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TMI Blog2022 (3) TMI 602X X X X Extracts X X X X X X X X Extracts X X X X ..... .3. (e) (H) which provided that balance Financial Debt forming part of the Admitted Debt shall stand converted into non-convertible redeemable preference shares of the company which shall be issued to the Financial Creditors upon conversion of the unpaid debt. The above provision in the Plan for conversion into non-convertible redeemable preference shares of the balance financial debt has no bearing on specific provisions in the plan by 3.3.(iii)(g) which clearly provided that excluded securities shall not be extinguished or waived under this Resolution Plan. In the clarification Order dated 03.02.2022, the Adjudicating Authority in Paragraph 29 has again observed that excluded securities are subsumed under Clause 3.3(iii)(c )(h) wherein the plan proposed that any balance financial debt forming part of admitted debt shall be converted into non-convertible redeemable preference share, for the reasons which are noticed, the observations in Paragraph 29 of the Clarification Order also cannot be sustained and deserves to be deleted. The observations of the Adjudicating Authority in Paragraph 29 that the approval of the resolution plan ipso facto discharge the enforcement of exclude ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otes on 25th June, 2021. The Resolution Professional filed an Application No. 1447 of 2021 before the Adjudicating Authority under Section 31 of the Code for approval of the Resolution Plan. On 04th August, 2021, ICICI Bank filed an application bearing I.A. No. 1799 of 2021 before the Adjudicating Authority seeking clarification on enforcement of the Excluded Securities under the Resolution Plan. The Adjudicating Authority vide its separate Order dated 03.02.2022 approved the Resolution Plan and also vide same Order dismissed the I.A. No. 1799 of 2021 filed by the ICICI Bank. 4. We have heard Mr. Tushar Mehta, Learned Solicitor General appearing on behalf of Committee of Creditors of Ushdev International Ltd., Mr. P. Chidambaram, Sr. Advocate appearing for the Resolution Applicant-Taguda Pte. Limited, Singapore, Mr. Krishnendu Datta, Sr. Advocate for ICICI Bank and Ms. Fatema Kachwalla, Advocate for the Resolution Professional. With the consent of the parties, these Appeals are being decided at the admission stage. 5. Mr. Tushar Mehta, Learned Solicitor General submits that Resolution Plan approved by the Committee of Creditors specifically provided that excluded securi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id prayer. 8. Learned Counsel for the CoC has submitted before us that CoC has no objection with regard to the prayer of the ICICI Bank in treating his dissenting vote to the Resolution Plan as assenting vote. 9. Learned Counsel for the Resolution Professional does not oppose the prayers made in the Appeals. 10. We have considered the submissions of Learned Counsel for the parties and perused the record. 11. Before we proceed to consider the respective submissions, it is necessary to notice certain portion of the Resolution Plan which is approved by the Committee of Creditors. Schedule I of the Resolution Plan deals with Definitions and Clause 21 of the Schedule I deals with Excluded Securities in following words: Excluded Securities shall mean the Promoter Guarantee, corporate guarantee dated 10th August, 2016 given by Ushdev Engitech Limited to ICICI Bank, and the Encumbrances created on the following immovable properties by the Promoters or third parties in favour of the Financial Creditors; (i) Basement No. 8, Apeeyjay House, Mumbai; (ii) Unit 1,2, 3 2nd floor, Old Harileela House, Mumbai; (iii) Villa no 92 94 at Lavasa; and (iv) Shop no 8,9,10 Tiara Comple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be extinguished or waived under this Resolution Plan and shall be assigned to Taguda India Prvaite Limited (which entity is the Identified Affiliate), along with the payment of INR 50 crore constituting the Assigned Debt by Taguda Indai Private Limited in the manner set out in Schedule XI. The Excluded Securities shall also not be extinguished or waived under this Resolution Plan and will continue be available with the Financial Creditors in accordance with their terms, which may be exercised by the Financial Creditors at their discretion for its for its debt. All other securities or other Encumbrances provided by the Company including on the fixed assets of the Company shall be extinguished as on the Final Settlement Date. The Financial Creditors reserve the right to take any action against the Promoters. 13. Sub-Clause 3.3(v) also makes it clear that excluded securities shall continue to survive in the manner set out in this Resolution Plan. Following portion of Sub-Clause3.3 (v) is as follows: (v) Furthermore, subject to sub-clause (vii) below, any third party (other than the Promoters) who has guaranteed or secured the obligations of the Company shall stand disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcluded securities are no longer enforceable as defined under the resolution plan. 2. The approval of the Resolution Plan shall not be construed as waiver of any statutory obligations/liabilities of the Corporate Debtor and shall be dealt by the appropriate Authorizes in accordance with law. Any waiver sought in the Resolution Plan, shall be subject to approval by the Authorities concerned. 15. The Order passed by the Adjudicating Authority approving the Plan was subject to observations made in the Order i.e. subject to directions no. 1 under the heading Reliefs, Concessions and Dispensations . Further in clarification Order in Paragraph 29 following observations have been made: Heard the counsel for the applicant and the counsel for the Respondent/RP and perused the documents. This bench is of the prima facie view that though the excluded securities as defined under the resolution plan means the promoter guarantee, Corporate guarantee issued by the Ushdev International Limited, the encumbrance created on the following immovable by the promoter of third parties, but however, these expressly declared excluded security are subsumed under clause 3.3.(iii)(c) and (h) wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is ready as a whole it is clear that excluded securities were to continue and no contrary intention is reflected in the plan. It is due to the above contents of the plan that Learned Counsel for the Resolution Applicant also does not dispute that the Plan never contemplated for extinguishment of excluded securities. Both the parties had argued that plan never contemplated for extinguishment of the excluded securities. The Adjudicating Authority thus committed error in making observation in issuing direction no. 1 of the Impugned Order under the heading Reliefs, Concessions, and Dispensations. Hence the following part of the Direction no. 1 Hence, excluded securities are no longer enforceable as defined under the resolution plan are deleted from the Order. The deletion of the above Direction No. 1 shall in no manner affect the approval of the Resolution Plan vide Order dated 03.02.2022. The Order dated 03.02.2022 is untouched with regard to other aspects of the Impugned Order. 17. Now we come to the I.A. No. 1799/MB/C-II/2021 filed by the ICICI Bank Limited. The Copy of the Application have been filed by the ICICI Bank Limited as Annexure A-23 in this Appeal. In the Applicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Resolution Plan which was by 91.06% majority of votes shall not be affected by converting dissenting vote of ICICI Bank Limited to Assenting Vote of Resolution Plan. The submission of Mr. Dutta has substance that in event ICICI Bank Limited is permitted to convert his dissenting vote into the assenting vote it will receive payments as a Financial Creditor which may be to the same extent as will be received by the other Financial Creditors. CoC which consists of all the Financial Creditors having expressed its no objection to the aforesaid prayer, we are inclined to accept the said prayer of ICICI Bank. We however make it clear that we are accepting the prayer of ICICI Bank Limited in this respect only due to the reason that CoC has expressed its no objection. This direction/order be not treated as precedent in any other matter. We are thus of the view that I.A. No. 1799/MB/C-II/2021 filed by the ICICI Bank Limited deserves to be allowed to the extent that the observations as noted above in paragraph 29 be deleted and the dissenting vote of ICICI Bank to the Resolution Plan be treated as assenting vote. In result, Company Appeal (AT) (Ins.) No. 172-173 of 2022 are allowed by de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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