TaxTMI 
TaxTMI 
2025 (8) TMI 1150
X X X X Extracts X X X X
X X X X Extracts X X X X
....en filed. 2. Brief facts of the case necessary to be noticed for deciding the appeal are : i. The consortium of Bank lead by SBI executed a Common Loan Agreement with the corporate debtor on 30.08.2011 for extending financial facility of Rs.900 crore for part financing the project namely Designs Engineering Construction Operation and Maintenance of four laning of Panvel Indapur Section of NH-17 from Panvel to Indapur, Maharashtra. ii. The corporate debtor committed default in repayment of the loan, account was declared NPA on 01.11.2016. The project Concession Agreement in favour of the corporate debtor was executed by National Highways Authority of India (NHAI) on 30.08.2011. iii. NHAI issued a circular for grant of One-Time Fund Infusion Scheme (OTFIS) for revival and completion of project of NHAI. The corporate debtor approached the NHAI for financing under the said OTFIS Scheme. A Tripartite Agreement was entered between NHAI, the corporate debtor and the lenders on 09.11.2016. NHAI under the scheme provided finance of Rs.540 crore to the corporate debtor. iv. The Tripartite Agreement contained stipulation for payment of NHAI facilities as....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on to file Section 7 application which was premised on Common Loan Agreement. Under the Novated Agreement dated 09.11.2016, the repayment of facilities extended by NHAI has to take place first. It is submitted that very basis of Section 7 has been knocked out due to novation of the Common Loan Agreement. The learned counsel for the Appellant has referred to various clauses of Agreement dated 09.11.2016 to support his submission as well as financial arrangement entered under the Agreement dated 09.11.2016. Secondly, it is submitted that the SBI has no authority to initiate Section 7 proceeding, there being no consent of all lenders of the consortium for initiation of Section 7 proceedings. 5. Learned counsel appearing for the SBI refuting the submissions of the counsel for the appellant submits that the Common Loan Agreement dated 30.08.2011 was neither rescinded nor novated by Agreement dated 09.11.2016. The financial facilities extended by the SBI and other lender continues and corporate debtor is obliged for repayment. It is submitted that Tripartite Agreement dated 09.11.2016 only provided manner of repayment of loan both to NHAI and the lenders. Although, the principal amoun....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ubmission which has been pressed by the counsel for the appellant is that on account of Tripartite Agreement dated 09.11.2016 entered between NHAI, the corporate debtor and the lenders the Loan Agreement dated 30.08.2011 stood novated hence no debt of the lenders subsisted after the said novation of the Agreement and the application filed under Section 7 based on Loan Agreement dated 30.08.2011 was without any basis and deserve to be rejected. Tripartite Agreement dated 09.11.2016 was entered with the SBI, NHAI corporate debtor and other two sister companies. The said Agreement has clearly noticed about the loan dated 30.08.2011 taken by concessionaire i.e., the corporate debtor for amount of Rs.900 crore for financing the project in question, which fact is noted in clause C of the Agreement, which is as follows: "(C) The Concessionaire had raised debt from the Senior Lenders under a common loan agreement dated August 30, 2011 executed inter alios amongst the Senior Lenders and the Concessionaire, as amended from time to time (hereinafter referred to as the "Common Loan Agreement") for an aggregate principal amount not exceeding Rs.900,00,00,000.00 (Rupees Nine Hundred Cro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....re clauses of the Tripartite Agreement. The interpretation Clause 1.3(c) clearly contemplated continuance of Financial Agreement with lenders and contemplated for harmonious construction of the Financial Agreements. Paragraph 1.3.1(e) is as follows: "1.3 Interpretation 1.3.1 In this Agreement, unless the context otherwise requires, (e) to the extent possible, the terms and conditions of this Agreement and those of the Concession Agreement, the Escrow Agreement, the Substitution Agreement, and the Financing Agreements shall be construed harmoniously, however in the event of any conflict between the terms and conditions of this Agreement on one hand and the terms and conditions of the Concession Agreement and/or the Escrow Agreement and/or the Substitution Agreement and/or the Financing Agreements on the other hand, the terms and conditions of this Agreement shall apply and be deemed to convey the correct understanding of the Parties and the inconsistent terms of the other documents as aforesaid shall not apply;" 12. The submission of the counsel for the appellant that the Agreement dated 09.11.2016 has novated the Com....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of Debt Service due in an Accounting Year as more particularly provided in the financial model to be agreed between the Authority and the Senior Lenders. It is clarified that the interest payments in relation to the Facility till COD shall be made from this account in accordance with the financial model to he agreed between the Authority and the Senior Lenders and these payments shall be permitted since interest during construction is factored into the amounts of the Facility. Also, it is clarified that after COD, the interest due in relation to the Facility shall be payable monthly from this account in accordance with the financial model to he agreed between the Authority and the Senior Lenders. It is also clarified that the service of principal amount of the Facility under this Clause shall be restricted to only 1% (one percent) of the principal amount till the due repayment and discharge of the outstanding amounts in relation to the NHAI OTFIS Facility; (viii) principal outstanding under the NIHAI OTFIE Facility in accordance with the financial model to be agreed between the Authority and the Senior Lenders. It is clarified that the servicing of the principal amount of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....proposal was given by the corporate debtor to SBI (Annexure A-20 to the appeal), where OTS proposal was given for Rs.250 crore towards full and final settlement. Following part of the letter is useful to extract where following has been stated: "Compromise and One Time Settlement Proposal The Company hereby offers Rs. 250.00 Crores towards full and final settlement of all the outstanding dues of all the banks/ lenders which shall be payable within 180 days from the sanction of Compromise and One Time Settlement Proposal by all the lenders and duly acceptance by the company with the terms and conditions mentioned below. The Terms of Payment of Compromise and One Time Settlement Proposal is as follows : Sr. No. Particulars Proposed Payment (In Crores) Timelines 1. Upfront Payment (5%) (In no lien account) 12.50 Along with the Proposal Compromise and One Time Settlement Proposal 2. Balance (95%) Payment 237.50 Payable in 180 days of sanction of Compromise and One Time Settlement Proposal and duly acceptance by the company. *This amount shall not be adjusted against the current dues in case of non-sanction of compromise ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e by the Borrower hereunder and under the Security Documents to be forthwith due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained herein to the contrary notwithstanding; (ii) exercise any and all rights specified in the Security Documents and other Transaction Documents including without limitation, to accelerate the obligations of the Promoter with intimation to NHAI, to make equity and other contributions and to enforce all of the Security created pursuant to the Security Documents; (iii) exercise such other remedies as permitted or available under Applicable Law;" 17. Learned counsel for the SBI has also referred to the Inter-Creditor Agreement dated 30.08.2011, which has been brought on record in the reply of the SBI in this appeal. Reference has been made to clause 4.3(a), which clearly provides that on event of default, each creditor shall have the right without prejudice to its other rights and to the rights of any other creditor to enforce its claim against the borrower. Clause 4.3(a) is as follows: "4.3 Provi....