TaxTMI 
TaxTMI 
2023 (3) TMI 72
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....nance Corporation Ltd. Both having been heard together are being decided by this common judgment. We need to notice the facts and sequence of events giving rise to I.A. No. 2966 of 2020 as well as Company Appeal (AT) No. 177 of 2022: (i) Housing Development Finance Corporation Ltd. (hereinafter referred to as 'HDFC Ltd.') made an offer to sanction a loan of Rs.400 crores to IL&FS as a lease rental discounting transaction. The repayment of the said facility was to be from the cash flows generated from the use of the TIFC property being let out by the Respondent No.1 which cash flows were to be and are assigned in favour of the Appellant. (ii) In pursuance of the said offer, Master Facility Agreement was executed on 25.06.2018 extending facility of Rs.400 crores to the IL&FS by the Appellant. Assignment and Administration Agreement dated 25.06.2018, Escrow Account Agreement dated 25.06.2018 and Power of Attorney dated 25.06.2018 were executed. (iii) This Tribunal in Company Appeal (AT) No. 346 of 2018 passed an order on 15.10.2018 staying the institution or continuation of suits or any other proceedings by any party or person or Bank or Company, etc. against 'IL&FS' and its 348....
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....he intending purchasers of the property, being The IL&FS Financial Center, situated at Plot No 22, G Block, Bandra Kurla Complex, Bandra East, Mumbai - 400 051, in respect of the rights, title and interest of the Applicant over the aforesaid property; (iii) Pending the hearing of the present Application including Interlocutory Application Nos. 2262 of 2020 and 2264 of 2020, by way of interim and / or ad - interim relief, this Hon'ble Tribunal be pleased to stay the operation and implementation of the advertisement, notice inviting expression of interest along with the expression of interest issued by Infrastructure Leasing and Financial Services Limited in so far as it seeks to sell the right, title and interest of the Applicant in the property being The IL&FS Financial Center, situated at Plot No 22, G Block, Bandra Kurla Complex, Bandra East, Mumbai - 400 051 and annexed as Annexure-O- Colly hereto; (iv) This Hon'ble Tribunal be pleased to grant exparte interim and/or ad-interim relief in terms of Prayer (iii); and Pass such further or other Order (s) as this Hon'ble Tribunal may deem fit and proper in the facts and circumstances of the case." (xii) In I.A. No. 2966....
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....2- 2263, 2264-2266 of 2020 and I.A No. 2330-2331, 2332-2333 of 2020 are disposed of accordingly. (xvii) In pursuance of the order dated 08.03.2022 of Hon'ble Justice (Retd.) D. K. Jain, the application was filed before the Adjudicating Authority being CA No. 248/MB/C-I/2022 seeking approval of the asset sale of TIFC property as approved by Hon'ble Justice (Retd.) D. K. Jain on 08.03.2022. (xviii) The order passed by this Tribunal dated 23.09.2022 in the application, as noticed above, was challenged by IL&FS in Civil Appeal No. 4708/2022, in which appeal the Hon'ble Supreme Court passed an order on 29.07.2022 staying the judgment and order of this Tribunal dated 13.05.2022. (xix) An application CA No. 248/MB/C-1/2022 filed for the approval of the Tribunal as per Revised Resolution Framework approved by this Tribunal by judgment dated 12.03.2020 came to be heard by the Adjudicating Authority and on 25.08.2022, order was reserved. The HDFC had filed an application being Intervention Application No.02/2022 in CA No. 248/MB/C-1/2022 on which the Adjudicating Authority issued notice on 26.08.2022. The order in CA No. 248/MB/C- 1/2022 was delivered by the Adjudicating Authority on ....
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....eivables from the asset in question to secure the facility of Rs.400 Crores could not have sold the asset without impleading the Appellant, who was a necessary party. It was duty of the IL&FS to ensure that the HDFC is impleaded in the application. The order passed in the application without hearing the necessary party is liable to be set aside. Application was filed by the IL&FS seeking the approval of sale of TIFC property before the NCLT, in which rights of HDFC were duly recognized by NCLAT's order dated 13.05.2022. It is further submitted that mere stay of order dated 13.05.2022 passed by this Tribunal by the Hon'ble Supreme Court on 29.07.2022 does not wipe out the order of this Tribunal and the interim order only makes the order inoperative. The NCLT ought to have considered the effect of order dated 29.07.2022 as well as order dated 13.05.2022 by this Tribunal while adjudicating the CA. It is submitted that the Appellant filed an application for intervention in CA No. 248/MB/C-1/2022 in which notices were issued on 26.08.2022 but before adjudication of intervention application, the impugned order has been passed. 3. Shri Ramji Srinivasan, learned senior counsel appearing f....
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....the process of sale of the TIFC property in October, 2020, in terms of the Resolution Framework approved by this Tribunal for resolution of debt of the IL&FS group vide order dated 12.03.2020. This Tribunal having not granted any interim order in I.A. No. 2966 of 2020, the process was continued and received approval of Hon'ble Justice (Retd.) D. K. Jain on 08.03.2022 and also been subsequently approved by the Adjudicating Authority on 23.09.2022. The Appellant has already filed its claim before the Claims Management Consultant for a sum of Rs.393,65,98,221/- which shall be dealt with as per the Revised Resolution Framework approved by this Tribunal. Both the Appeal and I.A. No. 2966 of 2020 deserve to be dismissed. 4. We have heard learned counsels for the parties and perused the record. 5. From the facts noticed above, it is clear that IL&FS has assigned receivables form TIFC property (property in question) vide Facility Agreement dated 25.06.2018. This Tribunal vide judgment dated 12.03.2020, has approved the Revised Resolution Framework and the steps were taken in pursuance of the Revised Resolution Framework. The IL&FS published an advertisement in Economic Times and Maharash....
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....t. In a writ of certiorari the defeated party seeks for the quashing of the order issued by the tribunal in favour of the successful party. How can the High Court vacate the said order without the successful party being before it. Without the presence of the successful party the High Court cannot issue a substantial order affecting his right. Any order that may be issued behind the back of such a party can be ignored by the said party, with the result that the tribunal's order would be quashed but the right vested in that party by the wrong order of the tribunal would continue to be effective. Such a party, therefore, is a necessary party and a petition filed for the issue of a writ of certiorari without making him a party or without impleading him subsequently, if allowed by the court, would certainly be incompetent. A party whose interests are directly affected is, therefore, a necessary party. 10. In addition, there may be parties who may be described as proper parties, that is parties whose presence is not necessary for making an effective order but whose presence may facilitate the settling of all the questions that may- be involved in the controversy. The question of m....
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....he English rules and the rules framed by the Patna High Court lay down that persons who are directly affected or against whom relief is sought should be named in the petition, that is all necessary parties should be impleaded in the petition and notice served on them. In "The law of Extraordinary Legal Remedies" by Ferris, the procedure in the matter of impleading parties is clearly described at p.201 thus: "Those parties whose action is to be reviewed and who are interested therein and affected thereby, and in whose possession the record of Such action remains, are not only proper, but necessary parties. It is to such parties that notice to show cause against the issuance of the writ must be given, and they are the only parties who may make return, or who may demur. The omission to make parties those officers whose proceedings it is sought to direct and control, goes to the very right of the relief sought. But in order that the court may do ample and complete justice, and render judgment which will be binding on all persons concerned, all persons who are parties to the record, or who are interested in maintaining the regularity of the proceedings of which a review is sought, sh....
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....ty to the application CA No. 248/MB/C-1/2022. 9. Present is a case where in the Creditors Committee, the Appellant is already a member with voting share of 1.89%. After inviting application for Expression for Interest, when bids were received meeting of the Creditors Committee took place on 17.12.2021. Minutes of the 5th meeting of the Creditors Committee of IL&FS has been brought on record as Annexure 4 to the Reply filed by Respondent No.1 in I.A. No. 2966 of 2020. Para 27 of the minutes clearly notices the objection of the representative of the Appellant. Para 2 of the minutes is as follows: "2. At this juncture, the representative of HDFC Limited ("HDFC Representative") mentioned that HDFC Limited has sent a letter to IL&FS and the COC Members, requesting them to postpone the discussion on approval of the Proposed Transaction as the said matter is sub-judice before the Hon'ble National Company Law Appellate Tribunal (NCLAT"). The Resolution Advisor acknowledged the receipt of the said letter and assured that appropriate response will be provided by the legal team of ILFS and stated that any questions that HDFC Limited may have on the agenda item will be taken up at the e....
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....2019 and the Second Addendum to the Third Progress Report dated December 5, 2019" 11. The above resolution was put to e-voting and by the e-voting as commenced on 28.01.2022, the resolution was passed with 73.57% votes. And only 4.24% voted rejecting the resolution. After Resolution was approved by the Creditors Committee, meeting of Board of Directors of IL&FS also passed the resolution on 29.01.2022, which is to the following effect: "TIFC "RESOLVED THAT in accordance with resolution framework for IL&FS Group as approved by Honourable National Company Law Appellate Tribunal ("NCLAT") in its order dated March 12, 2020 (Resolution Framework") and pursuant to the recommendations of the Asset Sale Committee of the Board ("ASC"), approvals of the Board of Directors of IL&FS accorded from time to time and pursuant to the approval dated January 28, 2022 of Committee of Creditors of the Company comprising of its financial creditors (as understood in the context of the Insolvency and Bankruptcy Code, 2016), the Board hereby approves the financial proposal submitted by Project Holdings (DIFC) Limited (an affiliate of the applicant, Brookfield Private Capital (DIFC) Limited) of INR 1....
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....ing of the Creditors Committee dated 17.12.2021 and approval of resolution with 73.57% was noticed. It was also noticed that the voting share of the Appellant was 1.89% only. It is useful to extract Paras 16 to 20 of the letter dated 08.03.2022, which is to the following effect: "16. Referring to the Orders passed by the Hon'ble NCLAT from time to time, ultimately culminating in the final Order dated 12 March 2020, delineating the powers and remit of the CoC, it is pointed out that the role of the IL&FS CoC (of which, HDFC is a Member with a voting percentage of 1.89%) is restricted/limited to only consider and vote on the highest bid and not to determine the distribution of the bid amount. These limitations/restrictions, in effect, enable the IL&FS Resolution in a more structured and orderly manner, without being left to the vagaries of competing interests of the Creditors, and in particular, dissonant attempts at upstaging/impeding the entire Resolution process, being attempted by HDFC. 17. Though it is candidly pointed out that generally the bids, relating to the real estate transactions, which are below 90% of the Average Fair Market Value are not accepted by the ASC a....
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....ght from the Adjudicating Authority, as per the Revised Resolution Framework approved by this Tribunal on 12.03.2020, it is not necessary that all dissenting Financial Creditors should be impleaded to the application. Present is not a case where it can be said that any principles of natural justice have been violated since the Appellant has raised its objection in the meeting of the Creditors Committee and also voted against the resolution. The filing of the application for approval before the Adjudicating Authority was as per the steps provided in the Revised Resolution Framework. We, thus, are of the view that the order of the Adjudicating Authority dated 23.09.2022 cannot be set aside on the ground of violation of any principles of natural justice. 14. Now we come to the second submission of learned counsel for the Appellant that the order of Hon'ble Supreme Court passed on 29.07.2022 staying judgment of this Tribunal dated 13.05.2022 does not wipe out the order of this Tribunal. In support of his submission Shri Kathpalia has relied on judgment of Hon'ble Supreme Court in "(1992) 3 SCC 1, Shree Chamundi Mopeds Ltd. vs. Church of South India Trust Association CSI Cinod Secretar....
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....e intimation in writing to the IL&FS. (iii) All Applications being I.A No. 2196 of 2020; I.A No. 2262- 2263, 2264-2266 of 2020 and I.A No. 2330-2331, 2332-2333 of 2020 are disposed of accordingly." 18. Against judgment dated 13.05.2022 passed by this Tribunal, Civil Appeal No. 4708/2022 was filed before Hon'ble Supreme Court in which appeal following order was passed on 29.07.2022: "ORDER Issue notice. Mr. Pranaya Goyal and Mr. Ashok Mathur, learned Advocates-on-Record, who have entered caveat on behalf of some of the respondents, accept notice. List the matter for disposal on 02.09.2022. In the meantime, the respondents shall file their responses within two weeks. The responses shall indicate the status of the amounts withdrawn from the Escrow Account, if any, pursuant to the judgment and order which is presently under challenge. Pending further consideration, there shall be ad-interim stay of the judgment and order presently under challenge." 19. Judgment of this Tribunal has been stayed by the Hon'ble Supreme Court. The applications which were decided by this Tribunal by judgment dated 13.05.2022 were essentially on the question as to whether the amount....