2024 (4) TMI 436 - AT - Insolvency and Bankruptcy

Prayer for interim distribution of funds lying in the Escrow Account of the Company - date on which Liquidation Value has to be taken for distribution of amount to the creditors - IL FS had not been servicing the debt since October 2018 - HELD THAT - The Liquidation Value as on 30.09.2018 is as per order dated 12.03.2020 where this Tribunal has accepted 15.10.2018 as the cut-off, there are no error in fixing the Liquidation Value as on 30.09.2018. Furthermore, the Lenders with the requisite majority has already taken a decision to approve Restructuring Plan, the SBI, who is also one of the Lender, cannot be permitted to wriggle out of the terms of the ITPCL Restructuring Plan and as per decision taken by the majority, prescribed in Clause 10 of the RBI Circular, the Restructuring Plan and the Liquidation Value taken therein is binding on the Applicant. In the present case, cut-off date has already been laid down by this Tribunal in the order dated 12.03.2020 2020 (3) TMI 1398 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI and the Liquidation Value as fixed by the Lead Bank cannot be said to be erroneous. The relevant fact which is brought to the notice here is that the Valuers report was received by the Lead Bank and thereafter third Valuer was engaged due to difference in the valuation by the Valuers and all the process was noticed and discussed in the Joint Lenders Meeting. There is no dispute that Liquidation Value as per the Valuers Report submitted by Lead bank has been communicated to the Applicant. There are no error in the Master Restructuring Plan having based on Liquidation Value as on 30.09.2018. Application dismissed.

Summary

Issues Involved:
1. Interim distribution of funds lying in the Escrow Account.
2. Provision of Liquidation Value as per RBI Circular.
3. Calculation and provision of updated Liquidation Value.

Summary:

1. Interim Distribution of Funds:
The State Bank of India (SBI) filed IA No.3730 of 2023 seeking interim distribution of funds lying in the Escrow Account of IL&FS Tamil Nadu Power Co. Ltd. (ITPCL). The Tribunal noted that since the Restructuring Plan had already been prepared and submitted, the application for interim distribution had become infructuous.

2. Provision of Liquidation Value:
SBI filed IA No.4453 of 2023 requesting the Lead Bank to provide the Liquidation Value as per Clause 7.2 of the RBI Circular dated 07.06.2019 and the Inter-Creditor Agreement (ICA). The Tribunal observed that the Liquidation Value was communicated to the Applicant prior to the approval of the Resolution Plan, rendering the application infructuous.

3. Calculation and Provision of Updated Liquidation Value:
SBI filed IA No.5112 of 2023 seeking a stay on further distribution of funds until the latest Liquidation Value as on the date of the Master Restructuring Agreement (MRA) was provided. The Tribunal highlighted that the Liquidation Value was calculated as of 15.10.2018, following the order dated 12.03.2020, which set 15.10.2018 as the cut-off date. The Tribunal found no error in the Liquidation Value being based on 30.09.2018 and dismissed the application.

Conclusion:
The Tribunal dismissed IA No.3730 of 2023 and IA No.4453 of 2023 as infructuous. IA No.5112 of 2023 was also dismissed, affirming the Liquidation Value based on the cut-off date of 30.09.2018 as per the Tribunal's earlier order.