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TMI Blog2019 (8) TMI 878X X X X Extracts X X X X X X X X Extracts X X X X ..... orate Insolvency Resolution Process and do not relate to any amount payable during the Corporate Insolvency Resolution Process . For the reason merely on the ground that the future claim has not been collated by the Resolution Professional , the Appellant- Bharat Petroresources Limited cannot assail the order of approval of plan (dated 25th July, 2018) passed under Section 31 of the I B Code - The Operational Creditors and the Financial Creditors having given almost same treatment, no interference is called for on the ground that Gail (India) Limited has not been treated as Operational Creditor . Application disposed off. - Company Appeal (AT) (Insolvency) No. 550 of 2018, 562 of 2018, 555 of 2018, 802 of 2018 & 38 of 2019 - - - Dated:- 19-8-2019 - Mr. S.J. Mukhopadhaya, Chairperson, Mr. A.I.S. Cheema Member(Judicial) and Kanthi Narahari Member(Technical) For Appellant : Mr. Manish K. Jha and Ms. Pallavi Kumar, Mr. Sudhir Makkar, Sr. Advocate with Mr. Ankit Chaturvedi, Ms. Saumya Gupta, Mr. Azmat H. Amanullah and Mr. Abhishek Choudhary Mr. N P S Chawla, Mr. Aaryan Sharma and Mr. Sujoy Datta, Mr. Anand Varma, Mr. Shwetank Singh and Mr. Dhairya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25% Engineers India Ltd. 20% BF Infrastructure Ltd. 20% Monnet Ispat Energy Ltd. 10% The Appellant- Bharat Petroresources Limited was designated as the Lead Operator to carry out Joint Operations pursuant to the Joint Operating Agreement . 4. Further, case of the Appellant is that as per Joint Operating Agreement , an Operator may issue cash call notices to the Consortium Partners to finance the operations for the applicable calendar month and the consortium partners were liable to contribute in accordance with their participating interest. As per Articles 7.6 and 7.7 of the Joint Operating Agreement , if any Consortium Partner fail to pay in part or full of its share other consortium partners are required to contribute to the amount of default, in accordance with their respective participating interest. 5. According to the Appellant, the Corporate Debtor time to time, defaulted in paying its share against calls ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Operational Creditors ought to be paid in priority to Financial Creditors and in no event later than 30 days after approval of the Resolution Plan . 12. It is also submitted that Para 6 of the Impugned Judgment notes that the liquidation value due to the unsecured financial creditors, operational creditors and other creditors of the Corporate Debtor as per the waterfall mechanism mentioned under Section 53 of the Code is NIL. Pertinently, even though the difference between fair value and liquidation value is more than ₹ 2000 crores, the Adjudicating Authority has approved the Resolution Plan , on the basis of the upfront payment of ₹ 25 crores in favour of Operational Creditors . 13. The counsel for the Appellant submitted that the Resolution Plan is unfair and discriminatory against the Operational Creditors . Company Appeal (AT) (Insolvency) No. 562 of 2018 (Appellant- GAIL (India) Ltd. ) 14. Learned counsel for the Appellant- Gail (India) Ltd. submitted that the Gail (India) Ltd. is also member of the Consortium of Aion Investment II Private Limited JSW Steel Limited ( Successful Resolution Applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for Operational Creditor . 20. It was submitted that after an alleged verification of the claims submitted by various parties including the Appellant and the Bharat Petro Resources Ltd. , the Resolution Professional ultimately categorized the Appellant and Bharat Petro Resources Ltd. in different categories of creditors. The Bharat Petro Resources Ltd. treated as an Operational Creditor whereas the Appellant- Gail (India) Ltd. as an other creditor , despite the fact that the debts owed by the Corporate Debtor to the Appellant and the Bharat Petro Resources Ltd. arise out of identical, facts, circumstances and contractual obligations, stemming from the default in payment of cash calls under the Joint Operating Agreement . 21. It was submitted that the Resolution Professional had categorized Bharat Petro Resources Ltd. as an Operational Creditor , the said Bharat Petro Resources Ltd. is now entitled to receive 21% of its claim, whereas the Appellant- Gail (India) Ltd. having categorised as a creditor other than a Financial Creditor or Operational Creditor by the Resolution Professional , it has not been provided with any amount. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essful Resolution Applicant has inter alia taken the following steps in compliance with the Resolution Plan : (a) Allotment of equity shares to the Financial Creditors of Corporate Debtor pursuant to the conversion of debt amount to ₹ 215,19,82,190/-; (b) Reduction of the equity share capital of the company and extinguishment of the equity share capital held by the promoters of Corporate Debtor and consolidation of the reduced equity share capital of Corporate Debtor ; (c) Completion of the deemed issuance of optionally convertible preference shares to the Financial Creditors of Corporate Debtor ; (d) Completion of payment of the cash equivalent to ₹ 2677,92,38,864/- to the Financial Creditors of the Corporate Debtor ; and (e) Infusion of the working capital and taking over of the Corporate Debtor for running the business by the Successful Resolution Applicant . Accordingly, the approved Resolution Plan , has been duly implemented in entirety in terms of the Resolution Plan by 31st August 2018 including payments to its creditors. 27. Further, according to counsel for the Successful Reso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 18(1) (b) by the Resolution Professional . 33. If any cost incurred during the Corporate Insolvency Resolution Process that cannot be treated to be the claim of an Operational Creditor and therefore, further claim amounting to ₹ 9,92,86,892/- towards future claim made by Bharat Petroresources Limited was rightly not collated by the Interim Resolution Professional / Resolution Professional . 34. For the reason aforesaid merely on the ground that the future claim has not been collated by the Resolution Professional , the Appellant- Bharat Petroresources Limited cannot assail the order of approval of plan (dated 25th July, 2018) passed under Section 31 of the I B Code . 35. Gail (India) Limited is identically situated like Appellant- Bharat Petroresources Limited . Gail (India) Limited filed two claims as Operational Creditor ; one amounting to ₹ 19,13,51,015/- for operations carried out under Block 1 and the other for ₹ 9,58,88,886/- for operations carried out under Block 2. The claims were filed by the Appellant within time, but instead of filing the claim in Form B, on wrong presumption they were filed in Form-F. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... secured/unsecured or dissenting/assenting creditors, and such discrimination is impermissible. Unsecured Financial Creditors Dissenting NIL Assenting Equity Amount + Converted Debt Secured Financial Creditors Dissenting Priority Payment (nominal amount equivalent to liquidation value proportionate to accepted debt) Assenting Refinanced Debt + Equity Amount + Converted Debt 41. It is also submitted that the Appellant has been wrongly categorized as Unsecured Financial Creditor towards claim dated 7th December 2017 despite having exclusive mortgage over property of the Corporate Debtor . 42. Learned counsel for the Appellant submitted that the plan is discriminatory because it baselessly treats Appellant as Unsecured Financial Creditor for its claim dated 7th December, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m in respect to the corporate guarantee as unsecured claim. The IFCI Limited had raised no objection; on the other hand, it accepted its status as an Unsecured Creditor in reference to its claim. 51. It is further stated that IFCI Limited is also estopped from objecting to the Resolution Plan , and/or treatment of claim in reference to the corporate guarantee given by the Corporate Debtor as Unsecured as ( a ) IFCI Limited has voted in favour of the Resolution Plan , without any protest or objection as to any of the terms of the Resolution Plan ; ( b ) no objection was raised by IFCI Limited before the Adjudicating Authority, where the approval application was pending for more than three months; ( c ) IFCI Limited has already accepted the full and final settlement under the Resolution Plan including inter alia an upfront payment of ₹ 83.01 Crores, equity worth ₹ 11.02 Crores and optionally convertible preference shares worth ₹ 12.40 Crores (subsequently bought out by the special purpose vehicle i.e. Milloret Steel Limited set up pursuant to the resolution plan in lieu of payment of equal amount). Notably, IFCI Limited has preferre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 6,76,23,265 unilaterally reduced/setoff by Resolution Professional towards material allegedly supplied to BHEL by CD without verifying from BHEL 2*45 MW ₹ 15,76,01,904.22 (Outstanding ₹ 6,13,72,750 + Interest- ₹ 9,26,29,154 ₹ 2,93,87,500 Claim of interest rejected and following amounts also reduced by Resolution Professional- -₹ 1,58,31,250 (Liquidated Damages) -₹ 1,55,54,000 (Overrun charges) -₹ 6,00,000 (amount to be paid by KO Gransons for work of turbine done by BHEL) Total Claimed amount- 25,73,70,781 (Twenty five crores seventy three lacs seventy thousand seven hundred and eight one rupees) =₹ 8,09,99,400 55. Learned counsel for the Appellant submitted that the interest was payable in terms of the payment clause no. 34 of the Supply Contract dated 14th May, 2010. Despite writing several emails, the Res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licant , the Successful Resolution Applicant has rightfully relied upon the same and its interests cannot be prejudiced for information contained in the Information Memorandum. 59. It was contended that the Appellant- Bharat Heavy Electricals Limited is estopped from challenging the classification at this belated stage. 60. It was further submitted that subsequent to the approval of the Resolution Plan by the Adjudicating Authority, the Successful Resolution Applicant has inter alia taken the following steps in compliance with the Resolution Plan : (a) Allotment of equity shares to the Financial Creditors of Corporate Debtor pursuant to the conversion of debt amount to ₹ 215,19,82,190/-; (b) Reduction of the equity share capital of the company and extinguishment of the equity share capital held by the promoters of Corporate Debtor and consolidation of the reduced equity share capital of Corporate Debtor ; (c) Completion of the deemed issuance of optionally convertible preference shares to the Financial Creditors of Corporate Debtor ; (d) Completion of payment of the cash equivalent to ₹ 2677,92,38 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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