2022 (5) TMI 915 - Tri - Insolvency and Bankruptcy

Seeking revision of timeline for completion of the works of dismantling, removing and lifting of the plant and machinery from Block B of the Lanco Babandh Power Limited - effective and peaceful possession of the site without any hindrances - HELD THAT - In view of the averments made both by the Applicant and the Learned Liquidator, it is observed that due to unruly incidents of trespass and assault on the security personnel deployed at the power plant premises of the Corporate Debtor, the Applicant has not been able to avail peaceful possession of the Plant and Machinery purchased through public auction conducted by the Liquidator, until the issue was resolved with the help of the officers of the District Administration and the Police authorities on the basis of our order in IA 600/2021. It is admitted by the Liquidator that the matter was finally resolved on 09.11.2021 with the help of the District Magistrate and SP of Dhenkanal district. The period of 9 months for dismantling and removal of the plant machinery by the Applicant shall be computed from the date of handing over of peaceful possession of the site by the Liquidator - Application disposed off.

Issues Involved:
1. Extension of timeline for dismantling and removal of plant and machinery.
2. Waiver of penalty for delay in completion of works.
3. Waiver of interest on late payments.
4. Ensuring peaceful possession and protection for the applicant.
5. Release of encumbrances on purchased assets.

Detailed Analysis:

1. Extension of Timeline for Dismantling and Removal of Plant and Machinery:
The applicant, a successful bidder for the assets of Lanco Babandh Power Limited, sought an extension of the timeline for dismantling, removing, and lifting the plant and machinery due to hindrances caused by protests and security breaches. The Tribunal acknowledged the applicant's inability to carry out the works due to law and order issues, which were resolved only on 09.11.2021. Consequently, the Tribunal ordered that the period of 9 months for dismantling and removal shall be computed from the date of handing over peaceful possession of the site by the Liquidator.

2. Waiver of Penalty for Delay in Completion of Works:
The applicant requested the waiver of the penalty imposed for any delay in completion of works as per Clause IX of the Letter of Intent. The Tribunal ruled that any penalty under Clause 9 of the Letter of Intent would be applicable only if the applicant fails to dismantle and remove the plant and machinery within the extended period of 9 months from 17.11.2021.

3. Waiver of Interest on Late Payments:
The applicant sought a waiver of the 12% interest on payments made after 30 days from the issuance of the Letter of Intent, citing the inability to commence work due to unrest at the site. The Tribunal allowed the Liquidator to consider waiving the interest on the last installment if the delay was directly related to the delay in handing over peaceful possession of the site by the Liquidator.

4. Ensuring Peaceful Possession and Protection for the Applicant:
The applicant faced significant disruptions due to protests by ex-employees and other creditors, which included trespassing, violence, and theft. The Tribunal noted that the issue was resolved with the help of the District Magistrate and SP of Dhenkanal district. The Tribunal did not provide a separate order for police protection but recognized the importance of ensuring smooth operations for the applicant.

5. Release of Encumbrances on Purchased Assets:
The applicant requested the release of all encumbrances, charges, and liens on the assets purchased. The Tribunal stated that no prior charge or lien survives once the assets are liquidated by the Liquidator, thus addressing the applicant's concern.

Conclusion:
The Tribunal provided a comprehensive resolution by extending the timeline for dismantling and removal, considering the waiver of interest on delayed payments, and clarifying the applicability of penalties. The Tribunal also acknowledged the resolution of security issues and confirmed the release of encumbrances on the purchased assets. The application was disposed of with these directions.

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