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TMI Blog2019 (4) TMI 333X X X X Extracts X X X X X X X X Extracts X X X X ..... dmitted claim of the Applicant without showing any reason in the impugned communication. Hence, such communication dated 14.05.2018 is not legally sustainable and liable to be set aside. For the aforesaid reasons, the RP’s communication dated 14.05.2018 is hereby set aside. RP is directed to update the total claim of the present Applicant, as being an Operational Creditor, submitted before him, in the relevant documents, i.e. List of Creditors and Memorandum of Information, as per the norms and criteria adopted for the purpose of consideration of a Resolution Plan for other related proceedings, so that proper apportionment of the payable amount can be made. It is pertinent to note here that the total claim of the Applicant seems to be less than 10% of the entire debts due by the Corporate Debtor company. Therefore, in such situation, in case a Resolution Plan is not approved, then the applicant would certainly get minimum payment as per the criteria adopted and norms fixed for liquidation value of the assets of the Corporate Debtor company, however, the present Applicant is having less than 10% of the claim of the entire debts payable by the Corporate Debtor, is having no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icipating industry, viz., Larsen Toubro (L T) had sought permission for withdrawal of additional water for which it had agreed to pay their pro rata contribution as per the MoU. It is further submitted that Hazira Area Industries Association (HAIA - a special purpose vehicle) had demanded additional pro rata contribution from both these industries i.e. Corporate Debtor and Larsen Toubro to be paid at the time of obtaining NoC from the HAIA; however, both of the industries sought a period of moratorium until their expansion project was ready for water drawl. Accordingly, the Corporate Debtor and L T gave undertaking to the HAIA to fulfil all the conditions of the NoC issued by the HAIA and all the conditions provided under the Agreement and MoU. The copy of the undertaking dated 19.12.2009 has been annexed to the present application as Annexure-E. 4. It is further stated that the Corporate Debtor company and L T have been given NoC by HAIA for right to draw additional water i.e. 30 MGD 85 2.2 MGD receptively subject to adherence to conditions provided under the Agreement and the MoU. It is pertinent to note that after obtaining such sanction of increased water demand fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted that the Applicant, along with other Participating Industries, had informed the Corporate Debtor company and L T that any partial sum paid by them would be first adjusted towards the interest amount only. Thereafter, the Applicant, along with other Participating Industries, repeatedly persuaded the Corporate Debtor company and L T to pay the principal amount as well as the interest amount @ 24% p.a. as per the terms and conditions of the Agreement, read with the MoU. A copy of demand note sent to the Corporate Debtor company has been annexed to the Application as Annexure-H. 8. It is further contended that due to the default of the Corporate Debtor company in making pro rata contribution for drawing additional water from the Singanpur weir, the Applicant had submitted its claim amounting to ₹ 16,41,67,107/- (which included the interest computed up to 31.05.2018) against the Corporate Debtor, before the Resolution Professional of the Corporate Debtor company vide email and letter of claim dated 20.04.2018. Copies of the e-mail and letter of claim dated 20.04.2018 are annexed to the application as marked as Annexure-I. 9. It is further informed that the RP vide h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C ), in terms of the Tripartite Agreement dated November 09, 1993 ( Tripartite Agreement ) entered into between SMC and the various Participating Industries mentioned therein (which includes the Corporate Debtor) ( Participating Industries ) and the Memorandum of Understanding dated November 09, 1993 ( MoU ) entered into between the Participating Industries. The Amount Claimed comprises of claims towards the principal amount payable in respect of the additional water drawl on a pro rata basis (to the tune of INR 4,58,24,474/- (INR 99,07,972 after adjusting against interim payments and tax deductible at source ( Principal Amount ) as well as interest amount that are already chargeable in respect of the default in payment of such principal payments by the Corporate Debtor, @24% compounded annually (to the tune of INR 15,33,42,633/- (incorrectly provided for under the application as INR 15,42,59,135/-) for the period ending on May 31st 2018 ( Interest Amount ). 2) Vide e-mail dated May 14, 2018, Respondent No.l partially admitted the Amount Claimed by the Applicant vide the Proof of Claim to the tune of its claim pertaining to the Principal Amount after adjusting all the interim pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bility of the Corporate Debtor to pay the Interest Amount claimed is in dispute. (c) Further, the provisional debit note submitted by the Applicant also seems to pertain to the liability of the Essar group (including the liability of Essar Power (shown as EPOL)) and does not seem to provide for the exclusive liability of the Corporate Debtor in this regard. (d) The Corporate Debtor has time and again disputed its liability to pay the Interest Amount, which is evident from the following; (i) As per the minutes of meeting of the Hazira Area Industries Association (the company formed for purposes of the Project) ( HAIA ) held on November 19, 2016 (a copy of which is annexed as Exhibit-I) the following was noted: QUOTE (g) Non-Payment of Contribution towards CAPEX of Singanpur Weir Project by ESSAR Essar has obtained Addl. Water Drawl Rights beyond its pro rata contributions towards CAPEX of Singanpur Weir Project (SWP), for which it has to repay to all Participating Industries (PIs) as per the Tripartite Agreement and MoU for SWP. Some of the PIs present viz, ONGC and RIL raised grave concern about non-receipt of payment of their respective shares. Secret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exed to the Application as Annexure-I) and had thus only admitted the Amount Claimed to the extent of the Principal Amount. 13. We duly considered the rival submissions made before us by the ld. Counsels for both parties and also perused the material available on record. 14. A perusal of the impugned communication dated 14.05.2018 goes to show that RP did consider the claim made by the applicant and out of ₹ 16,41,67,107/-, admitted ₹ 99,07,972/- and not admitted amount of claim of ₹ 15,42,59,135/-. However, the RP did not mention the reason for not considering such claim of the present Operational Creditor in its main communication dated 14.05.2018, which is now under challenge and being aggrieved with the aforesaid communication, the applicant submitted its representation dated 25.09.2018 reiterating its claim along with the rate of interest payable and, in support of its claim, it has also enclosed a copy of statement, i.e. Provisional Demand to the Corporate Debtor company, which shows the net amount payable to M/s. ESSAR GROUP - EPOL is ₹ 12,14,71,514/- towards draw/consumption of additional water. However, the RP is stated to have not agreed to r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... porate debtor. (2) For the purposes of sub-section (1), the resolution professional shall undertake the following actions, namely- (a) take immediate custody and control of all the assets of the corporate debtor, including the business records of the corporate debtor; (b) represent and act on behalf of the corporate debtor with third parties, exercise rights for the benefit of the corporate debtor in judicial, quasi-judicial or arbitration proceedings; (c) raise interim finances subject to the approval of the committee of creditors under Section 28; (d) appoint accountants, legal or other professionals in the manner as specified by Board; (e) maintain an updated list of claims; (f) convene and attend all meetings of the committee of creditors: (g) prepare the information memorandum in accordance with Section 29; (h) invite prospective resolution applicants, who fulfil such criteria as maybe laid down by him with the approval of committee of creditors, having regard to the complexity and scale of operations of the business of the corporate debtor and such other conditions as maybe specified by the Board, to submit a resolution plan or plans; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Memorandum of Information, so as to apprise the Resolution Applicant. Our such view finds support from the decision of the Hon ble Supreme Court in Arcelormittal India (P.) Ltd. (supra) and Swiss Ribbons (P.) Ltd. (supra) as well as Vijay Kumar Jain v. Standard Chartered Bank = 2019 (2) TMI 97 and in Innoventive Industries v. ICICI Bank Ltd. [2017] SCL 625 (SC). 19. Therefore, by placing reliance on the above stated judgment, we are of the considered opinion that the RP has not been empowered by the I B Code to adjudicate a claim. Hence, the present application succeeds on this limited legal ground alone, because it is found that the RP has rejected/non-admitted claim of the Applicant without showing any reason in the impugned communication. Hence, such communication dated 14.05.2018 is not legally sustainable and liable to be set aside. 20. For the aforesaid reasons, the RP s communication dated 14.05.2018 is hereby set aside. 21. The RP is directed to update the total claim of the present Applicant, as being an Operational Creditor, submitted before him, in the relevant documents, i.e. List of Creditors and Memorandum of Information, as per the norms and criteria ado ..... X X X X Extracts X X X X X X X X Extracts X X X X
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