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TMI Blog2024 (4) TMI 436X X X X Extracts X X X X X X X X Extracts X X X X ..... cular, the Restructuring Plan and the Liquidation Value taken therein is binding on the Applicant. In the present case, cut-off date has already been laid down by this Tribunal in the order dated 12.03.2020 [ 2020 (3) TMI 1398 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] and the Liquidation Value as fixed by the Lead Bank cannot be said to be erroneous. The relevant fact which is brought to the notice here is that the Valuers report was received by the Lead Bank and thereafter third Valuer was engaged due to difference in the valuation by the Valuers and all the process was noticed and discussed in the Joint Lenders Meeting. There is no dispute that Liquidation Value as per the Valuers Report submitted by Lead bank has been communicated to the Applicant. There are no error in the Master Restructuring Plan having based on Liquidation Value as on 30.09.2018. Application dismissed. - [ Justice Ashok Bhushan ] Chairperson And [ Barun Mitra ] Member ( Technical ) For the Applicant : Mr. Krishnan Venugopal, Sr. Advocate with Mr. Sanjay Kapur, Mr. Devesh Dubey, Mr. J. Rajesh, Advocates for SBI in I.A. No. 3730, 4453 5112 of 2023 For the Respondents : Mr. Ramji Srinivasan, Sr. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent demand, the Lead Bank in its JLF Meeting dated 16.10.2023 appraised the Lenders that it has received Liquidation Value from M/s GAA Advisory and M/s Kakode Associates Consulting Pvt. Ltd. of Rs.4580.03 crores and Rs.6188.66 crores. There being difference between the two Liquidation Value, the Lead Bank engaged third Valuer for calculating the Liquidation Value. The Liquidation Value was calculated as on 15.10.2018. The Applicant requested the Lead Bank i.e., Punjab National Bank ( PNB ) to provide latest Liquidation Value as on 22.09.2023. The third Valuer has provided the Liquidation Value of Rs.5192.43 crores, hence, the average Liquidation Value as on 15.10.2018 is Rs.4886.23 crores. The Lead bank having calculated the Liquidation Value on 15.10.2018, IA No.5112 of 2023 has been filed by the Applicant praying for following reliefs: a) This Hon ble Tribunal may be pleased to stay further distribution of fund and/or further payout as per the approved restructuring plan till Liquidation Value as on date of execution of Master Restructuring Agreement is provided by Lead Bank PNB ITPCL to the Applicant Bank and appropriate clause with respect to the treatment of dissenting lender ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Counsel for Respondent No.1 refuting the submissions of the learned Counsel for the Applicant submits that insofar as IA No.3730 of 2023, which asked for interim distribution of funds is concerned, it is submitted that Restructuring Plan having been prepared and submitted, the question of interim distribution of funds, does not arise and the said Application has become infructuous. Insofar as IA No. 4453 of 2023 is concerned, by which Application the Applicant has prayed for issuing direction to the Lead Bank to provide Liquidation Value, it is submitted that prior to the approval of Resolution Plan, Liquidation Value having already been communicated to the Applicant, the said Application has also become infructuous. Coming to IA No.5112 of 2023, it is submitted that Master Restructuring Agreement has already been signed in which Lenders have already distributed the amount, the Applicant has not communicated his consent or dissent vote. The Applicant is signatory to Inter-Creditor Agreement, where it is clearly provided that Lead Lender shall not be under any obligation to provide Liquidation Value to any Lender prior to submission of Resolution Plan for approval by the Lenders. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. The main issue which has arisen between the parties is with regard to date on which Liquidation Value has to be taken for distribution of amount to the creditors. The Liquidation Value which has been relied by the Lead bank and which Liquidation Value was submitted by Valuers was as on 30.09.2018. The learned Senior Counsel for the Applicant has referred to Clause 7.2 and 8.1 of the Inter-Creditor Agreement, which are as follows: 7.2 The Lead Lender shall, along with the Resolution Plan, provide the Liquidation Value due to each Lender as computed by the Registered Valuer(s) appointed by the Lead Lender. For avoidance of doubt, it is clarified that the Lead Lender shall not be under any obligation to provide the Liquidation Value to any Lender prior to submitting the Resolution Plan for approval by the Lenders. 8.1 The Resolution Plan shall provide for payment of not less than Liquidation Value due to the Dissenting Lenders. Such payment shall be made in accordance with the terms of the approved Resolution Plan. 9. RBI Circular dated 07.06.2019 has been referred to and relied by both the parties, which is Prudential Framework for Resolution of Stressed Assets. Under heading (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al in the Appeal provides as follows: 67. So far as cut-off date is concerned, for the present 15th October, 2018 being the date of interim order, we accept the cut-off date for distribution of the asset because the said date is the date of initiation of the resolution process of the Companies. Hence, the said date should be treated as initiation of the resolution process of the IL FS and Group Companies. 11. It is further relevant to notice that this Tribunal in the same order dated 12.03.2020 in paragraph 61 has noted the highlights of the key of the Resolution Framework. In paragraph 61, following has been noticed: 61. The Union of India on the basis of the present procedure as is followed under the guidance of this Appellate Tribunal and under the supervision of Hon ble Justice (Retd.) D.K. Jain, has highlighted the key of the Resolution Framework as follows: - Key Highlights of the Resolution Framework Initial Resolution Framework (1) As set out above, the Initial Resolution Framework and the First Addendum were filed by the Appellant with this Hon ble Tribunal vide the January 25 Affidavit. (2) The Initial Resolution Framework sets forth that an asset by asset solution, being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to either approve or reject the highest bid for a Sale Company will be placed before the New Board for its consideration. (vi) Approval of Justice (Retd.) D.K. Jain: If the New Board approves a sale proposal, the same will be placed before Justice (Retd.) D.K. Jain (appointed by this Hon ble Tribunal vide order dated February 11, 2019) for his approval. (viii) Approval of the Hon ble NCLT: Upon receipt of approval of Justice (Retd.) D.K. Jain, the proposal will be placed with the Hon ble NCLT for its approval. Upon receipt of approval of the Hon ble NCLT and payment of consideration by the successful bidder, the shares/assets of the relevant Sale Company will be transferred free and clear of all encumbrances, liens, third party rights to the successful bidder. 12. The Liquidation Value as on 30.09.2018 is as per order dated 12.03.2020 where this Tribunal has accepted 15.10.2018 as the cut-off, we do not find any error in fixing the Liquidation Value as on 30.09.2018. Furthermore, the Lenders with the requisite majority has already taken a decision to approve Restructuring Plan, the SBI, who is also one of the Lender, cannot be permitted to wriggle out of the terms of the ITPCL Rest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. For avoidance of doubt, it is clarified that the Lead Lender shall not be under any obligation to provide the Liquidation Value to any Lender prior to submitting the Resolution Plan for approval by the Lenders. 8. DISSENTING LENDERS 8.1 The Resolution Plan shall provide for payment of not less than Liquidation Value due to the Dissenting Lenders. Such payment shall be made in accordance with the terms of the approved Resolution Plan. 16. Clause 7.1, deals with the Approval of Resolution Plan and Clause 7.2 states that the Lead Lender shall, along with the Resolution Plan, provide the Liquidation Value due to each Lender as computed by the Registered Valuer(s) appointed by the Lead Lender. The relevant fact which is brought to the notice here is that the Valuers report was received by the Lead Bank and thereafter third Valuer was engaged due to difference in the valuation by the Valuers and all the process was noticed and discussed in the Joint Lenders Meeting. There is no dispute that Liquidation Value as per the Valuers Report submitted by Lead bank has been communicated to the Applicant. We, thus, do not find any error in the Master Restructuring Plan having based on Liquidati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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