TaxTMI 
TaxTMI 
2024 (6) TMI 349
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....vam 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 ASHOK BHUSHAN, J. This Appeal filed by Yamuna ....
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..... 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 the developments carried out by NOIDA, directed for payment of addition....
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....ii) 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 Bench to NCLT Principal Bench. (ix) On 23.01.2020, YEIDA filed an Application before the Adjudicating Au....
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.... 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 contingent liability was held to be sufficient, YEIDA having been held to be Operational Creditor, whose liquidation value being Nil. The ....
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....nt 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 Resolution Applicant for settlement has been placed before the State Government and the same is under consideration of the State of UP. Learned counsel for the Appellant submits that the matter may ....
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.... 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) in this Appeal, which indicates that Corporate Debtor has commenced several projects on land located for development. From the materials brought on record in the Status Report, it is clear that large number of....
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.... 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 Industrial Area Development Act, 1976, which contract could not have been tinkered with, without the approval and consent of the YEIDA. It is submitted that the claim of the Appellant regarding additional compensation and ....
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....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 treatment of its claim in the Plan and the Appeal has been filed only qua the treatment of the Appellant towards its claim. Shri Venkataraman further submits that additional compensation payable to the farmers against t....
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....annot 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 amount. It is submitted that insofar as recovery of additional farmers' compensation from sub-lessees, Suraksha shall extend all cooperation to YEIDA. It has been submitted that offer has been made in line of larger object ....
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....e 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-admission of various amounts. The claim submitted by YEIDA fell into three broad categories - Firstly, the IRP admitted only Rs.51.4 crore towards amount for pending works, which work was completed by JIL during CIRP, wh....
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....l 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 Promoter advanced submissions in support of the Intervention Application. 20. IA No.2660 of 2024 has been filed by Kuldeep Verma, Authorized Representative of Homebuyers of Jaypee Infratech Ltd., seeking intervention in the Ap....
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....on & 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 tenders have been taken out by IMC for award of 97 towers, where work is stalled and JAL is not allowing access to these towers, nor providing information or allowing IMC to replace the security agency with that of IMC. 26. Submissions have also been made on behalf o....
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....solution 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 23.08.2017 and 28.11.2017 with the IRP. The summary of the claims filed by YEIDA and the amount admitted by the IRP as well as the treatment in the Resolution Plan have been noticed by the Adjudicating Authority in paragraph 54 of the judgment, which is as follows:- "54. It is further submitted by YEIDA that it had filed its claims arising o....
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....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 notice that the Appellant in its IA No.3306 of 2021 in paragraph 8 of the objection has reiterated its case that it does not stand to oppose the Resolution Plan rather it would like the plan to succeed but, it has a public duty to ensure that the framework under CA is preserved. It is useful to extract paragraph 8 of the application filed by the Appellant, which is as follows:- "8. YEIDA submits that it has been and continues to be in favour of rehabilitation of the Yamuna Expressway Project. YEIDA is however bound by its public duties and must act in public interest. Throughout the proceedings in respect of JIL's CIRP, YEIDA ha....
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....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 future works." requires no adjudication." 32. The Adjudicating Authority in its impugned order has noticed the judgment of Jaypee Kensington (supra) and has extracted paragraphs 103, 104, 104.1, 104.2, 104.3, 104.4 and 104.5 and made following observations in paragraphs 67 and 68 : - "67. On perusal of the above paragraphs, it is observed that the Hon'ble Supreme Court has, inter alia, observed in Para 103 (ibid) that any tinkering with the contract in question, that is, the Concession Agreement, could not have been carried out without the approval and consent of the authority concerned, that is, YEIDA, while referring to the provisions of Regulation 37 of IBBI (CIRP) Regulat....
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.... 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 to External Development Charges (EDC) of YEIDA." 35. The Adjudicating Authority also proceeded to consider the claim of the Appellant regarding additional amount of compensation to the farmers. Paragraphs 105 to 107 of the judgment of Jaypee Kensington (supra) was extracted by the Adjudicating Authority. In paragraph 77 of the judgment, Adjudicating Authority observed:- "77. From the aforesaid paragraphs of the Jaypee Kensington, it is noticed that the Hon'ble Supreme Court has specifically observed in Para 106 that the contingency towards additional amount of compensation was required to be provided in the Resolution Plan in case liability would be ultimately fastened on the corporate debtor/JIL." 36. Adjud....
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....er 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 claim as an "Operational Creditor" and the Liquidation value owed to the Operational Creditors in the proposed Resolution Plan is 'Nil', and the SRA/Suraksha has still provided an amount of Rs. 10 Lakh for this contingency in its Resolution Plan, we find no illegality committed by the SRA/Suraksha by treating the claim of YEIDA as an Operational Debt and making a provision towards its payment in accordance with the provisions of IBC, 2016." 37. We having noticed the above, now we proceed to consider the questions framed in the appeal as above. Question Nos. (1), (2) and (3) 38. The above questions being inter-related are being considered together. We may first notice the claim of the appellant of Rs.1,689 Crores filed in the CIRP of the Corp....
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....hary 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 (supra), as affirmed by this Court in the case of Savitri Devi (supra) should also be given to the farmers whose lands were acquired for the benefit of YEIDA. However, this was made conditional. Additional benefit was granted to the landowners on the condition that they would handover the physical possession of land to YEIDA and withdraw the writ petitions/cases filed by them pending before the High Court." 40. The Hon'ble Supreme Court in Shakuntla's Judgment in paragraphs 66, 70 and 71, following was held:- "66. We further find that the respondents have indulged into the conduct of approbate and reprobate. They have changed their stance as per their convenience. When their projects were stalled on account of the farmers' agitation, it is they who approached ....
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.... 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. As noted above, IRP did not accept the claim on the ground that it is under arbitration. In view of the judgment of the Hon'ble Supreme Court in Shakuntla's case, the issue has been finally determined by the Hon'ble Supreme Court which law is binding on all concerned. We, thus, are of the view that the appellant's claim filed in the CIRP of the corporate debtor for additional farmers' compensation of Rs.1,689 Crores deserves consideration. As noted above, the appellant has been agitating their rights by filing objections to the resolution plan and with regard to resolution plan of Suraksha, IA No.3306 of 2021 was filed, as noted above, where claim for additional compensation of Rs.1,689 Crores towards farmers' compensation was agitated. 42. While noticing the fact of the present case, it has been noticed tha....
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....ncession 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 13-A was inserted by U.P. Act 10 of 2016, Section 13 and 13A 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, the Chief Executive Officer may direct that in addition to the amount of arrears, a further sum not exceeding that amount shall be recovered from the transferee or occupier, as the case may be, by way of penalty. 13-A. Any amount payable to the Authority under section 13 shall constitute a charge over the property and may be recovered as arrears of land revenue or by a....
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....lly." 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 be borne by the concessionaire as per the Concession Agreement. We, thus, are of the view that the amount of additional compensation towards 64.7% as allowed by the order issued by the State of Uttar Pradesh and have been affirmed by the Hon'ble Supreme Court in case of Shakuntla (supra), clearly makes the concessionaire i.e. corporate debtor liable to make the payment of additional cost and additional compensation cost which is required to be paid by concessionaire to the appellant. Hence, appellant is clearly a secured creditor with respect to additional compensation of Rs.1,689 Crores payable by the corporate debtor to the appellant. 50. We may also notice the judgment of the Hon'ble Supreme Court delivered on 12.02.2024 in "Greater Noida Industrial Development Authority vs. Prabhjit Singh Soni and Another- 2024 SCC OnLine SC 122" as noted above. In the above case, land was acqu....
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....im 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 appellant, the amount due and for which claim was made was Rs. 43,40,31,951/- This omission or error, as the case may be, in our view, materially affected the resolution plan as it was a vital information on which there ought to have been application of mind. Withholding the information adversely affected the interest of the appellant because, firstly, it affected its right of being served notice of the meeting of the COC, available under Section 24 (3) (c) of the IBC to an operational creditor with aggregate dues of not less than ten percent of the debt and, secondly, in the proposed plan, outlay for the appellant got reduced, being a percentage of the dues payable. In our view, for the reasons above, the resolution plan stood vitiated. However, neither NCLT nor NCLAT addressed itself on the aforesaid aspects which render their orders vulnerable and amenable to judicial review. b. The resolution pl....
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....ced 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 payable towards premium for the lease. The claim was set up by the appellant as a financial creditor of the CD." 53. The above case clearly was a case where unpaid instalments were payable towards premium for the lease which amount was held to be secured charge. Similarly, in the present case, additional farmers' compensation payable to the farmers is part of the acquisition cost which as per the provision of the Concession Agreement, as noted above, is required to be paid by the concessionaire. We, thus, are of the clear opinion that amount of additional compensation payable to the farmers towards additional cost of 64.7% for compensation is secured charge. 54. Question No.(1) is answered as follows : - YEIDA is secured creditor of the corporate debtor with respect to claim of Rs.1,689 Crores towards additional farmers' compensation claim. 55. Now we come to Question No.(2). Adjudicating Authority in the impugned ....
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....perational 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 additional farmers' compensation. We, thus, are of the view that the judgment of the "New Okhla Industrial Development Authority Versus Anand Sonbhadra" (supra) is not applicable in the facts of the present case. Adjudicating Authority failed to notice the provision of Section 13 and 13-A and considered of the claim of the appellant was only as operational creditor. Appellant being secured operational creditor, it is entitled for a different treatment in the resolution plan which is meted out to the other secured creditors. We have already noticed above that after the order of the Hon'ble Supreme Court, this Appellate Tribunal in this appeal drew attention of both the parties to judgment of "Greater Noida Industrial Development Authority vs. Prabhjit Singh Soni" (supra), the SRA has come up with without prejudice offer of Rs.1216 Crores payment towards additional farmers' compensation which offer is clearly in recognition of the f....
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.... 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 YEIDA in Clauses 4, 14 and 27 of Schedule 3 are also required to be disapproved. We are unable to countenance the proposition that by way of a resolution plan, it could be enjoined upon an agency of the government like YEIDA to give up or withdraw from a pending litigation. Similarly, extinguishment of existing liability qua YEIDA is not a relief that could be given to the resolution applicant for askance. For the same reason, the resolution applicant cannot seek extension of time period of the Concession Agreement by way of a clause of 'relief in the resolution plan without the consent of a governmental body like YEIDA." 58. It was held by the Hon'ble Supreme Court that NBCC who is Resolution Applicant before the Hon'ble Supreme Court in "Jaypee Kensington" (supra) case could not extinguish the liability of YEIDA. The observations made by the Hon'ble Supreme Court in paragraphs, as noticed above, clearly supports the submission of the appellant. The Adjud....
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....% each year with 10% upfront in 90 days) committed schedule as under table below. Timeline for payment Land Parcels (Acres) Payment Proposed % Payment proposed Upfront payment within 90 days from the Approval Date 122 10% At the end of Year 1 from the Approval Date 182 15% At the end of Year 2 from the Approval Date 304 25% At the end of Year 3 from the Approval Date 304 25% At the end of Year 4 from the Approval Date 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 sold 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 facilitating effective Implementation of the Resolution Plan, In larger public Interest :....
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....f additional compensation for this reason, because: (i) In the Jaypee Kensington Judgment, the Hon'ble Supreme Court held that even the responsibility of collection of the amount of additional compensation cannot be deflected onto the Appellant, as the Appellant was not going to be party to any sub-lease executed between the Concessionaire and its transferees. The relevant extract from the Jaypee Kensington Judgment is reproduced below: "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. [emphasis supplied] (ii) In view of the above, even if it is assumed without admitting that the sum of-INR 330 crores does pertain to lands transferred to third parties by the Concessionaire, the same cannot be deducted from the Appellant's claim for additional compensation (total....
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....sation claim of YEIDA. Question No.(6) 65. As noted above, the amount which was claimed towards EDC by the appellant was of Rs.624.6 crores out of which IRP has admitted Rs.409.6 crores. After filing of the additional affidavit dated 20.04.2024 by Suraksha, reply affidavit filed by Respondent Nos.2 and 3 as well as Respondent No.1 and additional affidavit filed by the appellant, the details regarding EDC claim has been clarified. The appellant by filing an additional affidavit dated 04.05.2024 itself has pleaded that upon completion of the process of review and reconciliation of account, the rectified statement of outstanding towards EDCs is only Rs.525.91 Crores. It is useful to extract paragraphs 2, 3, 4, 5 and 6 of the additional affidavit, which are as follows:- "2. This Additional Affidavit is being filed to rectify errors (regarding payments received by the Appellant on account of EDCs) in the Reply dated 29 April 2024 filed by the Appellant. It is submitted that these errors were made inadvertently and they occurred due to the haste with which the Reply was filed, and due to paucity of time. 3. In the submissions dealing with the Appellant's claim of External De....
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....t Tappal and Agra may be payable by Suraksha as per the provisions of Concession Agreement and in terms of the undertaking given by it in the rejoinder dated 03.05.2024 as and when external development work is carried out at Tappal and Agra. 67. Noticing the aforesaid, we answer Question No.(6) as follows:- Total amount of EDCs claimed as reviewed and reconciled by the appellant is Rs.529.91 crores subject to payment by EDCs towards land parcels at Tappal and Agra, as and when external development work is carried out at Tappal and Agra. Question No.7 68. The submission advanced by the learned Counsel for the Appellant is that external development charges are also secured claim within the meaning of Section 13 and 13A of the 1976 Act. It is submitted that EDC charges are payable by the Concessionaire/ Corporate Debtor on account of the Concession Agreement dated 07.02.2003. 69. The external development charges are neither defined in Concession Agreement nor in the 1976 Act. Under Clause 7.2, which deals with obligation of Taj Expressway Authority, under sub-clause (j), external development including electric supply, water supply, drainage arrangements etc. have been dealt wi....
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....ny amount payable to the Authority under section 13 shall constitute a charge over the property and may be recovered as arrears of land revenue or by attachment and sale of property in the manner provided under sections 503, 504, 505, 506, 507, 508, 509, 510, 512, 513 and 514 of the Uttar Pradesh Municipal Corporations Act, 1959 (Act no. 2 of 1959) and such provisions of the said Act shall mutatis mutandis apply to the recovery of dues of an authority as they apply to the recovery of a tax due to a Municipal Corporation, so however, that references in the aforesaid sections of the said Act to 'Municipal Commissioner', 'Corporation Officer' and 'Corporation' shall be construed as references to 'Chief Executive Officer' and 'Authority' respectively; Provided that more than one modes of recovery shall not be commenced or continued simultaneously." 72. As per Section 13-A any amount payable to the Authority under Section 13 shall constitute a charge over the property. Thus, the amount has to be covered by Section 13 for being a charge on the property. Section 13 gets attracted where any default is made in the payment of - (i) any consideration money or instalment thereof or any ot....
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....eement, which falls under Section 13 alone has to be treated to be amount, for default of which proceedings under Section 13A can be initiated. 73. The learned Counsel for the Appellant has also placed reliance on judgment of the Hon'ble Supreme Court in Jaypee Kensington case especially paragraph 107. In paragraph 107, the Hon'ble Supreme Court had occasion to consider the reliefs and concessions as sought for by the Resolution Applicant in relation to YEIDA. The Hon'ble Supreme Court held that said reliefs and concessions could not be granted and the Authority/ Agency of the Government like YEIDA cannot withdraw from a pending litigation, nor any existing liability can be extinguished, which is not a relief that could be given to the Resolution Applicant for askance. Paragraph 107 of the judgment is as follows: "107. Apart from the aforesaid, the reliefs and concessions as sought for by the resolution applicant in relation to YEIDA in Clauses 4, 14 and 27 of Schedule 3 are also required to be disapproved. We are unable to countenance the proposition that by way of a resolution plan, it could be enjoined upon an agency of the government like YEIDA to give up or withdraw from a ....
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....h regard to claims filed by the Appellant in the CIRP of the Corporate Debtor; and 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. For answering these issues, we need to first notice statutory scheme under the Code and the Regulations framed thereunder as well as the judgment of Jaypee Kensington, which has been relied by the Appellant. 77. Under the CIRP Regulations 2016, after public announcement is made, under Regulation 6, claim by an Operational Creditor has to be filed in Form-B as per Regulation 7(1) of CIRP Regulations, which is as follows: "7. Claims by operational creditors. (1) A person claiming to be an operational creditor, other than workman or employee of the corporate debtor, shall 13[submit claim with proof] to the interim resolution professional in person, by post or by electronic means in Form B of the Schedule: Provided that such person may submit supplementary documents or clarifications in support of the claim before the constitution of the committee." 78. There is no dispute between the parties that in response to the publication made un....
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....t or contributed to the failure of implementation of any other resolution plan approved by the Adjudicating Authority at any time in the past.] in technology used by the corporate debtor; and (l) obtaining necessary approvals from the Central and State Governments and other authorities." 79. Regulation 38 provides for 'Mandatory contents of the Resolution Plan'. Regulation 38, sub-clause (1) is as follows: "38. Mandatory contents of the resolution plan. (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 in favour of the plan. (1A) A resolution plan shall include a statement as to how it has dealt with the interests of all stakeholders, including financial creditors and operational creditors, of the corporate debtor. (IB) A resolution plan shall include a statement giving details if the resolution applicant or any of its related parties has failed to implement or contributed ....
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....ntract entered into between the concessionaire and statutory authority, that is, YEIDA. It is needless to observe that even if in the scheme of IBC, a resolution plan could modify the terms of a contract, any tinkering with the contract in question, that is, the Concession Agreement, could not have been carried out without the approval and consent of the authority concerned, that is, YEIDA. Any doubt in that regard stands quelled with reference to Regulation 37 of CIRP Regulations that requires a resolution plan to provide for various measures including 'necessary approvals from the Central and State Governments and other authorities'. The authority concerned in the present case, YEIDA, is the one established by the State Government under the U.P. Act of 1976 and its approval remains sine qua non for validity of the resolution plan in question, particularly qua the terms related with YEIDA. The stipulations/assumptions in the resolution plan, that approval by the Adjudicating Authority shall dispense with all the requirements of seeking consent from YEIDA for any business transfer are too far beyond the entitlement of the resolution applicant. Neither any so-called deemed approval ....
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....need to notice certain clauses of Concession Agreement and those of Regulation 2016 to find the answer. 84. In the Concession Agreement, Clause 4.3, which is under the heading "Land", clearly contemplate that Concessionaire shall be entitled to further sub-lease developed/ undeveloped land to sub-lessees/ end-users in its sole discretion without any further consent or approval or payment of any charges/ fee etc. to Authority or any other relevant Authority. Clause 4.3 (d) and (e) are as follows: "4.3.d. The Concessionaire shall be entitled to further sub-lease developed/ undeveloped land to sub-lessees / end-users in its sole discretion without any further consent or approval or payment of any charges/ fee etc. to TEA or any other relevant authority. e. After sub-lease of part of the land by the Concessionaire, the same can be transferred / assigned without requiring any consent or approval of or payment of any additional charges, transfer fee, premiums etc. to TEA or to any other relevant authority and/ or there can be subsequent multiple subleases of the land in smaller parts. The lease rent of the respective sub-leased portion of land shall be paid by the sublessees/ trans....
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....assets of Corporate Debtor can be dealt with. The Corporate Debtor, who has only lease hold rights cannot transfer any higher rights to any other person, including the SRA and Financial Creditors. 89. In view of the foregoing discussions, we are of the view that in the present case, no clause of Concession Agreement is being tinkered with by the Resolution Applicant, so as to require consent of YEIDA. The Resolution Plan deals with the claim of Creditors as per CIRP Regulations and Resolution Plan only deals with lease hold rights, which Corporate Debtor has in the land in question. 90. The learned Senior Counsel for the Appellant relied on two judgments of this Tribunal, i.e., Greater Noida Industrial Development Authority vs. Roma Unicon Designex Consortium, Successful Resolution Applicant - (2023) SCC OnLine NCLAT 1612 as well as judgment of this Tribunal in SEL Manufacturing Company Ltd. vs. Punjab Small Industries & Export Corporation Limited - Company Appeal (AT) (Insolvency) No. 881/2022. 91. The judgment of this Tribunal in Roma Unicon was a case where a Concession Agreement was executed by Greater Noida. Lease Deed was executed on 01.09.2010 in favour of M/s Earth Towne....
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....ssee shall have the right to sub-divide the allotted plot into suitable smaller plots as per planning norms and to transfer the same to the interested parties up to 31.03.2010 or as decided by the Lessor, with the prior approval of LESSOR on payment of transfer charges @ 2% of allotment rate. However, the area of each of such sub-divided plots should not be less than 20,000 sq. mts. However, individual flat/plot will be transferable with prior approval of the LESSOR as per the following conditions: - (i) The dues of LESSOR towards cost of land shall be paid in accordance with the payment schedule specified in the Lease Deed before executing of sub-lease deed of the flat. (ii) The lease deed has been executed. (iii) Transfer of flat will be allowed only after obtaining completion certificate for respective phase by the Lessee. (iv) The sub-Lessee undertakes to put to use the premises for the residential use only (v) The Lessee has obtained building occupancy certificate from Building Cell/Planning Section, Greater NOIDA. (vi) First sale/transfer of a flat/plot to an allottee shall be through a Sub-lease/Lease Deed to be executed on the request of the Lessee to the ....
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....yer Projects of Earth Sapphire Court and Earth TechOne submitted that they are ready to bear and pay the dues of the Appellant in the interest of the development of the projects. In the facts of the present case, we are of the view that the Appellant has not been diligent to take steps towards recovery of dues and are not entitled to charge any penal interest. We thus direct the Appellant to waive the penal interest and recalculate the dues of the Appellant which was due on the respective land holding companies as on date as held above." 94. In the above context, in paragraph 92, following was directed: "92. The RP has to publish a fresh Form-G inviting fresh Resolution Plans with specific condition that resolution plans shall be presented before the COC for consideration only when dues of the appellants are paid and permission of appellant is obtained for transfer of lease land." 95. The directions in paragraph 92 and 95(iv), which are relied by learned Counsel for the Appellant were in reference to the facts of the said case. Whereas in the present case CIRP has commenced against the Corporate Debtor, who himself was a lessee of the land and lease hold rights of the lessee ....
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.... issues, which has arisen in the present case. In the above case, the Resolution Plan, which was approved in the CIRP was not under consideration, rather proceedings emanated from demand notice subsequent to approval of Resolution Plan. Thus, observations made by this Tribunal in the above judgment were on different set of facts and has no application for consideration of Resolution Plan as per the provisions of the Code and Regulations framed thereunder. 98. The Adjudicating Authority in Part-X of the impugned order, dealt with 'Relief and Concessions', relevant claim in Sl. Nos.3 of Annexure 2, Sl. No.4 of Annexure II, Sl. No.5 of Annexure-II were denied. With regard to Sl. No.8 of Annexure II, the relief was declined in paragraph 139, which is as follows: "139. The next relief and concession listed at Serial No.8 of Annexure II is as follows: "8. Except those agreements/ letter of allotments, where the sub-lease deeds had been executed between the Corporate Debtor and the third parties, in relation to all the agreements/ letter of allotments, entered into between the Corporate Debtor and the third parties in relation to the transfer of the leasehold rights over the land si....
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....Plan. It is submitted that amount of additional farmers' compensation as proposed by the SRA is in addition to amount as has been proposed in the Plan and none of the payment to the Financial Creditors would be affected. 103. In view of the aforesaid statement made by the SRA, we see no reason to pass any order in the IA filed by NARCL. 104. Now, we come to the IA filed by Jayprakash Associates Limited seeking impleadment in the Appeal. Shri Krishnan Venugopal, learned Senior Counsel appearing for the Applicant, who are the Promoters/ Directors of the Corporate Debtor, submits that in Company Appeal (AT) (Insolvency) No.548 of 2023 filed by Jayprakash Associates Ltd. and Manoj Gaur, which was dismissed on 21.02.2024, Jayprakash Associates and the Manoj Gaur were not allowed by this Tribunal to submit grounds with regard to treatment of the claim of the YEIDA. Shri Venugopal has relied on paragraph 49 of the judgment in Jayprakash Associates (supra). In paragraph 49 of the judgment, we have made following observation: "49. As noted above with regard to the claim of YEIDA, Successful Resolution Applicant has already submitted a proposal which is under active consideration. In any....
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....delay the resolution of the Corporate Debtor and the filing of the Application for impleadment in the Appeal by YEIDA, is another attempt by Promoters/ Directors to delay the disposal. In the present Appeal filed by YEIDA, the claim of YEIDA has already been considered and being decided by this judgment. We are of the view that it is not necessary for this Tribunal to consider any submission advanced on behalf of Promoters/ Directors of the Corporate Debtor with regard to claim of YEIDA. YEIDA having itself filed an Appeal and diligently prosecuting its claim in this Appeal, we are of the view that any submission advanced by Promoters/ Directors with regard to claim of the YEIDA, need no consideration. We also see no reason to implead Promoters/ Directors in this Appeal. However, we have permitted Promoters/ Directors to intervene in the matter. We, thus, are of the view that no consideration is required to the submissions raised by Promoters/ Directors with respect to the claim of YEIDA in the present Appeal. 106. As regards to other IAs, one filed by Authorized Representative of Homebuyers; two IAs are filed by Home Buyers and one IA was filed by JIL Real Estate Allottees Welfar....
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.... Monitoring Committee, we are of the view that while implementing the plan, it is open for the JIL Infratech Ltd. to take all measures as per the Resolution Plan for implementation of the Plan. IA No.2650 of 2022 is disposed of with liberty to JIL Infratech Ltd., though its Implementation & Monitoring Committee to take all measures as permissible as per the Resolution Plan. It is further made clear that Resolution Plan having been approved is binding on all concerned, including erstwhile Promoters/ Directors. IA No.2650 of 2024 is disposed of accordingly. 109. In view of the above, all the IAs are disposed of accordingly. Question No. 10 110. Now we come to the last question, i.e., Question No.10 - What relief the Appellant is entitled in this Appeal. 111. The Hon'ble Supreme Court while delivering the judgment in Jaypee Kensington has noted the statements made by learned Counsel for the Appellant that despite stating its objection YEIDA has consistently maintained before the NCLT and before the Hon'ble Supreme Court that it does not stand to oppose the Resolution Plan for the sake of opposing the Resolution Plan. In paragraph 108 of the judgment, following observation was mad....
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....of Rs.1689 crores was the claim by the Appellant in the CIRP. The Suraksha offer also provided a timeline for payment, which timeline as per Suraksha offer dated 18.04.2029, is as follows : "WITHOUT PREJUDICE SURAKSHA OFFER Without going into the merits of the matter and despite having provision in the CoC approved plan that Suraksha shall not bear 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 crores 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 project 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 Propo....
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....n of Rs.1689 crores. The Financial Creditors under Resolution Plan have been proposed the payment of 79% of their secured dues. The Appellant, who is also a secured Operational Creditor to the extent of Rs.1689 crores, is also entitled for payment of same percentage of amount, which has been offered to the Financial Creditors. We, thus, are of the view that towards additional farmers' compensation, the Appellant is entitled for 79% of its claim, i.e., 79% of Rs.1689 crores, which comes to Rs.1334.31 crores. The SRA has already offered to make payment of Rs.1216 crores. Thus, the SRA has to bear additional amount of Rs.118.31 crores. The entitlement of Appellant being secured creditor is thus, clearly to amount of Rs.1334.31 crores. The SRA has already given an offer to bear Rs.1216 crores, ends of justice will be served in issuing direction to SRA to make payment of Rs.118.31 crores in addition to Rs.1216 crores already offered by it. 115. Now, we come to the timeline, which has been proposed by the SRA for payment. As per Regulation 38, the Operational Creditors are entitled for payment of their dues in priority over Financial Creditor. The payment of priority to the Operational ....
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....ed with following directions: (a) Successful Resolution Applicant is directed to make payment of unpaid provident fund to the workmen till date of insolvency commencement, after deducting the amount already paid towards provident fund in the Resolution Plan to the workmen. (b) The workmen are also entitled for payment of their gratuity dues as on insolvency commencement date, after adjusting any amount towards gratuity paid under the Resolution Plan. It is made clear that entitlement of those employees and workmen, who were demerged into AGSL shall not be there, since demerger has not been treated as termination of their services. (c) The employees are also entitled for the payment of their full provident fund, unpaid up to the date of insolvency commencement date. It is made clear that full payment of provident fund would be of that unpaid part of provident fund, which has not been deposited by the Corporate Debtor in the EPFO. (d) Employees shall also be entitled for the gratuity, which fell due up to insolvency commencement date. (e) The rest of the prayers of the workmen and employees are denied. (f) The Chairman of the Monitoring Committee, erstwhile Resol....