AI Drafter 
TaxTMI 
TaxTMI 
2024 (12) TMI 410
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....rya Gupta, Ms. Neha Shivhare and Ms. Alina Mathew, Advocates for R-1/ ICICI Bank. Mr. Sunil Fernandes, Sr. Advocate with Mr. Vaijyant Paliwal, Mr. Anoop Rawat, Mr. Sagar Dhawan, Mr. Aditya Marwah, Ms. Kirti Gupta, Mr. Ahkam Khan, Ms. Rajshree Chaudhary and Ms. Anushree, Advocates for R-2/ RP. Mr. Gopal Jain, Sr. Advocate with Mr. Ankur Mittal, Ms. Yashika Sharma and Ms. Muskan Jain, Advocates for SBI JUDGMENT ASHOK BHUSHAN , J. These Appeals have been filed by a Suspended Director of the Corporate Debtor, challenging the Orders dated 03.06.2024 passed by the Learned Adjudicating Authority (National Company Law Tribunal, Allahabad Bench, Prayagraj) in C.P. (IB) No.330/ALD/2018 and different IAs therein. By the Impugned Order dated 03.06.2024, the Adjudicating Authority has admitted Section 7 Application filed by the ICICI Bank Limited by commencing Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, Jaiprakash Associates Limited (JAL). 2. The Appeals also challenges Order passed by the Adjudicating Authority dated 03.06.2024 in CA 120/2019, IA 406/2023, IA 263/2024, IA 291/2024. IA 120/2019 was filed by the Corporate Debtor for dismissal of....
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....the provisions of Insolvency and Bankruptcy Code, 2016, (for short `The Code' or `The IBC'). viii. By a Notification dated 05.05.2017 in exercise of power under Section 35AA of the Banking Regulation Act, 1949, Central Government authorised the RBI to issue such directions to any Banking Company to initiate Insolvency Resolution Process in respect of default under the provisions of IBC. ix. A draft CRRP was approved in the JLF Meeting on 18.05.2017. x. A sanction letter dated 19.05.2017 was issued by ICICI Bank. xi. On 13.06.2017, RBI issued a press release recommending that for those account where 60% or more had been classified as NPA as on 30.06.2017, Banks may be directed to implement a viable Resolution Plan within 6 months, failing which the accounts may be treated for a reference under the IBC by 31.12.2017. xii. On 22.06.2017, DRP was approved by Lenders in JLF. xiii. RBI sent a letter dated 28.08.2017 to the ICICI Bank, directing that ICICI Bank may finalise a Resolution Plan for the JAL. It further directed that in the event that viable Resolution Plan is not finalised and implemented before the said date, Insolvency P....
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....orate Debtor filed a detailed Reply in Section 7 Application dated 16.09.2018. xxiv. Writ Petition No.313/2018, which was filed by JAL challenging the letter dated 14.08.2018 of the RBI came to be dismissed by Allahabad High Court vide Order dated 24.09.2018. xxv. A Special Leave Petition challenging the Order of the Allahabad High Court also came to be dismissed filed by JAL on 12.10.2018. xxvi. As noted above, the CRRP, which was approved on 22.06.2017, envisaged bifurcation of entire debt of Corporate Debtor into 3 Buckets to the following effect : "i. Bucket 1 Debt of Rs.11,689 Crores - being part of the "Other Debt" is to be discharged against sale of identified Cement Plants of the Corporate Debtor & JCCL to Ultra Tech Cement Limited for which a define agreement has been executed between the parties. ii. Bucket 2A Debt of Rs.6367 Crores - being "sustainable debt" will continue as debt of the Corporate Debtor. iii. Bucket 2B Debt of Rs.13,590 Crores - which is part of "Other Debt" to be transferred to a Special Purpose Vehicle (SPV) along with identified land of the Corporate Debtor of the equivalent value." xxvii.....
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....nancial Creditor on OTS Proposal submitted by Corporate Debtor, whichever is later. xxxvi. On 03.06.2024, Adjudicating Authority passed the Impugned Order admitting Section 7 Petition, by separate Order of the same date IA 291/2024, seeking deferment of the Judgment was rejected. xxxvii. These Appeals were filed by the Appellant before this Tribunal on 04.06.2024. These Appeals were heard on 10.06.2024 by this Tribunal on which date Notices were issued in the Appeal. Matter was directed to be listed on 24.06.2024, within which period the Bank was given time to file a Reply and may consider the proposal /OTS submitted by the Appellant by the said date. xxxviii. On 12.06.2024, all Lenders Meeting was held where Lenders decided that CIRP of JAL is to continue and any proposal from JAL may be considered under the ambit of IBC. xxxix. On 23.06.2024, Appellant submitted a revised OTS Proposal along with clarification. xl. On 24.06.2024, this Tribunal granted additional time to the ICICI Bank to consider the revised OTS Proposal. xli. On 28.06.2024, Committee of Creditors (CoC) of JAL was constituted as per provisions of the IBC. ....
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....6 to 15.05.2016, which is reflected from Annexure 6 to the Section 7 Application which dates were prior to approval of CRRP. The debt referred to in Bucket 2B was to be transferred to SPV and is no longer payable by the Corporate Debtor. Interest was also waived after 01.10.2016, hence there was no default within meaning of Section 3(12) of the IBC. Sanction letter was accepted by the Lender and is a binding contract between the Parties. Pursuance to sanction letter, various actions were taken including filing of First Motion and Second Motion for approval of the Scheme of Arrangement for transferring the debt to SPV relating to Bucket 2B. 6. Learned Counsel for the Appellant has also referred to the letter dated 07.12.2017 issued by the ICICI Bank, which was counter signed by SBI and IDBI to RBI stating that account of Corporate Debtor may be treated to be resolved, which letter clearly depicts the understanding of the Lenders themselves regarding resolution of entire debt. Reference to another letter dated 13.08.2018, written by the ICICI Bank to the RBI has also been made by Counsel for the Appellant. 7. Learned Counsel for the Appellant further submits that Judgment of th....
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....ection 62 of the Indian Contract Act, 1872 submits that upon novation of the contract, there is a complete reset of liabilities and amended/novated documents replaced/substitute the erstwhile documents. Respondent Bank in spite of restructuring document has relied on earlier facility documents. There being no revocation of the restructuring document, no reliance could have been placed by the Bank on the earlier financing documents. The claims which have been filed before IRP are inflated claims, ballooning of the claims is clearly not permissible. 9. Learned Counsel for the Appellant has referred to NARCEL's offer dated 07.03.2024 as on 30.09.2023 and submits that as compared to the amounts of default noticed in the said offer, the claims admitted by IRP are inflated and unduly enhanced. Lenders are pursuing the present proceeding to maximise their gains and are not interested in resolution of the Corporate Debtor. IBC is not designed as recovery mechanism. The Corporate Debtor is Asset Rich Company which is fully competent to resolve all its debts, OTS offer given to the lenders required to be accepted so as to wipe out the entire debt of the Corporate Debtor. The receivables o....
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....ubmitted with upfront payment. Adjudicating Authority, ought to have waited for outcome of the OTS and then proceeded to admit Section 7 Application. There were several valid reasons for not admitting Section 7 Application which were highlighted before the Adjudicating Authority. This Tribunal in large number of cases has given opportunity to Corporate Debtor to submit an OTS Proposal. 11. Shri Krishnendu Datta, Learned Senior Counsel appearing for the Financial Creditor refuting the submissions of the Counsel for the Appellant submits that for admission of Section 7 application, Financial Creditor has to prove debt and default of the amount above the threshold. Both the conditions have been fully proved in Section 7 application resulting to admission of Section 7 application. The submission of the Appellant that there was no default committed by the corporate debtor is incorrect and false. It is submitted that the Central Government has notified the RBI as an authority to issue necessary direction to the Banks to initiate Insolvency Resolution Process against a Corporate Debtor. The RBI having found the Corporate Debtor committing default under IBC has issued direction to the I....
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.... to an SPV of JAL i.e. Jaypee Infrastructure Development Limited vide scheme which scheme was never approved by the NCLT. The transfer of debt never took place to SPV debt which was subject matter of Bucket 2B continues to be in default in view of the scheme having never been implemented. Real Estate debt was not part of the MRA. Corporate Debtor in its reply filed before the Adjudicating Authority himself has pleaded that for debt of Rs.11,833.55 Cr. a scheme of arrangement has been framed under which scheme the debt is to be transferred with equivalent security to an SPV. The scheme was never approved, hence, default of the debt which is Real Estate debt continues. It is submitted that the Corporate Debtor in the written submission before the Adjudicating Authority has itself admitted that the present petition under Section 7 does not pertain to Bucket 1 or Bucket 2A rather petition under Section 7 pertains to Bucket 2B debt. Adjudicating Authority also in the impugned order has observed that it is admitted position that Section 7 application has been filed with regard to debt under Bucket 2B. It is submitted that the letter dated 19.05.2017 issued by the ICICI Bank has no releva....
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....oint in time than Companies Act, 2013. On default being committed on the part of the Corporate Debtor, lenders were fully entitled to invoke Section 7. More so, in the present case, there are binding directions issued by the RBI to initiate proceeding against JAL under the IBC. There is a huge debt on the part of the Corporate Debtor payable to lenders which is public money in default. Resolution under IBC is the only solution to resolve the Corporate Debtor. The Corporate Debtor has acknowledged its debt time and again. Adjudicating Authority has returned finding of debt and default by a reasoned judgment which need no interference by this Appellate Tribunal in exercise of appellate jurisdiction. The Appeal deserves to be dismissed. 12. Shri Gopal Jain, Learned Senior Counsel appearing for the State Bank of India- Intervenor submits that the outstanding dues of the State Bank of India against the Corporate Debtor as on 02.06.2024 are Rs.15,456 Cr. The State Bank of India itself has filed Section 7 application being CP (IB) No.108/ALD/2022 before the NCLT, Allahabad for initiating CIRP against JAL which was dismissed vide order dated 04.06.2024. In view of initiation of the CIRP....
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.... conducting the valuation of the Corporate Debtor has been appointed. Transaction review audit has also been directed. It is submitted that the Resolution Professional is obliged to issue Form G in the CIRP of the Corporate Debtor and delay is being caused in the CIRP. In view of the Form G having not yet been issued on account of pendency of these Appeals, thus, urgency to resolve the Corporate Debtor was noticed by the Hon'ble Supreme Court in its judgment dated 09.08.2018. It is submitted that the CoC having been constituted, Appellant needs to follow the process as set out under Section 12A for its endeavour to settle the debt of Financial Creditors. 14. From the submissions of Counsel for the parties and materials on record, following are the questions which arise for consideration in these Appeals:- (I) Whether the direction issued by the Reserve Bank of India dated 14.08.2018 to ICICI Bank to initiate CIRP process against the Corporate Debtor is not relevant for determining default by Corporate Debtor within meaning of Section 3(12) of the IBC? (II) Whether under the Resolution approved in JLF meeting held on 22.06.2017 for debt of Rs.11833.55 Crore (inc....
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....nd urgent measures are required for their resolution; AND WHEREAS the Insolvency and Bankruptcy Code, 2016 has been enacted to consolidate and amend the laws relating to reorganisation and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximisation of value of assets to promote entrepreneurship, availability of credit and balance the interest of all the stakeholders;" 17. Section 35AA which was inserted by Ordinance is as follows : - "35AA. The Central Government may by order authorise the Reserve Bank to issue directions to any banking company or banking companies to initiate insolvency resolution process in respect of a default, under the provisions of the Insolvency and Bankruptcy Code, 2016. Explanation--For the purposes of this section, "default" has the same meaning assigned to it in clause (12) of section 3 of the Insolvency and Bankruptcy Code, 2016." 18. A notification dated 05.05.2017 was issued by the Central Government which is as follows:- "MINISTRY OF FINANCE (Department of Financial Services) ORDER New Delhi, the 5th May, 2017 S.O. 1....
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....On 28.08.2017, RBI wrote to ICICI Bank which provided that based on IAC recommendation, it has been decided that those accounts which are materially NPA as on 30.06.2017 can be given time till 13.12.2017 for resolution outside IBC. In Annexure-1 to the list of account of Jaiprakash Associates Ltd. was mentioned as Item No.1. Paragraph 3 of the letter stated as follows:- "3. Based on the IAC recommendations, it has been decided that of the above accounts, those which are materially NPA as on June 30, 2017, i.e., where more than 60 per cent of the total outstanding is classified as NPA on CRILC, will be given time till December 13, 2017 for resolution outside IBC. In the event that a viable resolution plan is not finalised and implemented before the said date, insolvency proceedings under the provisions of the IBC may be initiated before December 31, 2017, unless already initiated." 21. The RBI issued directions dated 14.08.2018 to the ICICI Bank directing the ICICI Bank to initiate the insolvency resolution process in respect to the default committed by JAL. Letter dated 14.08.2018 reads as follows:- "DBR.No.BP ** August 14, 2018 The Managing Director &....
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.... by the Hon'ble Supreme Court against JAL in another matter that we had advised you to hold initiation of CIRP against the borrower entity. 3. The Reserve Bank had subsequently filed an application before the Hon'ble Supreme Court with a prayer that the directions for initiation of CIRP in respect of the said company may be permitted to be issued. The Hon'ble Supreme Court, in its final order dated August 9, 2018 has inter alia directed that, "RBI is allowed, in terms of its application to this Court to direct the banks to initiate corporate Insolvency resolution proceedings against JAL under the IBC". 4. In view of the above, the subsequent steps taken by the bank in pursuance of the same restructuring which was found not to have been implemented before the deadline, cannot be taken cognizance of. The statement that the 'company is meeting debt obligations as per the restructured terms with NIL arrears as on date to all the lenders' is misleading and invalid since the restructuring was itself rendered null and void. Further, multiple banks, including ICICI Bank, have since reported the borrower as being in default in the weekly reporting of bo....
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.....P. (C) 744 of 2017 on 18.01.2018 seeking leave of the Hon'ble Supreme Court to allow RBI to follow the recommendations of the IAC to initiate a CIRP against JAL under the IBC. The Hon'ble Supreme Court passed an order on 09.08.2018 in W.P. (C) No.744 of 2017 which is reported in (2018) 18 SCC 575. The Hon'ble Supreme Court noticed the recommendations of IAC with respect to JAL. The Hon'ble Supreme Court also noticed that JAL was classified under the SMA-II category by banks as early as on 03.10.2014 and as an NPA on 31.03.2015. The Hon'ble Supreme Court also observed that the application filed by the RBI clearly indicate the financial distress of JAL and JIL. In paragraphs 48.4, 49 and 50.5, following has been observed:- "48.4... The RBI constituted an Internal Advisory Committee (IAC) consisting primarily of its independent directors. The IAC took up for consideration accounts which were classified either partly or wholly non- performing from amongst the top 500 exposures in the banking system as on 31 March 2017. As a first step, the IAC recommended all such non-performing asset accounts with fund and non-fund based outstanding exceeding Rs 5,000 crores. The IAC has ini....
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....on 7 application filed by the ICICI Bank. It was contended before the Allahabad High Court that Jaiprakash Associates Ltd. is not a defaulter. An argument was also advanced before the Allahabad High Court that the judgment of 'Chitra Sharma' of the Hon'ble Supreme Court does not in so many words direct or permits the RBI to issue any direction against the petitioner for adopting insolvency proceedings. Allahabad High Court after noticing the paragraphs 40, 41 and 42 of the judgment of the Hon'ble Supreme Court in Chitra Sharma's case made following observations:- "The aforesaid decision of the Supreme Court clearly indicates that the proposals of the petitioner were not accepted and that on the interlocutory application of the RBI, it found that the petitioner is under financial distress and to safeguard the interest of the home buyers the request of the RBI to allow it to initiate CIRP against the petitioner under IBC is acceded to and the RBI is allowed to direct the Banks to initiate corporate insolvency resolution proceedings (CIRP) against the petitioner under IBC. In view of the above conclusion drawn by the Supreme Court, the directions issued the Letter of....
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....ding of which had been NPA since 30.06.2016. Annexure 1 of the letter is as follows:- "List of Accounts ICICI BANK LTD. 1 JAIPRAKASH ASSOCIATES LIMITED *# 2 MONNET POWER COMPANY LIMITED* # 3 ESSAR POWER (JHARKHAND) LIMITED *More than 60 percent of total outstanding has been NPA since June 30, 2016 # SDR timelines exceeded." 30. Paragraphs 3 and 4 of the said letter also read as follows:- "3. Based on the IAC recommendations, it has been decided that of the above accounts, those which are materially NPA as on June 30, 2017, ie., where more than 60 per cent of the total outstanding is classified as NPA on CRILC, will be given time till December 13, 2017 for resolution outside IBC. In the event that a viable resolution plan is not finalised and implemented before the said date, insolvency proceedings under the provisions of the IBC may be initiated before December 31, 2017, unless already initiated. 4. Accordingly, enclosed are two separate lists of accounts, one, where the ICICI Bank Limited is the lead bank (Annex 1), and, two, where the ICICI Bank Limited is a member of the Joint Lenders Forum (JLF) (Annex 2....
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....in Chitra Sharma's case (supra) nor the RBI were to determine the default on the part of the Corporate Debtor which needs to be decided and adjudicated only in proceedings under Section 7 by the Adjudicating Authority. There can be no two opinions on the above submission. It is the Adjudicating Authority who has to determine the question of debt and default in Section 7 application which can be foundation or basis for passing an order of admission of Section 7 application. However, the question is as to whether the said directions issued by the RBI are relevant on the question of default by the Corporate Debtor. 33. Looking to the statutory scheme under Section 35AA and directions issued by the RBI, we are of the view that the direction issued by the RBI which are based on foundation of default within the meaning of Section 3(12) are also relevant material while determining the question of default by the Corporate Debtor in proceeding under Section 7. In this context, we may refer to the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules 2016. Rule 4(1) provides as follows:- "4. Application by financial creditor.-(1) A financial creditor, either by ....
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....nancial year 2014-15 due to various reasons beyond the control of management and there has been pressure on liquidity which resulted in delay in meeting the obligation towards lenders and others and with a view to overcome the liquidity problem, a joint lender forum was constituted on 18.12.2014 as per the RBI Circular dated 26.02.2014. A Draft Comprehensive Re-organisation and Re- structuring Plan (CRRP) was approved by the JLF which was subject to final approval by the Independent Evaluation Committee (IEC) which was appointed by the RBI. The Appellant's submission is that the IEC approved the draft CRRP which recommendations were considered and finally approved by the JLF in their meeting held on 22.06.2017. In the Appeal, a broad feature of finally approved CRRP has been captured. It is useful to extract paragraphs 13 and 14 of the Appeal:- "13. It is submitted that the finally approved CRRP broadly envisaged bifurcation of the entire debt of the Corporate Debtor into 2 parts - "sustainable debt" and "other debt". While "sustainable debt" is to remain the liability of the Corporate Debtor, the "other debt" had been addressed through sale/transfer of assets of the Corpo....
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....ores placed in this Bucket, the debt aggregating Rs. 2543.55 Crores stands settled through direct Debt Assets Swap. For the remaining debt of Rs.11,833.55 Crores (including Interest), a Scheme of Arrangement has been framed in consultation and with the approval of banks/Fls. Under this Scheme, the above debts are to be transferred with equivalent security to an SPV for which the Scheme of Arrangement has also been dismissed by the Ld. Adjudicating Authority for which the Appellant is in the process of filing requisite Appeal as per law. The Scheme was effective from 01.07.2017 and upon sanction of the Scheme, the entire loan and the land parcels of equivalent value will stand transferred to the SPV." 37. The Corporate Debtor has also filed reply to Section 7 application before the Adjudicating Authority in which reply also the Corporate Debtor took the same stand in paragraph 28 of the reply filed before the Adjudicating Authority. In paragraphs 28 and 29, following was pleaded:- "28. The finally approved CRRP broadly envisages bifurcation of the entire debt of the Corporate Debtor into 2 parts - "sustainable debt" and "other debt". While "sustainable debt" is to remain....
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.... as stipulated in the MRA have also been executed. A copy of the Master Restructuring Agreement dated 31.10.2017 is annexed hereto marked as ANNEXURE -16. For sake of convenience, the Corporate Debtor is annexing a summarized Chart showing the details of restructured debt of ICICI Bank Limited under different categories, security provided, revised rate of interest, repayment schedule, payments made towards principal and interest becoming due etc., which is marked as ANNEXURE - 17. From the perusal of the MRA and the summarized Chart it can be seen that the restructured debt is repayable in quarterly instalments commencing from 31.03.2018 only. This Chart further shows that the repayments of principal amount of loans and interest becoming due and payable have been paid and there is nothing which is in arrears. Hence, the question of default in respect of this part of the loan also does not arise. (iii) Implementation of Bucket 2b: Out of the debt of Rs.13,590 Crores placed in this Bucket, the debt aggregating Rs. 2543.55 Crores stands settled through direct Debt Assets Swap. For the remaining debt of Rs.11,833.55 Crores (including Interest), a Sch....
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....ause 1.1.94 defines 'Real Estate Debt' which clause is as follows:- "1.1.94. "Real Estate Debt" means the amounts of an aggregate amount of approximately Rs. 14,000,00,00,000/- (Rupees Fourteen Thousand Crore only) forming part of the Existing Loans, and which does not and shall not fall within the ambit of this Agreement." 40. Now we need to notice as to what were the facilities which were covered by the MRA. Schedule II of the MRA referred to the facilities. Schedule II of the MRA contained 'particulars of lenders and existing financial assistance'. The ICICI Bank is mentioned at Serial No.13 of the Schedule II. Serial No.13 is listed only two facilities of RTL 8.00 Cr. and RTL 15.00 Billion which is as follows:- Sr.No. Name of the Lender s Amount of the loan / financial assistance (in Rupees crore) Restructured Amount under this Agreement (In Rupees crore) Loan No. Facility Agreement / IM Date Particulars of Existing Financing Documents Particulars of Existing Security Documents Particular s of movable and immovable properties 13. ICICI Bank Limited (i) RTL 8.00 billion (ii) RTL 15.00 billion (i) J0051610 01 (ii) 0000008 57 (....
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....pee term loan to the tune of INR 150,00,00,000 (Rupees One Hundred and Fifty Crore Only) ("Facility 6") to Jaypee Sports International Limited ("JSIL"), which was subsequently amalgamated into the Corporate Debtor pursuant to the Order of the Hon'ble High Court of Judicature at Allahabad dated September 14, 2015 approving the Scheme of Amalgamation between the Corporate Debtor and JSIL and their respective shareholders and creditors ("JSIL Scheme of Arrangement"). Facility 6 was granted under the Rupee Term Loan Facility Agreement dated June 30, 2012 read with the General Conditions dated June 30, 2012 (collectively "Facility Agreement 6"). Pursuant to the aforesaid Order sanctioning the JSIL Scheme of Arrangement, the debts of JSIL were transferred to the Corporate Debtor. The copy of the Order of Hon'ble High Court of Judicature at Allahabad dated September 14, 2015 is annexed hereto and marked as Annexure- 3. (Facility 1, Facility 2, Facility 3, Facility 4, Facility 5 and Facility 6 are collectively, referred to as the "Facilities".) (Facility Agreement 1, Facility Agreement 2, Facility Agreement 3, Facility Agreement 4, Facility Agreement 5 and Facility Agreement 6 are ....
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.... Sl. No Principal overdue Interest Overdue 1 Rupee Term Loan of Rs. 400 Crores Loan account number: J005161002 363,946,960.23 148,739,147.0 0 15-05- 2016 83 9 2 Rupee Term Loan of Rs. 500 Crores Loan number: account J005163001 462,447,559.32 282,771,778.9 0 30-04- 2016 85 4 3 Rupee Term Loan of Rs. 1200 Crores Loan account number: J005165001 1,572,964,731.24 1,616,684,830.48 647,679,560.0 2 30-04- 2016 85 4 4 Rupee Term Loan of Rs. 1200 Crores (under corrective action plan) Loan account number: 0000002297 857,142,856.00 3,554,092,369.0 0 592,831,778.0 0 30-04- 2016 85 4 5 Rupee Term Loan of Rs. 1300 Crores Loan account number: J005164001 1,627,692,567.8 1 863,958,686.2 3 30-04- 2016 85 4 6 Rupee Term Loan of Rs. 150 Crores Loan account number: 0000003165* 41,436,058.00 58,637,920.83 30-04- 2016 85 4 *loan account number before amalgamation of JSIL in JAL was J117202001 Only amount defaulted till August 31, 2018 is presented in the above table." 44. Now when we look into th....
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....NEXURE- 17. From this chart it is evident that the restructured debt is repayable in quarterly instalments commencing from 31.03.2018 only. This chart further show that the repayments of principal amount of loans and interest becoming due and payable have been paid and there is nothing which is in arrears. Hence, the question of default in respect of this part of the loan also does not arise. (vii) Bucket 2b debt is to be transferred with equivalent security to an SPV for which the Scheme of Arrangement is pending for final sanction before this Hon'ble Tribunal. The Scheme is effective from 01.07.2017 and upon sanction of the Scheme the entire loan and the land parcels of equivalent value will stand transferred to the SPV. As per terms of the sanction letter dated 19.05.2017, interest on this part of the debt has ceased with effect from 01.10.2016 and no part of the debt is repayable as the entire amount is to be transferred to SPV in terms of the approved Scheme. Hence, in respect of this part of the loan also there is no question of any default." 46. The Adjudicating Authority in the impugned order has noticed the above position and in paragraph 15 of the order ha....
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....levant for the facilities for which Section 7 application was filed by the Financial Creditor. We, thus, answer Question Nos. (II) and (III) in following manner:- (II) Under the Restructuring Plan approved in JLF meeting held on 22.06.2017 for debt of Rs.11833.55 Crore (including interest) a scheme of arrangement was framed to transfer the above debt along with land parcel of equivalent value to an SPV, namely Jaypee Infrastructure Development Ltd., which debt was referable to Bucket 2B, and the Section 7 application filed by the ICICI Bank related to debt of Bucket 2B only. (III) Master Restructuring Agreement entered on 31.10.2017 between JAL and lenders did not cover the facilities, default of which was claimed by the ICICI Bank in application under Section 7 filed against the Corporate Debtor on 06.09.2018. QUESTION NOS. (IV) & (V) 48. As noticed above, for debt of Rs.11833.55 Crore (including interest), a scheme of arrangement was prepared to transfer the debt to SPV w.e.f. 01.07.2017. Scheme of arrangement was approved by the lenders and 1st motion petition was approved by the NCLT on 08.12.2017 and Second motion petition was also filed on 23.01.2018. ....
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....lause." 51. The Scheme petition also came to be rejected by the Adjudicating Authority by the order of the same date dated 03.06.2024 which is under challenge in this Tribunal as noted above. 52. The argument of Corporate Debtor on the strength of scheme of arrangement was considered and not accepted. In paragraph 82 of the order, following was observed:- "82. Another plea of the Corporate Debtor is that default on repayment of debt that occurred earlier in 2014-15, has ceased to exist after CRRP under DRP has been approved and an Scheme of Arrangement for Bucket 2B loan has been finalised. This Scheme has been made for the resolution of the debt in Bucket 2B keeping in view the direction of the RBI in its letter dated 22.08.2017, as per which the JLF including ICICI as a lead Bank was required to finalise a resolution plan for JAL and it has also been provided that in the event that a viable resolution plan is not finalised and implemented before 13.12.2017, insolvency proceedings under the provisions of the IBC may be initiated before 31.12.2017. There is no dispute that the Scheme for the resolution of the Bucket 2B loan could not be implemented till 13.12.2017 as....
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....ear that the IBC is a special statute dealing with revival of companies that are in the red, winding up only being resorted to in case all attempts of revival fail. Vis-à-vis the Companies Act, which is a general statute dealing with companies, including companies that are in the red, the IBC is not only a special statute which must prevail in the event of conflict, but has a non obstante clause contained in Section 238, which makes it even clearer that in case of conflict, the provisions of the IBC will prevail. 25. A conspectus of the aforesaid authorities would show that a petition either under Section 7 or Section 9 IBC is an independent proceeding which is unaffected by winding-up proceedings that may be filed qua the same company. Given the object sought to be achieved by the IBC, it is clear that only where a company in winding up is near corporate death that no transfer of the winding-up proceeding would then take place to NCLT to be tried as a proceeding under the IBC. Short of an irresistible conclusion that corporate death is inevitable, every effort should be made to resuscitate the corporate debtor in the larger public interest, which includes not only ....
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....precedent. The mere fact that the proceeding for approval of scheme of arrangement which was initially approved by the lenders remains pending from 2018 to 2024, there being no default on the part of the Corporate Debtor qua the debt which was owed by it cannot be accepted. As per the scheme of arrangement, the scheme was to come into effect from 01.07.2017. Scheme never came into operation nor the debt which was bifurcated in Bucket 2B came to be transferred to the SPV. The debt continued with the Corporate Debtor and default for the aforesaid debt was clearly made out. 55. Counsel for the Respondent has also placed reliance on the judgment of this Tribunal in Company Appeal (AT) (Insolvency) No.690 of 2023- "State Bank of India vs. Abhijeet Ferrotech Limited" where application under Section 7 filed by the State Bank of India was rejected. Relying on proceedings which were initiated in the DRT by the Bank and pending in the High Court in Appeal filed by the Corporate Debtor before the Calcutta High Court, Adjudicating Authority held that the proceeding under Section 7 is barred in view of the order passed by the DRT Calcutta. The Appeal filed by the SBI challenging the order of....
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.... RECORD OF DEFAULT AS AVAILABLE WITH ANY CREDIT INFORMATION COMPANY The details of records available with the credit information companies are listed below: The status classification reports of the Corporate Debtor maintained by TransUnion CIBIL could not be made available on account of technical issues. The Financial Creditor craves leave to refer to and rely upon such reports, as and when available. Correspondence with Trans Union CIBIL are annexed hereto and marked as Annexure-36 60. Appellant has obtained necessary credit information and filed before the Adjudicating Authority which credit information was obtained and filed which has been noted by the Adjudicating Authority in the impugned order. It is also brought on the record that an order was passed by the NCLT directing for filing the record from the information utility for the year 2020 in the pending petition as well as in the petition to be filed in the NCLT under Section 7 filed. In pursuance of the order passed by the NCLT, NeSL records were also obtained by the Financial Creditor on 08.06.2020 and were filed before the Adjudicating Authority. In paragraph 63 of the judgement, Adjudicating Authority has returned a ....
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....rough Debt Assets Swap and for the balance debt of Rs. 11833.55 scheme of arrangement has been framed..." 86. After considering the entire facts of the case so far discussed and taking into account the decision of the Apex Court in the above mentioned cases, we find that in the present case, default has occurred and ICICI Bank's Section 7 Petition is complete providing all the details of debts and default as required in Part IV of the Application and attaching all the necessary supporting documents including ROD from NeSL along with CIBIL Report and CIRLC Report from RBI portal as required in Part V of the Application and there is no disciplinary proceeding against the proposed IRP. Considering that all the above elements are fulfilled as required under IBC, we find that this Application deserves to be admitted u/s 7 for starting CIRP against the Corporate Debtor." 62. The submission of the Appellant is that since the scheme of arrangement under Section 230-232 of the Companies Act, 2013 was filed with the consent of the lenders which remains pending and was rejected by NCLT only on 03.06.2024, hence, there is no default on the part of the Corporate Debtor and the S....