9911796707
TMI Blog2024 (4) TMI 436X X X X Extracts X X X X X X X X Extracts X X X X ..... IL&FS Tamil Nadu Power Co. Ltd. (hereinafter referred to as "ITPCL"). The ITPCL being one of the Group Company of IL&FS was categorized as "Amber Company". The claim of the Applicant to the extent of INR 555.57 crores was accepted by the Claims Management Advisor. After interim order passed by this Tribunal on 15.10.2018, the IL&FS has not been servicing the debt of the Applicant from October 2018. IA No.3730 of 2023 has been filed by the State Bank of India praying for interim distribution of funds lying in the Escrow Account of the Company, in which notices were issued on 21.08.2023. (ii) The steps were taken for restructuring of ITPCL, which was required to be done as per RBI (Prudential Framework for Resolution of Stressed Assets) Direction, 2019. As per the above directions, Liquidation Value was also to be required to be communicated at the time of approval of Resolution Plan. The Liquidation Value has not been provided by the Lead Bank to the Applicant. The Liquidation Value due to each Lender has to be provided and Resolution Plan has to be sent to all Lenders for their consideration. Restructuring Plan and Restructuring Resolution Plan was submitted to the Applicant, but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nadu Power Company Limited in IA No.5112 of 2023. 3. We have heard Shri Krishnan Venugopal, learned Senior Counsel appearing for the Applicant(s) - State Bank of India and Shri Ramji Srinivasan, learned Senior Counsel appearing for the Respondent/ IL&FS and Shri Sanjay Bajaj, learned Counsel appearing for Respondent/Punjab National Bank. 4. The learned Senior Counsel for the Applicant submits that as per RBI (Prudential Framework for Resolution of Stressed Assets) Direction, 2019, the Resolution Plan should provide for payment not less than the Liquidation Value due to the Dissenting Lenders and Resolution Plan has to be implemented within 180 days from the end of review period. The learned Senior Counsel for the Applicant has also referred to Inter-Creditor Agreement dated 04.07.2019, which also required Resolution Plan to provide the Liquidation Value due to each Lender. Shri Venugopal submits that the Liquidation Value obtained by the Lead Bank is as on 15.10.2018, whereas, Liquidation Value was to be calculated as on 31.03.2023. it is submitted that Liquidation Value obtained by the Lead Bank is not in accordance with the RBI (Prudential Framework for Resolution of Stressed A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30.09.2018 as the date for calculation of Liquidation Value on account of it being the closet quarter end date. The Liquidation Value of ITPCL as on 30.09.2018 has already been assessed and provided to the Applicant, which is clear from the Minutes of the Meeting dated 16.10.2023. The valuation methodology as well as the date for computation of the liquidation was voted and approved by all Lenders except SBI. Based on the Liquidation Value, in the event SBI clarifies its stand, SBI's share would be Rs.373.97 crores towards 100% satisfaction of its debt, which will be payable by ITPCL. SBI can still provide his 'consent' or 'dissent' to get entitlement as per the terms of the ITPCL Restructuring Plan. The submission of the Applicant that Liquidation Value is to be computed as on 31.03.2023 is without any basis. Further, the SBI has failed to provide any reasoning or basis for calculation of Liquidation Value as on date of MRA. The MRA is in compliance of RBI Circular. The RBI Circular itself provide that decision taken for implementation of the Plan representing 75% by value of the total outstanding credit facilities and 60% of Lenders by number, will be binding on all Lenders. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he lenders initiate the process of implementing a resolution plan (RP) even before a default. In any case, once a borrower is reported to be in default by any of the lenders mentioned at 3(a), 3(b) and 3(c), lenders shall undertake a prima facie review of the borrower account within thirty days from such default ("Review Period"). During this Review Period of thirty days, lenders may decide on the resolution strategy, including the nature of the RP, the approach for implementation of the RP, etc. The lenders may also choose to initiate legal proceedings for insolvency or recovery. 10. In cases where RP is to be implemented, all lenders shall enter into an intercreditor agreement (ICA), during the above-said Review Period, to provide for ground rules for finalisation and implementation of the RP in respect of borrowers with credit facilities from more than one lender. The ICA shall provide that any decision agreed by lenders representing 75 per cent by value of total outstanding credit facilities (fund based as well non-fund based) and 60 per cent of lenders by number shall be binding upon all the lenders. Additionally, the ICA may, inter alia, provide for rights and duties of ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of "Cut-Off Date" (i.e. October 15, 2018): No interest, additional interest, default interest, penal charges or other similar charges to accrue after the Cut-Off Date of October 15, 2018. (ii) Appointment of valuers for determining the fair value and liquidation value: Two valuers to be appointed to determine the fair value and liquidation value in respect of "Sale Companies" (i.e., entities being monetized as part of the 'Asset Level Resolution'). (iii) Categorisation of entities (Category I and Category II): Based on the H1 bid value received, a Sale Company would either be, a: (a) Category I Company i.e., where the bidder is willing to assume all liabilities of the Sale Company whether operational or financial without compromise of the debt; or (b) Category II Company i.e., where the financial bid amount offered by the applicant is less than all the liabilities of the Sale Company. (iv) Constitution of a Creditors' Committee: In respect of the relevant Sale Company, Creditors' Committee will be constituted (in lieu of individual creditor consents, which are to be dispensed with) in the following manner: (a) For a Category I Company, the Creditors' Committee sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submissions with regard to relevant date on which Liquidation Value has to be taken. The learned Senior Counsel for the Applicant has referred to paragraphs 10, 11 and 12 of the RBI (Prudential Framework for Resolution of Stressed Assets) Direction, 2019. Paragraph 10, we have already quoted above, paragraphs 11 and 12, are as follows: "11. In respect of accounts with aggregate exposure above a threshold with the lenders, as indicated below, on or after the 'reference date', RP shall be implemented within 180 days from the end of Review Period. The Review Period shall commence not later than: (a) The reference date, if in default as on the reference date; or (b) The date of first default after the reference date. 12. The reference dates for the above purpose shall be as under: Aggregate exposure of the borrower to lenders mentioned at 3(a), 3(b) and 3(c) Reference date Rs. 20 billion and above Date of these Directions Rs.15 billion and above, but less than Rs.20 billion January 1, 2020 Less than Rs.15 billion To be announced in due course" 14. Paragraphs 11 and 12, on which reliance has been placed by learned Senior Counsel for the Applicant do not thr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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