TaxTMI 
TaxTMI 
2024 (11) TMI 1515
X X X X Extracts X X X X
X X X X Extracts X X X X
....er dated 08.10.2021 in TP 258 of 2019 in CP (IB) 111/7/NCLT/AHM/2018 with Inv. P. 53 of 2018, Inv. P 54 of 2018 and IA 60 of 2020 passed by the Adjudicating Authority, NCLT, Indore Bench, at Ahmedabad (together referred to as "Impugned Judgment"), whereby two judges of the Adjudicating Authority have admitted the petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as "Code") against Respondent No. 1, 2. The Appellant is Promoter of the Respondent No. 1 i.e., Shree Maheshwar Hydel Power Corporation Ltd. ('SMHPCL') who is the Corporate Debtor and being represented through its IRP, is the Respondent No. 1 herein. The Power Finance Corporation Ltd. ('PFC') is the Respondent No. 2, who is the Financial Creditor of the Respondent No. 1. 3. Heard the Counsel for the Parties and perused the records made available including the cited judgements. Submissions of the Appellant 4. It is the case of the Appellant that he is the Promoter of Respondent No. 1 holding 29,17,20,330 shares of face value of Rs. 10/- each which constituted 58.43% of the total paid up capital of the Respondent No. 1. The Appellant gave the background of the Prom....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ya Pradhesh (GoMP) sanctioned (a financial guarantee of Rs. 400 Crores) to enable the Respondent No. 1 to raise the public bonds Optionally Fully Convertible Debentures (OFCD). The Lenders were requested to provide the balance funds required to complete the project and in this background, the Respondent No. 2, as lead lender along with other lenders came forward to finance Respondent No. 1. 10. The Appellant assailed the conduct of the Respondent No. 2 who tried to fish in the troubled water and took advantage of precarious financial condition of the project by putting unnecessary pre-condition for further funding for the project forcing the Appellant and the Respondent No. 1 to arbitrary terms and conditions which required changes in Article of Association ('AoA') to make it subordinate to dictum of the lenders especially the Respondent No. 2. 11. The Appellant cited few such pre conditions which included condition like consultation with the Respondent No. 2 as condition precedent in appointment of the Chairman, the Managing Director and the Director Finance ('DF') of Respondent No. 1 and further stipulated that Lender's Nominee Directors will be involved in the management o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... GoMP constituted a High Level Committee ('HLC') for the purpose of finding the way forward to complete the project, comprising of representatives of GoMP, Ministry of Power ('MoP'), Government of India ('GoI') Promoters, Respondent No. 2 and Lenders and the committee gave its Report on 02.05.2015 giving three scenarios of further course of action. "(I) By 02.08.2015 the existing promoter will arrange Rs. 600 crores as well as debt of Rs. 1100 Crores at concessional rates to achieve the stipulated electricity tariff of Rs. 5.32. II. NHPC/NHDC will take over the company and Respondent No. 2 will be amenable to infusing equity or additional debt as well as lowering interest rate for existing debt with support from lenders so that the tariff is at Rs. 5.32 per unit. III. Cancellation of PPA- M.P. Power Management Company limited cancels the existing Power Purchase Agreement." 16. The Appellant submitted that the Scenario-I could not be achieved due to non co-operation of the Respondent No. 2 and subsequently, the Respondent No. 2 unilaterally declared Option I as "failed" to pursue its own interpretation of Option 2 by forcibly taking 51% of the shares of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erted shareholding of 23.32% of Respondent No. 1. 21. The Appellant stated that based on his complaint, the RoC Gwalior on 21.10.2017, delivered the report under Section 206 of the Companies Act, 2013 whereby it was held that the lenders were responsible for violation of provisions of Companies Act, 2013 and were responsible for unsatisfactory state of affairs of Respondent No. 1, since, the management control of the Respondent No. 1 was taken over by the Lenders especially the Respondent No. 2 w.e.f. 25.11.2005. The Appellant criticized the Respondent No. 2, who after getting such adverse remarks from RoC, filed a frivolous application under Section 241 & 242 of the Companies Act, 2013 against the Promoters which has been rejected at various legal fora including by the Hon'ble Supreme Court of India. The Appellant stated that the Tribunal gave its order on 15.06.2017 in Company Petition No. 175/ 241-242/ NCLT/ AHM/ 2017; this Appellate Tribunal gave its order in Company Appeal (AT) No. 237 of 2017 on 12.03.2018 and the Hon'ble Supreme Court of India passed the judgment on 18.05.2018 in Civil Appeal No. 5028 of 2018, holding the Respondent No. 2 as responsible for making mess of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....P and GOI and accordingly the GoMP constituted a task force on 18.04.2019 to find a way out for implementation of project. The Appellant stated that the Promoter vide Letters dated 03.08.2018 and 19.10.2018 issued to Respondent No. 2, presented a concrete offer of funding from Cantor Fitzgerald Europe on 16.10.2018 and one of pre-conditions for such investment was that "All litigation to be put on hold" which was not agreed by the Respondent No. 2. The Appellant submitted that vide e-mail dated 05.11.2018, the Promoter/Appellant also submitted a draft MoU to Respondent No. 2, however, Respondent No. 2 re-drafted the terms and conditions of the MoU only in July 2019. 25. It is the case of the Appellant that despite no debt being due from the Respondent No. 1, in the interest of the Project, the MoU was executed between Respondent No. 2, the Respondent No. 1 and the Promoters (Appellant) on 22.07.2019. The Appellant emphasized that the term of the MoU was to subsist till 12 months and only by this time if the MoU was not implemented, only then MoU could have been terminated and the period between 22.07.2019 till 22.07.2020 was to be treated as a calm period to ensure that viabilit....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t under the MoU i.e. Mr. ML Gupta but due to repeated breach of the MoU by Respondent No. 2, Mr. ML Gupta resigned on 28.02.2020. 29. The Appellant submitted that Section 7 application of the Respondent No. 2 was listed before the Hon'ble Bench comprising of Dr. Deepti Mukesh and Virendra Kumar Gupta wherein after hearing parties, orders were reserved. On 08.10.2021, the Bench pronounced a split verdict since they could not arrive at a consensus. Thereafter, for the purpose of reference under Section 419(5) of Companies Act, 2013 draft issues were framed by the Judicial member. 30. The Appellant stated that issues framed for reference by the Judicial Member and technical member were thereafter assigned to Special Benches of NCLT, Kolkata comprising of a single judicial member by the President, NCLT, New Delhi vide order dated 21.02.2022. however, the same could not be drafted and pronounced as the said Special member demitted office. The matter was thereafter referred to the Special Bench comprising of J. Rohit Kapoor, Member (judicial) who heard the referred matter on 26.07.2022, 28.07.2022, 29.07.2022 and thereafter, reserved the order on 01.08.2022 and the impugned order w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tum of financial debt is found to be due and payable, the Section 7 application is maintainable is fallacious since there is no "financial debt" and consequently no default has arisen on account of Respondent No. 1, since, the Respondent No. 2 himself is responsible for mess of the Respondent No. 1 and for non-payment of interest amounts under the Additional Loan Agreement which was not disbursed by Respondent No. 2 and therefore, there is no default by the Respondent No. 1 of any debt due and payable. The Appellant submitted that there is no mention regarding date of occurrence of default despite the clear instructions for providing these details as per the Form 1 and date of default has not been mentioned in the Loan Recall Notice either. 35. The Appellant emphasized that an act of engineering by the Respondent No. 2 a purported default by not disbursing the interest component sanctioned by way of the Notice of Drawal, clearly tantamount to malafide initiation of the CIRP in violation of Section 65 of the Code. 36. The Appellant submitted that various loan agreements have been entered into by Respondent No. 2 while in complete control of the Respondent No. 1. This Appellate....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tood time barred. 39. The Appellant submitted that the Minutes of Board meeting and the Balance Sheets of the Respondent No. 1 were prepared by KMPs appointed by Respondent No. 2 as the Lead lender and approved by the Board which was completely under the control of Respondent No. 2 and other Lenders since 2005. Therefore, any such alleged acknowledgement in any Balance Sheet BoD minutes cannot be relied upon. The Appellant reiterated that initiation of CIRP is for ulterior purposes and Section 65 of the Code is applicable as CIRP is with malicious intent for any purpose other than for resolution of the Corporate Debtor. 40. Concluding his remarks, the Appellant strongly urged this Appellate tribunal to dismiss the Impugned Order to protect the Respondent No. 1 (Corporate Debtor) and the Promoters of the Respondent No. 1. Submissions of Respondent No. 2 41. Per contra, the Respondent No. 2 denied all the averments made by the Appellant treating these as misleading and malicious. 42. The Respondent No. 2 gave his version of series of events since 1995 to present day and tried to present a complete picture to demonstrate complete failure of the Appellant as Promoter, ag....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the Project which itself reveals lack of financial and managerial capacity of the Appellant. The Respondent No. 2 submitted that due to lack of commitment from Appellant and the Respondent No. 1, the loan accounts of the Respondent No. 1 were classified as Non-Performing Assets ('NPA') on 31.03.2012. 46. The Respondent No. 2 submitted that there are several acknowledgments of debt and default on part of the Respondent No. 1 for instance while the HLC was preparing its report, on 17.11.2014, Debt was acknowledged in the Annual Report/Balance Sheet of the Corporate Debtor for the FY 2013-14 and the said balance sheet was signed by Sh. Mukul Kasliwal (Promoter) as one of Directors of the Respondent No. 1. The Respondent No. 1 again acknowledged its liability/debt in the meeting of the BoD of the Respondent No. 1 held on 29.09.2015, which was attended by the Promoter Sh. Mukul Kasliwal. 47. The Respondent No. 2 gave the background and the events compelling lenders and the Respondent No. 2 to acquire equity due to operation of law subsequent to invocation of pledged shares and partial conversion of debt into shares. The Respondent No. 2 submitted that on 22.03.2016, in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Project and to run the day-to-day affairs of the Respondent No. 1. The Respondent No. 2 stated that he was compelled to file a Petition under Section 241, 242 & 244 of the Companies Act, 2013 bearing CP. No. 15/1241- 242/NCLT/AHM of 2017 before the NCLT seeking appropriate reliefs inter-alia, for handing over of records of the Respondent No. 1 from the erstwhile management, removal of 'Management Disputed' status of the Corporate Debtor by the RoC. 50. The Respondent No. 2 denied allegation of the Appellant that additional loan agreement was forced upon them and pointed out that the aforesaid Additional Loan Agreement was supported by the Promoter Sh. Mukul Kasliwal in the board meeting dated 02.03.2017, as recorded in the minutes of meeting that "Shri Mukul Kasliwal specifically requested the Board to record that, the sanctioning of additional loan to complete the project is a welcome step apart from all the issues and concerns going on between the Lenders and Promoters and Lenders will receive support from the promoters as well in view to complete the project." The Respondent No. 2 emphasized that the Appellant is estopped from questioning the said Loan Agreement & a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... that at the time of disbursal of Rs. 384 Crores, the amount of Rs. 10 Crores had not become due for payment by Respondent No. 1, and therefore, it was not disbursed along with Rs. 384 Crores and further submitted that any allegations of default having been 'created' or engineered' is incorrect and baseless as the Respondent No. 1 received the debt and defaulted in payment of interest on the amounts already disbursed. 54. The Respondent No. 2 submitted that the Respondent No. 1 could not comply with the terms, conditions and covenants of the Additional Loan Agreement, based on which Respondent No. 2 had sanctioned the Additional Debt, inter alia, including conditions provided under Article 2.3 (a) read with Article IV of the Additional Loan Agreement, occurrence of events adversely impacting the ownership of Government companies/ lenders (including Respondent No. 2) etc., provided under Article 4.1 (ii) (a) and accordingly Respondent No. 2 could not have, and did not disburse any further money out of the Additional Facility to the Corporate Debtor. The Respondent No. 2 stated that the additional loan was sanctioned as part of the revival measures in accordance to the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iation of CIRP against the Respondent No. 1. 59. The Appellant elaborated that on 12.03.2018. this Appellate Tribunal dismissed the Appeal filed by Respondent No. 2 against the NCLT's Order dated 15.06.2017 and while dismissing the Appeal, inter alia, directed that the Government of GoMP and GoI, need to urgently consider the way forward in public interest to get the Project completed. The Respondent No. 2 submitted that this Appellate Tribunal in the Order dated 12.03.2018 further held that the Promoter/ Appellant had a responsibility and a duty to manage the Respondent No. 1 as per the Companies Act in which they have failed. The Respondent No. 2 empathetically submitted that this Appellate Tribunal held categorically that "the Promoter do not appear to be enthusiastic to get status quo ante restored in the Articles not inspire confidence that if we strike down these amendments made on 25.11.2005 (and subsequently) they can take charge and complete the project which attracts public interest. Promoters have not brought to our attention that at any time they opposed, or stood up to the gradual takeover." 60. The Respondent No. 2 clarified that in the judgement dated 12.03.201....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is Agreement shall be subject to the satisfaction of each condition precedent set forth in Article IV hereof and the condition precedent under Article 4.1(ii)(a) provides that "validity of the Additional Facility as well as its terms and conditions shall be subject to Government Companies/Lenders holding majority equity in the Project and based on which Respondent No. 2 had sanctioned the Additional Loan, could not be complied with, on account of the Orders dated 15.06.2017 and 12.03.2018 passed by the NCLT and by this Appellate Tribunal. Accordingly, in view of the terms of sanction as aforesaid, Respondent No. 2 could not have disbursed any further amount under the Additional Loan Agreement to the Respondent No. 1. 63. The Respondent No. 2 emphasized that the Additional Loan Agreement was executed much prior to this Appellate Tribunal's Order dated 12.03.2018, and prior to NCLT Order's dated 15.06.2017 in the proceeding arising from the Petition under Section 241-242 of the Companies Act, 2013. The Respondent No. 2 stated that since, the acquisition of shareholding of Respondent No. 1 by the Lenders had been declared invalid vide the said Orders, therefore, further disbursal o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the Appellant was appointed as CMD of Respondent No. 1. The Respondent No. 2 stated that on 06.08.2019, invoked shares were returned to the Appellant and the same is recorded in the letter dated 05.03.2020 issued by the Sh. M.L. Gupta the MD appointed by the Appellant. Further, conversion of debt into equity done by PFC, was also reversed & accepted by the Board of the Respondent No. 1. 67. The Respondent No. 2 submitted that the MoU stipulated that the Appellant shall bring in an upfront amount of Rs. 10 crore within three weeks from appointment of CMD of this choice i.e. by 27.08.2019 (the appointment having been made on 06.08.2019) and this was first and foremost obligation of the Appellant, independent of any other action by any of the parties. The Respondent No. 2 stated that admittedly, only Rs. 1 Crore, that too in tranches, was brought by the Appellant and the balance amount of Rs. 9 Crore was never brought, thus the first default under the MoU was committed by the Appellant on 27.08.2019 itself. The Respondent No. 2 stated that Clause 11 of the MoU records that "While submitting the Settlement Plan, the Settlement Plan would make provision with respect to the various L....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in the MoU, which it could have, as his Section 7 application was still pending and had not been admitted. 71. The Respondent No. 2 submitted that there was no dispute on aspect of limitation between the Member Technical and the Member Judicial of the NCLT, which is evident from the Orders dated 08.10.2021 passed by the said two Members and the questions framed for reference to the Third Member. Whilst the Judicial Member has held that the Section 7 Petition is not barred by limitation, the Technical Member has not given any finding on limitation and no question has been framed by either of the Members on limitation, therefore, the issue of limitation attained finality on 08.10.2021 and thus, the present Appeal insofar as it challenges the said Order on limitation is itself barred by limitation. The Respondent No. 2 has taken this specific objection in the Reply to Appeal, to which there is no rebuttal/rejoinder. The Respondent No. 2 stated that without prejudice to the Application under Section 7 is not barred by limitation, as the disbursement of debt of Rs. 384.59 crore under the Additional Loan Agreement dated 27.04.2017 took place in the year 2017 and the Application u/s Se....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mohan Bajaj v. Shivam Fragrances Pvt. Ltd. & Ors., [(2018) 210 Comp Cas 84] in support of this pleadings. 75. The Respondent No. 2 stated that this Appellate Tribunal held that "the Promoter do not appear to be enthusiastic to get status quo ante restored in the Articles not inspire confidence that if we strike down these amendments made on 25.11.2005 (and subsequently) they can take charge and complete the project which attracts public interest.............." and further, in Para 51 of the Order dated 12.03.2018, this Appellate Tribunal has observed that "The Project has been delayed endlessly." The Respondent No. 2 submitted that in terms of the aforesaid Order of this Appellate Tribunal, the Secretary (Power), GoI on 24.03.2018 convened a meeting, which was attended by Promoters, GoMP, PFC & other Lenders and recorded in the said meeting that all concerned including Promoters favored resolution of Corporate Debtor under Code. 76. The Respondent No. 2 stated that at five places acknowledgment of debt has been made by the Respondent no. 1 i.e., on 17.11.2014 - Balance Sheet of the Respondent No. 1 for Financial Year 2013-14, 29.09.2015- Minutes of meeting of Board of Directo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gned and thereafter on 11.12.2019, vide its letter addressed to the Respondent No. 1 and Appellant, PFC highlighted non-compliance of the provisions of the MoU by the Appellant and Respondent No. 1. The Respondent No. 2 submitted that the MoU was entered into pursuant to this Appellate Tribunal Order and the recommendation of STF, however, as the MoU was not implemented by the Promoter himself, Respondent No. 2 had no option but to take recourse to the Section 7 Petition and thus, the contention of the Appellant that Section 7 Petition was not to be pursued in light of the MoU, are meaningless in as much as the terms of the MoU were not even implemented by the Appellant. 81. Concluding his pleadings, the Respondent No. 2 requested to dismiss the appeal with exemplary cost. Our Analysis 82. Since, the case has chequered history, it will be important for us to note down the basic facts of the case before going into the merit of the pleadings by the Appellants and the Respondents. History of the Project and Case 83. The history of the project and case has been captured from the pleadings and submissions made by the parties before us and are summarized as under :- 84.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s of the sanction letter dated 02.03.2005, it 'was stipulated that the Respondent No. 2 in consultation with other lenders will approve the appointments of Chairman, Managing Director and Director (Finance) on the Board of the Corporate Debtor and accordingly, AoA of the Respondent No. 1 was amended. 89. The Respondent No. 1 requested the Lenders to disburse more money to complete the Project and Lenders agreed to convert defaulted portion of interest in their respective accounts into Zero Coupon Bonds ('ZCB') redeemable over a period of 20 years after a moratorium of 1 (one) year from the commercial operation date ('COD') of the Project. 90. We also note that on 16.09.2005, an Amendatory and Restated Agreement (A&RA) was signed amongst the GoMP, MPSEB, the Respondent No. 2, the Respondent No. 1 and Appellant and as per Clause 3.3 of the A&RA, it was the responsibility of the Promoter to achieve financial closure within 180 days of the signing of the A&RA i.e. by 15.03.2006 and the COD was as defined in the PPA or 4 years from the effective of GoMP's Counter Guarantee for the optionally fully convertible debentures. 91. We understand that in September, 2005....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd its enforcement, the Respondent No. 1 and the lenders (Respondent No. 2, HUDCO, REC, Central Bank of India, State Bank of India, Life Insurance Corporation Ltd., IFCI, Dena Bank, GIC, NIC, IDBI, UIICL, OIC & NIA (14 lenders) entered into Master Restructuring and Loan Agreement (MRLA) on 22.06.2010. 95. We note that since inception of project during 1993 to 2010, the lenders distributed Rs. 1817 Crores, whereas Promoters could infuse only Rs. 497 Crores out of requirement on their part of Rs. 749 Crores. It is also a fact that project was stalled between 2010-2016 and loan accounts of Respondent No. 1 were declared NPA on 31.03.2012. 96. We observe that since the project was not moving forward, a High Level Committee (HLC) headed by Additional Chief Secretary (Finance), GoMP, was constituted to suggest the way forward for the Project which included Respondent No. 1, Appellant, Respondent No. 2, other lenders and promoters and the HLC's report dated 02.05.2015 was submitted giving three likely Scenarios to complete project. At this stage, it is important to understand these three scenarios which reads as under :- (A) Scenario-I: "Implementation by the present promot....
X X X X Extracts X X X X
X X X X Extracts X X X X
....self and other Lenders, issued a Loan Recall Notice to the Respondent No. 1 demanding payment of the outstanding dues but no repayment was made to the Lenders. In such financial conditions, in order to meet the immediate fund requirements as part of revival measure of the Project, Respondent No. 2 in principle agreed to increase the Project cost from Rs. 2760 Crores to Rs. 8121 Cores and requirement of additional debt of Rs. 3022 Crores ('Additional Debt") for the Project. Subsequently, at the request of the Respondent No. 1, an Additional Loan Agreement dated 27.04.2017 was executed between Respondent No. 2 and the Respondent No. 1 for an additional term loan of Rs. 600 Crores and the Respondent No. 2 disbursed Rs. 384.59 Crores. The said Additional Loan Agreement was entered into by Respondent No. 2 in the capacity of Lender's Agent, Security Agent and Lender and the terms and conditions including security creation, for this additional loan was approved in the extra ordinary general meeting('EGM') of the Respondent No. 1 held on 31.07.2017. 100. We note one contentious issue w.r.t. interest amount of Rs. 10 Crores due to be payable by the Respondent No. 2 and not paid,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....which was attended by Respondent No. 1, Respondent No. 2, Appellant, GoMP, GoI, Lenders and in Para 17, it was decided that resolution of the Respondent No. 1 under IBC is best solution GoMP also supported admission of Section 7 application of the Respondent No. 2 in an Affidavit filed on 03.08.2018 in Section 7 application of the Respondent No. 2 filed on 16.02.2018. On 11.04.2019, the Respondent No. 1 through MD filed an affidavit before NCLT that resolution need to be found of Respondent No. 1. 106. During the pendency of Section 7 application before NCLT, GoMP formed a Task Force, which decided on 25.05.2019 that Promoter and Lenders should try to find a way forward and accordingly an MoU was signed amongst Lenders, Respondent No. 1 and Appellant on 22.07.2019 to explore a settlement plan by the Appellant for OTS. Accordingly, Respondent No. 2 returned equity shares due to invocation of pledged shares and partial conversion of debt into equity bank to the Appellant pursuant to NCLT/this Appellate Tribunal/ Hon'ble Supreme Court of India judgment that these acts of Respondent No. 2 were not in accordance with procedures prescribed under the law. 107. We note that the manag....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 7 application and being split verdict, the matter was referred to the President NCLT who made reference to Member (Judicial), Kolkata, Mr. Rohit Kapoor on 21.03.2022 under Section 419 (5) of the Companies Act, 2013 who pronounced the Impugned Order i.e., his judgement on 27.09.2022. 112. We were informed that additional loan of Rs. 600 Crores was supported by the Promoters i.e., Mukul Kasliwal as recorded in BoD minutes dated 02.03.2017, where it was recorded the following. "Shri Mukul Kasliwal specifically requested the Board to record that, the sanctioning of additional loan to complete the project is a welcome step apart from all the issues and concerns going on between the Lenders and Promoters and Lenders will receive support from the promoters as well in view to complete the project." (Emphasis Supplied) 113. We also note that Schedule II of SLA dated 27.04.2017, the existing debts of Rs. 1750.93 Crores were acknowledged. Further as per Article 2.3 and Article 4.1 (ii) (a) of SLA provides :- "Article 2.3 "The Drawdown under this Agreement shall be subject to the satisfaction of each condition precedent set forth in Article IV hereof. Furth....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... IV. If point no. I and II above are in affirmative then whether the application U/s of IB Code ought to be rejected?" (Emphasis Supplied) Issues framed by the Member (Judicial) :- "(I) Whether M/s. Entegra Ltd., the original promoter and M/s. Power Infrastructure India as strategic investors, have any locus to intervene in the matter on behalf of the corporate debtor? (II) Whether, notice dated 17.01.2018 recalling the loan is bad in law. (III) Whether, present application filed under Section 7 of IBC, 2016 is an instance of fraud/malicious initiation of insolvency proceedings U/s 65 of the Code? (IV) If point No. III above is affirmative then whether the application U/s 7 of the IB Code ought to be rejected on that ground?" (Emphasis Supplied) 117. From above issues framed by Judicial Member and Technical Member, the common threads of issues pertains to validity of Recall Notice dated 17.01.2018; whether Section 7 application of Respondent No. 2 is malicious and fabricated insolvency petition or otherwise, locus of the Appellant and finally whether Section 7 ought to be rejected or otherwise. 118. Following issues emerges in....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... • We have noted that the Respondent No. 2 sanctioned Rs. 100 Crores (RTL - 1) and foreign currency loan of Rs. 34 million USD (FCL-1) on 10.10.1997. The Respondent No. 2 further sanctioned additional foreign currency loan of USD 18.9 Million to the Respondent No. 1 (FCL-II) on 24.11.1998 and the authorized loan facilities were entered into loan agreement which was executed between the Respondent No. 1 and Respondent No. 2 on 04.12.1998. • We have already noted that due to lack of financial arrangements from Promoters side regarding equity infusion and funds, the financial closure could not be achieved and as a result of which the project did not see any progress up to October, 2005. • Subsequently, after intervention of GoMP and GoI and other stakeholders, the Respondent No. 2 revalidated the loan on 02.03.2005 for OFCDs which was sanctioned somewhere in March, 2001. • We have already noted earlier the facts regarding amendatory and restated agreement dated 16.09.2005 and common loan agreement amongst the lender on 29.09.2006. • We have also recorded that at the request of the Respondent No. 1, the Lenders also agreed to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ppellant that the past loan agreement by the Lenders have deemed to become illegal since subordinate loan agreement dated 29.09.2006 was sanctioned by BoD in violation of provision of 63(3) of the Companies Act, 2013. • We note the plea of the Appellant that any illegality in the subsequent loan agreement would completely invalidate of past transactions and past loan agreements and thus all these previous loan agreements tantamount to sham agreements. • It is further the case of the Appellant that the additional loan agreement dated 27.04.2017 entered into Respondent No. 2, despite their knowing that the said agreement was void-ab-intio and illegal and therefore there was no financial debt due and payable under such illegal loan agreements and therefore there is no question of any default by the Respondent No. 1. • The Appellants another argument is that, since the Respondent No. 2 was wearing the hats of both as Financial Creditor as well as allegedly in the management of the Respondent No. 1, there could not be any valid loan agreement between the Respondent No. 1 & Respondent No. 2. • Further, we have noted the contention of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2 had sanctioned money through the additional loan agreement just to facilitate the financial closure to be done by the promoters of the Respondent No. 1. • We have already noted that both the GoI and GoMP even tried their best to revive the project and have been actively involved in consultation with various stakeholders including the Respondent No. 2 and Promoters and under these persuasive efforts of both Central and State Governments, the Respondent No. 2 kept on sanctioning the loans the Respondent No. 1. As regard the point raised by the Appellant regarding non disbursal of Rs. 10 Crores as interest/ IDC, we do not find any merit that this was deliberately done by the Respondent No. 2 only to initiate Section 7 application. We wonder, if the Respondent No. 2 and other Lenders have pumped in thousands of Crores of loans to the Respondent No. 1, why would they hesitate to give additional loan of mere Rs. 10 Crores but for any legal hurdle as brought out before us w.r.t., judicial orders whereby the Lenders ceased to be shareholder and therefore, the conditions precedent of Scenario II of HLC could not have been met and consequently the Lenders were not obliged to r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....10.2017 and 15.01.2018 which were also not paid by the Respondent No. 1. • The Member (Technical ) of Ahmedabad Bench further notes that "22. ....However, even first instalment of such interest which fell due for payment on 15.07.2017 has not been paid. Further, next two instalments of interest due on 15.10.2017 and 15.01.2018 have also not been paid. The crucial fact is to be noted that disbursement of loan was undergoing till 05.01.2018 and balance loan amount (600 crores minus 384 crores) has not been disbursed at all and, therefore, responsibility for non-completion of project squarely lies on the shoulders of the lenders, who were in complete control of the project at that point of time, It is also noted that the applicant-financial creditor asked the corporate debtor to pay existing debt of Rs. 2139 crores plus interest on the additional loan within 15 days from the date of such recall notice knowing fully well that the corporate debtor was not in a position to do so and such position of the corporate debtor was substantially attributable to the conduct of the applicant-financial creditor itself. This factual position speaks for itself. Further, in our v....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssions on any judgment of the Hon'ble Supreme Court of India's (out of catena of the judgments) on the subject where it has been held again that the role of the Adjudicating Authority is limited to find existence of debt for which default has taken place, meeting the stipulated minimum threshold limit and take action to accept Section 7 application else reject the same. The Hon'ble Supreme Court of India again and again held limited role of Adjudicating Authority in such case except where non-compliance to provision of the Code is noted. • The Adjudicating Authority is required to work as per the mandate of the Code and regulations and in accordance with the ratio decided by the Hon'ble Supreme Court of India and this Appellate Tribunal, rather than presumption and assumptions in quoting few facts here and there out of context, and therefore, we do not support the rational of the Member (Technical) Ahmedabad Bench as contained in his order dated 08.10.2021. • We find that all the parameters of Section 7 application has been met and correctly pointed out in the Impugned Order by both the Judicial Members of Ahmedabad and Kolkata in their judicial orders. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ho was the Financial Creditor and also allegedly in control of the Respondent No. 1 since, 2005 to 2018, could have initiated present Section 7 application or should have initiated application under Section 10 of the Code. (b) Whether the invocation of pledge shares and partial conversion of debt into equity by the Respondent No. 2 has adverse impact in the present appeal. (c) Whether, the Lenders especially the Respondent No. 2 assumed the role of owners in addition to role of the Lenders after invocation of pledged shares and partial conversion of debts into equity or the Lenders were involved in management with limited roles to protect their loan advanced to the Respondent No. 1. • We have already noted the various facts regarding the failure of the Corporate Debtor to complete the project and also their failure to make the payment from time to time to the Lenders. We also note that even the financial closure could not take place on account of non infusion of equity and other funds by the promoters within the stipulated time period. • It is the case of the Appellant that this happened due to external factors which were not under the control of the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....1 effectively got transferred from the Appellant to Lenders especially Respondent No. 2. Hence, the Respondent No. 2 became the shareholder and could not have initiated Section 7 application. In this connection, we note that these amendments were done with the consent and approval of shareholders including the Promoters. We note that GoMP fully consented to the said process. • In this background, we note that the Respondent No. 1 requested the Lenders to disburse further amount to complete the project and then existing lender also agreed to convert default portion of interest by the Respondent No. 1 in their respective books into ZCB, details of same, we noted in our earlier discussions. We have already noted that Master Restructuring and loan agreement was executed subsequently on 22.06.2020. We also note that the amendatory and restructuring agreement (A&RA) was also signed amongst GoMP, Financial Creditors, Respondent No. 1 and the Appellant and according to Part 3.3 of A&RA, it was responsibility of the Promoters to achieve financial closure within 180 days of signing of A&RA dated 15.03.2016. • However, the financial closure could not take place due t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ers would have kept his promise to infuse the stipulated equity and funds, similarly if the Respondent No. 1 would have paid back the amount due on the stipulated time to the Lenders, there would not have been any occasion to make such decision by the Lenders including changes under AoA or creating pledged deed. Further, if the Appellant and the Respondent No. 1 would have done their acts properly, there was no need for Respondent No. 2 to invoke the pledged shares and partially convert the subordinate loan into equity shares. In fact, there is no need for any banker to do so. After all the bankers are involved in granting loans and getting interest, which is their normal business and only to protect their financial interest, Lenders make such provisions like partial conversion of debt into equity or invocation of pledged shares in case of default by borrowers. Hence, in this background, it need to be appreciated that the allegation that deemed control of the Respondent No. 1 got transferred from the Appellant to Respondent No. 2 with ulterior motives of Lenders is not correct. • We also note that the Promoters Mr. Manoj Kasliwal continued to remain on BoD of the Respo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sional' under Section 18 of the I&B Code." (Emphasis Supplied) • Thus, this Appellate Tribunal held that by invocation of pledged shares, the Lenders became Shareholder and could not press for their claims under Code. • At this stage, we would like to refer to the Hon'ble Supreme Court of India judgment dismissing this Appellate Tribunal's above quoted judgment in the case of PTC India Financial Services Limited vs. Venkateswarlu Kari and Anr. in Civil Appeal No. 5443 of 2019. • We are conscious of facts that issue before the Hon'ble Supreme Court of India was on few legal issues i.e., is whether the Depositories Act, 1996 read with the Regulation 58 of the Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996 has the legal effect of overriding the provisions relating to the contracts of pledge under the Indian Contract Act, 1872 and the common law as applicable in India. • We note that the aspect of invocation of pledged shares resulting Lenders to became management shareholder v/s his right to file Section 7 application came up again to this Appellate Tribunal and it was decided comprehensiv....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ation is barred by Limitation. There does not exist any debt as on date, thus, there is no question of default in respect of the Financial Creditor.... 5. Learned Senior Counsel for the Appellants submitted that the debt owed by Corporate Debtor was secured by pledge of shares of the Corporate Debtor held by the IPCL. The Financial Creditor after invocation of pledge and subsequent transfer of shares in the name of SBI CAP Trustee Company Ltd, now holds 95.2% of shares in the Corporate Debtor. The Financial Creditor admitted in form No. 1 the value of the pledged shares is Rs. 5,475 Crores and thus, the entire debt of the Financial Creditor stood discharged and there is no default. This Appellate Tribunal in the case of PTC India Financial Services Ltd. (in short PFS) Vs. Mr. Venkateshwaralu Kari and Mandava Holdings Pvt. Ltd. Company Appeal (AT) (Ins) No. 450 of 2018 held that once shares are transferred to the Financial Creditor, the Financial Creditor becomes the owner of the shares and in such a situation there is no debt due to the Financial Creditor as the dues stand satisfied by way of shares. Ld. Adjudicating Authority erroneously held that the Judgment of this App....
X X X X Extracts X X X X
X X X X Extracts X X X X
....arath Energy (Utkal) Ltd., (Company Appeal (AT) (Ins) No. 597 of 2018). Thus, the invocation of pledge in itself does not amount to transfer of shares or discharge of debt. This Appellate Tribunal in the case of PFS held that invocation of pledged of shares amounts to discharge of debt. However, Hon'ble Supreme Court has stayed the proceedings. Therefore, this Judgment does not help the Appellants. 14. After hearing Learned Counsel for the parties, we have perused the record. 15. The following two issues are crop up in these Appeals. (a) Whether the Application under Section 7 of I&B Code, filed pursuant to the RBI Circular dated 12.02.2018? (b) Whether the liability of the Corporate Debtor stood discharged in view of the invocation of the pledged shares by the Financial Creditor. Issue No. 2 18. According to the Appellants after invocation of the pledged shares the Financial Creditor became 95.2% shareholder of the Corporate Debtor and the entire dues of Corporate Debtor stood discharged. In support of this submissions Learned Counsel for the Appellants cited two Judgments one of this Appellate Tribunal in the case of PTC India....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the Financial Creditor cannot maintain the Application under Section 7 of I&B Code, or the entire dues of the Corporate Debtor stood discharged. 27. It is argued on behalf of the Appellant that after invocation of pledge and subsequent transfer of shares the Financial Creditor held 95.2% shares of the Corporate Debtor. Thus, the entire debt of the Financial Creditor stood discharged. If this is the position, then why the Corporate Debtor after receiving the notice of invocation of pledged shares dated 20.12.2017 sent an acknowledgement of debt on 16.02.2017 (See Annexure 20 of Page 313 Reply of Financial Creditor Vol. II) and after transfer of shares sent letters dated 25.05.2018 and 11.06.2018 for settlement. It shows that even after transfer of shares in the Demat Account of SBI CAP Trustee Company Ltd., there exist a debt of more than Rs. 1 lakh and there is a default on the part of the Corporate Debtor. 29. Thus, we are unable to convince with the arguments of Learned Counsel for the Appellants that after invocation of the pledged shares by the SBI CAP Trustee Company Ltd. liability of the Corporate Debtor stood discharged. 30. It is true that after ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ation of pledged shares, (which were returned back to the Appellant based on judgement of judicial fora as already discussed earlier), the Respondent No. 2 does not lose his right to initiate Section 7 application. • Similarly, we hold that invocation of pledge share and partial conversion of debt into equity by Respondent No. 2 has no adverse impact in the present appeal. 121. Issue No. (III) Whether, the additional loan agreement dated 27.04.2017 was fabricated or forced upon the Respondent No. 1 to initiate Section 7 application by the Respondent No. 2 and whether the Recall Notice dated 17.01.2018 was legal or not. • It is the case of the Appellant that the additional loan agreement dated 27.04.2017 was fabricated and created by the Respondent No. 2 only with dubious intentions of initiating Section 7 application against the Respondent No. 1 and similarly additional loan agreement dated 27.04.2017 was also illegal and therefore, the present Section 7 application of the Code could not have been initiated at all by the Respondent No. 2. In this connection, we note that the additional loan agreement was signed on 27.04.2017 between the Respondent....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Kolkata Bench which reads as under :- "Analysis and Findings: II. Whether, notice dated 17.01.2018 recalling the loan is bad in law? 70. While adverting to answer the question/issue no. (II) as referred above, it is relevant to refer to the three reply affidavits filed by the Corporate Debtor:... 74. A clear picture that emerges from the above position on record is concluded as under. i. First reply by the Corporate Debtor dated 13.04.2018 was filed on 16.04.2018. ii. Second reply affidavit was filed on 15.04.2019. iii. Third reply affidavit by the Corporate Debtor was filed on 28.02.2020. iv. The time gap between each of these reply affidavits is around between 8 to 12 months. Therefore, it was after a huge gap of 22 months from the date of filing the first affidavit, Corporate Debtor has come up with a completely new plea in the third reply that the first and second reply affidavits were filed in collusion and without any decision by the Board of Directors. It is stated in third reply affidavit that the Company Secretary who filed the 1st affidavit was acting at the behest of the applicant and the 2nd affida....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd Lenders will receive support from the promoters as well in view to complete the project. iv. Entegra is thus estopped from questioning the said Loan Agreement and any argument to the contrary is hit by doctrine of approbate and reprobate. v. Schedule II of the Additional Loan Agreement dated 27.04.2017 acknowledges the already existing debt of Rs. 1750.93 crore including the aforesaid amount due to the Financial Creditor (Pg. No. 736/758). Further, the Recitals to the Loan Agreement (Pg. Nos. 685/707) also acknowledge the previous liabilities of the Corporate Debtor; when seen and examined on the basis of record referred therein is found to be correct. 79. Debt was also acknowledged in the Annual Report/Balance Sheet of the Corporate Debtor for the FY 2013-14 signed by Sh. Mukul Kasliwal (Promoter) as one of Directors of the Corporate Debtor on 17.11.2014. The Annual Report was filed with the RoC & is part of public record. The Annual Report is also filed by Entegra Ltd. as Annexure-QQ with CP No. 175/2017. 80. Debt is again acknowledged in the Balance Sheet of the Corporate Debtor for FY 2016-17 signed on 28.08.2017. 81. The Corporat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t to Section 8, where it is mandatory on the part of any operational creditor to issue demand notice to the Corporate Debtor. However, the commercial practice and also for the principal of natural justice, the financial creditors and the bankers issue loan recall notice whereby they give all the details and also certain time line within which the loan and interest along with other charges, if any, are recalled by the bankers and the Corporate Debtor is called upon to repay. In the present case, the Respondent No. 2 issued loan recall notice on 17.01.2018, which we have already noted earlier and highlighted the significant portion. • From this loan recall notice dated 17.01.2018, it becomes clear that the Respondent No. 2 reminded Respondent No. 1 of his continuous failure to service of financial facilities and based on which the account of the Respondent No. 1 was declared as NPA as on 31.03.2012. • This recall notice dated 17.01.2018 also mentioned about earlier recall notice dated 05.01.2016 demanding payment of Rs. 1817 Crores as outstanding amount as on 31.12.2015 along with additional payment of Rs. 342.68 Crores towards ZCB. • We also no....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the Respondent No. 1 Mukul Kasliwal in the board meeting dated 02.03.2017, as recorded in the minutes of meeting that "Shri Mukul Kasliwal specifically requested the Board to record that, the sanctioning of additional loan to complete the project is a welcome step apart from all the issues and concerns going on between the Lenders and Promoters and Lenders will receive support from the promoters as well in view to complete the project". • Thus, this issue goes in favour of the Respondent No. 2. 122. Issue (IV) Whether, Section 241 and 242 Companies Act, 2013 application filed by the Appellant who got reliefs from NCLT/ NCLAT and the Hon'ble Supreme Court of India has any bearing on present Section 7 application. • As regard, Section 241 & 242 of the Companies Act, 2013 and the decision of the NCLT, this Appellate Tribunal and the Hon'ble Supreme Court of India, which we have discussed earlier, we find that this was done w.r.t. invocation of pledged shares and partial conversion of debt into equity which was done in particular facts and circumstances of the case. We also find that this Appellate Tribunal while dismissing the appeal of the Respondent No....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... IA, if any, are closed. ============= Document 1 SHRI MAHESHWAR HYDEL POWER CORPORATION WORKING OF OUTSTANDING AMOUNT as on 15.01.2018 Rs in Cr Amount. 1 Loan Amount 1,018.49 2 Deferred Payment Guarantee 318.49 3 Zero Coupon Bonds 103.87 4 Interest dues 673.32 4 Amount paid out of Corpus on behalf on Borrower 1.45 5 Fee a Guarantee fee 21.07 b Facility Agent Fee 0.35 c Security Agent Fee 1.00 d Legal Fee 0.26 e Other Recoevrable from borrower 1.00 - Delayed charges on above(calculated.upto 15.01.18) 650.13 Grand Total 2,789.42 Document 2 : WHEREAS 1. The Borrowar is in the process of' executing, Implementing and developing a 10x40 MW Maheshwar Hydro Electric Power Project ut Village Mendleshower. District Khargone. Madhya Pradesh, Indie (hereinafter referred to us the "Project). B. To finance part of the Project Cost, the Borrower has approached the banks and financial Institution viz. IFCI Limited ("IFCI"), State Bank of India ("SBI"), Deas Bank ("DE"). Central Bank of India ("CBol"), PFC. IDBI Baak Limited ("IDBI"). Life Insurance Corporation of India ("GIC"). General Insurance Corporation Limited ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Debenture Holders"). LENDERY CES SECURITY AGENT 9 TRUE COPY Document 3 ROBOTTED by NCL execuled iriaster restructuring und loon agreement dated June 22. 2010 [hereinafter referred to IS "MRĻA"). L. The work on the Project was further stalled with interest dues outstanding since January 2011, primarily due to zon-infusion of equity by the erstwhile promoter ) Subsequently, the Government of Madhye Fredesh costhidrod-a-High Level Committee in the year 2014 to suggest the way forward. The committee vide its report dated May 02: 2015 submined its recommendations suggesting three possible scenarios of revival of the Project. 2. Scenario-1: Implementation by the erstwhile promoter and 3 months" tire was allowed till August 02, 2015 for infusion of the additional funds: Scenario-2: Government companies shall hold majority equity stake in the Project with management control; und Scenaric-3: Cancellation of the power purchase agreement. .M Thereafter, in view of the failure of the erstwhile promoter to comply with the requirements of Scenario-1, Existing Leaders decided to implement Scenario-2 as aforesaid mentioned. . N. Accordingly, to acquire ma....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Six Hundred Crore Only), subsuming the Corpus Fund, as set out against its name in Schedule I hereto and on the terms and conditions contained in this . Agreement. The Borrower agrees that it shall apply the proceeds of cach Drawdown for utilisation of the following: release of property compensations where awards have been passed: release of compensation for submergence land where awards have been passed; e) completion of balance development works on rehabilitation land already acquired; d) settlement of outstanding dues of MPPMCL to restart R&R works: e) senlement of past dues of Bharat Heavy Electricals Limited ("BHEL"), payments against finished goods ready for dispatch by BHEL / advance to BHEL / civil 'contractor to facilitate mobilization; settlement of outstanding salaries of staff as well as small supplier's/contractor's dues. statutory payments (including but not limited to Taxes, TDS, service tax, work tax, etc.): other administrative expenses i.e. sultry', security, electricity etc .; payments made from the Corpus Fund arranged for the Project shall be subsumed as part of the principal outstanding of the Additional Facility as on date of this Agre....
X X X X Extracts X X X X
X X X X Extracts X X X X
....om Ra. 2,760.00 Crore (Rupees Two Thousand Seven Hundred and Sixty Crores Only) to Rs, 8,121.00 Crore (Rupces Eight Thousand One Hundred and Twenty Ond Crores Only) with SCOD extended to December 31. 2018. The Borrower shall ensure to get the no objection certificates from all tite Existing Lenders for Additional Debt of Rs. 3022.00 croce (Rupees Three Thousand and Twenty Two crore only) to be tied up for the Project. B Restructuring of PFC's commitment under the Existing Loans and re- - schedulemeat of ZCBs with respect to PPC are as follows: (a) T Re-schedulenent of PFC Existing Loan with first equal quarterly installment repayment on the 'commitment of PFC under Loans (2) and PFC: Sub-debt due on first standard due date falling 1.5 years from SCOD of December 31. 2018 1.e. on July 15. 2020 along with the following conditions [detailed in Schedule X-B): extension of repayment schedule of commitment of PPC under Loans (2) and PFC Sub-debt in equal quarterly instalinent for a term of 28 years. The Interest rate of the said touns shall be: The document rate till May 31, 2016 for all loans, etc. bi 'The special interest rate equivalent to AAA rated renewable/ non-co....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... levellised fixed tariff of not less than Rs. 5.32 per unit On actual generation. shinll be converted into preference shares as proposed in terms of para D below. With effect from January 1, 2017. OFCD payments shall be cleared from the Additional Debt tied up for the Projeel. . (iii) Document 7 ARTICLE VII EVENTS OF DEFAULT AND REMEDIES 7.1 Events of Default For the purpose of this Agreement, happening of any of the following events after the date of execution of this Agreement shall constitute aa Event of Default: (a) Default in Payment of Principal Default by the Borrower in the payment of any Repayment Installment of the principal of the Additional Facility on any Due Date and such default has continued for a period of thirty (30) days (whether or nul deinand in respect thereof has been made). (b) Default In Payment of Interest'ete. Default by the Borrower in payment of: € (1) any installment of Interest on the Additional Facility on any interest payment date and such default has continued for a period of thirty (30) days (whether or not demand In respect thereof has been made). (ii) any monies acoruing due under this Agreement and oth....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 1 3. The construction works for the Project were stalled in September 2001 due to non- tie up of equity impacting the financial tie-up of the Project. GLORALAW Central Wing, First Floor, Thapar House, Janpath Lane, 124 Janpath, New Delhi - 110 001, India Phone: +91 11 4551 1000 - 29 | Fax: +91 11 4551 1099 | E-Mall: [email protected] www.linklegal.in , NEW DELHI | MUMBAI | BENGALURU | GURUGRAM | HYDERABAD -|: CHENNAI ACCOMModa Low Survices Combining the experience, expertise and excellence of DH Law Associates with Document 9 with its strategic investors infused only Rs. 499.27 crore of equity till date, despite the fact that Project cost had gone up substantially and Lenders have disbursed entire debt of Rs. 1817.03 crore till June 2016. 8. The Company also failed to maintain the financial discipline: in terms of the Financing Agreements and defaulted in repayment of dues, interest and outstanding amounts to the Lenders. Accordingly, the loan accounts of the Company were classified as Non-Performing Assets ("NPA") by the Lenders with PFC classifying the loan account as NPA on 31.03.2012 in accordance with-guidelines as-applicable- to each of the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f additional debt of Rs. 3,022 Crore (Rupees Three Thousand and Twenty-Two Crore only) ("Additional Debt") for the Project. Subsequently, a Loan Agreement dated 27;04.2017 was executed between PFC and the Company ("Additional Loan Agreement") for an additional term loan of Rs. 600 crore (Rupees Six Hundred Crore Only) (hereinafter referred to as "Additional Facility") out of the total Additional Debt requirement for the Project. Pursuant to the said Additional Loan Agreement, PFC has already disbursed an amount of Rs. 384.59 crores till 02.01.2018 12. That, in terms of Article 2.3 (a) of the Additional Loan Agreement, the drawdown/disbursement by PFC was subject to the satisfaction by the Company of each condition precedent as set forth in Article 4.1, 4.2 and 4.3 of the Additional Loan Agreement. However, the Company failed to comply mandatory conditions precedent. Despite the failure of the Company to comply with the conditions precedent, PFC, upon receipt of the drawdown request of the Company and in the interest of the Project, made part disbursement of Rs. 384.59 crores till 02.01.2018. That even after the part disbursement of RE: 384.59 Crores, the Company could not com....