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TMI Blog2024 (4) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... to Clause 31.3.1 and Clause 4.1.1, it is clear that both the provisions provide same priority and Clauses (e) [Concession Fee due and payable to the Authority], (f) [monthly proportionate provision of Debt Service due in an Accounting Year] and (g) [Premium due and payable to the Authority] are the same. The bone of contention between the parties are that since Clause (e) uses word Concession Fee due and payable to the Authority , it is higher in priority from Clause (f), which deals with monthly proportionate provision of Debt Service due in an Accounting year and concession fee includes the premium, hence, the premium has to be paid priority to the payment under Clause (f). Parties having categorized premium in different Clause, which is below the monthly proportionate provisions of Debt Service due in an Accounting year, it cannot be said that the same was done without any meaning and premium payment is in lower priority to monthly proportionate provision of Debt Service due in an Accounting Year. There are substance in the submission of learned Counsel for the Applicant that with regard to withdrawal from Escrow Account, the priority as given in Clause 4.1.1 of Escrow Agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h State Bank of India ( SBI ). SBI presently is a lead Bank under the Common Loan Agreement. Under the Concession Agreement, the BKEL was obliged to pay Concession Fees and Premium to the NHAI as per the Concession Agreement. (iii) Deferment in payment of premium was granted by NHAI with regard to which a Supplementary Agreement was entered in the year 2016. Under the Concession Agreement as well as Escrow Agreement a distribution mechanism was set out. Clause 4.1.1 provided distribution mechanism of the Escrow Agreement. Similarly, under Clause 31.3 of the Concession Agreement regulated the Withdrawal during Concession Period . (iv) This Tribunal passed an interim order on 15.10.2018 in Company Appeal (AT) No.346 of 2018 with regard to IL FS and its Group Companies. By subsequent order dated 12.03.2020, this Tribunal confirmed the interim order and approved the Resolution Process of the IL FS Group to be continued as per the procedure suggested by the Union of India. By an order dated 11.02.2019, this Tribunal accepted the classification of Respondent No.2 BKEL as Red Entity of the IL FS Group. Respondent No.2 being Red Entity, it was required to discharge certain payment obligati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the Resolution Framework read with the lnvlT Resolution Process and BKEL lnvlT Transfer approved by the Hon'ble NCL T vide order dated 15 September 2021, Respondent No. 1 shall be restrained from taking any actions which may jeopardise the resolution of Respondent No. 1 including termination of the Concession Agreement, replacement of Respondent No. 2 (as the concessionaire) with any other entity/person for collection toll from the Project and/ or initiation of any legal proceedings against Respondent No. 2 for recovery of premium dues and other dues in the nature of interest and penalties etc; (e) Ad-interim and interim injunction in terms of prayer clauses (a) to (c) above pending hearing and final disposal of this Application; and (f) pass such further orders as this Hon'ble Tribunal may deem fit and necessary in consideration of facts and circumstances of the given case, and thus render justice. 2. Notices were issued in the Application and an interim order was passed on 26.04.2023 by this Tribunal in terms of prayers (c) and (d) of the Application. Reply has been filed to the Application by Respondent No.1, to which rejoinder has also been filed by the Applicant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has made the payment of premium till April 2021 and now it has stopped the payment of premium. Concessionaire had not been depositing the monthly deferred premium to the NHAI since April, 2021. It is submitted that under the Concession Agreement, Respondent No.1 is entitled to terminate the Concession Agreement as well as appoint a third party/ agency to collect the toll. Respondent No.1 is fully entitled to terminate the Concession Agreement and appoint any agency, but due to interim order passed by this tribunal on 26.04.2023, Respondent No.1 could not terminate the Agreement. Respondent No.1 has right to take over the toll collection from Concessionaire. It is submitted that premium of total dues against Respondent No.2 are more than INR 400 crores. As per the Concession Agreement, payment has to be made to Respondent No.1 within 30 days of receiving a demand along with necessary particulars. It is submitted that prayers made in IA No.985 of 2023 need to be rejected. 6. Learned Counsel appearing for Respondent No.2 has opposed the prayers (a) and (b) made in the Application, however, it has supported prayers (c) and (d) made in IA No.985 of 2023. It is submitted that payment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the period remaining in that year, and for each subsequent year of the Concession Period, the Premium shall be determined by increasing the amount of Premium in the respective year by an additional 5% (five percent) as compared to the immediately preceding year. For the avoidance of doubt, the Premium for all subsequent years shall be determined by increasing the amount of Premium by 5% (five percent) as compared to the immediately preceding year. For avoidance of doubt it is clarified that the term 'Premium' as referred in para above shall be as applicable for one financial year. In accordance with and in compliance with the terms of this agreement, If payment of such 'Premium' is due and payable only for part of such financial year, then only pro-rata payments @ 1 / 12th of such Premium shall be payable for each month of such part financial year for which such Premium payments is due as payable. For the purpose of assessing the amount due for payment on such payment of Premium, part of a month shall be deemed to be a full month. in such circumstances the subsequent year as referred to in para above, for the purpose of 5% (five per cent) annual escalation, shal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orth in the Financing Agreements; and (k) balance, if any, in accordance with the instructions of the Concessionaire. 11. When we look into different Clauses, Clause 31.3.1 at Clause (e), deals with Concession Fee due and payable to the Authority ; Clause (f) deals with monthly proportionate provision of debt service due in an Accounting Year; and Clause (g) deals with Premium due and payable to the Authority . The Escrow Agreement between the parties has also been brought on record. Escrow Agreement dated 22.11.2012 also needs to be noticed to find out the relevant Clauses of the Escrow Agreement with regard to withdrawal during concession period. Clause 4 deals with Withdrawals from Escrow Account and Clause 4.1 deals with Withdrawals during Concession Period. Clause 4.1.1 is as follows: 4. WITHDRAWALS FROM ESCROW ACCOUNT 4.1 Withdrawals during Concession Period 4.1.1 At the beginning of every month, or at such shorter intervals as the Lenders' Representative and the Concessionaire may by written instructions determine, the Escrow Bank shall withdraw amounts from the Escrow Account and appropriate them in the following order by depositing such amounts in the relevant Sub- Acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he parties entering in the contract were well aware with both concession fee as well as premium . Hence, Clauses (e) and (g) are used separately for concession fee and premium . In event the payment of premium was to be made under Clause (e), there was no occasion for using premium separately in Clause (g). It is well settled rule of construction of contract that when contract between the parties is clear, it has to be given effect to and further no part of the contract can be treated to be OTIOSE. Parties having categorized premium in different Clause, which is below the monthly proportionate provisions of Debt Service due in an Accounting year, it cannot be said that the same was done without any meaning and premium payment is in lower priority to monthly proportionate provision of Debt Service due in an Accounting Year. We, thus, find substance in the submission of learned Counsel for the Applicant that with regard to withdrawal from Escrow Account, the priority as given in Clause 4.1.1 of Escrow Agreement has to be followed. 13. We, however, notice that in the present case, the resolution of Respondent No.2 as per the Resolution Framework approved by this Tribunal on 12.03.2020 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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