TaxTMI 
TaxTMI 
2023 (3) TMI 246
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....f 2023 is filed by Authum Investment and Infrastructure Limited (hereinafter referred to as "AIIL"), a non-banking financial corporation, which had originally proposed the RP for RHFL. 3. The facts herein are taken from the appeal arising out of SLP(C) No. 411 of 2023 filed by AIIL, which, in brief, are as follows: 3.1 RHFL executed a number of Debenture Trust Deeds, of which nine were executed with the IDBI Trusteeship Services Limited, respondent No. 3 herein, for issuance of debentures on a private placement basis, having face value of Rs. 5 lakhs. These debentures were issued on 30th August 2018. It is pertinent to note that RHFL had, previously, taken upon itself substantial debt through loans from several banks and financial institutions. 3.2 In May 2019, RHFL defaulted on its loan obligations to various lenders. The outstanding debt was quantified to around Rs. 11,540 crore. It is important to note that its sister concern, Reliance Commercial Finance Limited (hereinafter referred to as 'RCFL'), had previously defaulted on its loan obligations in March 2019. 3.3 On 6th July 2019, a consortium of lenders led by the lead bank, i.e., Bank of Baroda, respondent No. 4 herein, ....
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....llocated by a country's respective national numbering agency, which, in India, is the NSDL. 3.10 In pursuance of the requirement prescribed by the SEBI Circular, a commercial suit bearing No. 162 of 2022 was originally filed by R.K. Mohatta Family Trust, respondent No.1 herein and one of the debenture holders of RHFL, before the High Court of Bombay in 2021, seeking voting by the debenture holders on the RP. The High Court, vide its order dated 31st March 2022, directed for a meeting of the debenture holders to be convened to allow the debenture holders to vote on the RP. Vide another order dated 12th May 2022, the High Court further directed that the results of the voting would be placed in a sealed envelope before the High Court. 3.11 The voting on the RHFL RP took place on 13th May 2022, and the results thereof were submitted before the High Court on 10th August 2022. 3.12 Thereafter, an Interim Application being IA No. 3928 of 2022 in Commercial Suit (L) No. 27568 of 2021 was filed by RHFL seeking disclosure of the voting result, which was allowed by the High Court vide order dated 28th September 2022, in order to assist the Court as to whether the requisite majority, as pre....
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....eeking approval of the RP pertaining to it on the same terms as ordered by this Court in respect of RCFL in Rajkumar Nagpal (supra), for the two cases were nearly identical and any unscrambling of the RHFL RP would prove time consuming and inimical to the interests of the debenture holders. 3.19 The High Court, vide the impugned order, dismissed the Interim Application, holding that the power to mould relief and approve the RP, as had been done by this Court under Article 142 of the Constitution of India in the case of Rajkumar Nagpal (supra) could not be done by the High Court in exercise of its inherent powers under Section 151 of the CPC. Hence, these appeals. 4. We have heard Shri K.K. Venugopal and Shri Dhruv Mehta, learned Senior Counsel appearing on behalf of both the appellants, Shri K.V. Viswanathan, learned Senior Counsel appearing on behalf of Bank of Baroda and Canara Bank, and Shri Venkatraman, learned Additional Solicitor General (ASG) appearing on behalf of SEBI. 5. Shri Venugopal and Shri Mehta submitted that the High Court itself has observed that this Court had found that the RP in the case of RCFL was beneficial to the debenture holders upto the exposure thres....
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....y, this requirement is not satisfied and as such, if the RP is to be accepted, the option should be given to type 2 and 3 debenture holders to either accept the RP or for a right to stand outside and pursue other legal means to recover their entitled dues. 8. In this respect, we may gainfully refer to paragraphs 108 and 109 of the judgment in the case of Rajkumar Nagpal (supra), which read thus: "108. The above table highlights that small investors, especially those whose exposure is up to INR 10 lakhs, are benefiting to the extent of 100% of their principal amount. Even debenture holders whose exposure is more than 10 lakhs are receiving 29.96% of their principal amount. In comparison, the secured ICA lenders would receive 24.96% of their principal amount, which is lower than the recovery made by the debenture holders. It is also important to highlight that none of the debenture holders have raised any grievance with regard to the proposed compromise. In such a situation, application of the SEBI Circular, though right in law, may lead to unjust outcomes for the retail debenture holders if this court were to reverse the entire course of action which has occurred in the present c....