TaxTMI 
TaxTMI 
2026 (5) TMI 1033
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....a, and Mr Pranav Das, Advocates for Respondent No.1 Mr Vaijayant Paliwal, Moulshree Shukla, Ms Gayathri, Advocate for R2. JUDGEMENT JUSTICE YOGESH KHANNA, MEMBER (JUDICIAL) Four appeals viz. Company Appeal (AT)(ins) No.299/2020, 467/2020, 639/2020 and 640/2020, all have been filed against an impugned order dated 12.02.2020 whereby application MA No.2385/2019 has been allowed by the Ld. NCLT. Such appeals are a) Comp. App. (AT) (Ins) No. 299 of 2020 - State Bank of India v Venugopal Dhoot & Ors.; b) Comp. App. (AT) (Ins) No. 467 of 2020 - Pertamina Hulu Energi Nunukan Company v Venugopal Dhoot & Ors.; c) Comp. App. (AT) (Ins) No. 639 of 2020 - BPRL Ventures Indonesia B.V. & Anr. v Venugopal Dhoot & Ors.; and d) Comp. App. (AT) (Ins) No. 640 of 2020 - BPRL Ventures Indonesia B.V. & Anr. v Venugopal Dhoot & Ors. And two appeals Company Appeal (AT) (Ins) No.1442/2024 and 1623/2024 have been filed against the impugned order dated 26.06.2024. 2. Essentially, Mr. Dhoot sought all foreign oil and gas assets be considered as assets of Videocon Industries Ltd and be included in its Information Memorandum. On 22.08.2019, the Ld. National Company Law Tribunal, Mumbai Bench ("NCL....
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....uesting Videocon Industries Ltd be removed as a co-obligor and instead be made a corporate guarantor so that Videocon Industries Ltd will not be required to show it as a primary liability on its balance sheet. Thus this structure was changed and Videocon Industries Ltd became a corporate guarantor. This step was taken in pursuance to the letters and VN Dhoot's submission that foreign oil and gas assets are to be ring fenced from the troubles being faced by the domestic business. The relevant extract of the letter dated 21.11.2016 of Mr. VN Dhoot is as under:- The Group is facing stress in domestic debt servicing on account of insufficient cash flows from the domestic business VIL. Therefore, in order to protect the oil and gas assets of the group from the financial stress being experienced by VIL in the domestic business, it is essential to shift the SBLC Facility from VIL and VOVL on Obligor/Co-Obligor Basis to VOVL. Accordingly, VIL shall be released as co-obligor from the SBLC Facility, while VOVL shall continue as the Borrower of the SBLC Facility. In view of the above, the process of shifting the SBLC facility from VIL, with VOVL continuing as the Borrower an....
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....e Lenders, by maximising the value by rightly timing the asset monetisation/sale process and still explore all options for resolving and restricting the debts of the Petitioner and its subsidiary Videocon Hydrocarbon Holdings Ltd; e) initiation of CIRP of Videocon Oil Venture Ltd at that stage shall not achieve value maximisation. In the writ petition there was no whisper of applicability of moratorium under Section 14 of IBC because of CIRP of Videocon Industries Ltd. 12. Thereafter Mr. Dhoot as well as Videocon Oil Venture Ltd moved an application viz MA No. 1306/2018 and MA No.1416 of 2018 seeking consolidation of Videocon Industries Ltd and 15 group companies, excluding Videocon Oil Venture Ltd and in such application there was no mention of foreign oil and gas and it only mentioned domestic companies. 13. On 8th August, 2019 Ld. NCLT allowed the consolidation of 13 companies out of 15 companies; Mr. VN Dhoot did not stop at writ petition and MA 1416/2018 and during the pendency of such writ petition, participated in valuation and monetisation process, initiated by the secured lenders. On December 18, 2018 SBI addressed a letter to Videocon Oil Venture Ltd reques....
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....cepted since he was not an applicant within the meaning of Section 12A of the IBC r.w. Regulation 30A of the CIRP Regulations, 2016. Whilst the legal position was amply clear, Mr Dhoot, nevertheless, filed an application before the Ld. NCLT seeking direction to the Resolution Professional to consider his Form FA. Mr Dhoot in his Section 12A Proposal for Videocon Industries Ltd +12 specifically did not include the foreign oil and gas assets. The query and response as mentioned in Section 12A proposal is reproduced herein below:- Ques- Earlier in 2017 the proposal spoke about repayment through cash flows of its Brazilian counterparts, what is the arrangement and how is it going to be met? Reply- In view of lack of clarity on account of CIRP of VOVL, we are now proposing to keep the offshore assets out of the business plan. The revised plan which we are proposing to submit shall be a sound plan which shall address all the concerns of the lenders. 18. In November-December 2020 despite Mr. Dhoot having no locus standi whatsoever to submit a proposal for withdrawal under Section 12A of the Code, the CoC of Videocon Industries Ltd +12 Group companies, with a view to e....
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....s follows: - b) Set aside the impugned order dated 08.06.2021 passed by the Adjudicating Authority and the Respondents be ordered to issue fresh IM and call for fresh EOI/Resolution Plan for all assets of Videocon Group including all foreign oil and gas assets of Videocon group; and 23. The said appeal viz. Company Appeal (AT)(Ins) No.650/2021 was decided by this Tribunal vide its order dated 05.01.2022 wherein all submission of Mr Dhoot were recorded, including the issues raised above; i.e. the contentions viz; "The Ld senior counsel further stated that their existed no legal or statutory requirements to trade the foreign oil and gas assets as part of the Consolidated CIRP process. However, in 'finance and accounts' there is a matching concept of liability and its corresponding assets wherever liability is considered the corresponding assets is suppose to exist in the form of the assets or the liability/borrowings which have been used to finance the losses. In any case, commercial wisdom of CoC is non-justifiable as already laid down by multiple judgements of Hon'ble Supreme Court. Hence this appeal deserves to be dismissed and is dismissed. 24. This Tribun....
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....ding assets is supposed to exist in the form of the assets or the liability / borrowings which have been used to finance the losses. In any case, commercial wisdom of CoC is non-justifiable as already laid down by multiple judgments of Hon'ble Supreme Court. Hence, this appeal deserves to be dismissed and is dismissed." 25. It was argued by the learned Solicitor General the findings in the decision dated 05.01.2022 in CA (AT)(Ins) No.650/2021 covered the impugned order dated 12.02.2020. Further he argued now the bidding process for the assets of Videocon Oil Venture Ltd stands complete and Bharat Petroleum Products Ltd has given the highest bid. The learned Solicitor General submitted that admittedly the order dated 19.02.2020 of this Tribunal has not been challenged by Mr. Dhoot. Further Mr. V. Dhoot had filed an application being IA No.3896/2023 in CP(IB) 2742/2019 seeking rejection of any resolution plan dealing with foreign assets of Videocon Oil Venture Ltd but such application was also rejected on 26.06.2024. 26. It is also pertinent to mention Mr Dhoot filed IA No.3896/2023 praying for rejection of the Resolution Plan submitted by BPCL, primarily on the ground of inclu....
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....es, arguments and submissions pertinent in the present set of appeals have already been dealt with and answered in favour of CoC by this Tribunal in its order dated 5th January 2022 passed in Appeal 650 of 2021. It was an argument of the appellant-SBI that all issues in the present underlying appeals, including CA(AT)(Ins.) No. 299 of 2020 have been decided by this Tribunal vide its final judgement dated 5th January 2022 passed in CA(AT)(Ins.) 650 of 2021. Now the core issue agitated by Mr. V. Dhoot in MA 2385 was the foreign oil & gas assets be considered as assets of Videocon Industries Ltd + 12 Group companies and those must be included in the Information Memorandum of Videocon Industries Ltd. The argument of Mr. V Dhoot that CoC has not challenged the findings of impugned order is completely erroneous. In Appeal 299 of 2020, CoC has challenged such findings in detail. 29. Now, Mr. V Dhoot had himself filed Appeal 650 of 2021 in the CIRP of Videocon Industries Ltd +12 group companies wherein he was essentially contending that (a) the Resolution Professional and Committee of Creditors of VIL+12 group companies should not have invited and placed the resolution plan for voting i....
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....identical in all aspects to the arguments and pleadings in the present Appeals. 34. A bare perusal of the reliefs sought in MA 2385 (which forms the subject matter of the instant Appeals) and the reliefs sought in Appeal 650 of 2021 would make it abundantly clear that the subject matter of both the proceedings is in fact identical. 35. The relevant prayers from the MA 2385 of 2019 and the Appeal 650 of 2021 are also reproduced herein: MA 2385 of 2019 Appeal 650 of 2021 Hence it is prayed that a. Resolution Professional of the Corporate Debtor, Videocon Industries Ltd. be directed to consider and treat all assets, properties (tangible and intangible), rights, claims, benefits of the Respondent Nos. 2 to 5 as assets and properties of Videocon Industries Ltd. for the purpose of present CIRP and to include the assets, liabilities, claims of Respondent Nos. 2 to 5 in the Information Memorandum (IM) of the present Corporate Debtor, Videocon Industries Ltd; XXI. RELIEFS SOUGHT: b) Set aside the Impugned Order dated 08.06.2021 passed by the Adjudicating Authority and the Respondents be ordered to issue fresh IM and call for fresh EOI/Resolution Plan for all assets of V....
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.... & gas assets in the IM of VIL+12 group companies has been categorically rejected by this Tribunal in its order dated 5th January 2022. 41. The order in Appeal 650 of 2021 passed by this Tribunal has in effect overruled the finding in the order dated 12th February 2020 passed by the Hon'ble NCLT, Mumbai in MA 2385 of 2019 as the issue whether the foreign oil & gas assets are to be included in the IM of VIL+12 group companies has been duly considered and categorically rejected by this Hon'ble NCLAT. This is clear from the following chain of events: (a) Mr. Dhoot had filed MA 2385 of 2019 in the Company Petition pertaining to the Videocon Industries Limited ("VIL") i.e. Company Petition (IB) No. 2 of 2018; (b) Mr. Dhoot's argument was the foreign oil & gas assets held by the Indian and foreign subsidiaries of VIL must be included in the CIRP of VIL+12 group companies; (c) the Ld. NCLT, Mumbai Bench vide order dated 12th February, 2020 allowed MA 2385 of 2019; (d) subsequently, the operation of the 12th February, 2020 order was stayed by this Tribunal by way of order dated 19th February, 2020 passed in Appeal 299 of 2020 and stay on the 12th February 2020 order continues till d....
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..... The lenders have granted loans to both the domestic business under VIL + 12 group companies as well as the foreign oil & gas assets which are held through VOVL. The lenders of VOVL comprise of 92.66% of the total admitted claims of the CoC of VIL + 12 group companies. It is also pertinent to note the lenders of VOVL have (a) first ranking charge over all the assets of VOVL, VHHL, VINI and VEBL (including their respective shareholding in the step-down companies / joint ventures); (b) except for EXIM Bank, have a first ranking charge over the domestic assets of VIL + 12 group companies. Thus, the lenders of VOVL also have majority stake in the CoC of VIL + 12 group companies and are the majority first ranking secured lenders at both VIL + 12 group companies for the rupee loans and VOVL for the SBLC facilities. 45. Section 30(4) of the Code empowers the CoC to consider the feasibility and viability of the plan and the manner of distribution of amounts while approving a resolution plan. In India Resurgence ARC (P) Ltd. v. Amit Metaliks Ltd., (2021) 19 SCC 672, the Hon'ble Supreme Court held considerations of asset distribution, including priority in scheme of distribution, is a bu....
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....n oil and gas assets in the CIRP. 49. The decision of consolidation is the prerogative of the lenders in exercise of their commercial wisdom, i.e., to seek/ or not to seek consolidation in their effort of maximization of the value of the Corporate Debtor for all the stakeholders. In any case, an unwanted consolidation cannot be forced upon the lenders - as it is essentially their interest which is at stake in the CIRP, especially at the instance of ex-promoter responsible for insolvency. 50. Qua contention (iv), we note Mr. Dhoot's contention is the lenders of Videocon Oil Venture Ltd filed a claim in the CIRP of Videocon Industries Ltd due to Videocon Industries Ltd's guarantee obligation, and thus, the foreign oil and gas assets have to be included in VIL's CIRP. The said averment is absolutely baseless as it goes against the basic principle of co-extensive liability of borrower and guarantor, which has been cemented by various judgements of the Hon'ble Supreme Court viz. BRS Ventures Investments Ltd. v. SREI Infrastructure Finance Ltd., (2025) 1 SCC 456). Lenders have filed the claims and also has been admitted by the Resolution Professional. An ex- promoter, who has drive....
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....ng to Videocon Oil Ventures Ltd; c) the CIRP of Videocon Oil Ventures Ltd would erode the value of assets of Videocon Oil Ventures Ltd. Nowhere in the writ petition was it mentioned the assets belong to Videocon Industries Ltd. In fact in paragraph 12 of the Writ Petition, Videocon Oil Ventures Ltd has mentioned as follows: "12. On 6th June, 2018, the parent Company (VIL) being in financial stress for various reasons, have been admitted into National Company Law Tribunal (NCLT) for debt resolution under the regime of Insolvency and Bankruptcy Code. Lenders of Petitioner VOVL are exploring options for monetisation of the Oil & Gas assets owned by it and have decided to carry out the valuation of these oil assets." 54. Thus, the fact of commencement of CIRP preceded the Writ Petition and even then, there was no plea on the applicability of moratorium over the foreign oil & gas assets or the inclusion of foreign oil & gas assets in the CIRP of Videocon Industries Ltd by including it in the Information Memorandum of Videocon Industries Ltd. 55. Mr. V Dhoot and Videocon Oil Ventures Ltd, Videocon Hydrozen Holdings Ltd and Videocon Energy Brasil Ltd participated in the val....
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....n oil & gas assets in the CIRP of VIL + 12 Group companies. This appeal was dismissed by this Tribunal vide order dated 5th January 2022. 60. Thus the chain of events make it abundantly evident that, prior to, during and even post CIRP of VIL+12 group companies, Mr. Dhoot has himself sought to segregate Videocon Oil Venture Ltd and Videocon Industries Ltd. It is imperative to state the lenders have not taken any contradictory stance, as alleged by Mr. V Dhoot. The lenders have always maintained that Videocon Industries Ltd and Videocon Oil Venture Ltd are separate entities and the foreign oil and gas assets cannot form part of CIRP of VIL + 12 group companies. 61. Qua contention (vi) we note Videocon Oil Ventures Ltd was never meant to be part of the "single economic entity" with Videocon Industries Ltd. In fact, the letters and correspondence shows that Videocon Oil Venture Ltd, Videocon Hydrozen Holdings Ltd, Videocon Energy Brasil Ltd and Videocon Indonesia Nunkan Inc are meant to be part of "single economic entity". A bare perusal of the Consolidated Financial Statements of the Specified Companies of the Videocon Group as at 31st March, 2017 will unequivocally demonstrate....
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.... be included in the CIRP of the Videocon Industries Ltd. 65. Qua contention (vii), it is pertinent to note Mr. Dhoot did not stop his agitation that the foreign oil & gas assets ought to be included in the CIRP of VIL+12 group companies despite the order passed by this Tribunal on 05.01.2022 in Appeal 650 of 2021. He agitated the same grounds and contentions before the Ld. NCLT, Mumbai Bench by filing his IA 3896 of 2023 along with the application bearing IA 2787 of 2023 filed by the Resolution Professional of Videocon Oil Ventures Ltd. A perusal of IA 3896 of 2023 filed by Mr. V Dhoot shows the same grounds and contentions that have been agitated by Mr. Dhoot in MA 2385 of 2019 and in Appeal 650 of 2021 and rejected by this Tribunal vide order dated 5th January 2022 were sought to be re-agitated by Mr. Dhoot in IA 3896 of 2023. Both the aforesaid applications have been decided by 2 separate orders both dated 26th June 2024 by Ld. NCLT, Mumbai. Mr Dhoot's IA 3896 of 2023 has been dismissed by way of a reasoned order. The VOVL Resolution Professional's IA 2787 of 2023 has been allowed by the Ld. NCLT. In addition to the abovementioned two applications, Mr. V Dhoot re-agitated the....
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.... Limited, the shares held by Videocon Hydrozen Holdings Ltd in Videocon Energy Brasil Ltd and the shares held by Videocon Energy Brasil Ltd in IBV, which is the Brazilian joint venture company. Videocon Oil Ventures Ltd. is a holding company which derives its value from the shares held in the subsidiaries as evident from the chart above. VOVL Ltd. had availed financial assistance from various Indian banks and financial institutions in order to, inter alia, fund the acquisition and ongoing operations of the various assets. The lending and securities structure which has been disclosed to all the participating PRAs makes the aforesaid clear. 70. The invitation to submit EOI and RFRP clearly spelled out the process was for invitation of resolution plan for Videocon Oil Ventures Ltd. The Resolution Professional or the CoC at no juncture invited bids for any individual assets of Videocon Oil Ventures Ltd. or its subsidiaries. Even the Information Memorandum was prepared as per the regulations and gave vital information about Videocon Oil Ventures Ltd. The participating interests were never shown as assets owned by Videocon Oil Ventures ltd. 71. After running a process for almost....
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....OC and the applicant and there is no scope for non-implementation of such offer/plan. Given the conditions the four plans/offers, including the offer of the appellant had stipulated for implementing such offer/plans, it became imperative for the Resolution Professional and CoC to ensure any offer/plan that is ultimately approved by COC and then placed by the Resolution Professional for the approval of the adjudicating authority is ultimately implementable. Therefore, the COC instructed the RP to comply with the conditions which were enshrined in pre-existing contractual documents and which were also pre-conditions for implementation of the offer/plan received in the process. Accordingly, this entire exercise has been done to comply with the legal principle that an offer/ plan approved by COC has to be implementable and at the same time to ensure there is no protracted litigation by any contractual counter-party that their rights have been violated. 75. Accordingly, ROFR notice was issued to BPRL and was so accepted by the same. If ROFR was not given to BPRL, then the resolution plans/offers would not have been implementable. Subsequently, BPRL's offer was put forward for voting ....
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.... BPRL. Admittedly COC comprises of public sector banks and institutions. The contracting party is BPRL, which is a subsidiary of BPCL, which is also a public sector undertaking. This is not a transaction between private parties which is being undertaken in any unscrupulous manner but a transfer which is in furtherance of pre-existing contractual rights and a consequence of offer/plans received during CIRP. 78. It is evident that Mr. V Dhoot's contentions have been considered in detail and dismissed on four separate occasions by different fora, including this Tribunal. It is a settled position of law courts must take cognisance of events and developments subsequent to the institution of proceedings while deciding the lis viz Pasupuleti Venkateswarlu v. Motor and General Traders, (1975) 1 SCC 770, and Beg Raj Singh v. State of U.P. & Ors., (2003) 1 SCC 726]. Thus, the judgement dated 05.02.2022 has settled the issue in the instant appeals. To our considered view, the final order and judgement dated 05.01.2022 in Appeal 650 of 2021 and the order dated 26.06.2024 passed by the Ld. NCLT, Mumbai are well reasoned orders and we are not inclined to interfere. 79. Qua contention (viii....
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....de an offer to purchase the Videocon Energy Brasil Ltd Quotas by matching the offers made by other resolution applicants. The said offer of BPRL was accepted and approved by 99.96% voting of the CoC in its commercial wisdom, which was further approved by Ld. NCLT vide its order dated 26.06.2024. 81. In the CIRP of Videocon Industries Ltd, it is only the shareholding of the offshore subsidiaries held by Videocon Industries Ltd that is included. In the Information Memorandum of Videocon Industries Ltd, it is expressly mentioned that VOVL is a subsidiary of Videocon Industries Ltd and that Videocon Industries Ltd through its subsidiaries Videocon Oil Ventures Ltd and Videocon Hydrozen Holdings Ltd has interests in oil fields in Brazil and Indonesia. 82. Further, it is also mentioned in the Information Memorandum of VIL that pledge has been created in favour of SBICAP Trustee Company Limited (Security Trustee) over the shares of Videocon Oil Ventures Ltd held by the Videocon Industries Ltd. In furtherance of the same, it is pertinent to note vide Invocation Notice dated 09.03.2018, the Security Trustee invoked the pledge over the shares of Videocon Oil Ventures Ltd held by Videoc....