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TMI Blog2021 (11) TMI 843X X X X Extracts X X X X X X X X Extracts X X X X ..... t and other input cannot be examined as these are not the subject matter of the Appeal even remotely. The Code is silent on the issue of Group Insolvency and only when input is available in respect of all subsidiary companies and holding company then only it can be examined and that too only with respect to the material available in the Appeal Paper book and relief sought. This Tribunal is the creature of the statute only and hence, it has to work within the framework of the Code. As far as filing of claim by the Respondent and withdrawing the claim, thereafter, is the prerogative of the Bankers at its own risks and based on its own evaluation. The claim has been withdrawn and permitted by the Adjudicating Authority . Hence, this issue is not of much consideration in the present appeal. Each member of CoCs have an independent mechanism for evaluation considering its own benefits and risks - it is amply clear that the Appellant has to prove the fraudulent or malicious intent and has to file specific application under Section 65 of the Code. The Appellant has not done so. Hence, this Tribunal cannot accede to the request of the Appellant to annule the proceedings. The Adjud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned order. 4. The Appellant has made the following submissions as stated below: a. The Appellant has submitted that it is an Engineering Procurement Construction Contract Company with a business model of Executing BOT (Build-Operation-Transfer) Projects through its six special purpose vehicle company which includes corporate debtor /DHPL. b. The Appellant has stated that the DHPL was incorporated as a 100% subsidiary of the Parent Company which was the investment vehicle created for infusing promoter contribution into the SPVs. The SPVs were created by the Parent Company to fulfil contractual obligation laid down for BOT projects merely to execute these projects. These projects were awarded to the Parent Company and was envisaged to be executed using the expertise and experience of the Parent Company and the promoter contribution infused by the Parent Company. Post the incorporation of the SPVs including the Corporate Debtor, the Parent company continued to be in control and management of them, took on itself all the obligations as an EPC contractor (Fixed Price) and as a financial sponsor. The Adjudicating Authority ordered for commencement of CIRP against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar prayer alongwith an affidavit, which is pending for adjudication. The CoC of the parent company has specifically passed a resolution and allowed the Resolution Professional to proceed with the application IA No. 2497 of 2019 in the course of the 18th CoC meeting. Financial Creditors constituting 66.6% of the CoC of the parent company has approved this Resolution. IA No. 2497 of 2019 still remains pending for adjudication. f. It is also submitted that the Respondent no.2 is bound by the decision of the CoC of the parent company and even if it is dissenting, it cannot opt of circumvent the decision. The financial creditor forms a part of the CoC of EIEL and has been participating in the CoC meetings. The CoC of EIEL had specifically approved the consolidation during the course of the 19th CoC meeting with 66.6% voting and the Respondent No.2 is thus barred as per Edelweiss Asset Reconstruction Company Ltd Vs. Sai Regency power Corporation Pvt. Ltd Ors CA (AT) (Ins) No. 887 of 2020. Thus, it is established that all the assenting as well as the dissenting members of the CoC of the parent company are bound by the majority decision. The Respondent No.2 is fully aware that to fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is held 37. It is thus clear that, where a statute itself lifts the corporate veil, or where protection of public interest is of paramount importance, or where a company has been formed to evade obligations imposed by the law, the court will disregard the corporate veil. Further, this principle is applied even to group companies, so that one is able to look at the economic entity of the group as a whole . That in Radico Khaitan Ltd. Vs. BT FC Pvt. Ltd. 2021 (4) TMI 144,NCLAT, Delhi, the Appellant, an operational creditor filed an appeal against the impugned order 02.09.2020 passed by the Adjudicating Authority, Bangalore Bench, where the Adjudicating Authority had rejected the application filed by the appellant for consolidation of two CIRP, stating that the Appellants being operational creditor have no locus standi to file the consolidation application / to interfere in the CIRP of the Respondent No.2. g. It is also stated that in the light of above contentions, the malafide conduct of the Respondent No.2 and in order to achieve value maximization as well as to ensure that the commercial judgment of the CoC of EIEL is to push ahead for consolidation of EIEL and its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. NHAI granted approval for one-time fund infusion to the extent of INR 2798.8 Million subject to the terms of tripartite agreement among the Corporate Debtor, NHAI and Bank of India (as the lead bank of the senior lenders) and that on 27.03.2017, due to default in payment of interest under the DHPL facilities for the period from September 2016 to February 2017, the Respondent No.2 issued a demand notice to the Corporate Debtor demanding payment of total outstanding ₹ 187.7 million under the DHPL facilities. However, the Corporate Debtor failed to make payment of the outstanding monies under the DHPL facilities demanded under the aforesaid demand notice to the Respondent No.2. The account of the Corporate Debtor was declared as NPA on 30.09.2016 w.e.f. 31.12.2015. b. On 26.04.2018, the Tripartite Agreement as referred to above, was executed, inter alia by the Corporate Debtor and the Bank of India, being the Lead Bank representative of the Senior Lenders (including ICICI Bank). By virtue of signing the said Tripartite Agreement, the Corporate Debtor admitted and acknowledged the facilities granted by the Senior Lenders, including the DHPL facilities granted by the Resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ault(s) in repayment of its debts to its creditors including the Respondent no.2. e. It is relevant to note that on 29.08.2020, the Appellant herein i.e. Mr. Nakul Bharana filed an Additional Affidavit in the Company Petition before the Ld. Adjudicating Authority stating that the Committee of Creditors of Era Infra Engineering Limited , which is a separate legal entity vis-a-vis the Corporate Debtor, has allegedly voted for the consolidation of the Corporate Debtor with Era Infra Engineering Limited. In view thereof, Mr. Nakul Bharana averred that the decision of the majority of Committee of Creditors of Era Infra Engineering Limited for the consolidation of the Corporate Debtor would be binding upon the Answering Respondent herein. Such an argument is not only fallacious but also untenable in law in view of the fact that ICICI had withdrawn its claim from the CIRP of Era Infra Engineering Limited. f. It is also stated that the Appellant has also mentioned that the present company appeal has been filed under Section 61(5) of the Code. However, there is no such statutory provision under the Code. In view of the above, it is clear that the present appeal is not maintainable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in that CIRP. Right of lenders to withdraw claim was unequivocally recognised by the RP when proposal for consolidation as discussed at the 18th COC of the parent company. b. Once admitted, CIRP initiated is a proceeding in rem. Whether application under Section 10 is admitted or that of financial creditor under Section 7 is admitted, the result is the same and the consequent CIRP is proceeding in remain for all creditors and stakeholders. Therefore, the same is not a ground for challenge to the admission order. The CD admits that it has valid debt and has committed default by filing of an application under Section 10 of Code. Various other acknowledgments of debt are also mentioned herein below. The allegation that application under Section 10, IBC was filed in pursuance of an alleged scheme of consolidation is false, legally untenable and an afterthought because Section 10 does not provide for filing of an application for such a reason. c. It is also stated that the COC of the parent company has opted for consolidation of CIRP is irrelevant to CIRP of Corporate Debtor. The COC of the Corporate Debtor ought to consent to such consolidation. No consent has ever been given by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g for works to be carried out was done considering the project in the hands of each subsidiary company. Evaluation for lending is based on each subsidiary s separate business model and risk profile. The parent Company has guaranteed the loans of SPVs such as the Corporate Debtor, however SPVs such as the Corporate Debtor have not guaranteed loans of the parent company. Most importantly, the lenders have different charge in the parent company SPVs such as the Corporate Debtor and are not co-obligors. d. It is also stated that the Appellant wrongly contends that the present case is one of alleged double claim by R2. Participation of R2 as creditor in the parent company is at the sole discretion of the R2 and R2 admittedly withdrew its claim from the parent company. The withdrawal of claim is permitted and has been acknowledged by the RP of the parent company in the COC minutes as well as vide letter dated 19.03.2019. The issue raised is false and frivolous. Balance Sheet of the Corporate Debtor acknowledges debt to R2 and all lenders. The Hon ble Supreme Court vide order in the case of Asset Reconstruction Company (India) Limited v. Bishal Jaiswal, CA No. 323 of 2021, has catego ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g company then only it can be examined and that too only with respect to the material available in the Appeal Paper book and relief sought. This Tribunal is the creature of the statute only and hence, it has to work within the framework of the Code. d. As far as filing of claim by the Respondent and withdrawing the claim, thereafter, is the prerogative of the Bankers at its own risks and based on its own evaluation. The claim has been withdrawn and permitted by the Adjudicating Authority . Hence, this issue is not of much consideration in the present appeal. Each member of CoCs have an independent mechanism for evaluation considering its own benefits and risks. e. The financial creditor, who filed the initiation of CIRP in the present case i.e. ICICI bank has dissented voting in the agenda of consolidation of the CIRP of the parent company with its SPVs including the Corporate Debtor for which two applications CA No.2448/2019 and 2497/2019 filed in CP No (IB) 190/2017 which is pending for adjudication before the Adjudicating Authority and cannot be the sole ground for setting aside the order dated 18.09.2020 passed in CP No.(IB)725/2020 ordering initiation of CIRP of the Cor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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