TaxTMI 
TaxTMI 
2025 (6) TMI 1426
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....0,00,000/- (Rupees Twenty Six Crores) was lent and advanced by the petitioner to the respondent. The said loan was secured by two deeds of hypothecation, dated August 28, 2020, and February 18, 2021. 4. In terms of the said loan agreement and deeds of hypothecation, the repayment obligations of the respondent under the said loan agreement were secured by a first charge on all investments (present, and future) on pari-passu basis with the existing loan of the petitioner. 5. I.A. G.A. COM 1 of 2025 is an application for vacating and / or setting aside and / or stay of the interim order dated December 19, 2024 passed by this court in AP COM NO. 1049 of 2024. Relevant portion of the order is quoted below:- "The law is well settled. Parallel proceedings filed under the SARFAESI Act and the Arbitration and Conciliation Act 1996 can continue. The factum of extension of loan facility to the respondent is not in dispute. The respondent admits that Rs.26 crores had been lent by the petitioner. The reason why the respondent does not accept the liability to pay back the loan is that a sister concern of the petitioner company had expressed a desire not to take any coercive measure against t....
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....espondent from operating the afore-mentioned bank account without maintaining a minimum balance of Rs.40 crores in it. The respondent is at liberty to pray for vacation, variation and modification of the order." 6. The court was, prima facie, satisfied that the factum of the extension of the loan facility of Rs. 26,00,00,000/- (Rupees Twenty Six Crores) was not in dispute. The reason why the respondent did not accept the liability to pay back the loan was that a sister concern of the petitioner company had expressed a desire not to take any coercive steps against the respondent, but such contention of the respondent was not available from the record. From the communication dated November 16, 2024, the investments over which the petitioner had the first charge was found to be worth Rs. 12.41 crore. The panchnama and the inventory issued by the authorized officer and the communication of the authorized officer disclosed that, possession of such investments could not be taken over. The respondent resisted the authorized officer and did not hand over those documents. The authorized officer complained of non-cooperation. The conduct of the respondent persuaded the court to arrive at a....
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.... protection or interim measure which would appear to the court to be just and proper in the facts and the circumstances of the case should be granted. This court, upon being satisfied with regard to the depletion of the value of the investments which had been charged in favour of the petitioner, had deemed it fit to injunct the respondent from operating the bank account maintained with the ICICI Bank without keeping a continuous balance of an amount of Rs. 40 crores. This was done in order to secure the amount payable to the petitioner, by the respondent. 11. In the course of arguments, the respondent filed a supplementary affidavit. The first supplementary affidavit dated March 18, 2025 was not in proper form and did not disclose material particulars. The court had permitted the respondent to file another supplementary affidavit and the same was filed on May 2, 2025. 12. Objecting to the contents of the supplementary affidavits, Mr. Bachawat submitted that the net value of the securities or investments which were disclosed in the supplementary affidavit had no legal sanctity. There was no clarity as to whether those investments were held by the respondent as their own assets or ....
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....dues from the respondent. Further, no assurance or undertaking had ever been given to the respondent by the petitioner in any proceeding before the NCLT. The petitioner was not a party to the proceedings viz, CP No. 275 (KB) of 2021, SREI Infrastructure Finance Ltd. v. Trinity Alternative Investment Managers Ltd. The specific contention of Mr. Bachawat was that in spite of the order passed under the SARFAESI Act, the respondent had parted with/ disposed of/transferred/redeemed 62,346.08 numbers of units held in the ICICI Prudential Money Market Fund Direct Plan Growth. It was also submitted by Mr. Bachawat that even after the order of injunction was passed, the respondent had depleted and disposed of further investments, particularly investments in infrastructure resurrection funds, strategic opportunity funds, etc. Thus, the respondent acted in violation of the order and such conduct raised a question of bonafide of the respondent. 16. The contention of the respondent that there had been suppression of material facts by the petitioner was also refuted by Mr. Bachawat and it was submitted that in the order dated December 19, 2024, the connection between SIFL and SEFL had been reco....
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....ess transactions between the respondent and third-party investors, who had engaged the respondent to make investment on their behalf. Thus, Mr. Bachawat submitted that, GA No. 1 of 2025 should be dismissed and the injunction should be continued. 18. Mr. Joy Saha, learned Advocate for the respondent, submitted that, SEFL was the 100% wholly-owned subsidiary of SIFL. At the time of grant of such loan on August 28, 2020, Trinity was also a 100% owned subsidiary of SIFL. The purported loan was in effect, money transferred by the 100% shareholders of Trinity in favour of Trinity i.e., SIFL to Trinity. The said amount was in fact an investment by the promoter and 100% shareholder of Trinity in Trinity itself and not a loan. Such investment had been made on August 28, 2020. SIFL sold 49% shareholding in Trinity to Payaash, mush later. Till date, SIFL was the majority shareholder, having 51% of the share holding in Trinity. Proceedings were pending before the NCLT, Kolkata since July 2022 with regard to the management and control of Trinity, between Payaash vs. Trinity and ors, viz, CP NO. 230 of 2022. Certain orders were passed. It was directed that SIFL could continue with the meetings,....
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.... any part of the property from the local limits of the jurisdiction of the court. 22. In the instant case, there has been no incident which would indicate that Trinity was trying to sell any unit or deal with any of its assets. Thus, the interim order should be vacated and the application for injunction should be dismissed. The injunction on the bank account had caused serious hindrance in the business of the respondent and the money belonging to third party investors which were lying in the bank accounts were blocked. 23. Heard the learned advocates for the respective parties. The question is whether the interim order already passed on December 19, 2024 should be vacated or continued and what reliefs were available to the petitioner. The fact that Rs. 26,00,00,000 crores was lent by the petitioner, is an admitted position. The amount was reflected in the books of accounts. The respondent claims to have intended to take out a Rights Issue, which SIFL had objected to. The letter dated April 23, 2024 issued by the respondent is quoted below. " TRINITY Trinity Alternative Investment Managers Limited Dated : 23rd April 2024 To M/s. Srei Equipment Finance Limited Kolkata Reg....
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.....08 lakhs. Although, those disclosures have been stated to be unreliable, in my opinion the petitioner has not been able to establish with proper calculations that such investments which have been disclosed are not worth Rs. 26 crores. A further deliberation and probe by this court would amount to a mini trial. The value of the investments depends on market conditions. The charge on investments was created consciously by the parties. The parties were both commercial entities and well versed in the subject. There is nothing on record to show that the alleged reduction in the value of the assets was attributable to any malafide conduct of the respondent. The significant factor before this court is that SEFL was a 100% fully owned subsidiary of SIFL, on the date of grant of loan, i.e., August 28, 2020. 25. Trinity, was also a 100% fully owned subsidiary of SIFL. Thus, in effect SIFL had lent the money to Trinity which was also owned by SIFL. Thereafter, SIFL sold 49% shareholding in Trinity to Payaash. Till date, SIFL is the majority shareholder, owning 51% of the shares in Trinity. 26. The loan was extended by the petitioner to a wholly owned subsidiary of its parent company, which....
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....After the resolution plan was approved by NCLT on August 11, 2023, the dues payable to the petitioner by the respondent, as per the books of account was Rs. 26,00,00,000, which was communicated by a letter dated August 23, 2024. The possibility that only Rs. 26,00,00,000 was admitted in the resolution plan towards dues of SEFL cannot be ruled out. 28. The relevant portions of the order of the NCLT dated August 11, 2023 with regard to the approval of the resolution plan are quoted below:- "78. Now we proceed to consider the Resolution Plan which has been filed before this Adjudicating Authority through I.A. (IB) No. 428/KB/2023 and I.A. (IB) No. 434/KB/2023 which are applications filed under section 30(6) of the Insolvency and Bankruptcy Code, 2016, after approval of the resolution plan by the consolidated Committee of Creditors ("CoC") of SREI Equipment Finance Limited and SREI Infrastructure Finance Limited. 79. These applications were filed by Mr. Rajneesh Sharma, Administrator of SREI Equipment Finance Limited ("SEFL") and SREI Infrastructure Finance Limited ("SIFL"), by invoking the provisions of section 30(6) of the Insolvency and Bankruptcy Code, 2016 ("the Code" or "IBC....
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....jab National Bank 4. State Bank of India 5. Bank of Baroda 5. Indian Bank 7. Punjab and Sind Bank 8. Central Bank of India 9. UCO Bank 10. Bank of India 11. Indian Overseas Bank 12. Bank of Maharashtra 13. IDBI Bank 14. Lakshmi Vilas Bank 15. Dhan Laxmi Bank 16. Axis Bank 17. South Indian Bank 18. Karur Vysya Bank 19. Karnataka Bank 20. ICICI Bank 21. HDFC Bank 22. SIDBI 23. NABARD 24. IFCI Ltd. 25. Bank of Ceylon 26. People's Bank 27. Standard Chartered Bank 28. Aozora Bank Ltd. 29. ING Bank, a branch of ING-DiBa AG 30. DEG - Deutsche Inventions-und Entwicklungsgesellschaft mbH ("DEG") 31. Sumitomo Mitsui Finance and Leasing Co., Ltd. 32. Finnish Fund for Industrial Cooperation Ltd. (FINNFUND) 33. Belgian Investment Company for Developing Countries SA/NA-BIO 34. Societe de Promotion et de Participation pour la Cooperation Economique S.A ("PROPARCO") 35. Export Import Bank of United States (represented by International Advisors) 36. Global Climate Pa....
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....l authority, guarantors and other stakeholders. We place reliance on the recent judgement of Hon'ble High Court of Rajasthan in the matter of EMC v. State of Rajasthan wherein it has been inter-alia held that : * * * "Law is well-settled that with the finalization of insolvency resolution plan and the approval thereof by the NCLT, all dues of creditors, Corporate, Statutory and others stand extinguished and no demand can be raised for the period prior to the specified date." * * * On the date of approval of resolution plan by the Adjudicating Authority, all such claims, which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan. The Hon'ble Supreme Court also held that all the dues including the statutory dues owed to the Central Govt, any State Govt or any local authority, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues for the period prior to the date on which the Adjudicating Authority grants its approval under section 31 could be continued." 31. Interim protection is....
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....offices, Government or Semi Government of the State or Central Government with regard to the respective reliefs, waivers and concessions. The competent authorities including the Appellate authorities may consider grant such reliefs, waivers and concessions keeping in view the spirit of the Code. * * * * * * 123. Subject to the observations made in this Order, the Resolution Plan dated 18 January 2023 along with an addendum dated 24 January 2023, is hereby APPROVED by this Adjudicating Authority. The Resolution Plan shall form part of this Order and shall be read along with this order for implementation. The Resolution Plan thus approved shall be binding on the Corporate Debtor and other stakeholders involved in terms of section 31 of the Code, so that revival of the Debtor Company shall come into force with immediate effect. * * * 124. The Moratorium imposed under section 14 of the Code shall cease to have effect from the date of this order. 125. The Administrator shall submit copies of the records collected during the commencement of the proceedings to the Insolvency & Bankruptcy Board of India for their record and also return to the Resolution Applicant or New Promote....