TaxTMI 
TaxTMI 
2025 (2) TMI 634
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....of manufacturing juices and dairy products and is a subsidiary of USA based multinational company Schreiber Foods Inc.. The Corporate Debtor was operating a mega food park under the aegis of the Mega Food Park Scheme of the Govt. of India, situated at Dabwala, Kalan, Fazilka, Punjab (in short 'Food Park'). 3. The CD invited the manufacturers to set up their units at the food park and the manufacturers are promised basic utilities such as power, steam, water, refrigeration, cold storage etc. Thus, the Appellant executed a lease deed dated 06.11.2015 with the CD which was subsequently registered on 09.03.2016, pursuant to which the CD leased a part of its food park constituting an area measuring 65,000 sq. ft. on a long-term lease basis to the Appellant. The lease deed was effective for a period of 20 years with a lock in period of 10 years expiring on 28.02.2026. 4. The Appellant and the CD also entered into a Utility Services and Common Facilities Agreement (Utility Services Agreement) on 08.02.2016. As per this agreement, the CD was to provide uninterrupted and timely provisions of various utilities including but not limited to warehousing, steam, refrigeration, soft water, ....
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....tand terminated from 31.01.2019. 9. The Small Industries Development Bank of India (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (in short 'Code') against the Corporate Debtor which was admitted on 28.02.2019 and the Respondent was appointed as the RP. 10. The Respondent made the public announcement on From A and in terms of Regulation 6 of the IBBI (Insolvency Resolution Process for Corporate Person) Regulations, 2016 (in short 'Regulations') calling upon creditors of the CD to submit their claims with proof. 11. It is alleged that the Appellant vide email dated 14.03.2019 filed its claim in Form C with the Respondent and also appended the termination notice dated 31.12.2018. 12. It is alleged that the Respondent, vide its email dated 20.03.2019, asked for some clarification from the Appellant. It is further alleged that on 04.04.2019 the Appellant replied to the email dated 20.03.2019 sent by the Respondent and provided clarification as sought but did not receive any reply though the Appellant sent the reminders as well. In the meantime, it is alleged that the Respondent without admitting the claim of the Appella....
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....able to be set aside. On the other hand, the learned counsel appearing for the resolution professional stated that the said letter dated 31.12.2018 produced today was never placed before the resolution professional and if the same is produced, the resolution professional will take appropriate decision thereon. In view of the above referred submissions of both the learned counsels, we dispose of this CA granting opportunity to the applicant to submit any fresh documents including letter dated 31.12.2018 within two weeks from today and on receipt of the same the resolution professional shall consider the same in accordance with the law and Regulations issued thereunder and shall pass an appropriate order within two weeks thereafter. Accordingly, CA No.466/2019 is disposed of." 14. It is alleged that after the aforesaid order dated 04.09.2019, the Appellant again supplied a copy of the termination notice of the UOMA but in response thereto the Respondent conveyed to the Appellant on 23.09.2019 that the Appellant is a replated party. The Appellant therefore filed I.A No. 59 of 2021 on 05.01.2021 again challenging the action of the Respondent which was contested by the Respo....
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....e agreement was amended reducing the period from three months to one month. It is alleged that letter of termination was not signed by the authorised person because UOMA was executed on 08.12.2017 through the Managing Director of the CD pursuant to Board Resolution dated 06.12.2017 and on behalf of the Appellant by Mr. Amitabha Ray and Mr. Dimitri Humbert whereas the purported notice of termination was signed by a different person Mr. Leon Verdes, Chief Financial Officer of the Appellant Company who was not a signatory to the agreement and did not have power to terminate the said agreement. It is also alleged that representative of the Appellant interacted with the respondent several times on various issues but never informed the respondent at any time about the alleged termination of the said agreement. It is alleged that the letter of termination is a manufactured document on the basis of which it cannot presumed that UOMA was terminated. It is also alleged that the decision of the Respondent dated 23.09.2019 was not challenged by the Appellant for a long time but after delay of about 15 months the Appellant filed I.A No. 59 of 2021 on 05.01.2021. 19. The Tribunal in para 12 o....
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.... order only mentions that the Appellant is the related party of the CD based on the terms and conditions of the UOMA but it failed to refer to any provision of the Code under which an investment in or profit sharing with the CD qualifies the Appellant as a related party. 22. It is argued that UOMA already stood terminated before the commencement of the CIRP because the said notice was given on 31.12.2018 terminating the UOMA w.e.f. 31.01.2019 whereas the CIRP was initiated on 28.02.2019. It is further submitted that the Tribunal has committed an error in holding that the termination of the said agreement before the CIRP will not make any material change to the status of the Appellant who continues to be a related party of the CD even after the initiation of CIRP also. Counsel for the Appellant has further submitted that no provision of the agreement creates a joint venture or partnership between the parties or makes a party the agent of the other for any purpose unless otherwise agreed. It is further submitted that the Tribunal has failed to consider the fact as to why UOMA agreement was entered into between the parties because it was only to ensure timely and uninterrupted supp....
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....s for manner of investment in utility assets by the parties. It is submitted that appropriation of surplus income generated from the Utility assets (profit sharing) is an enough indicator that the Appellant was a related party of the CD. Lastly, he has relied upon a decision of the Hon'ble Supreme Court in the case of Phoenix ARC Pvt. Ltd. Vs. Spade Financial Services Limited & Ors. Civil Appeal No. 2842 of 2020 which has also been relied upon by the Tribunal in the impugned order. 25. We have heard Counsel for the parties and perused the record with their able assistance. 26. The relationship between the parties commenced with the execution of the lease deed dated 06.11.2015 followed by Utility Services and common facilities agreement dated 08.02.2016. The Appellant also execute UOMA dated 08.12.2017. The relevant portion of the said agreement has been reproduced by the Tribunal in the impugned order which is also relevant to be reproduced again in this order for a quick glance:- "II. Purpose: The Parties concur that the purpose of this Agreement Is to enable smooth and steady transfer of the rights to operate and manage the Utility Assets from IMFPL to SDDPL with e....
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....nately. 80% of the Surplus from Utility operations will accrue to IMFPL and IMFPL would retain the balance Surplus on all illy billings after deducting costs Incurred by SDDPL based on the cod! module outlined in Annexure "D" and as amended by the steering committee from time to time. If total monthly Surplus exceeds 6,000,000 (Rupees Sixty Lace) SDDPL will retain 10%, of total surplus towards repayment of Its Investment In the Utility Operation. All Utility charges shall be subject to applicable taxes. VIII. Project Steering Committee: d. All decisions of the Committee shall be taken to the extent possible by unanimity falling which the matter shall be decided by a simple majority. The Committees shall meet as often as required but at least once every month at the registered office of either Party or such other venue as decided mutually by the Pales. Where personal attendance Is not possible. Members can participate by tele-conference. Promptly after each meeting of the Committee. the authorized member shall prepare and circulate the minutes of such meetings and after. approval, the approved minutes shall be signed by the membe....
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....rations & management of the Utility Asset after mutual discussion. This option shall be exercised jointly by the Parties with the condition that the supply of Uninterrupted Utilities would continue without any Impediment. The notice period and Transition arrangements would also be agreed jointly by both parties in such a situation. e) In case IMFPL wants to sell its Utility Assets. the first right of refusal shall be given to SDDPL. SDDPL shall have (ho right to decide the same within 60 days from the date of notice. The sale consideration for the Utility Assets shall be at the fair market value or offer price. It is expressly agreed by the Parties that in the event of a sale of the Utility Asset by IMFPL, SDDPL 's right under (his Agreement and its right to receive uninterrupted Utilities shall not be affected in any manner; and that the third party shall also be obligated to provide uninterrupted utilities and assume IMFPL 's roles and duties under this Agreement. f) IMFPL would have the right to exit the arrangement if there is a significant underachievement of operating and financial KPIs (as outlined in Annexure "D' for more than 6 months at any p....
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....p, corporation or other corporate entity; or (b) make any use whatsoever of any Confidential Information of the other Party for its own purpose or for any other purpose other than the generation, provision, and/ or consumption of the utilise hereunder; and shall during the subsistence of this Agreement also use their best endeavors to prevent any other Person from doing so. c. All documents furnished by disclosing Party to the other receiving Party pursuant to this Agreement which Is specifically marked as confidential or otherwise shall be confidential and form part of the Confidential Information of the disclosing Party and to be subject to the confidentiality obligations as contained herein. unless they are generally known to the public, known to the resolving Party prior to such disclosure or have been or are lawfully disclosed by a third party to the receiving Party whom the receiving Party has no reason to believe that the third party has breached any legal obligations to any Person. Such documents shall be kept carefully and with the same degree of care as receiving Party would have to protect its own confidential Information of similar nature and shall be returned ....
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....sh Sharma, Company Secretary, Schreiber Dynamix Dairies Private Limited, 215, Atrium Building, C Wing. Unit No.1018, 10 Floor, Andheri Kurla Road, Andheri East, Mumbai-400093 SUBJECT: YOUR LETTER DATED 11.09.2019 REGARDING ALLEGED OF UTILITY OPERATION AND MANAGEMENT AGREEMENT DATED 06.12.2017 W.E.F. 31.01.2019 Dear Sir, During the resumed hearing of CA No. 466 of 2019 in CP(IB) 174/chd/chd/2018 on 04.09.2019 before Hon'ble National Company Law Tribunal, Chandigarh, suddenly and unexpectedly your lawyer produced a photocopy of letter dated 31.12.2018 purported to be a letter terminating the Utility Operation and Management Agreement dated 06.12.2017 w.e.f. 31.01.2019. It was pointed out to the Hon'ble NCLT that this letter was not a part of the pleadings. Accordingly, the CA was disposed of with directions as contained in the order pursuant to which you have sent a photocopy of the said purported letter to the undersigned. As per the directions of Hon'ble NCLT, I am directed to pass appropriate order. On perusal of the photocopy of letter provided by you, the undersigned has passed the following order: That the photoc....
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.... in record as has been placed before the Resolution Professional now. 6. That the NCLT, Chandigarh in its order dated 28.02.2019 in para 27 has already recorded that the borrower has been classified as "suspected fraud" based on the findings of the forensic audit. The Resolution Professional has thus the apprehension that the promoters of Corporate Debtor and SDDPL are colluding and they seem to have manufactured this letter as in the entire trail of events leading to declaring SDDPL as related party, they never talked of termination of this agreement at any time before and the Resolution Professional has the understanding that the agreement was terminated on 31.03.2019. Therefore, as and when they submit the original of the purported letter dated 31.12.2018, the Resolution Professional shall take necessary steps to check the authenticity of documents in addition to satisfying him with respect to reasons recorded herein this order. Therefore, the Resolution Professional is of the considered opinion that the Schreiber Dynamix Dairies Private Limited continues to be related party of the Corporate Debtor, International Mega Food Park Limited in terms of section 5(24)....