9911796707
TMI Blog2023 (7) TMI 214X X X X Extracts X X X X X X X X Extracts X X X X ..... inable or not. The Hon ble Supreme Court had occasion to consider Section 60(5)(c) in GUJARAT URJA VIKAS NIGAM LIMITED VERSUS MR. AMIT GUPTA AND ORS. [ 2021 (3) TMI 340 - SUPREME COURT ]. In the above case, power purchase agreement was entered between the Corporate Debtor and GUVNL. GUVNL issued notices alleging that event of default has occurred, Corporate Debtor was called upon to remedy his default failing which the power purchase agreement was to be terminated. The Corporate Debtor filed an Application under Section 60(5) with regard to notice issued by GUVNL where an Interim Order was passed on 31st May, 2019 restraining the Appellant from terminating PPA till the next date of hearing. The Adjudicating Authority allowed the Application setting aside the notice issued by the GUVNL. Appeal was dismissed by the Appellate Tribunal against which the GUVNL filed an Appeal - The Hon ble Supreme Court noticed earlier judgments of the Supreme Court where expression arising out of or related to were explained. It was noted that word arising out of and relating to have been given expansive interpretation by the Supreme Court. Hon ble Supreme Court however observed that it is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent No. 3-Punj Lloyd Limited (Corporate Debtor) entered into two sponsor support Agreements dated 30th September, 2011. By an order dated 08th March, 2019, on an application filed under Section 7 by the ICICI Bank, Corporate Insolvency Resolution Process commenced against Punj Llyod Limited (Corporate Debtor). On 14th September, 2020, the Appellant issued a notice of event of default to Respondent No.1 and the Corporate Debtor informing them inter alia the admission of the Corporate Debtor in CIRP constituted an event of default under the Facility Agreement which entitled the lenders to take necessary action against the Respondent No. 1. ii. The State Bank of India further issued a notice dated 08th March, 2022 to Respondent No. 1-Khagaria and the Corporate Debtor under Clause 3.2.1 of the Substitution Agreement notifying Respondent No. 1 of its intention to exercise its rights under the Substitution Agreement by substituting Respondent No. 1 as a concessionaire under the Concession Agreement with a nominated Company. iii. The notice dated 08th March, 2022 was replied by the Corporate Debtor vide its Letter dated 30th March, 2022 requesting the State Bank of India on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s contended that Applicants have no locus to file the Application. The Adjudicating Authority after hearing the parties on the said application held the Application maintainable under Section 60(5)(c) of the Code. Subsequently, on 31st August, 2022, the Adjudicating Authority directed the copy to be given to Learned Counsel for the State Bank of India. The Appellant aggrieved by both the orders dated 08th June, 2022 and 31st August, 2022 has come up in these Appeals. 3. We have Heard Mr. Abhinav Vasisht, Learned Sr. Counsel appearing for the Bank, Mr. Sunil Fernandes has appeared for Respondent Nos. 1 to 3 and Ms. Gunjan Sinha Jain, Advocate has appeared for NHAI. 4. Learned Sr. Counsel for the Appellant submits that Khagaria Respondent No. 1 is a step down subsidiary of the Corporate Debtor hence its asset can not form part of the liquidation estate of the Corporate Debtor in terms of Explanation (d) to sub-section 4 of Section 36 of the Code. It is submitted that the Liquidator does not have locus to file an application which is not maintainable. It is submitted that the Adjudicating Authority has no jurisdiction to decide dispute unrelated to the Corporate Debtor. The Stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the notice dated 08th March, 2022 issued by the State Bank of India to the Khagaria-Respondent No. 1. Notice dated 08th March, 2022 was addressed to both Khagaria and Punj Llyod House (Corporate Debtor). It is useful to notice the letter dated 08th March, 2022 issued by the State Bank of India which is to the following effect: Ref No.: SBI/OBND/AMT-II/2021-22/KPHPL/402 Date: 08/03/2022 Khagaria Purnea Highway Project Limited 78, Institutional Area, Sector 32, Gurugram 122001, Haryana, India And Punj Llyod House 17-18, Nehru Place, New Delhi, 110019, India ( Concessionaire / Company / Borrower ) Attn: Mr. S K Goyal/Mr. Gaurav Kapoor, Mr. Rahul Maheswari Dear Sir Ref: Facility Agreement dated 30 September, 2011 executed inter alia by the Senior Lenders (list attached as Annexure I), Concessionaire (as the borrower), State Bank of India as the lenders agent issuing bank, and SBICAP Trustee Company Limited as the security trustee for senior debt amounting to INR 586,00,00,000/- (Indian Rupees Five Hundred and Eighty Six Crores Only) ( Senior Debt Facility ) and Facility Agreement dated 30 September, 2011 execu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt of its assets and/or property, or for the winding up or liquidator of its affairs, or other action has been presented to a court or other Government Authority. The term Obligor is defined in the Facility Agreements to mean and inter alia include the Borrower, the Sponsor and the Pledger(s) and the term Sponsor is defined in the Facility Agreements to mean Punj Lloyd Limited and Punj Lloyd Infrastructure Limited. Since PLL has been admitted into insolvency and more than two years has been passed since then and the liquidation application with respect to PLL before NCLT has already been filed. Therefore, in our considered view, the Event of Default had occurred and is subsisting under the Facility Agreements and accordingly, we had declared the occurrence of an event of Default under Facility Agreements pursuance to the notice of event of default dated 14 September 2020 in respect of the Senior Debt Facility and Sub Debt Facility. It may also be noted that the Facility Agreements and the Substitution Agreement, the Senior Lenders now propose to exercise their right of substitution and substitute the Concessionaire with a Nominated Company (as defined under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s or any question of law or facts, arising out of or in relation to the insolvency resolution or liquidation proceedings of the corporate debtor or corporate person under this Code. 10. Section 60(5) began with non-obstante clause. Sub-Section 5(c) which is relied provides any question or priorities or any question of law of facts, arising out of or in relation to the Insolvency Resolution or Liquidation Proceedings of the Corporate Debtor the key words under Section 60(5)(c) are ARISING OUT OF OR IN RELATION TO THE INSOLVENCY RESOLUTION OR LIQUIDATION PROCEEDINGs OF THE CORPORATE DEBTOR. What is the meaning of expression arising out of or in relation to has to be examined to find out as to whether Application I.A. No. 2691 of 2022 is maintainable or not. 11. Elaborating the submission, Learned Counsel for the Appellant has relied on Section 36(4) (d) of the Code. Section 36(4)(d) is as follows: 36. Liquidation Estate. 4. The following shall not be included in the liquidation estate assets and shall not be used for recovery in the liquidation:- .. (d) assets of any Indian or foreign subsidiary of the corporate debtor; or 12. Section 36 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... settings. Justice G.P. Singh in his authoritative commentary on the interpretation of statutes, Principles of Statutory Interpretation, has noted that the same words used in different sections of the same statute or used at different places in the same clause or section can have different meanings. Therefore, it is necessary to bear in mind the context in which the phrases have been used. Justice G.P. Singh has stated in his commentary that: ― When the question arises as to the meaning of a certain provision in a statute, it is not only legitimate but proper to read that provision in its context. The context here means, the statute as a whole, the previous state of the law, other statutes in pari materia, the general scope of the statute and the mischief that it was intended to remedy. 14. It was held by Hon ble Supreme Court that NCLT has jurisdiction to adjudicate dispute which arises only from or which relates to the Insolvency of the Corporate Debtor. In paragraph 69 of the Judgment, following has been laid down: 69. The institutional framework under the IBC contemplated the establishment of a single forum to deal with matters of insolvency, which were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C which empower the RP to exercise rights for the benefit of the Corporate Debtor in certain adjudicatory proceedings. They submit that Section 60(5)(c) of the IBC must be read in consonance with Sections 25(2)(b) and 18(f)(iv), which would be rendered nugatory if NCLT becomes the exclusive forum for the enforcement of all the Corporate Debtor s rights. Section 25(2)(b) of the IBC provides: ― Section 25 - Duties of resolution professional.- (1) .. (2) For the purposes of sub-section (1), the resolution professional shall undertake the following actions, namely:- . (b) represent and act on behalf of the corporate debtor with third parties, exercise rights for the benefit of the corporate debtor in judicial, quasijudicial or arbitration proceedings; Section 18(1)(f)(vi) provides: ― Section 18 - Duties of interim resolution professional .-The interim resolution professional shall perform the following duties, namely:- (f) take control and custody of any asset over which the corporate debtor has ownership rights as recorded in the balance sheet of the corporate debtor, or with information utility or the depositor ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
