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TMI Blog2021 (3) TMI 1333X X X X Extracts X X X X X X X X Extracts X X X X ..... rder 39 Rule 1 2 CPC, it has been made clear that undertaking given by the holding company on behalf of Subsidiaries Company is not binding on the subsidiary companies because they are distinct entities having freedom to take actions as per its requirement. Therefore, once IBC proceeding is initiated, unless the proceeding in which order has been granted has overriding effect over IBC, such proceeding or order cannot come in the way of admitting a Company Petition under Section 7 of the Code. Upon perusal of the documents, it appears that these loans were given to the Corporate Debtor in between 2015 and 2018 i.e. before the Hon'ble High Court of Delhi passed order on 12.10.2018. In the said order, it has only been said that Altico should not create any third party right in favour of others. However, since there are two transactions one is Debenture transaction and another is Facility Agreement, out of these two, none being repaid by the Corporate Debtor despite notice has been served upon it, even if Facility Agreement issue is excluded as per the order of Honourable High Court of Delhi passed on 12.10.2018 then also, the financial creditor could establish its case by say ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e trustee of ACRE-81 -Trust. 4. The petitioner submits that upon execution of Debenture Trust Deed dated 04.12.2015 between Ramprastha SARE Reality Pvt. Ltd. and Axis Trustee Services Ltd. for issuance of 9,500 secured, rated, to be listed, redeemable, non-convertible debentures of a face value of ₹ 1,00,000 each aggregating to nominal value of ₹ 95,00,00,000 being issued for cash, on private placement basis, in single series. Altico has also subscribed for another 2,200 secured, unlisted, redeemable, non-convertible debentures of a face value of ₹ 10,00,000 each aggregating to ₹ 220,00,00,000 upon execution of Debenture Trust Deed dated 24.11.2016 between Ramprastha SARE Reality Pvt. Ltd. and Axis Trustee Services Ltd. for the debentures subscribed by Altico. 5. Over and above the subscription of debentures, Altico and one KKR India Asset Financial Pvt. Ltd. (for brevity 'KKR ) has entered into a Facility Agreement on 14.05.2018 with SARE Gurugram Private Limited, Altico and KKR extended a term loan facility of an aggregate value of ₹ 100,00,00,000. The disbursement commitment was divided between Altico and KKR as being ₹ 60,00,00, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the composite transaction entered between them. The purpose of these supplementary and ancillary agreements was only to aid the execution and performance of the Purchase Agreement which is the Principal Agreement. This agreement has been entered into on 28.04.2011 between Wafra and SARE Public inter-alia providing that the Security created under the Debentures becomes enforceable upon occurrence of an Event of Default and upon the Security become enforceable, Wafra will have right to appoint a Receiver to perform various functions as illustrated under the Debenture Trust Deed. 9. Similarly, Share Pledge and Assignment Agreement dated 28.04.2011, was also executed between Wafra, SARE Public and SARE Cyprus. By virtue of this Share Pledge and Assignment Agreement, the entire shareholding of SARE Cyprus was pledged in favour of Wafra by SARE Public. Due to default in repayment on the bond by SARE Public and upon the request of SARE Public, Wafra refinanced and restructured the original bond into two separate bonds with aggregate original principal amount of US $37,944,000 of SARE Public's Series A Secured Convertible Senior Bonds due 2020, and an aggregate original principa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g nature of the Facility Agreement entered into between SARE Public and Wafra, and held that defendants in the suit are permitted to create charge over the assets of the subsidiary Company, when appeal was filed by KKR over the said order dated 08.01.2020, Division Bench of Hon'ble High Court of Delhi on 07th 17th July, 2020 restrained the mandate given by Single Judge to the extent saying that the defendant Nos. 1 to 15 shall not create any charge over the assets of the respective companies. 14. On appointment of Receiver for the reason SARE Public failed to repay around US$60 Million repayable to Wafra, the intervener counsel has submitted that since holding company of the subsidiary having entered into purchase agreement in between SARE Public and Wafra and since a clause has been executed stating that the said agreement is not only binding upon SARE Public but also upon its subsidiaries, this Bench cannot pass an admission order to initiate Corporate Insolvency Resolution Process under the Code as because these subsidiary companies have no right to enter into any transaction with regard to their assets for they have already been bound by the clause in the Purchase Ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;ble Supreme Court of the State of New York thereafter the said Receiver has filed a declaration suit before the Hon'ble High Court of Delhi against its Indian Subsidiary Companies as well as the Lenders who have provided loans to Indian Subsidiaries for development of their projects. It is no doubt that on 12.10.2018 Hon'ble High Court of Delhi passed an interim order restraining this Corporate Debtor from creating any third party rights and the defendant nos. 16 17 i.e. KKR and Altico are restrained from giving effect to the Facility Agreement dated 14.05.2018 to the extent of charge, security, mortgage or pledge of any of the assets of defendant nos. 1 to 15 till the next date of hearing. Thereafter, the Hon'ble High Court heard at length and passed an order holding that subsidiaries are not bound by the undertaking or agreement entered into by the Holding Company. It has not decided the main relief sought by the applicant herein. It has been stated that clarification dated 01.11.2018 shall continue to operate. 20. It is no more res Integra that once IBC petition is filed, the only point i.e. to be decided is whether debt and default have been proved by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of Honourable High Court of Delhi passed on 12.10.2018 then also, the financial creditor could establish its case by saying that Assignment with respect to Debentures is valid and not in violation of the orders of Hon'ble High Court and there being no contest with regard to the debt and default from the Corporate Debtor side, we believe that the applicant herein has proved the existence of debt and default under both the transactions. With regard to facility agreement, that issue being pending before the Hon'ble High Court of Delhi, since the petitioner has proved existence of debt and default in relation to debentures issued for an amount of ₹ 95 Crore and ₹ 220 Crore along with interest, we hereby hold that it is a case fit for admission to initiate CIRP taking default of repayment of debenture amounts by the corporate debtor, in view thereof, this petition is hereby admitted by appointing CA Ajit Gyanchand Jain having Registration No. IBBI/IPA-001/IP-P00368/2017-18/10625 and email-id [email protected] as Interim Resolution Professional with directions as follows:- (1) In pursuance of Section 13 (2) of the Code, we direct that Interim Insolvency Resol ..... X X X X Extracts X X X X X X X X Extracts X X X X
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