TaxTMI 
TaxTMI 
2024 (6) TMI 349
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....a Kumar, Mr. Akshay Sharma, Mr. Shivam Shorewala, Advocates for R2 & R3. Mr. Abhishek Verma. Mr. Anant Singh and Mr. Arun Yadav, Advocate in IA 3017/2023. Mr. S. Niranjan Reddy, Sr. Advocate with Mr. Raunak Dhillon, Ms. Aishwarya Gupta, Mr. Ashutosh Singh, Mr. Nityesh Dadhich, Advocates for I.A. No. 2535/2823 of 2024 Mr. Sumesh Dhawan, Mr. Shaurya Shyam, Ms. Vatsala Kak, Advocates for Intervenor IA No. 2660/2024 Mr. Gaurav Mitra, Mr. Ishan Roy Choudhary Chitranshul Sinha, Advocate for homebuyers. Company Appeal (AT) (Insolvency) No.493 of 2023 2 Ms. Parul Sharma, Advocate for Intervenor/ I.A. No. 3703/2023 Mr. M. Krishnan Venugopal, Sr. Advocate with Mr. Anupam Choudhary, Mr. Sarvesh Mehra, Mr. Avinash Mathews and Mr. Krishan Agarawal, Advocates for Intervenors (Sai Prakash associates Ltd.)- Applicants in I.A. No. 1881 of 2024 Mr. Akshat Hansaria, Amit Kumar Mishra, Ms. Mitaksara Goyal and Mr. Shivam Singh, Advocates for Homebuyers Ms. Srishti Kaul, Mr. Harish Nadda, Mr. Vikalp Singh, Mr. Kumar Shashank, Mr. Rishab Singh, Mr. Shashank Shekhar Shukla, Ms. Deepanwita Chakraborty, Mr. Arun Yadav, Mr. Anant Singh and Mr. Abhishek Sharma, Advocates for SRA JUDGMENT ASH....
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....the costs of acquiring and developing of the land leased to it. In return, it was granted the rights to collect toll on the Yamuna Expressway for 36 years and to commercially exploit the land for development, i.e., 6,177 acres of land abutting the Yamuna Expressway. The land, which was leased to the Concessionaire had been acquired by the YEIDA between year 2007-2014. The Concession Agreement was assigned to the Corporate Debtor - Jaypee Infratech Ltd. on 19.10.2007. (iii) There were several acquisitions of land by two other Industrial Development Authority constituted under the 1976 Act, i.e. NOIDA and Greater Noida. Acquisitions made by NOIDA and Greater Noida were challenged before the Allahabad High Court by means of several writ petitions. The Allahabad High Court vide its judgment dated 21.10.2011 in Gajraj Singh vs. State of Uttar Pradesh decided all the writ petitions upholding the acquisition, except for acquisitions in few villages, where no development was carried out by the NOIDA. Full Bench of the High Court, although found the invocation of urgency clause not in accordance with law, but to balance the equities, of the farmers, whose lands were acquired and th....
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....ected reconstitution of Committee of Creditors ("CoC") and to include the Homebuyers. (vii) The IRP applied for exclusion of time period and by order dated 06.05.2019, the NCLT Allahabad Bench directed the IRP and CoC to proceed with the CIRP subject to outcome of the pending applications. An Appeal was filed by IDBI Bank before NCLAT, challenging the order dated 06.05.2019. The Appellate Tribunal passed an order on 30.07.2019 granting certain exclusion of time and IRP and CoC were directed to call for and consider fresh Resolution Plans, which order was challenged by JAL before the Hon'ble Supreme Court. On 06.11.2019, the Hon'ble Supreme Court in the appeal filed by JAL, directed the completion of CIRP within 90 days. It was further directed that only revised Plans of Suraksha and NBCC should be invited and considered by the CoC. (viii) Revised Resolution Plans were submitted and NBCC Resolution Plan was approved by 97.36% vote share of the CoC. An Application was filed by the IRP on 19.12.2019 before the NCLT Allahabad Bench, seeking approval of the Plan. The Principal Bench of NCLT, vide order dated 13.01.2020 transferred the proceedings from NCLT Allahabad Be....
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.... dated 19.05.2022. The Hon'ble Supreme Court in the above judgment upheld the Government Order dated 29.08.2014 and held that State Government order was in larger public interest taking care of the concerns of the allottees as well as the farmers. (xii) The Adjudicating Authority heard the learned Counsel for the YEIDA, IRP, SRA, CoC, JAL, Homebuyers and others and by judgment dated 07.03.2023, approved the Suraksha Resolution Plan. The objections filed by the YEIDA were dismissed. In the impugned order dated 07.03.2023, the objections filed by YEIDA were dealt with in Part-VIII - IA No.3306/PB/2021 under the heading 'Objections of YEIDA' from paragraphs-51 to paragraph-92 of the judgment. In the Resolution Plan with regard to claim towards External Development Charges, the SRA has proposed payment of an amount of Rs.10 lakhs, against the admitted claim of Rs.6,111.591/- crores, which allocation was upheld by the impugned order. Coming to the issue of claim of additional compensation payable to farmers, the Adjudicating Authority upheld the allocation of Rs.10 lakhs to the YEIDA. The payment of Rs.10 lakhs towards the additional compensation, which was treated to be contin....
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....ration Case No.03 of 2020 pending before the Commercial Court. 20. We make it clear that pendency of this Appeal and the above interim order may not be treated as any restraint in implementation of the Plan insofar as other aspects of the Plan are concerned." 6. During the hearing of the Appeal, a statement was made by learned Counsel for SRA that they have given proposal to the Appellant and the matter was adjourned awaiting the decision on the proposal. In the proceedings on several dates, the statement of Counsel for the parties were noted that proposal is pending, which has been placed before the State Government for consideration. This Tribunal also drew attention of learned Counsel for the parties on the judgment delivered by the Hon'ble Supreme Court on 12.02.2024 in the matter of Greater Noida Industrial Development Authority vs. Prabhjit Singh Soni & Anr., Civil Appeal Nos.7590-7591 of 2023. Both the parties were also asked to look into the judgment of the Hon'ble Supreme Court. On 19.02.2024, in proceedings of this Appeal following was recorded: "19.02.2024: Learned counsel for the Appellant, Mr. Amar Gupta, submits that proposal received from Resolut....
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....e dated 01.05.2024. An additional affidavit on behalf of the Appellant was also filed on 04.05.2024, bringing on record certain discrepancies in the Appellant's computation, which was earlier reflected in the reply affidavit. 8. We have heard learned Counsel for the parties on additional affidavit and the reply affidavits on 06.05.2024, on which date the judgment was reserved. 9. Before we proceed to notice respective submissions of learned Counsel for the parties, it is relevant to notice certain special facts regarding CIRP of the Corporate Debtor - Jaypee Infratech Limited. As noted above, the YEIDA vide Concession Agreement had granted rights to Corporate Debtor to construct a six-lane 160 km long, super expressway with rights to collect toll on the Yamuna Expressway and to commercially exploit the land for development for 6,177 acres of land abutting the Yamuna Expressway. The Corporate Debtor who was substituted as concessionaire in the year 2008, proceeded to carry out the construction of commercial as well as development of land abutting the Yamuna Expressway. 10. A Status Report has been filed by the Implementation and Monitoring Committee (Respondent No.1 herein)....
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.... Shri Sumant Batra, learned Counsel appearing for Respondent No.1. We have also heard learned Counsel for the Intervenors including Shri Krishnan Venugopal, learned Senior Counsel appearing for Ex. Promoter; Shri S. Niranjan Reddy, learned Senior Counsel appearing for NARCL. We have also heard learned Counsel appearing for Homebuyers, who had filed Intervention Applications and sought intervention in the present Appeal. 12. Shri N. Venkataraman, learned ASG appearing for the Appellant, challenging the order contends that Adjudicating Authority has not passed the order dated 07.03.2023 in accordance with the observations and findings as returned by the Hon'ble Supreme Court in its judgment dated 24.03.2021 in Jaypee Kensington Boulevard Apartment Welfare Assocaition & Ors. vs. NBCC (India) Ltd. It is submitted that earlier Resolution Plan submitted by NBCC, which has extinguished the claim of the Appellant towards additional compensation and other claims had been disapproved by the Hon'ble Supreme Court. The Hon'ble Supreme Court in the above judgment has noted that the Concession Agreement entered with Concessionaire and YEIDA was in accordance with the provisions of UP Industri....
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....o his additional affidavit dated 04.05.2024 submits that in view of the pleadings brought by the parties on record, rectified amount of EDC as per Concession Agreement is now Rs.525.91 crores only. It is submitted that Suraksha has already undertaken to make payment of EDC for land parcel at Tappal and Agra, as when the external development work is carried out in Tappal and Agra, which payable claim shall be of Rs.572.89 crores. The learned ASG submits that the claim filed by the Appellant towards the EDC is also a secured claim, since the claim of EDC arises out of Concession Agreement between the parties and by virtue of Section 13 of the 1976 Act, this claim is also a secured claim. The learned ASG during the submissions has reiterated the submissions of the Appellant, which was also recorded by the Hon'ble Supreme Court in Jaypee Kensington's judgment that YEIDA ""does not stand to oppose the resolution plan only for the sake of opposition; rather it would like the plan to succeed but, it has a public duty to ensure that the framework under CA is preserved". The learned Senior Counsel for the Appellant submits that Appellant in this Appeal is only concerned with regard to treat....
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.... Rs.1689 crores, in which claim, the additional farmers' compensation of Rs.330 crores pertaining to land parcel of 1537 acres already subleased by the Corporate Debtor to third parties before CIRP commencement date, cannot be included. It is submitted that Information Memorandum itself noted the fact of sub-lease of land parcel of 1537 acres. It is further submitted that amount of additional farmers' compensation of Rs.143 crores pertaining to land in Noida where projects of Homebuyers are situated also need to be deducted, since additional farmers' compensation regarding the said land has already been paid by Noida Authority. The Appellant cannot seek reimbursement on behalf of Noida Authority. It is submitted that deducting the amount of Rs.330 crores and Rs.143 crores as noted above, additional farmers' claim made by the Appellant, comes to only Rs.1216 crores, which has been 100% offer made by the Suraksha to the Appellant in 'without prejudice' proposal. It is submitted that payment of Rs.1216 crores in a period of four years is also payment in priority to Financial Creditors. The payment to Operational Creditor is in priority does not mean upfront payment of the entire amoun....
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....2003 are from a project of public importance under the UP Industrial Area Development Act, 1976, and thus should be treated outside of Code, is misplaced and contrary to law. All dues of all the creditors of the Corporate Debtor, including the Appellant have to be dealt with in accordance with the provisions of the Code. All creditors are required to submit their claims and the Appellant in the present case already submitted its claim in Form-B, accepting the proceedings before the Adjudicating Authority in the CIRP of the Corporate Debtor. YEIDA cannot claim that its consent is required for payment towards its dues, since the payment of dues to the creditors have to be dealt with in accordance with the Code and no creditor can say that without its consent no payment can be proposed to it. It is submitted that IRP has not admitted the claim of additional farmers' compensation and no challenge was made by the Appellant to non-admission of the claim. It is submitted that IRP has verified and admitted the claim to the extent of Rs.461 crores only, which decision was communicated by detailed letter dated 28.11.2017, which also provided a comprehensive explanation for admission and non-....
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....DA is required for transfer of ownership to Assenting Financial Creditor. It is submitted that learned Counsel for the Suraksha has already made submission that additional payment, which has been offered by the Suraksha shall not affect any payout to the Financial Creditors. NARCL has prayed for intervention in the Appeal. 18. IA No.2535 of 2024 has also been filed by NARCL, seeking impleadment of the Applicant as party. We have permitted the NARCL to intervene in the matter without allowing the Application for Intervention. 19. IA No.1881 of 2024 has been filed by Jayprakash Associates Limited to be impleaded in the Appeal, who claims to be erstwhile Promoter of the majority of the shareholder in Corporate Debtor and Corporate Guarantor of the loans to JIL by secured Financial Creditors. The Applicant refers to judgment of this Tribunal dated 21.02.2024 in Jaiprakash Associates Ltd Vs. Jaypee Infratech Ltd. & Ors. in Company Appeal (AT) (Insolvency) Appeal No. 548 of 2023, where the issue raised by the Applicant regarding challenge to the Resolution Plan insofar as YEIDA claims is concerned was not considered. Shri Krishnan Venugopal, learned Senior Counsel appearing for the....
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....s as envisaged in the Resolution Plan. Suraksha may be directed to continue the construction as there is no stay in implementation of the Plan. 24. An IA No.2650 of 2024 has been filed by Jaypee Infratech Ltd., through its Implementation & Monitoring Committee praying for following directions: "(a) Allow the instant Application; (b) Direct the erstwhile promoter Jaiprakash Associates Ltd. to handover physical possession of the Project sites i.e., Garden Isles, Krescent Homes, Kasa Isles, Orchard, Kube, Pebble Court, Wish Point, 15 stalled towers in two on-going Project sites i.e., Kensington Boulevard Apartments and Kosmos, to IMC, without any obstruction so as to enable IMC to take necessary future steps of award of tenders for construction in Stalled Projects; (c) Direct Jaiprakash Associates Ltd. to provide the relevant information and details as sought for in para 30 of the instant Application and cooperate further for any relevant information to revive the stalled projects and towers. (d) Pass any other order or directions as may be deemed fit and proper." 25. Shri Sumant Batra, learned Counsel appearing for Applicant submits that tend....
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.... is actually 100% payment towards additional farmers compensation? (6) What is the amount of claim towards EDC in view of the pleadings of the parties before Adjudicating Authority and in this Appeal? (7) Whether claim towards EDC is also a secured claim under 1976 Act and needs to be dealt in the Resolution Plan as secured claim? (8) Whether for treatment of claims filed by YEIDA in CIRP of Corporate Debtor, consent of YEIDA is required for proposing a payment to YEIDA in the Resolution Plan? (9) Whether for transfer of leasehold rights of Corporate Debtor to the SRA and Assenting Financial Creditor, in the Resolution Plan, consent of YEIDA is necessary? (10) What relief the Appellant is entitled in this Appeal? 29. Before we proceed to consider the questions as framed above, we need to notice details of the claim filed by the Appellant in CIRP of the Corporate Debtor, treatment of said claim in the Resolution Plan submitted by Suraksha and certain findings of the Adjudicating Authority while considering the approval of the Resolution Plan. In pursuance of publication made by the IRP, Appellant- YEIDA filed its claim in Form-B on 23.....
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....admitted for Rs.409.6 Crores. One other claim was admitted by the IRP was claim towards pending work i.e. Rs.51.4 Crores. Adjudicating Authority in paragraph 54, as noted above, has noticed that the Appellant has raised objections to the treatment meted out in the Resolution Plan pertaining to (i) pending works and External Development Charges including interest; (ii) un-executed External Development Works and other future works and (iii) 64.7% additional compensation payable to farmers. Appellant has raised objection regarding treatment of its claim when earlier plan was submitted by NBCC which plan was approved by the Adjudicating Authority on 03.03.2020 which was made subject matter of challenge before the Hon'ble Supreme Court and the Hon'ble Supreme Court has set aside the plan approval by its order in "Jaypee Kensington v. NBCC (India) Ltd.- Civil Appeal No. 3395 of 2020". When the Resolution Plan was submitted by Suraksha and was approved by the CoC, Appellant filed IA No.3306 of 2021 objecting to the Resolution Plan submitted by Suraksha. The application/objection filed by the Appellant raised various grounds to object its treatment in the Resolution Plan. It is useful to n....
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....t, following has been observed:- "62. Before, we proceed to adjudicate upon the objections of YEIDA, we observe from the SRA/Suraksha's reply that it is willing to execute and bear all costs pertaining to "Future works" as per the terms of the Concession Agreement. The contents of the relevant reply, reads thus: "c. The Resolution Applicant is ready and willing to execute all the future works as and when required, as per the terms and conditions of the Concession Agreement. With regard to work from which external development charges arise, it is submitted that the same is to be decided and done in future, therefore Resolution Applicant is not liable to pay the same as on today and will deal with the same in future as per terms of the Concession Agreement. d. As the Resolution Applicant is willing to execute the future work, as and when required, and bear all the costs under the terms and condition of the Concession Agreement, no amount is due and payable to YEIDA at present." Hence, in view of the above referred willingness/undertaking of the SRA, the dispute with regard to "Costs pertaining to unexecuted External Development works and other ....
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....Resolution plan. In our considered view, what YEIDA cannot get directly as an "Operational Creditor", it cannot get it indirectly under the attire of being an "Authority". 73. In the instant case, if we ignore the reliefs and concessions sought in the Resolution Plan for a moment, then in our view, we find no such provision in the Suraksha's Resolution Plan, which is in violation of the terms of the Concession Agreement (CA) under reference. Further, the proposal regarding extinguishment of claim of YEIDA in the Resolution Plan, because of it being the Operational Creditor, does not amount to violation of the Concession Agreement by the Successful Resolution Applicant, as the same is being effected due to operation of law." 34. After making the above observations, Adjudicating Authority came to the conclusion that provision of Rs.10 Lakhs towards the operational claim relating to External Development Charges is not illegal. In paragraph 74 with regard to External Development Charges, following has been observed:- "74. Hence, we find no illegality in the Resolution Plan, so far as it relates to provision of Rs. 10 Lakhs towards the operational claim relating....
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....f this Court found that the appellant is not a financial creditor, the appellant may be entitled, at least, to be treated as an operational creditor. We would think that, having regard to the fact that both the NCLT and NCLAT have proceeded on the basis that the appellant is an operational creditor, we need not stretch the exploration further and pronounce on the questions, which may otherwise arise. We must not be oblivious to the following prospect, should we find that the appellant is not an operational creditor, even under the IBC Regulations apart from claims by financial creditors and operational creditors, claims can be made by other creditors. However, there are, undoubtedly, certain advantages, which an creditor enjoys over the other creditors. We would proceed on the basis that, while the appellant is not a financial creditor, it would constitute an operational creditor." (Emphasis Supplied) 80. Further, we are conscious of the fact that under the provisions of IBC 2016, NCLT has no 'equity jurisdiction'. It can neither interfere with the commercial wisdom of CoC nor it can go beyond the provisions of the Code. Since YEIDA itself had filed its cl....
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....hallenged before the Allahabad High Court by means of writ petition. One of the writ petition was also filed by the corporate debtor. 39. The judgment of the Allahabad High Court in quashing the Government order dated 29.08.2014 has been set aside by the Hon'ble Supreme Court in appeal filed by the Appellant i.e. "Yamuna Expressway Industrial Development Authority etc. vs. Shakuntla Education and Welfare Society and Others- 2022 SCC OnLine SC 655". The Hon'ble Supreme Court in Shakuntla's judgment in paragraph 50 held as follows:- "50. It could thus be seen that the recommendations of the Chaudhary Committee were principally intended to resolve the issue between the farmers and the allottees, and to find out a workable solution to the problem. The Chaudhary Committee recommended similar treatment to be given to the farmers whose lands were acquired for YEIDA, as was given to the farmers whose lands were acquired for the benefit of NOIDA and Greater NOIDA. The Chaudhary Committee found that the same benefits as were given to the farmers whose lands were acquired for the benefit of NOIDA and Greater NOIDA in view of the judgment of the High Court in the case of Gajraj (su....
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....terest will outweigh the personal interest. The High Court was therefore not justified in holding that the policy decision of the State was unfair, unreasonable and arbitrary. We are of the considered view that the High Court has erred in allowing the writ petitions. The present appeals, therefore, deserve to be allowed. 71. In the result, we pass the following order: (i) The appeals are allowed; (ii) The impugned judgment and order dated 28th May, 2020, passed by the Allahabad High Court in Writ Petition No. 28968 of 2018 and companion matters is quashed and set aside; (iii) The writ petitions filed by the respondents covered by the impugned judgment and order dated 28th May, 2020 passed by the Allahabad High Court are dismissed;" 41. The judgment of the Hon'ble Supreme Court in Shakuntla's case delivered on 19.05.2022 made it clear that the farmers whose land was acquired by the appellant are entitled for additional compensation of 64.7% which compensation has to be recovered from the lessee/allottees of the land and in consequence of the said Government Order, demands were issued to the allottees including the Corporate Debtor for payment. ....
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....ority, the Authority shall perform the following functions:- xxx xxx xxx (f) to allocate and transfer either by way of sale or lease or otherwise plots of land for industrial commercial or residential purposes and such other land uses as per master plan." 45. Section 7 empowers the Authority in respect of transfer of land. Section 7 of the Act is as follows:- "7. The Authority may sell, lease or otherwise transfer whether by auction, allotment or otherwise, any land or building belonging to the Authority in the industrial development area on such terms and conditions as it may, subject to any rules that may be made under this Act, think fit to impose." 46. The authority in exercise of its functions under 1976 Act entered into a Concession Agreement with Jaiprakash Industries Ltd. dated 07.02.2003. Under the Concession Agreement, land for construction of expressway (160 km from Noida to Agra) as well as land for development was leased out to the concessionaire which came to be assigned in favour of the Corporate Debtor in the year 2008 as noted above. Two more sections of the 1976 Act need to be noticed. They are Section 13 and Section 13-A. Section ....
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....re is liable to pay all acquisition cost for acquisition of land. In Chapter IV of the Concession Agreement, Clause 4.1 provides:- "CHAPTER-TV LAND 4.1. Land for construction of Expressway shall be provided by TEA to the Concessionaire, generally in a width of 100 meters along the alignment of the Expressway with additional land width, where required, for developing other facilities like Toll Plazas etc., on following terms & conditions." 48. Clause 4.1 (d) provides as follows:- "d. The sole premium of the transferred land shall be equivalent to the acquisition cost plus a lease rent of Rs. 100.00 (Rupees one hundred) only per hectare per year. The acquisition cost shall be the actual compensation paid to the land owners without any additional charge and shall be payable by the Concessionaire as per applicable rules. The lease rent shall be payable annually." 49. Clause 4.3 deals with land for development. Clause 4.3 provides that premium of the transferred land shall be equivalent to the acquisition cost plus a lease rent of Rs.100 per hectare per year. Thus, the acquisition cost is part of the premium of transferred land and acquisition cost has to b....
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....ollowing:- "55. In our view the resolution plan did not meet the requirements of Section 30(2) of the IBC read with Regulations 37 and 38 of the CIRP Regulations, 2016 for the following reasons: a. The resolution plan disclosed that the appellant did not submit its claim, when the unrebutted case of the appellant had been that it had submitted its claim with proof on 30.01.2020 for a sum of Rs. 43,40,31,951/- No doubt, the record indicates that the appellant was advised to submit its claim in Form B (meant for operational creditor) in place of Form C (meant of financial creditor). But, assuming the appellant did not heed the advice, once the claim was submitted with proof, it could not have been overlooked merely because it was in a different Form. As already discussed above, in our view the Form in which a claim is to be submitted is directory. What is necessary is that the claim must have support from proof. Here, the resolution plan fails not only in acknowledging the claim made but also in mentioning the correct figure of the amount due and payable. According to the resolution plan, the amount outstanding was Rs. 13,47,40,819/- whereas, according to the appell....
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....as to be a closer examination of the plan's feasibility. Here, on the part of the CD there were defaults in payment of instalments which, allegedly, resulted in raising of demand and issuance of precancellation notice. In these circumstances, whether the resolution plan envisages necessary approvals of the statutory authority is an important aspect on which feasibility of the plan depends. Unfortunately, the order of approval does not envisage such approvals. But neither NCLT nor NCLAT dealt with those aspects." 51. After making observations in paragraph 55, the Hon'ble Supreme Court set aside the plan and remitted the plan to the CoC for resubmission. 52. The above judgment of the Hon'ble Supreme Court has specifically noticed Section 13-A of the 1976 Act and has set aside that with regard to amount which was payable in the above case were charge within the meaning of 1976 Act. From the facts as noticed by the Hon'ble Supreme Court in the judgment, it is clear that in paragraph 5 of the judgment following has been noted:- "5. Pursuant to the public notice, in the month of January 2020, appellant submitted a claim of Rs. 43,40,31,951, being unpaid instalments pay....
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....preme Court held that Noida was an operational creditor. It was held that lease, in question, did not fall under Section 5(8)(f). In paragraph 222, following was held by the Hon'ble Supreme Court:- "222. We would think that, having regard to the fact that both NCLT and Nclat have proceeded on the basis that the appellant is an operational creditor, we need not stretch the exploration further and pronounce on the questions, which may otherwise arise. We must not be oblivious to the following prospect, should we find that the appellant is not an operational creditor, even under the IBC Regulations apart from claims by financial creditors and operational creditors, claims can be made by other creditors. However, there are, undoubtedly, certain advantages, which an operational creditor enjoys over the other creditors. We would proceed on the basis that, while the appellant is not a financial creditor, it would constitute an operational creditor." 56. The above judgment was not a case where question of security interest by an operational creditor came for consideration. Present is a case where the appellant is claiming secured creditor of the corporate debtor in reference to....
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....ssway on one hand and other parcels on the other, is a subject matter of the arbitration proceedings. However, going by the terms of the CA, prima facie, we are unable to find any indication therein that the liability for compensation with reference to the land under Expressway is not of the concessionaire. In any case, while making a provision for meeting with this contingent liability of additional amount of compensation, the resolution applicant could not have decided of its own that there will not be any liability of the concessionaire or its assigns towards the land under Expressway. 106.2. Similarly, the resolution applicant of its own, could not have decided that end-user would mean sub-lessee and thereby deflect even collection of the amount towards this liability on YEIDA and that too when YEIDA was not going to be a party in creation of any sub-lease. The structuring of these propositions regarding contingent liability turns out to be wholly illogical, apart from being at loggerheads with the terms of the Concession Agreement. 107. Apart from the aforesaid, the reliefs and concessions as sought for by the resolution applicant in relation to YEID....
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.... CIN: U67120MH1993PTC072685 | Tel: +91 22 43341999 | Email: [email protected] WITHOUT PREJUDICE Annexure-1 SURAKSHA OFFER April 18, 2024 Without going into the merits of the matter and despite having provision in the CoC approved plan that Suraksha shall not bear any additional liability, only with good intent and bona-fide, in order to bring this CIRP process to logical conclusion as per directions of Hon'ble SC, In line with larger objects of the Code of insolvency resolution and in larger public Interest, Suraksha is willing to unconditionally pay additional amount of Rs 1216 crore to farmers by Jaypee for the land of 8,640 acres (excluding 1537 acres of land already sold to third parties by Jaypee before submission of the resolution plan and also excluding land of 744 acres at NOIDA where stuck projects of homebuyers are situated for which farmers have already received additional compensation - Refer page 28 of Information Memorandum) in 4 years (25% each year with 10% upfront in 90 days) committed schedule as under table below. Timeline for payment Land Parcels (Acres) Payment Proposed % Paym....
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....ayment as contained in the offer dated 18.04.2024. When we look into the offer dated 18.04.2024, it is clear that the compensation of Rs.1216 Crores have been proposed for land parcels and in such compensation amount of Rs.330 Crores and Rs.143 Crores have been deducted. 61. Learned Counsel for the SRA has submitted that the Appellant is not entitled for payment of Rs.330 Crores which pertains to the land parcels which were already transferred by the corporate debtor to third party prior to initiation of the CIRP. The submission advanced by SRA- Suraksha is that Suraksha shall extend all co-operation for recovering the additional farmers' compensation from third party who were leased out the land prior to insolvency commencement. Counsel for the Appellant has objected to the aforesaid deduction of Rs.330 crores. It is useful to notice the reply of the appellant to the additional affidavit filed on behalf of Suraksha in paragraph 37(i) and (ii), following has been stated:- "37. The stated basis for reduction of the sum of-INR 330 crores is utterly untenable. Whether or not the said sum pertains to lands transferred to third parties by the Concessionaire is immaterial and....
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....ed Rs.247 crores from the Appellant towards the amount of additional compensation. Reference of the letter dated 23.01.2014 has been made in reply filed by the appellant to the additional affidavit. We, thus, are of the view that even if the amount is paid by the Noida towards additional farmers compensation, the same can always be asked from the appellant to reimburse, hence, the amount of Rs.143 crores also cannot be deducted from the claim of Rs.1,689 crores. The amount proposed by the SRA of Rs.1216 Crores thus, cannot be held to be 100% payment of additional compensation to YEIDA towards additional farmers' compensation. 64. In view of the foregoing discussions, we answer Question Nos. (4) and (5) in following manner:- (4) The entire claim of Rs.1,689 Crores submitted by YEIDA towards the additional farmers' compensation need consideration and amount of Rs.330 Crores pertaining to land parcels already sub-leased by the corporate debtor to third party and an amount of Rs.143 crores pertaining to land arranged from Noida need no deduction. Thus, appellant's claim of Rs.1689 crores towards additional farmers' compensation need consideration. (5) Without 'prej....
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....o. I that a further amount of INR 114.21 crores paid by the Corporate Debtor towards EDCs is to be deducted from the aforesaid amount. However, the Appellant submits that the aforesaid amount (of INR 525.91 crores) does not include the payments already received from the Corporate Debtor and the sum of INR 114.21 crores cannot be deducted again. 5. The aforesaid computation is based on the records available with the Appellant. It is further submitted that the Appellant has always been. and continues to be, ready and willing to reconcile its accounts for rectification of any inadvertent errors and omissions and make adjustments in its claimed amounts. 6. In addition to the abovesaid amount, the EDCs for land parcels at Tappal and Agra (amounting to ~INR 572.89 crores) will be payable by Suraksha as per the provisions of the Concession Agreement and in terms of the undertaking given by it in its Rejoinder dated 03 May 2024." 66. From the additional affidavit filed by the appellant itself, it is clear that total EDCs claim of the appellant after reconciliation is Rs.529.91 crores whereas the IRP has admitted only Rs.409.6 crores. Insofar as EDCs claim as contained ....
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....andscaping, water supply, sewerage and drainage systems, electricity supply transformer, sub-station, solid waste management and disposal or any other work which may have to be executed in the periphery of, or outside, a project for its benefit, as may be provided under the local laws;" 71 It is the case of the Appellant that claim of EDC as filed by the Appellant in the CIRP of the Corporate Debtor, arises out of Concession Agreement. The question for consideration is as to whether EDC are charges in which Appellant has secured interest. The learned Counsel for the Appellant has referred to Section 13 and 13A of the 1976 Act to support his submission that EDC are secured charges. We need to first notice the provision of Section 13 and 13A of the 1976 Act, which are as follows: "13. Where any transferee makes any default in the payment of any consideration money or installment thereof or any other amount due on account of the transfer of any site or building by the Authority or any rent due to the Authority in respect of any lease, or where any transferee or "Occupier makes any default in payment of any amount of" in the payment of any fee or tax levied under this Act, ....
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....ent of Rs.100 per hectare per year. The payment of EDC charge is not covered by any charges towards transfer of land in question. The second category as noticed above is wherein transferee or occupier makes any default in payment of any rent due to the Authority in respect of any lease. The EDC charges are not payment of any rent due to the Authority in respect of any lease. The third category, which falls under Section 13 is "where any transferee or occupier makes any default in payment of any fee or tax levied under the Act. Thus, any fee or tax, which are levied under the 1976 Act shall form a charge within the meaning of Section 13. There can be no doubt that EDC charges are not a tax or a fee under the 1976 Act. The expression fee or tax levied under the 1976 Act has to be given meaning. Because for non-payment of any fee or tax levied under the Act, imposition of penalty is contemplated. Section 13 contemplate imposition of penalty to the extent of sum not exceeding the amount that is to be recovered from the transferee or occupier. Section 13 being a penal provision has to be strictly construed. Thus penalty can be imposed only for any fee or tax levied under the 1976 Act. T....
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....e disapproved. The Appellant has come up in this Appeal challenging the Plan of Suraksha, which was under consideration before the Adjudicating Authority. No reliefs and concessions was granted for extinguishing the liability of EDC. Rather, the Adjudicating Authority dealt with claim as operational debt and held that liquidation value of the Operational Creditor being Nil, payment of amount of Rs.10 lakhs in the Plan towards EDC charges is not illegal, nor violates any provisions of the Code. We have already notice the observations of Adjudicating Authority with regard to provisions of Plan regarding EDC. In paragraph 74 of the impugned order, the Adjudicating Authority has made following observations: "74. Hence, we find no illegality in the Resolution Plan, so far as it relates to provisions of Rs.10 lakhs towards the operational claim relating to External Development Charges (EDC) of YEIDA." 75. In view of the foregoing discussions, we answer Question No.7 in following manner: Claim towards EDC of the Appellant is not a secured claim under the provisions of 1976 Act and does not need to be dealt in the Resolution Plan as a secured claim. Question Nos. 8 ....
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.... (ca) cancellation or delisting of any shares of the corporate debtor, if applicable; (d) satisfaction or modification of any security interest; (e) curing or waiving of any breach of the terms of any debt due from the corporate debtor; (f) reduction in the amount payable to the creditors; (g) extension of a maturity date or a change in interest rate or other terms of a debt due from the corporate debtor; (h) amendment of the constitutional documents of the corporate debtor; (i) issuance of securities of the corporate debtor, for cash, property, securities, or in exchange for claims or interests, or other appropriate purpose; (j) change in portfolio of goods or services produced or rendered by the corporate debtor; (k) change 38. Mandatory contents of the resolution plan. 58[(1) The amount payable under a resolution plan - (a) to the operational creditors shall be paid in priority over financial creditors; and (b) to the financial creditors, who have a right to vote under sub-section (2) of section 21 and did not vote in favour of the resolution plan, shall be paid in priority over financial creditors who voted....
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.... other Creditors, which is as per the scheme of the Code, is a question to be answered. 81. The learned Counsel for the Appellant has placed much reliance on judgment of the Hon'ble Supreme Court in Jaypee Kensington's case. Now, we come to the judgment of the Hon'ble Supreme Court in Jaypee Kensington's case. The judgment of Jaypee Kensington emanated from an order of Adjudicating Authority approving the Resolution Plan of NBCC. The objections raised by the Appellant were with regard to its treatment in the Resolution Plan of NBCC. In the judgment, the Hon'ble Supreme Court considered the claim of the YEIDA from paragraph 86 to 109, which is under the heading 'Point C' - "Matters related with the land providing agency YEIDA". While considering the claim of the YEIDA, nature of contract with Concessionaire also came to be examined. From paragraph 86 to 100, submission of parties were noticed. The Hon'ble Supreme Court observed that Concession Agreement is not a statutory one, is nevertheless a contract entered into between the Concessionaire and the statutory Authority, i.e., YEIDA. While considering the aforesaid question in paragraph 103, the Hon'ble Supreme Court held that Re....
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....re and Resolution Applicant could not have itself decided on its own that it will have no liability towards the land in Expressway. In paragraph 106.1, it was again reiterated that alterations of the material terms of the Concession Agreement cannot be made without the consent of the YEIDA and further in paragraph 107 dealt with reliefs and concessions. It was held that existing liability qua YEIDA is not a relief that could be given to the Resolution Applicant for askance. The above observations have to be understood in the background that Hon'ble Supreme Court was examining the nature of the contract and it has held that no tinkering of contract is permissible in a Resolution Plan without the approval of the YEIDA, which is a law declared by the Hon'ble Supreme Court in reference to the contract in question and is clearly applicable to the Resolution Plan of Suraksha also. The question, thus, is to be considered is as to whether provisions of the Resolution Plan provides for any tinkering of any clause of the contract. Since, when any clause of the contract is being tinkered by the Resolution Applicant, approval of the YEIDA is required. We, however, have noticed above that statu....
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...., transfer all its rights and obligations under this Agreement to a SPV for which documents as may be required shall be executed between the Concessionaire, the TEA and the SPV without additional cost to the Concessionaire or the SPV." 86. Clause 18.1 contemplate a situation where Concessionaire and Authority deem it necessary to transfer Concessionaire's rights and obligations under the Agreement to a SPV. In the present case the said eventuality had taken place, when the Authority and Concessionaire assigned Concessionaire's rights in favour of JIL, whereas Agreement was initially entered between Jaiprakash Industries (renamed as Jaiprakash Associates Limited). 87. We need to notice Regulation 37 of CIRP Regulations, 2016, which clearly contemplate transfer of all parts of the assets of the Corporate Debtor to one or more persons. Regulation 37 (a) is again noted, which is to the following effect: "37. Resolution plan.-- A resolution plan shall provide for the measures, as may be necessary, for insolvency resolution of the corporate debtor for maximization of value of its assets, including but not limited to the following: - (a) transfer of all or part of ....
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....which included transfer of land, which was leased to Earth Towne and further two Companies as noted above. Greater Noida has sent a letter to RP claiming dues on the subsidiary of the Corporate Debtor namely - Earth Towne. The Resolution Plan submitted by M/s Alpha Corp Development Pvt. Ltd. was approved by the CoC. Another Resolution Plan submitted by Roma Unicon Designex Consortium was approved. A direction was also issued to the Appellant to transfer lease land in favour of the SRA vide order dated 07.12.2021. Three Appeals were filed challenging the order approving the Resolution Plan as well as order dated 07.12.2021. In context of the aforesaid, this Tribunal found that approval of Resolution Plan erroneous and issued certain directions. It is relevant to notice paragraph 68, 69 and 70 of the judgment, which are as follows: "68. We have noticed the statutory provision, that Explanation to Section 18(1)(f) clearly contemplates that assets of subsidiary company are entirely different from assets of the holding company and principle of lifting of veil cannot be invoked contrary to statutory prescription as in the present case that is Section 18(1)(f). 69. Now o....
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.... allottees or SRA that is why the conditions was provided in the Resolution Plan asking the direction to the Appellant to transfer the project land in favour of the SRA or Special Purpose Entity. Thus, Resolution Plan could not have contained clause for transfer of land without there being any approval of the Appellant for such transfer. Further direction to the Appellant to transfer while waiving of its entitlement and charges is clearly contrary to the terms and conditions of the lease and not in a public interest." 92. In the above case, the assets belonged to the subsidiary company, which was not in the CIRP, whereas the Resolution Plan contained the provision obligating the Greater Noida to transfer lease hold right in favour of SRA. In paragraph 69, clauses of the Lease Deed regarding transfer of plot was noticed, which clearly contemplated approval of Authority for transfer. In the above context in paragraph 70, it was held as quoted above. In the above context it was observed that Greater Noida before granting any permission for transfer of the land shall require their dues pertaining to land premium, lease rent and other legal dues to be cleared. Following was observed ....
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.... Appellant. The Plan was approved by the Adjudicating Authority on 10.02.2021 and demand notice was issued on 05.03.2021, subsequent to the approval of Plan, which was challenged by the Appellant by filing IA No.598 of 2021 before the NCLT seeking quashing of the demand. The Adjudicating Authority did not grant the relief prayed by the Appellant. Hence, the Appeal was filed, praying for quashing the demand notice dated 05.03.2021 and 27.06.2022 and direct the Respondent to issue No Objection Certificate for the said Plan. In the above case, this Tribunal ultimately dismissed the Appeal by not interfering the order of the Adjudicating Authority. In paragraphs 21, 22, 23, this Tribunal made following observations: "21. In our opinion, the protective umbrella of IBC, 2016 for CIRP cannot be extended to an extent that public authorities are asked to part with their assets without full payment of their dues or without compliance to terms and conditions of the sale or lease deed or their transfer policy. The 'clean slate principle' will not apply to the factual matrix of the present case, where there was prior demand from public sector land authority which was also not disclosed....
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....uted between the Corporate Debtor and third parties. In the absence of specific details of such agreements/ letters of allotments being available before us and without affording an opportunity of hearing to the third parties, we are not inclined to interfere in the dealings of Corporate Debtor with third parties and therefore, this blanket relief is declined. However, the SRA would be at liberty to proceed in accordance with law." 99. From the reliefs and concessions as noted above, it is clear that no relief has been granted to meet its liabilities towards YEIDA. To the contrary in the Plan of NBCC such relief was considered. 100. In view of the foregoing, we answer Question Nos.8 and 9 in following manner: Answer to Question No.8 : For treatment of claim of YEIDA in the CIRP of Corporate Debtor and for payment to YEIDA in the Resolution Plan, consent of YEIDA is not required. Answer to Question No.9 : For transfer of lease hold rights of Corporate Debtor to SRA or Assenting Financial Creditors in the Resolution Plan, consent of YEIDA is not necessary. 101. Before we come to the last question, i.e. question of relief, we need to consider the different IA....
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....dered in Company Appeal (AT) (Ins.) No.493 of 2023 filed by YEIDA. We, thus, are of the view that issues pertaining to the claim of YEIDA and their ground to challenge the impugned order approving Resolution Plan are best suited to be examined and decided in the appeal filed by YEIDA where impugned order is under challenge and grounds have been raised. We, thus, are of the view that the issues raised by the Appellant, as noted above, need to be examined and considered in the appeal filed by YEIDA i.e. Company Appeal (AT) (Ins.) No.493 of 2023 and there is no necessity to consider those issues in this appeal which is filed by the Suspended Promoter and Director of the Corporate Debtor. Answer to both the questions is recorded accordingly" 105. In the judgment dated 21.02.2024, we have noted that YEIDA has already filed its Appeal in Company Appeal (AT) (Insolvency) No.493 of 2023 challenging the treatment of its claim in the Resolution Plan. We have also in the aforesaid judgment noted the statement made on behalf of the Counsel for the parties in Company Appeal (AT) (Insolvency) No.493 of 2023 regarding settlement proposal between SRA and YEIDA. In paragraph-49 of the judgment o....
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....d to pay huge interest to the Banks, while paying their EMIs. The learned Counsel for the Intervenor(s) reiterated that the resolution of the Corporate Debtor have been delayed by the Promoters/ Directors, who have been intervening at every stage of the proceedings and creating hurdles in the progress of CIRP. It is submitted that due to related party contract, the Promoters/ Directors have been permitted to carry out certain construction works, which construction works are going on at a very slow speed and Promoters/ Directors intends to continue with construction and are not permitting the insolvency resolution process to complete. The Promoter/ Directors have not even handed over various Projects, which now have to be dealt with and carried out by the SRA. The learned Counsel for the Homebuyers submit that Homebuyers, who are more than 20000 in number in different Projects, are waiting for their homes for more than a decade and this Tribunal may direct the SRA to complete the Project as early as possible and handover the possession of units to the Homebuyers. Learned Counsel for the JILREAWS also sought direction to expedite the construction and delivery of homes to sufferer Hom....
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.... and else it would be ready to do everything within its power to ensure that the plan is a success. Thus, it would not be out of place to add a sanguine hope that being the owner of the land in question and public authority, YEIDA, who had envisaged and promoted the entire project, would, in future dealing with the matter, act with caution and circumspection, while earnestly reflecting upon the practical impact of its propositions/decisions on various stakeholders, including the homebuyers." 112. Before us also, the learned Counsel for the Appellant repeated the same submission that YEIDA is not against the implementation of the Plan and it has filed the Appeal to protect interest of the Public Authority for the dues, which are payable to the YEIDA as per the Concession Agreement, which amount are to be utilized for public cause. We have also noticed above that CIRP of the Corporate Debtor commenced on 07.08.2017. More than six and a half years have elapsed from the commencement of the CIRP. The matter has travelled three rounds to the Hon'ble Supreme Court. There are more than 20,000 Homebuyers, who are awaiting for their homes for last more than a decade. The farmers whose add....
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.... 4 from the 304 25% Total Compensation for land parcels aggregating to 9,384 acres 8,640 1,216 100% Compensation excluded relating to land parcels of 744 acres where homebuyers' projects are situated and for which farmers have already received additional compensation 744 143 Compensation excluded relating to land parcels already paid by Jaypee to Third Parties aggregating to 1,537 acres 1,537 330 Total Additional Farmers' Compensation 10,921 1,689 The above additional payment is subject to YEIDA and State Government facailitating effective implementation of the Resolution Plan, in larger public interest: A. On payment 10% of the total amount proposed, the farmer's dues get restructures as per above payment schedule. YEIDA will grant all requisite approvals, allow construction of stalled projects as per Resolution Plan, development and sale of the said land parcels, etc. In case of sale of land to third party, the proportionate dues of the particular land will eb paid at the time of transfer; B. On payment of ....
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.... Operational Creditor. The submission of the Appellant that entire payment should be paid at once by the SRA, cannot be accepted. We have already noticed that stakeholders are awaiting for their claims to be considered, including those Homebuyers and there has been prolonged litigations on different issues and the Resolution Plan could be approved only by impugned order dated 07.03.2023. To put finality to the process and by accepting the claim of Appellant as secured Operational Creditor towards amount of Rs.1689 crores and directing payment of amount equivalent, which has been given to the secured Financial Creditor, ends of justice will be served in paving a way forward for implementation of the Resolution Plan. We could have asked the SRA to move for an addendum to be submitted before the CoC, by including the aforesaid provisions, but it will delay the process. Hence, we have adopted second course, i.e., by issuing direction to the SRA to make payment of 79% of secured claim of the Appellant of Rs.1689 crores within the timeline as indicated above, which direction shall make the Resolution Plan of the SRA compliant deserving approval. 116. We may also refer to the judgment ....
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....ake steps for payment. (II) Company Appeal (AT) (Insolvency) No. 987 of 2022 - Regional P.F. Commissioner v. Ashish Chhawchharia, Resolution Professional for Jet Airways (India) Ltd. - is allowed. The Successful Resolution Applicant is directed to make payment to the Appellant of provident fund dues as admitted by the Resolution Professional. (III) Company Appeal (AT) (Insolvency) No. 792 of 2021 and Company Appeal (AT) (Insolvency) No. 361 of 2022 are dismissed. (IV) The order of the Adjudicating Authority dated 22.06.2021 approving the Resolution Plan is upheld subject to orders as above." 117. The above judgment of Jet Aircraft has also been approved by the Hon'ble Supreme Court vide its order dated 18.01.2024 in 2024 SCC OnLine SC 727. 118. We follow the course, which was followed by this Tribunal in Jet Aircraft. To obviate the further delay in implementation of the Resolution Plan and to take care of the interest of stakeholders, including Homebuyers and claim of the Appellant towards additional farmers' compensation, we dispose of this Appeal in following manner: (1) The impugned order passed by Adjudicating Authority insofar as it d....