TaxTMI 
TaxTMI 
2020 (2) TMI 1345
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....s the guarantor, shareholder, former Managing Director / Chairman of the Videocon Industries Limited (parent Company of Videocon Group of Companies) has filed this Miscellaneous Application under Section 60(5)(c) of the Insolvency and Bankruptcy Code, 2016 and, inter alia, has made the following prayers: a. Resolution Professional of the Corporate Debtor, Videocon Industries Ltd. be directed to consider and treat all assets, properties (tangible and intangible), rights, claims, benefits of the Respondent Nos. 2 to 5 as assets and properties of Videocon Industries Ltd. for the purpose of present CIRP and to include the assets, liabilities, claims of Respondent Nos. 2 to 5 in the Information Memorandum (IM) of the present Corporate Debtor, Videocon Industries Ltd; b. That this Hon'ble Tribunal be pleased to declare that moratorium as per the provisions of the Code is applicable and imposed on the said foreign oil and gas assets and all the other rights, assets (tangible and intangible) and benefits held by or through the Respondent Nos. 2 to 5; Background: 2. After admission of each of the Company Petition separately against the 15 Videocon Group Companies....
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....s released from obligor / co-obligor structure and became Confirming Party and Guarantor to the said Agreements. 8. The Videocon Group presently is holding foreign Oil & Gas assets and participating interest therein with BPCL under a structure as given below : Note: BPRL Ventures Indonesia B.V. is a wholly owned subsidiary of Bharat Petro Resources Ltd. and holds 12.5% Participating Interest in the Nunukan Oil and Gas Asset separate and independent of the Participating Interest held by Respondent No. 5 (VINI). The balance 64.5% of Participating Interest is held by third party - PHE Nunukan Company. 9. The summary of date of constitution of each of the above Companies and shareholding thereof as given in the written submissions are reproduced below: Company Date of Incorporation Shareholding and Management Remarks IBV Brasil Petroleo Ltd. ('IBV Brasil') -- Equally between BPRL Ventures BV and VEBL Direct holder of the participating interests by virtue of the Joint Operating Agreement VB (Brasil) Petroleo Pvt. Ltd. 28 Jun 2007 Equally between BPRL and VIL JV Company incorporated to acquire IBV Brasil; stood merged with IBV Br....
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....present Corporate Debtor / VIL, mentioning that the present Corporate Debtor / VIL was authorized to bid in consortium with Bharat Petro Resources Limited [hereinafter referred to as "BPRL"] for the Brazilian Assets. 5. 30.07.2007 The present Corporate Debtor / VIL and BPRL jointly submitted the final bid / "binding proposal" for the potential acquisition of 100% of the issued and outstanding capital stock of EnCana Corporation or alternatively for direct asset purchase. 1. The present Corporate Debtor / VIL and BPRL referred to as "Purchaser". 2. Also mentioned "In the event our proposal is successful, purchaser will set-up a SPV for the purpose of consummating the Transaction." 6. 7.01.2008 The Company VEBL (Respondent No. 4) was constituted, having 100% subsidiary of VIL which is now 100% subsidiary of VHHL (Respondent No. 3). 7. 12.09.2008 Quotaholders Agreement was entered into by and between BPRL, the present Corporate Debtor / VIL and VB (Brasil) Petroleo Private Limitada. It is important to note that the recitals mention that (a) BPRL and VIL have signed a Joint Bidding Agreement dated June 13, 2007, in connection with acquisition of a....
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....res of VHHL (Respondent No. 3) held by it to VOVL and, therefore, revised shareholding structure of VHHL (Respondent No. 3) has become 99% held by VOVL; whereas 1% is held by the present Corporate Debtor / VIL. 18. 06.06.2018 to 25.09.2018 The company Petitions against 15 Videocon Group Companies were admitted by NCLT, Mumbai Bench. 19. 08.08.2019 The Adjudicating Authority passed order of Consolidating CIRP of 13 Videocon Group Companies by way of detailed order. 20. 22.08.2019 The Adjudicating Authority of this Bench granted interim protection thereby prevented the State Bank of India from selling oil and gas assets pending the hearing of the present Application. 11. The financial documents entered into and executed between the parties in the Videocon Group companies as given in its submissions is being referred to in this paragraph. The two most important documents to our mind are Rupee Term Loan Agreement under which credit was extended to the 13 Videocon group of companies presently under insolvency and the SLC/ SBLC facilities under which loans were extended by the Financial creditors for the Oil and gas assets. This would again as per this Bench....
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....all also be treated as the event of default of RTL facility besides the insolvency of the VHHL. vi) The RTL Agreement also mentions about LOC / SBLC Facility Agreement, Offshore Share Pledge Agreement, Oil & Gas Funding Loans is defined as collectively the LOC / SBLC Facility, the Supplemental Rupee Facility, the Foreign Currency Facility, Additional Foreign Currency Facility. vii) Clause 12.47 regarding revenues from identified oil and gas assets of RTL Agreement mentions that "The obligor shall ensure that the contracts in respect of product of identified oil and gas assets shall be broadly consistent with the terms envisaged in the business plan. In the event that the selling price of the products from the identified oil and gas assets are contracted at a value lower than that assumed under the business plan, the vendor shall have right to stipulate such additional conditions as may be deemed necessary by them." viii) The said Clause 12.49 further mandates that the Borrowers of the RTL Agreement shall procure an undertaking from VOVL (Respondent No. 2) that it shall not divest, pledge, alienate or dilute its direct or indirect shareholding in its subsi....
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....ter-alia by and between (i) the Consortium of Lenders set out in the Schedule; (ii) the State Bank of India (as the 'Security Agent'); (iii) the Respondent No. 1 / the present Corporate Debtor / VIL and Respondent No. 2-VOVL (as 'Obligors'); and (iv) VHHL (Respondent No. 3) (as the 'Foreign Currency Borrower'). The VIL is termed as one of the co-obligors; (i) In recitals, it is mentioned that VOVL (Respondent No. 2) directly and/or indirectly manages and controls the overseas oil and gas business of Videocon Group by holding participating interest in foreign oil and gas assets fields; whereas in relation to the present Corporate Debtor / VIL, it is mentioned that VIL is also engaged in the oil and gas exploration and extraction business in India and through overseas subsidiaries of VIL holds participating interest in various oil and gas fields globally. (ii) In terms of the said LOC/ SBLC Facility Agreement, the said SBLC Facility was inter-alia secured by the following: a) First ranking pledge by VIL of 100% of fully paid up equity shares of VOVL/Respondent No. 2; b) First rank in charge in participating interest by way o....
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....d charge; (e) First ranking pledge by VEBL (Respondent No. 4) of all its shares of IBPL, both present and future (currently 50% of the share capital of IBPL), over which the Rupee Lenders will have second charge; (d) On 30.3.2017, the SBLC Tranche 1 Facility Agreement as well as SBLC Tranche 2 Facility Agreement came to be amended by way of Deed of amendment to both the Tranche 1 and Tranche 2 LOC / SBLC Facility Agreements, inter alia, mentioning as under: 2. VIL Obligations 2.1 "...VIL shall stand released from all its obligations as a Co-Obligor / Obligor and Obligor Agent under the Tranche 1 / 2 LOC/SBLC Facility Agreement. ..." 2.2 "... All references to the terms "Obligor", "Co-Obligor" and "Obligor Agent" under the Tranche 1 / 2 LOC/SBLC Facility Agreement, shall be deemed to be references only to VOVL. ..." 2.3 "On and from the date of this Amendment Agreement, VIL shall be deemed to be the "Confirming Party" to the Tranche 1 / 2 LOC/SBLC Facility Agreement." 12. As per the submissions made before this Bench in the ongoing CIRP of Respondent No. 1 i.e. the present Corporate Debtor / VIL, all the Financial Creditors of....
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.... 37 BARCLAYS BANK PLC 65.55 - 65.55 38 ABG SHIPYARD LTD 15.00 - 15.00 39 YES BANK 143.00 - 143.00 40 MORGAN SECURITIES & 76.45 - 76.45 Grand Total 34,370.75 23,120.90 57,491.65 The claim of the Oil and Gas vendors in the total claims of the Financial creditors in the Corporate Debtor's company /VIL is about 40.2%. Contentions of Applicant, Mr. Venugopal Dhoot: 13. The Applicant mentions that this Application under Section 60(5) (c) of the Code and the Applicant being guarantor, shareholder and Ex Managing Director and Chairman of the Videocon Group has locus to file present Application to include all assets and properties belonging to the Respondent No. 1 in the present CIRP in the interest of all stakeholders. 14. It is further contention of the Applicant that under the provisions of the Code, he is duty bound to bring all assets and properties of the Respondent No. 1 in the knowledge of this Authority as the Resolution Professional has failed to include the said assets as the assets and properties of the present Corporate Debtor / VIL. 15. The foreign oil and gas assets, properties, ....
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....pendent means of income and/ or assets and/ or business to acquire / subscribing shareholding or assets but solely on the basis of the financial assistance from the present Corporate Debtor / VIL, the foreign oil and gas assets, properties and/ or interests therein was acquired. 24. The present holding structure to hold the participating interests in the foreign oil and gas assets through the Respondent Nos.2 to 5 (SPVs) was created for the convenience purpose as it was practically difficult for the present Corporate Debtor / VIL to fund the operation costs of these foreign oil and gas assets (cash calls) from India to foreign countries under the provisions of the FEM Act. 25. Under the provisions of the FEM Act, the foreign subsidiaries could easily get the finance in the foreign countries in the foreign currency under the automatic route on the basis of the guarantee of the Indian holding company i.e. the present Corporate Debtor / VIL. Whereas, the substantial time was being wasted to send money of cash call from India to abroad as it required the specific permission from Reserve Bank of India under the approval route and therefore just for the convenience purpose the stru....
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....ets, properties and/ or the interest therein including present or future or vested or contingent, in favour of the lenders of the Rupee Term Loan Agreement i.e. the financial creditors of the Respondent No. 1, the present Corporate Debtor / VIL and the 12 other consolidated companies. 32. Notwithstanding the amendment in LOC/ SBLC Facility Agreement practically there is no change in the liability accepted by the Respondent No. 1, the present Corporate Debtor / VIL as it was/ is the confirming party and Guarantor to the said Facility Agreement under which oil and gas business was financed. 33. In consequence to above arrangement in the present ongoing CIRP of the Respondent No. 1, the present Corporate Debtor / VIL plus other 12 consolidated companies, the Lenders of foreign oil and gas business i.e. lenders of Respondent Nos.1 to 5 have lodged their claim to the tune of Rs. 23,120.90 Crores in the present ongoing CIRP. 34. In the clauses of the Loan Agreements i.e. RTL Agreement as well as LOC/ SBLC Facility Agreement, the loan granted are interconnected and inseparable. Hence, it is impossible to have Resolution of the group as envisaged in the Code without inclusion of t....
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....bsidiaries and there was no occasion in that Writ Petition to challenge the real ownership and beneficial interest of the Videocon Industries Ltd. rather it was clearly mentioned that the property was initially acquired by the present Corporate Debtor / VIL in conjunction with BPCL. The contention of the State Bank of India: 41. The CIRP process envisaged in the Code is creditor driven process and no interference from the third party like the present Applicant is warranted. The present Application is filed to delay the ongoing CIRP. 42. The present Applicant, Mr. V. N. Dhoot has no locus standi to file the present Application. The Resolution Professional is competent to take any such steps if required in law. The property sought to be included is not owned by the present Corporate Debtor / VIL and will not come under the ambit of the order of moratorium under Section 14(1) (b) of the Code. 43. The Adjudicating Authority do not enjoy any jurisdiction over the foreign companies so no order of restraining the sale of such assets can be passed by the Adjudicating Authority. 44. The subsidiary and its assets are not the assets of the holding company and that the subsidiar....
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....lution Professional to take control and custody of any assets over which the Corporate Debtor has ownership right as recorded in the balance sheet of the Corporate Debtor. In the present case the balance sheet of the present Corporate Debtor / VIL do not reflect the foreign oil and gas assets as assets of the Corporate Debtor. Hence, cannot be treated as "its" assets. 51. Explanation to Section 18(1) of the Code clarifies that the term "assets" shall not include the assets of any Indian or foreign of the subsidiary of the Corporate Debtor. 52. Therefore, the assets of the Respondent Nos.2 to 5 cannot be said to be assets of the present Corporate Debtor / VIL. 53. That it is established principle of law that the subsidiary companies have separate legal existence than their legal holding companies. For the said purpose the Ld. Senior Counsel has relied on many authorities which are discussed hereinafter. 54. The Beneficial Ownership Agreements have never been tendered in past nor brought in the knowledge of lenders and now have been surreptitiously revealed at the application stage to defeat the rights of the lenders. The signatures appearing on the said Agreements are of....
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....taken by the Applicant herein is contrary to the stand taken by them in the Writ Petition filed before the Supreme Court for protecting the Respondent Nos.2 to 5 from pushing to the CIRP. Now, therefore by no stretch of imagination the present Application can be entertained. 62. Even otherwise, there is no public interest to lift the corporate veil in between Respondent Nos. 1 to 5. In fact, the Applicant who has created the structure cannot be permitted in law to pray for lifting corporate veil which he himself created. 63. The Respondent Nos.2 to 5 are independent companies and just because it is 100% held by the present Corporate Debtor / VIL, the assets of Respondent Nos. 2 to 5 is separate and distinct with the assets of the Respondent No. 1, the present Corporate Debtor / VIL and cannot be termed as assets of the holding company in view of the settled law. 64. In case the Application is allowed for any reason, the crucial investment by BPCL shall get jeopardized and entire investment of Rs. 11,750 Crores shall be at stake as the participating interest allotted to the JV company may get allotted to the other parties under the terms of the Joint Operating Agreement pur....
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....ated Order in case of VIL. While doing so this Bench had framed certain parameters on the touchstone of which the rationale or otherwise regarding consolidation was decided. It would be worthwhile to see whether in this case those parameters stands or not. 68. For the purpose of the present CIRP to determine the true ownership and status of the said foreign oil and gas assets and the properties, it is important to first understand the acquisition and financing for operational of these foreign oil and gas assets and the terms mentioned therein. 69. It is not disputed by the parties that the CHA business was funded through the RTL Agreement by the lenders of Respondent No. 1, the present Corporate Debtor/ VIL. The RTL Agreement had an obligor / co-obligor arrangement initially amongst the 13 Videocon Group Companies which were mainly into the CHA business. The 14th Company i.e. C.E. India Limited is owner of Videocon brand, goodwill, trademark and patents and was the guarantor and later on, the 15th Group Company i.e. Videocon Telecommunication Limited, which was in the telecom business had also become party to the RTL Agreement and accepted the obligor / co-obligor structure w....
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....y Clause 9.1 (i)(a) & (d) which mentions about pledging of 100% shares of Respondent No. 1 / VIL as well as first ranking charge on Videocon brand. (Admittedly, Videocon brand is held in C.E. India Limited which Company is already part of the ongoing CIRP of Respondent No. 1 / VIL and 12 consolidated Companies). Further, Clause 9.1 (ii)(a) to (e) clearly shows the linkage of Respondent No. 1 / VIL and security given by it and clearly refers to the second charge by the Rupee Lenders (i.e. the lenders of CHA business of 13 consolidated Companies under the ongoing CIRP). 73. It is worthwhile to understand that the aforesaid clauses of the LOC / SBLC Facility Agreements, both Tranche 1 and Tranche 2, have not been diluted by the amendment Agreements executed by both the parties belatedly. 74. Consequent to the above clauses as well as the guarantee issued, the Financial Creditors of foreign oil and gas business of the Videocon Group have admittedly lodged claim of Rs. 23,120.90 Crores in the ongoing CIRP. 75. Now, coming to the RTL Agreement, for default of which the said 15 Videocon Group Companies, including Respondent No. 1 / VIL are referred to the CIRP, as particularly re....
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....th Agreements, the facts remains that the security and other obligations promised by Respondent No. 1 / VIL in favour of LOC / SBLC Lenders were never diluted and in fact, its mere change of the nomenclature of VIL from obligor / co-obligor to the Confirming Party and the guarantor. 79. As such, it is clear from the above that the Financial Creditors in the ongoing CIRP i.e. Rupees Facility Lenders as well as the LOC / SBLC Facility Lenders have interweaved the obligations and rights of Respondent Nos.2 to 5 while granting the Rupee Facility to the 13 Companies under the CIRP. Whereas similarly the SBLC Lenders have taken the obligations from Respondent No. 1 / VIL while granting the loan to the foreign oil and gas business. Therefore, it brings us to the conclusion that the lenders treated the Assets of the Videocon Group as the common Assets and created common / cross liabilities in favour of each other, by creating inter-dependent and interlacing financial arrangements between the CHA business, telecom business and foreign oil and gas business of the Videocon Group. 80. However, mere treating the Assets as the common Assets, liabilities as the common and inter-dependent an....
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....ve tried to place relevant portions of some of them in my Order along with inference which can be drawn from them. 86. In the case of LIC v. Escorts Ltd. and others reported in (1986) 1 SCC 264, it is held as under: "90. It was submitted that the thirteen Caparo Companies were thirteen companies in name only; they were but one and that one was an individual, Mr. Swaraj Paul. One had only to pierce the corporate veil to discover Mr. Swaraj Paul lurking behind. It was submitted that thirteen applications were made on behalf of thirteen companies in order to circumvent the scheme which prescribed a ceiling of one per cent on behalf of each non-resident of Indian nationality or origin, or each company 60 per cent of whose shares were owned by non-residents of Indian nationality/origin. Our attention was drawn to the picturesque pronouncement of Lord Denning M. R. in Wallersteiner v. Moir (1974) 3 All ER 217 and the decisions of this Court in Tata Engineering and Locomotive Co. Ltd. v. State of Bihar (1964) 6 SCR 885 : (AIR 1965 SC 40), the Commr. of Income Tax. v. Meenakshi Mills AIR 1967 SC 819 and Workmen v. Associated Rubber Ltd. (1985) 2 Scale 321. While it is ....
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....he company. The request of the company was turned down on the ground that it was not possible to treat the company as a citizen for the purposes of Art. 19. In Commr. of Income-tax. v. Meenakshi Mills (supra), the corporate veil was lifted and evasion of income tax prevented by paying regard to the economic realities behind the legal facade. In Workmen v. Associated Rubber Industry (supra), resort was had to the principle of lifting the veil to prevent devices to avoid welfare legislation. It was emphasised that regard must be had to substance and not the form of a transaction. Generally and broadly speaking, we may say that the corporate, veil may be lifted where a statute itself contemplates lifting the veil, or fraud or improper conduct is intended to be prevented'. or a taxing statute or a beneficent statute is sought to be evaded or where associated companies are inextricably connected as to be, in reality, part of one concern. It is neither necessary nor desirable to enumerate the classes of cases where lifting the veil is permissible, since, that must necessarily depend on the relevant statutory or other provisions, the object sought to be achieved, the impugned conduct,....
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....ompany carrying on business in the U.K. owned 98% of the shares in a foreign company, which gave it a preponderating influence in the control, election of directors etc., of the foreign company. The remaining shares in the foreign company were, however, held by independent persons, and there was no evidence that the English company had ever attempted to control or interfere with the management of the foreign company, or had any power to do so otherwise than by voting as shareholders. It was held that the foreign company was not carried on by the English company, nor was it the agent of the English company, and that the English company was not, therefore, assessable to income-tax. Renusagar was not the alter ego of Hindalco, it was submitted. On the other hand these English cases have often pierced the veil to serve the real aim of the parties and for public purposes. See in this connection the observations of the Court of Appeal in DHN Food Distributors Ltd. v. London Borough of Tower Hamlets (1976) 3 All ER 462. It is not necessary to take into account the facts of that case. We may, however, note that in that case the corporate veil was lifted to confer benefit upon a gr....
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....the realities of the situation. The aim of the legislation is to do justice to all the parties. The horizon of the doctrine of lifting of corporate veil is expanding. Here, indubitably, we are of the opinion that it is correct that Renusagar was brought into existence by Hindalco in order to fulfil the condition of industrial licence of Hindalco through production of aluminium ..... 68. The veil on corporate personality even though not lifted sometimes is becoming more and more transparent in modern company jurisprudence. The ghost of Salomon's case (1897 AC 22) still visits frequently the hounds of Company Law but the veil has been pierced in many cases. Some of these have been noted by Justice P. B. Mukharji in the New Jurisprudence. 69. It appears to us, however, that as mentioned the concept of lifting the corporate veil is a changing concept and is of expanding horizons. We think that the appellant was in error in not treating Renusagar's power plant as the power plant of Hindalco and not treating it as the own source of energy. The respondent is liable to duty on the same and on that footing alone; this is evident in view of the principles enunciated....
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....edge of the Lenders and BPCL. All stakeholders, despite frequent change in holding structure, were/are treating it as property, assets held by VIL through the Respondent No. 2 to 5, for exclusive benefit of parent company i.e. VIL and not VOVL. 90. Thus, it is clear from the aforesaid catena of Judgments that the corporate veil between the subsidiaries and holding companies are to be lifted depending facts of each case and no straight jacket formula can be defined. As held in aforesaid judgments, now in the modern jurisprudence, the corporate veil can be lifted for unlimited reasons and it is not only limited to the extent of the cases of fraud, impropriatory. Each case need to be tested with the unique facts of arrangement applicable to it. In the recent case of Arcelormittal India, Hon'ble Apex Court has held that there is a limited principle of English Law which applies and the Court may pierce the corporate veil for the purpose, and only for the purpose of depriving company or its controller of the advantage that they would otherwise have obtained by company's separate legal personality. 91. It is also held in the said Judgment that where a statute itself lifts th....
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.... receive 100% dividends of it clearly indicates that it was / is the intention and understanding of all parties that the said assets are being held by the Respondent No. 1/ VIL. 96. Therefore, to our mind there is no question of lifting corporate veil yet even if the corporate veil is lifted no advantage would accrue to the Applicant or the parent company which has created the structures of Respondent Nos.2 to 5. It is sought to be contended by the State Bank of India and BPCL that the Applicant would be benefited in case the corporate veils are lifted and the foreign oil and gas assets are included in the present ongoing CIRP as the personal guarantee exposure of Mr. V. N. Dhoot would reduce however, after examining the Rupee Term Loan Agreement and LOC/ SBLC Facility Agreement which clearly mention that all promoters including Mr. V. N. Dhoot will be personally liable and has issued the personal guarantees for repayment of both the facilities to the lenders of both Respondent No. 1/ VIL as well as Respondent Nos.2 to 5. Therefore, we do not find that just because of inclusion of the assets in the present CIRP any benefit would accrue to the Applicant as in such case under the ....
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....riteria of deciding ownership of the assets when the other documents and evidences are in place. 100. Another contention of the State Bank of India is the explanation (b) appended to Section 18 of the Code, which inter alia, mentions that assets of any Indian and foreign subsidiary of the Corporate Debtor shall not be deemed to be assets of the Corporate Debtor. It is to be noted that this explanation comes into play in case it is established that the assets in question are undoubtedly held and purchased by the subsidiaries from its sources. However, in the present case as stated above the crucial acquisition documents still mentions that name of Respondent No. 1/ VIL as the Purchaser and there is no subsequent transfer of these rights in favour of the Respondent Nos.2 to 5. 101. Now, coming back to the contentions of BPCL that in the event such application is entertained it shall suffer irreparable loss and rather the investment of Rs. 11,750 Crores shall be at stake, firstly, this submission on the face of it is not correct from the perspective of the Code, as the BPCL or BPRL is a 50% holder of the participating interest held through the 50:50% JV of the BPCL and Responden....
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....d/ or foreign oil and gas assets as common assets for granting of the facility amount. iv) Common liabilities: The clauses of the SBLC Facility Agreements and the VTL and RTL Facility Agreements have demonstrated that the security available for satisfaction of the debts are common securities belonging to various entities in the Videocon group, as was there for the 12 consolidated Companies; v) Inter-dependence: As already discussed and held hereinbefore the Lenders have treated the foreign oil and gas assets and businesses dependent with the CHA business by way of putting various restrictions and cross defaults in respective funding Agreements to CHA and foreign oil and gas business. That apart the executed documents, the acquisition documents do indicate the Respondent Nos.2 to 5 were never independent and financially sound to acquire and maintain the properties but, it is admitted that all the time Respondent Nos.2 to 5 were dependent on Respondent No. 1/ VIL. Similarly, the funding arrangements also envisaged that for the CHA business funding foreign oil and gas assets shall have second charge and vice versa. vi) Interlacing of finance: In view of the ....
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....ial capability to serve the cash calls. Admittedly, the funding was done on the basis of the responsibility and guarantee taken by the parent company. ix) Intricate link of subsidiaries: The Respondent Nos.2 to 5 were incorporated subsequent to acquisition of the assets, the shareholding pattern, the control on these Respondents was/ is common and admittedly never was independent but, there is intricate link amongst them. Further, the loan documents and security arrangement mentioned therein clearly establish the intricate link between them and Respondent No. 1/ VIL. x) Intertwined accounts: The accounts of Respondent Nos.2 to 5 were completely under control of the Respondent No. 1/ VIL and each other Lenders have taken the charge on the proceedings of each other's account, which itself shows the accounts were intertwined. xi) Inter-looping of debts: As stated hereinbefore, we have already held that the accounts were intertwined and creditors of CHA business and oil and gas business have already created inter-looping of the debts in favour of each other's debt. xii) Singleness of economics of units: As discussed above in the preceding par....
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.... oil and gas assets and properties, including any claim, interest therein, of Videocon Group held through Respondent Nos.2 to 5 will have to be said to be the property of Respondent No. 1, the present Corporate Debtor/ VIL for the purpose of the present CIRP. 109. That in view of aforesaid finding it is clear that the provision of Section 14 of the Code shall come into play. The Section 14(1)(c) of the Code is reproduced hereunder:- "14. Moratorium - (1) Subject to provisions of subsections (2) and (3) on the insolvency commencement date, the Adjudicating Authority shall by order declare moratorium for prohibiting all of the following namely:- 1. xxx 2. xxx 3. Any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, (54 of 2002)" 110. As referred in foregoing paragraphs, we have already held that the security interest is created by Rupee Facility Lenders in the oil and gas assets and there is cross creation of the security interest by all lend....