2019 (8) TMI 1743 - AT - Companies Law

Settlement of claim of creditors - no Progress Report has been filed by Union of India/ILFS - HELD THAT - Union of India/ILFS are allowed to file the Progress Report by tomorrow. Before the next date of hearing, the Union of India must pass final order and settle the claim of all the creditors - The Union of India/ILFS are directed to file a fresh Progress Report by 3rd September, 2019. Post these appeals for orders on 5th September, 2019 at 3 00 PM on the top of the list.

Summary

Issues:
1. Progress report submission by Union of India/ILFS.
2. Settlement of claims of creditors for three Amber/Green Entities.
3. Steps to be taken with regard to 82 Red Entities.
4. Permission requirement for dealing with assets of Red Entities.
5. Conducting meetings with Financial Creditors/Lenders.
6. Debiting amounts in violation of the tribunal's order.
7. Viability of a Red Entity to pay debts.
8. Filing a fresh Progress Report by Union of India/ILFS.

Analysis:
1. The Appellate Tribunal noted that despite a previous order, no Progress Report had been filed by Union of India/ILFS. They were given another opportunity to submit the Progress Report by the next day.

2. The Tribunal emphasized that before the next hearing, the Union of India must finalize and settle the claims of all creditors concerning three specific Amber/Green Entities according to a signed Term Sheet. Additionally, they were instructed to notify all Financial Creditors of other Amber Entities and seek their consent similar to the process followed for the mentioned three entities.

3. Regarding the 82 Red Entities, the Union of India/ILFS were directed to outline the steps they intended to take. Prior permission from a designated authority was mandated before any transactions involving the assets of these entities to avoid violating the Interim Order of the Tribunal.

4. The Tribunal stressed the importance of obtaining prior approval before selling, transferring, or dealing with any assets of the Red Entities. Failure to do so would be considered a breach of the Tribunal's Interim Order issued in October 2018.

5. Union of India/ILFS were permitted to convene meetings with Financial Creditors/Lenders and urged to expedite the resolution process for all Amber Entities, especially the three specific ones and the remaining ten entities, considering the significant time elapsed since the Interim Order.

6. In case any Bank/Financial Institution had debited amounts contrary to the Tribunal's order, Union of India/ILFS were authorized to report the matter to the designated authority for appropriate action. The institutions involved were to be informed that such actions might lead to contempt of court.

7. A Red Entity, represented by a senior counsel, expressed readiness to pay off debts, indicating viability and solvency. The Tribunal directed that if confirmed, the concerned Financial Creditor could bring this to the attention of the designated authority for necessary actions.

8. Finally, Union of India/ILFS were directed to submit a fresh Progress Report by a specified date, and the appeals were scheduled for further orders on a specific date and time.