. Section 5(7) defines 'Financial Creditor' means any person to whom a financial debt is owed, whereas 'Financial Debt' has been defined under Section 5(8) means a debt alongwith interest, if any, which is disbursed against the consideration for the time value of money, which are as follows: "5. Definitions.─ (7) "financial creditor" means any person to whom a financial debt is owed and includes a person to whom such debt has been legally assigned or transferred to; (8) "financial debt" means a debt alongwith interest, if any, which is disbursed against the consideration for the time value of money and includes- (a) money borrowed against the payment of interest; (b....
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....'. Distribution of debts to the 'Financial Creditors', 'Operational Creditors' and Others 165. The distribution of debts to the 'Financial Creditors' and the 'Operational Creditors' during the 'Corporate Insolvency Resolution Process' cannot be equated with distribution of debts to all stakeholders after the liquidation for the following reasons: 166. The 'Resolution Applicant' proposes the distribution of debt to the 'Financial Creditors', 'Operational Creditors' and other stakeholders out of the amount proposed to be paid by the 'Resolution Applicant'. 167. On the other hand, after liquidation, debt is distributed out of the assets of the 'Corporate Debtor' in terms of Section 53 of the 'I&B Code' in order of priority, which reads as follows: "53. Distribution of assets.─ (1) Notwithstanding anything to the contrary contained in any law enacted by the Parliament or any State Legislature for the time being in force, the proceeds from the sale of the liquidation assets shall be distributed in the following order of priority and within such period as may be specified, namely: - (a) the insolvency resolution process costs an....
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....Creditors. It is not a distribution of assets from the proceeds of sale of liquidation of the 'Corporate Debtor' and, therefore, the 'Resolution Applicant' cannot take advantage of Section 53 for the purpose of determination of the manner in which distribution of the proposed upfront amount is to be made in favour of one or other stakeholders namely- the 'Financial Creditor', 'Operational Creditor' and other creditors. 169. Sub-clause (b) of sub-section (2) of Section 30 of the 'I&B Code' mandates that the 'Resolution Plan' must provides for the payment of the debts of 'Operational Creditors' in such manner as may be prescribed by the Board which shall not be less than the amount to be paid to the 'Operational Creditors' in the event of a liquidation of the 'Corporate Debtor' under Section 53. That means, the 'Operational Creditors' should not be paid less than the amount they could have received in the event of a liquidation out of the asset of the 'Corporate Debtor'. It does not mean that they should not be provided the amount more than the amount they could have received in the event of a liquidation which otherwise amount to discrimination. 170. In view of the aforesaid p....
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....has been legally assigned or transferred; (21) "operational debt" means a claim in respect of the provision of goods or services including employment or a debt in respect of the [payment] of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any local authority" 175. From the definition of 'Operational Debt', we find the following classification has been made by the Parliament: (i) Those who have 'supplied goods' and 'rendered services' and thereby entitled for payment. (ii) The employees who have 'rendered services' for which they are entitled for payment. (iii) The Central Government, the State Government or the Local Authority who has not rendered any services but derive the advantage of operation of the 'Corporate Debtor' pursuant to existing law (statutory dues). 176. From the aforesaid definition, the 'Operational Creditors' can be classified in three different classes for determining the manner in which the amount is to be distributed to them. However, they are to be given the same treatment, if similarly situated. 177. For the aforesaid reasons, if the employees a....
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.... Bank 2,481.61 2,228.40 89.80% Canara Bank 3,798.06 3,410.53 89.80% EARC Trust SC 114 602.39 540.93 89.80% EARC Trust SC 187 92.25 82.84 89.80% EARC Trust SC 217 1,697.77 1,524.54 89.80% EARC Trust SC 233 993.46 892.10 89.80% EARC Trust SC 292 1,966.31 1,765.68 89.80% EARC Trust SC 322 554.92 498.30 89.80% EARC Trust SC 137.25 123.25 89.80% 327 EARC Trust SC 337 1,273.78 1,143.82 89.80% EARC Trust SC 323 978.63 878.77 89.80% EARC Trust SC 326 10.00 8.98 89.80% Bank of Baroda 5.00 4.49 89.80% Punjab National Bank 2,936.25 2,636.66 89.80% Deutsche Bank 2,829.88 2,541.14 89.80% ICICI Bank 2,294.11 2,060.03 89.80% Union Bank of Ind....
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.... *426.81 ~17.70 As set out above at C1 And C2 D. Operational Creditors (other than Workmen and Employees) D1. Operational - ~196 ~196 100% Creditors with admitted claim amount less than Rs. 1 crore (i.e. ~1,600 operational creditors out of a total of 1,855 operational creditors in No.) D2 Operational Creditors with admitted claim amount equal to or more than Rs. 1 Crores - ~4,877.99 1,000 20.50% Total (D1 + D2) **5,073.99 1,196.00 As set out above at D1 and D2 * Claims as admitted by the Resolution Professional as reflected in the list of creditors updated as of 24 October, 2018. The Successful Resolution Plan was approved by the COC on 25 October, 2018 basis the voting share and claim amounts set out in this list. ** The COC in deference to the non-binding "recommendations" of the Hon'ble National Company Law Tribunal, Ahmedabad Bench (as set out in its order dated 8 March 2019) ("NCLT Order") and the order dated 20 March 2019 of this Hon'ble Tribunal, has pursuant to its 22nd meeting vide a....
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....ia Pvt. Ltd.') was supposed to provide the manner in which the distribution is to be made amongst all the stakeholders including the 'Financial Creditors' and the 'Operational Creditors'; we requested Mr. Harish Salve, learned Senior Counsel for 'ArcelorMittal India Pvt. Ltd.' to address this Appellate Tribunal as to how to distribute the amount, if the 'ArcelorMittal India Pvt. Ltd.' is allowed to distribute. 182. Mr. Harish Salve, learned Senior Counsel for 'ArcelorMittal India Pvt. Ltd.' while agreed that total amount of Rs. 42,000 Crores to be distributed amongst the stakeholders, suggested the following 'Scheme for Distribution': "1. The operational creditors ("OC") are to be paid on the basis of the percentage of their debt depending upon the amount available for distribution to OC's. 2. Up to 08.03.2019 i.e. the Plan Approval Date, the Resolution Professional ("RP") had "admitted" claims of INR 5074 Cr. However pursuant to the order dated 08.03.2019 passed by the Adjudicating Authority ("Plan Approval Order"), the total of all the claims "registered" by the RP is in the vicinity of INR 19000 Cr. In addition to the same, there are a large number of di....
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....er a period of time as the figure of "Y" becomes final and stands reduced (by final rejection of disputed claims), additional distributions can be made of the incremental figure of "Z" arrived at by dividing "X" by "Y" - being the revised figure. 12. The final distribution will be made when finality is reached on all disputed claims and the final figure of "Y" is available with the resolution applicant. 183. Learned counsel for 'ArcelorMittal India Pvt. Ltd.' submitted that a. The process of distribution will take some time. It is proposed that the actual process may be carried out by a reputed Chartered Accountants' firm, as may be selected/appointed by this Hon'ble Appellate Tribunal, whose fees and cost will be borne by the Resolution Applicant. The Resolution Applicant will take all necessary steps to assist the said Chartered Accountants' firm, and the Adjudicating Authority for adjudicating the claims, including by way of legal fees of representation of the estate before the NCLT and the higher authorities. b. This Appellate Authority may make an order allowing all such OCs (who are dissatisfied by the amount of claim admitted and/or reje....
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....he preceding paragraphs. 189. The grievance has been made by 'MSTC Limited' and other Appellants that in spite of the order passed by the Adjudicating Authority, the 'Resolution Professional' has not recorded their claims. In this background, we asked the 'Resolution Professional' to file the chart showing the amount claimed in terms of the order passed by the Adjudicating Authority. Same is reflected hereunder and which we have accepted: I.A. No. Name of Creditor Amount of claim (Rs) as per I.A. as per pages 34-41 of NCLT Order 28/2018 Dakshin Gujarat Vij. Co. Ltd. 313,23,33,224 446/2018 Dakshin Gujarat Vij. Co. Ltd. 5882,28,00,000 467/2018 Dakshin Gujarat Vij. Co. Ltd. 606,49,00,000 468/2018 State Tax Officer 544,00,00,000 443/2018 Gujarat Energy Transmission Corporation Ltd. 896,52,00,000 325/2018 Bharat Petroleum Corporation Limited 443,05,33,379 53/2018 Bharat Petroleum Corporation Limited 503,83,46,437 469/2018 Indian Oil Corporation Ltd. 3762,58,74,503 52/2019 MSTC Limited 813,30,00,000 438/2018 GAIL India Limited 2,47,26,000 470/2018 Global Transnational Trading FZE N....
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.... Creditor Rs. 55,440 Cr. Rs. 49,473 Cr. 3 Operational Creditor Rs. 27,101 Cr. Rs. 5,074 Cr. 196. The additional claim of the 'Operational Creditors' has been admitted by the Adjudicating Authority and upheld by us, which are as follows: S. No. Name of Creditor Amount of claim (in Rs.) as per I.A. as per pages 3441 of NCLT Order 1 Dakshin Gujarat Vij Co. Ltd. 3,13,23,33,224 2 Dakshin Gujarat Vij Co. Ltd. 58,82,28,00,000 3 Dakshin Gujarat Vij Co. Ltd. 6,06,49,00,000 4 State Tax Officer 5,44,00,00,000 5 Gujarat Energy Transmission Corporation Ltd. 8,96,52,00,000 6 Bharat Petroleum Corporation Limited 4,43,05,33,379 7 Bharat Petroleum Corporation Limited 5,03,83,46,437 8 Indian Oil Corporation Ltd. 37,62,58,74,503 9 MSTC Limited 8,13,30,00,000 10 GAIL India Limited 2,47,26,000 11 Global Transnational Trading FZE NA TOTAL 1,37,67,77,13,543 Following claims have also been....
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....ncial Creditors & Operational Creditors' S. No. Category of Stakeholders %age Amount (in Rs.) A. Operational Creditors 60.7% 1. Operational Creditors-I# 59.614% 1,17,55,48,49,224 2. Operational Creditors-II## 100.00% 2,14,07,00,000 3. Total-I 1,19,69,55,49,224 B. Financial Creditors 60.7% 4. Financial Creditors-I 60.7% 3,00,30,14,50,000 5. Financial Creditors-II 100.00% 30,00,000 6. Total-II 3,00,30,44,50,000 Grand Total ( 3 + 6 ) 4,19,99,99,99,224 197. On the basis of first calculation, the distribution chart is shown below: S. No. Category of Stakeholder Name of the Stakeholder Amount admitted by Resolution Professional (In Rs. Crores) Amount payable as per 60.7% Total Amount allowed for payment* A. Financial Creditors State Bank of India 13,220.91 8,025.0924 8,025.094 60.7% IDBI ....
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....oda 7.70 4.6739 4.674 60.7% Standard Chartered Bank 70.34 42.6964 42.704 60.7% The Bank of New York Mellon, London Branch 202.50 122.9175 122.924 60.7% Inox Air Products Private Limited 78.48 47.6374 47.644 60.7% Axis Bank 61.91 37.5794 37.584 60.7% B. Financial Creditors B1. Financial Creditors (with admitted claims less than Rs. 10 lacs) Melwani Gopal Tharumal and/or Melwani Vinod 0.08 0.08 0.08 100.00% Arvind Parakh HUF 0.08 0.08 0.08 100.00% Mr. Arvinlal N Shah & Mrs. Indumati A Shah 0.08 0.08 0.08 100.00% Mr. Jiwat K Dansanghani and Mrs. Neetu J Dansanghani 0.03 0.03 0.03 100.00% Nathu Ram Verma 0.02 0.02 0.02 100.00% C. Operational Creditors (other than Workmen and Employees) Operational Creditors with admitted claim amount less than Rs. 1 crore ....
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....d that during the 'Corporate Insolvency Resolution Process', the 'Corporate Debtor' did business of about Rs. 55,000/- Crores (data not available and, therefore, not verified). Therefore, according to him, the 'Operational Creditors' have not been allowed any amount. 202. In view of such submissions, we directed the 'Resolution Professional' to file affidavit giving details of profit if generated during the 'Corporate Insolvency Resolution Process' for determination as to who is entitled to such profit. 203. The 'Resolution Professional' in his affidavit has stated as follows: "(3) As directed, the earnings before interest, tax, depreciation and amortization ("EBITDA") of the Corporate Debtor from operations during the period of CIRP and subsequent period (as provided by acting CFO of the Corporate Debtor and Alvarez & Marsal India Private Limited, Advisor ("A&M / Advisor") is as follows: Particulars Aug 17- Mar 18 (Audited) Apr 18- Feb 19 (Provisional) ** Total for CIRP Mar 2019 (Provisio nal)** Total EBIDTA from Operations 1,759 2,241 4,000 229 4229* *Figures from April 1, 2019 till date are not available. Howev....
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....nd, therefore, the total profit should be distributed amongst the 'Operational Creditors' who are generally provided lesser amount than the 'Financial Creditors'. 207. Mr. Harish Salve, learned Senior Counsel appearing on behalf of the 'ArcelorMittal India Pvt. Ltd.' submitted that the 'ArcelorMittal India Pvt. Ltd.' having provided Rs. 2,500 Crores towards the working capital, the said amount of Rs. 2,500 Crores should be adjusted out of the profit generated and the rest amount after the audit may be distributed amongst the Creditors (both the 'Financial Creditors' and the 'Operational Creditors'). 208. It was further submitted that the balance amount be kept in a designated Escrow Account if the 'Operational Creditors' having disputed the claim, avail remedy under Section 60(6) of the 'I&B Code'. 209. The suggestions made by Mr. Harish Salve was opposed by both counsel for the 'Financial Creditors' and the 'Operational Creditors' as according to them, the said amount cannot be treated to be amount invested by 'ArcelorMittal India Pvt. Ltd.'. 210. Having heard rival contentions, we are of the view that the amount of profit if generated during the 'Corporate Insolvency ....
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....Process' is complete, all non-financial claims and disputes would be resolved in pending proceedings or fresh proceedings. It is for the latter that the legislature has accommodated the period of the 'Moratorium'. Therefore, according to him, after approval of the plan under Section 31, the claim of all the Creditors is extinguishing against the 'Corporate Debtor'. 215. In the preceeding paragrapgh, we have noticed the suggestion made by Mr. Harish Salve, learned Senior Counsel that the 'Operational Creditors' having disputed claims can avail remedy under Section 60(6) of the 'I&B Code'. Thereby, over a period of time as the figure of aggregate amount of debt payable to the 'Operational Creditors' (as shown to be 'Y') becomes final and stands reduced (by final rejection of disputed claims), additional distributions can be made of the incremental figure of 'Z', which is the percentage of distribution being arrived at the time. 216. Therefore, the submission that after approval of the plan under Section 31, the claim of the creditors estinginguished against the 'Corporate Debtor' is contratry to the suggestion made by Mr. Harish Salve, learned Senior Counsel that "the 'Operatio....
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.... application can be filed against the 'Corporate Debtor'. 218. In "M/s. Prasad Gempex v. Staer Agro Marine Exports Pvt. Ltd. & Ors.− Company Appeal (AT) (Ins.) No. 291 of 2018 etc.", this Appellate Tribunal by its order dated 1st February, 2019 held that notwithstanding the order passed under Section 31 of the 'I&B Code' (which comes within the purview of any existing law), it is open to a person to file a suit or an application against the 'Corporate Debtor' after completion of the period of 'Moratorium' in accordance with Section 60(6) of the 'I&B Code'. 219. In "M/s. Roma Enterprises v. Mr. Martin S.K. Golla, Resolution Professional− Company Appeal (AT) (Ins.) No. 232 of 2018", this Appellate Tribunal by its order dated 6th May, 2019 held that where the claim of an 'Operational Creditor' involves a disputed question of fact as it cannot be decided by the 'Resolution Professional' or the Adjudicating Authority, such 'Operational Creditor' can raise such issue and claim at an appropriate stage i.e. after 'Moratorium' is over, which reads as follows: "4. In "Swiss Ribbons Pvt. Ltd. & Anr. vs. Union of India & Ors.─ 2019 SCC OnLine SC 73", the Hon'bl....
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....isfied and, therefore, they cannot avail any remedy under Section 60(6) of the 'I&B Code'. The 'Financial Creditors' in whose favour guarantee were executed as their total claim stands satisfied to the extent of the guarantee, they cannot reagitate such claim from the Principal Borrower. 222. It is made clear that this decision relates to 'Corporate Insolvency Resolution Process' initiated against 'Essar Steel India Limited'. It does not relate to 'Odisha Slurry Pipeline Infrastructure Limited'. Mr. Harish Salve, learned Senior Counsel for the 'Resolution Applicant' made it clear that the 'Resolution Plan' do not relate to any outstanding debt in 'Odisha Slurry Pipeline Infrastructure Limited'. 223. Company Appeal (AT) (Insolvency) Nos. 242, 243, 266, 279, 290, 291, 292, 293, 300, 302-303, 304-305, 332-333, 337, 338, 345, 349, 361, 374, 376, 449, 454, 580 & 551 of 2019 are allowed with observations and directions as made above; Company Appeal (AT) (Insolvency) Nos. 517 & 518 of 2019 stand disposed of with liberty as given to them and Company Appeal (AT) (Insolvency) Nos. 257, 265, 375, 428, 429 & 181 of 2019 are dismissed. No costs. ============= Document 1 IN THE MATTER....
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....y of paying off overdue amounts of UG and KSS would be by "transfering" the debt. In other words, the banks would assign the entire amount overdue to the Company/NBFC/ARC. This Hon'ble Court may direct the RBI to grant necessary permission for such transfers. For the bid amount of Rs. 42,000 cr. TRUE COPY 1 (ADVOCATE) Document 2 ArcelorMittal 10 September 2018 To Mr. Satish Kumar Gupta, Resolution Professional With copy to: The Committee of Creditors, Essar Steel India Limited Dear Sirs, Re: Insolvency Resolution of Essar Steel India Limited This is in connection with the insolvency resolution process of Essar Steel India Limited ("ESIL") under the provisions of the Insolvency and Bankruptcy Code, 2016, as amended from time to time ("IBC"). We present the following proposal to the Committee of Creditors (the "AM Proposal") without prejudice to our rights: (a) ArcelorMittal hereby offers to pay upfront INR 42,000 crores (Rupees forty-two thousand crores) towards the resolution of the debt of secured financial lenders of ESIL. This amount reflects 100% of the principal outstanding dues of the secured creditors of ....
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.... turning around highly distressed steel assets globally offers the best long-term solution for ESIL and its stakeholders. We stand ready to effect the above at the earliest direction of the Committee of Creditors. Please note that the AM Proposal must in no way be construed as an admission of the purported ineligibility of any company in the ArcelorMittal group to submit a resolution plan under the IBC or otherwise, nor is it in derogation of our right to avail of appellate remedies against this Order. We continue to believe that we are, and have always been, eligible to submit bids for ESIL, and we reserve all rights in respect to any finding to the contrary (including by the Hon'ble NCLAT). We hope for a favourable consideration of our proposal leading to a quick settlement of your outstanding dues with the highest possible recovery. Thanking you, Regards Sanjay Sharma (On Behalf of ArcelorMittal India Private Limited, the Resolution Applicant) Document 4 Based on break up of Admitted clalms put by RP on Virtual Data Room Lender Name Allahabad Bank Axis Bank/8C Lowy Bank of Baroda Bank of India Canara Bank Central B....