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TMI Blog2024 (8) TMI 1343X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Rakesh Chatterjee, Advocates for ILFS Mr. Gopal Jain, Sr. Advocate with Mr. Gaurav Juneja, Mr. Aayush Jain, Mr. Gaurav Lavania and Mr. Soorya B, Advocates for Edelweiss JUDGMENT ASHOK BHUSHAN, J. Interlocutory Application No.1288 of 2024 This IA has been filed by Infrastructure Leasing and Financial Services Ltd. ("IL&FS") and Jharkhand Road Projects Implementation Company Ltd. ("JRPICL") praying for clarification of the order dated 26.05.2022 passed by this Tribunal in IA No.2114 of 2021 and it is further prayed that Respondent - Sadbhav Engineering Ltd. be restrained from taking any further action to enforce or execute the Arbitral Awards dated 06.08.2020 and 28.03.2023. Interlocutory Application No.2006 of 2024 2. This IA has been filed by Edelweiss Alternative Asset Advisors Limited ("Edelweiss") claiming to be Financial Creditor of JRPICL and IL&FS entity. The Applicant Edelweiss support the reliefs sought in IA No.1288 of 2024 by IL&FS and JRPICL. Interlocutory Application No.3262 of 2024 3. This IA has been filed by Sadbhav Engineering Ltd. & GKC Projects Ltd. in IA No.1288 of 2024 praying for certain reliefs. Reliefs claimed in IA No.3262 of 2024 are opp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lien against any amounts lying with any creditor against any dues whether principal or interest or otherwise against the balance lying in any bank accounts and deposits, whether current or savings or otherwise of the 'IL&FS' and its 348 group companies." (ii) In the Company Appeal (AT) No.346 of 2018, Ministry of Corporate Affairs filed Progress Report with Addendum with proposed Resolution Framework for the IL&FS Group was also filed. The Resolution Framework provided for revised distribution mechanism. The Resolution Framework was approved by this Tribunal vide order dated 12.03.2020 and by the same order this Tribunal also affirmed the interim order dated 15.10.2018. By an order dated 15.10.2018, this Tribunal stayed the institution or continuation of suits or any other proceedings against the IL&FS and its group entities. (iii) An Application for modification of order dated 15.10.2018 was filed by GKC Projects Limited, in which Application an order was passed on 11.01.2019 by this Tribunal, where this Tribunal permitted arbitration proceeding between IL&FS group companies and other parties, including the arbitration proceedings of Applicant No.2 and Respondent to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1996 on 21.09.2022. The Sadbhav Engineering Ltd., Respondent No.2 to the Application has filed an Application for enforcement of the Award before Civil Court, (Commercial Division) at Ranchi being Execution Case No.12 of 2023 and 13 of 2023. Sadbhav Engineering Ltd. has also filed enforcement petition seeking the execution of Award in their favour. When the proceedings for enforcement of the Award was going on before the Civil Court (Commercial Division), IA No.1288 of 2024 was filed by the Applicants - IL&Fs and JRPICL praying for following reliefs: "(a) Clarify that the order dated May 26, 2022 passed by this Hon'ble Appellate Tribunal in LA. No. 2114 of 2021 only allowed the Arbitral A ward dated August 6, 2020 passed in favour of Sadbhav Engineering Limited to be opened from its sealed cover, and does not in any manner_ allow or permit award holders of the IL&FS Group (such as Sadbhav Engineering Limited and GKC Projects Limited) to initiate any recovery actions against IL&FS Group entities (such as the Applicant No. 2), including taking any action for the execution and/or enforcement of the Arbitral Awards; (b) Permanently restrain Sadbhav Engineering Limited an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sealed cover in which the Award was kept, but the stay order was not modified, hence, it cannot entitle the Respondent to proceed to execute the Award, which is being sought to be done by the Respondent. It is submitted that order dated 15.10.2018, which contained the interim directions, are still continuing, which were affirmed by this Tribunal on 12.03.2020, which clearly restrain institution of any proceedings or continuation of suits or any other proceedings by any party against IL&FS and its group companies. The order dated 15.10.2018 having not been modified or tinkered with by order dated 26.05.2022, the enforcement proceedings filed by Respondent in Civil Court (Commercial Division) Ranchi is not maintainable and the same is prohibited by order dated 15.10.2018. As per the resolution frame work the IL&FS and its group entities has to be resolved and the Respondent, who is an Operational Creditor or other creditors have to receive their dues as per the resolution framework and the que cannot be breached by any Respondent by prosecuting enforcement proceedings. It is submitted that JRPICL is now being reclassified as Red Entity, in pursuance of which, IA for reclassification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, whereas no payment has been received by the Respondent. It is further submitted that moratorium dated 15.10.2018, did not apply to Green Entities, since Green Entities are able to meet all their payment obligations, both financial and operation, as and when they become due. The Respondent, who has completed the projects and their huge dues are pending and due to non-clearance of dues by the Applicant, the Respondent is suffering great hardship. The Applicant No.2 has generated thousands of crores of revenue from the Financial Year 2018-19 to Financial Year 2022-23. It is submitted that order dated 26.05.2022, does not need any clarification. 10. Learned Senior Counsel for the Sadbhav Engineering Ltd., Shri Rakesh Dwivedi also referred to IA No.3262 of 2024 in which several prayers have been made by the Applicant, i.e., Sadbhav Engineering Ltd. and Anr. In IA No.3262 of 2024, it is submitted that various effective figures have been brought, including the release of amount of Rs.362.7 crores to a related party since Financial Year 2017-18, i.e. ITNL. JRPICL was declared as 'Green Entity' on 19.09.2019. It is submitted that with several other entities, whose dues were payable by J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties and further to freeze all claims on the cut-off date 15/10/2018. He submits that the Orders passed in the Appeal stopping enforcement and recovery or any execution are still in force. Hence, even if the award in sealed cover is directed to be opened. The Applicant shall not be entitled to enforce the award or make recovery from the ILFS or its subsidiary. Sri Arun Kathpalia submits that he is entitled to take all action in pursuance of the award. Since, the entity i.e., Jharkhand Road Project Implementation Company Limited is a green entity. Sri Ramji Srinivasan submits that even though it is green entity, it may fall in the red category. We have considered the submissions of the Parties. The Order dated 11/01/2019 which was passed for keeping the award in sealed cover is now more than three years ago. It has submitted by Counsel for the Applicant that the award was prepared and signed more than two years ago. We are of the view that the award which is kept in the sealed cover need to be opened by the Arbitrators and parties may be communicated the award. We without entering into the issues and submissions raised by the parties regarding the future actions in conso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmissions of the applicant (Sadbhav Engineering Ltd.) that applicant is entitled to take all actions in pursuance of the award as was also noticed. After noticing submissions of both the parties, this Tribunal in order dated 26.05.2022 made following directions:- "We are of the view that the award which is kept in the sealed cover need to be opened by the Arbitrators and parties may be communicated the award. We without entering into the issues and submissions raised by the parties regarding the future actions in consonance with the award, only observe that all contention and the course of action shall be open to the parties to be taken in accordance with law. We make it clear that this Order should be treated as only modification of para 2 of the Order dated 11/01/2019. I.A. No. 2114 of 2021 is disposed of accordingly." 13. The above order clearly indicate that this Tribunal did not enter into issue raised by respective parties as noted in the order. What was observed that "the course of action shall be open to the parties to be taken in accordance with law". The observations made in the order dated 26.05.2022 cannot be read to mean that it has in any manner varied th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder dated 15.10.2018. We have noticed the prayers made in IA No.2114 of 2021 as quoted above, which clearly indicate that what was prayed was that to allow Arbitral Tribunal to open the signed Award from the sealed cover and deliver the same to the parties to the arbitration proceedings. No other prayer was made in the IA 2114 of 202. The rival contentions of the parties, which was noticed in order dated 26.05.2022 was not decided, nor this tribunal intended that by opening of the sealed cover, the Respondents can proceed to enforce the Award against the IL&FS and its group entities. 17. In view of the above the prayer (a) in IA No1288 of 2024 is allowed as per the above clarification. 18. Now, we come to the other prayers in IA No.1288 of 2024 and the prayers made in IA No.3262 of 2024. From the facts of the present case, it is clear that the interim order was passed by this Tribunal on 15.10.2018, prohibiting institution or continuation of suits or any other proceedings by any party or person or Bank or Company against IL&FS and its group companies in any Court of Law, Tribunal/ Arbitration Panel or Arbitration Authority. 19. In IA No.1288 of 2024, prayer (b) of the Applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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