TaxTMI 
TaxTMI 
2020 (1) TMI 1327
X X X X Extracts X X X X
X X X X Extracts X X X X
....ditor and Authorized Representative for the Corporate Debtor and perused the documents filed by the parties. 3. The Financial Creditor has claimed the total amount of Rs. 32,22,50,660.16p as outstanding against the Corporate Debtor as on 29.07.2019. Clause 2 of Part-IV of the Application discloses the details of the loan amount due to the Financial Creditor by the Corporate Debtor. Submissions of Financial Creditor 4. The case of the Financial Creditor is that the Corporate Debtor namely Bhadreshwar Vidyut Pvt. Ltd. (formerly known as OPGS Power Gujarat Pvt. Ltd.) operates and develops power generation assets in India and currently has 414 MW in operation principally under the Group Captive Model and 62 MW of solar assets. The Corporate Debtor had approached the Punjab National Bank, the Financial Creditor herein namely Syndicate Bank, Indian Bank, Vijaya Bank (now Bank of Baroda) and State Bank of Hyderabad (now State Bank of India) for financial assistance. The Punjab National Bank was the lead Bank and it was referred to as 'PNB Consortium', for working capital needs. 5. It is averred that the Corporate Debtor sought financial assistance for the purpose of meeting w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....porate Debtor executed a pari-passu second charge by way of mortgage in respect of the property belonging to the Corporate Debtor. 7. In addition, the Corporate Debtor executed Joint Deed of Hypothecation dated 17.12.2015, in favour of the PNB Consortium by creating i) a pari-passu first charge by way of hypothecation of whole of the current assets of the Corporate Debtor namely stocks of Raw Materials, stores and spares not relating to plant and machinery (consumable stores & spares), Bills Receivable and Book Debts and all other movables of the Corporate Debtor both present and future as related to Units 1 and 2 both present and future; i) a pari-passu second charge by way of hypothecation of a) the whole of Corporate Debtor's Movables fixed assets (other than current assets) of Units 1 and 2 both present and future, pertaining to projects viz., Coal based Captive Power Plants Units 1 and 2 situated at Bhadreshwar Village, Mundra Taluk, Kutch-Bhuj District, Gujarat owned by the Corporate Debtor, b) the balance lying in Trust and Retention Account both ranking after the Charges created and/or to be created in favour of the Term lenders for Units 1 and 2 of the Corporate Debto....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d a detailed Reply Affidavit along with typed set of documents wherein it is stated that the present Application filed by the Financial Creditor is premature and not maintainable neither in law nor on facts. It is stated that the Financial Creditor with only 1.64% of the total value of debt has moved this Application against the Corporate Debtor which is a 'going concern' without having due regard to the public interest and interest of the other Financial Creditor. 13. The Corporate Debtor has further submitted that the Corporate Debtor has set up 2 x 150 MW Thermal Power Plant at Bhadreshwar, Kutch, Gujarat at a total project cost of Rs. 1996.54 Crores, with Term Loan aggregating to Rs. 1497.40 Crores i.e. Term Loan from REC Limited (formerly known as Rural Electrification Corporation Limited) of Rs. 998.26 Crores, Punjab National Bank of Rs. 252.74 Crores and State Bank of India of Rs. 246.40 Crores. 14. The details of the project costs and its source have been given in a tabular form as under:- Particulars (Rs. Cr) Original Cost Cost Overrun-1 Cost Overrun-II Total Project Cost Debt 1215.41 175.11 106.88 1497.40 REC Limited 810.27 116.74 71.25 998.26 SB....
X X X X Extracts X X X X
X X X X Extracts X X X X
....among themselves. The PNB consortium of Working Capital Lender Banks also as the term lenders have executed a "Master Inter Creditor Agreement" dated 26.07.2016 amongst themselves, copy of which is placed at pages 106 to 140 of the typed set filed with the Counter Affidavit. Similarly, all working capital and term lenders have entered into a Trust and Retention Account Agreement (TRA) on 26.07.2016 with the Corporate Debtor, copy of which is placed at pages 141 to 199 of the typed set filed with the Counter Affidavit. Both these Agreements form the basis of the understanding and agreement between the Consortium Lenders with regard to the accounts of the Corporate Debtor, the allocation of funds and the inter-se obligations between the Consortium Lenders. 18. Subsequently, post sanction and installation of working capital consortium, the Financial Creditor has reduced its Cash Credit (fund based facilities) from Rs. 31 Crores to Rs. 7.92 Crores and further the Financial Creditor was not releasing from sanctioned "non-fund" based limits and reduced the other limits such as LC limits from Rs. 70 Crores to Nil and BG limits to Nil and thereafter, on 05.12.2018, the Financial Creditor ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to allow the Corporate Debtor to utilize the LC limits to the extent of frozen limits of Rs. 46.5 Crores. 21. The Corporate Debtor states that in the Working Capital Lenders Meeting held on 07.02.2019, the Financial Creditor replied that since the account was transferred to their Branch, there requires permission from its Head Office to renew and allow the Corporate debtor to use working capital limits as per sanction and requested the Corporate Debtor to share the Power Purchase Agreements (PPAs) with all the lenders. It is stated that from the minutes of the various meetings of the Joint Lenders and Working Capital Lenders, there was no doubt about the viability and operational efficiency of the Plants of the Corporate Debtor and the Corporate Debtor have been enjoying fullest co-operation and confidence of the lenders. 22. The operational and financial performance of the project since its Commercial Operation Date distinguishes the Corporate Debtor from other contemporaries in the power sector the Corporate Debtor's Plant is fully commissioned, technically capable to run on full capacity and it has been operating continuously since Commercial Operation Date. It is stated t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ving agreed to these terms, the contention of the Financial Creditor that the Corporate Debtor is in default is incorrect; the Authorized Representative expatiated. 26. The Corporate Debtor has referred to the Clause 2.1 and 2.2 (b) (i) of the Master Inter-Creditor Agreement (MICA) dated 26.07.2016 and stated that the Financial Creditor is bound by the provisions of MICA and more particularly, Clause 2.2 (b) states that no enforcement action shall be initiated except after complying with the procedure and requirement set out therein and any lender intended to take any Enforcement action ("Enforcement Intending Party") shall give notice of its intention to initiate Enforcement Action ("Enforcement Action Notice") to all the other Lenders, the Lenders' Agent. After receipt of notice from the Enforcement Intending Party, a meeting of the Lenders shall be convened and if the course of action proposed by the Enforcement Intending Party in the Enforcement Action Notice or any other course of action is approved by the Lenders holding more than 60% of the then outstanding Secured Obligations, then all the Lenders shall jointly take or cause to be taken by the Lenders' Agent/Securi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing OTS and also requested the Financial Creditor to withdraw the Application filed before the NCLT and accordingly, the Corporate Debtor submitted the revised OTS on 17.09.2019, which is pending consideration by the Joint Lenders. 31. It is stated that the Promoters of the project have an unblemished track record and they are not willful defaulters. Further, the Corporate Debtor has reiterated its contention that when the overwhelming majority of the consortium of bank and lenders request the Financial Creditor not to pursue this Application, it is not fair on the part of the Financial Creditor whose stake is a meager 1.64%. Further, since the Corporate Debtor and the Consortium of Lenders are working out for a proper Resolution Plan which is also the objective of I&B Code, 2016, the action of the Financial Creditor is premature. Therefore, the Corporate Debtor has prayed this Tribunal that the Application filed by the Financial Creditor may be dismissed with costs. 32. The Corporate Debtor has also filed a Memo on 13.12.2019, wherein it is stated that the policy of the Government of India on joint lending arrangement issued on 30.01.2013 which is based on the report of the Diwa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....usal of CRILCFGMO which is a Return of defaulted borrowers placed as Annexure 1 in page No. 146 and 147 this Authority is satisfied that on 20.07.2018 Syndicate Bank, the Financial Creditor has reported to have moved the borrower into the "Moved to Default Status' on 16.07.2018 along with 10 various other lending Banks. Also, the Financial Creditor has issued a recall notice on 05.12.2018 (Copy produced at Page No. 143 to 145 of the typed set) to the Corporate Debtor instructing them to clear the dues, failing which recovery action will be initiated including filing before NCLT. A contention is seen to have been made by the Authorized Representative who appeared on behalf of the Corporate Debtor that a Resolution Plan is already under consideration by all other Financial Creditors and only the Applicant/Financial Creditor who is having a negligible 1.64% voting power in the total claim has come forward for the CIRP process. 36. Be it as may; the Committee of Creditors to be constituted once the CIRP is initiated will be competent to decide upon the viability of the Resolution Plan reportedly under consideration. This Authority is concerned only with either admission or rejecti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ribunal by the creditors, in the instant case by Financial Creditor, this Authority has no hesitation in admitting this Petition and initiating the Corporate Insolvency Resolution Process (CIRP) as against the Corporate Debtor. Thus taking into consideration the facts and circumstances of the case as well as the position of Law, we are of the view that this Application as filed by the Applicant -Financial Creditor is required to be admitted under Section 7(5) of the I&B Code, 2016. 40. The Financial Creditor has proposed the name of one JAYASHREE S IYER having Registration Number [IBBI/IPA-002/IP-N00741/2018-2019/12211] (Email id:- [email protected]) as Interim Resolution Professional (IRP) and a written communication in the format prescribed under Form 2 of the Insolvency and Bankruptcy Board of India (Application to Adjudicating Authority) Rules, 2016 has been filed by the proposed IRP who is appointed as the IRP to take forward the process of Corporate insolvency Resolution of the Corporate Debtor. The IRP appointed shall take in this regard such other and further steps as are required under the Statute, more specifically in terms of Section 15, 17, 18 of the Code and fil....