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TMI Blog2024 (11) TMI 410X X X X Extracts X X X X X X X X Extracts X X X X ..... tigating before the Courts and the SRA would be absolved of taking the implementation under the Resolution Plan further. The NCLAT had declined to stay the order of the NCLT dated 13.01.2023 which held that all the Conditions Precedent were fulfilled. Further, on a perusal of the impugned order, it is evident that the NCLT and NCLAT rendered concurrent findings of fact that the SRA had fulfilled all the Conditions Precedent. In other words, it was repeatedly declared by different fora that the Effective Date was frozen on 20.05.2022 and the obligation of the SRA to implement the Resolution Plan was absolute. To contend that its hands were tied since the Conditions Precedent were still being challenged before this Court is nothing but a reflection of its mala fide intention on the part of the SRA to not fulfil its obligations in accordance with the Resolution Plan under the garb of pendency of litigation. Such an undue delay cannot be permitted, especially in light of the intention of the IBC, 2016 to ensure a successful and time-bound revival of the Corporate Debtor. This places a higher obligation on the SRA to act in an expeditious manner. Whether the NCLAT could have directed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one and the same, the only difference being that the Appellants had offered not to press issues relating to the compliance of the Conditions Precedent and grant of extensions/exclusions along with offering to withdraw the Company Appeal and the Appeals pending before this Court. The PBG of Rs. 150 Crore could not have been allowed to be adjusted with the first tranche payment of Rs. 350 Crore. Non-compliance of the SRA with the order of this Court has led to a dereliction of its obligations to implement the Resolution Plan. Whether the non-implementation of the Resolution Plan by the SRA necessarily leads to the consequence of liquidation as under Section 33(3) of the IBC, 2016? - HELD THAT:- The impugned order of the NCLAT nowhere caps the Airport Dues to a maximum of Rs. 25 Crore. Moreover, such a mention of Rs. 25 Crore is plainly absent in its observations regarding Airport Dues. All that is mentioned is that The payment of Airport Charges has to be made as per the Resolution Plan when the implementation of the plan commences as per the Resolution Plan . It is in this regard that Clause 6.4.1(j) provides that if the CIRP costs exceed the current estimates, then they will be pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... implement the Resolution Plan in terms of Clause 9.4 of the Resolution Plan and Clause 3.13.7(iii) of the RFRP is that the Appellants are entitled to invoke the PBG automatically without any reference to the SRA. Therefore, it is directed that the PBG may be invoked by the Appellants in accordance with the terms of the Resolution Plan. Whether the timely implementation of the Resolution Plan is also one of the objectives of the IBC, 2016? - HELD THAT:- Rule 15 of the NCLT and NCLAT Rules, 2016 grants power to the NCLT and NCLAT respectively, to extend the time limits for doing any act which have been fixed, either by the rules or by an order, as the justice of the case may require. However, such power must not be exercised mechanically without any application of mind. An extension on the strict timelines fixed under the resolution plan must be done by adequately weighing the period of extension sought with the consequences of such extension on the continued implementation of the Resolution Plan. After all, such a discretion cannot be exercised to the detriment of the resolution plan and its implementation itself - The feasibility and practicability of the resolution plan adjudged b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kmen and Employees dues ............... 56 iv. Issue No. 4: Achievement of Effective Date .............................................. 57 v. Issue No. 5: Non-fulfilment of Conditions Precedent ............................... 59 C. SUBMISSIONS ON BEHALF OF THE RESPONDENTS ................... 63 D. ISSUES FOR DETERMINATION ......................................................... 76 E. ANALYSIS ............................................................................................... 77 i. Whether the Performance Bank Guarantee (PBG) could have been adjusted against the first tranche payment which was to be made under the Resolution Plan, within 180 days from the Effective Date in contravention of the order of this Court dated 18.01.2024, the terms of the Resolution Plan and the provisions of law? ........................................ 85 a. Whether the Conditions Precedent were fulfilled by Respondent No.1/SRA and the Effective Date was fixed at 20.05.2022?.................. 85 b. Whether the NCLAT could have directed the Performance Bank Guarantee (PBG) to be adjusted against the first tranche payment which was to be made within 180 days of the Effective Date? ............ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion Plan. The NCLAT further issued several directions including a direction that the Performance Bank Guarantee of Rs. 150 Crore (hereinafter, the PBG ) could be adjusted towards the first tranche payment of Rs. 350 Crore which was to be made by Respondent No.1. A. FACTUAL MATRIX 2. The NCLT vide its order dated 20.06.2019 in C.P. 2205 (IB)/ (MB)/ 2019 admitted the application for initiation of Corporate Insolvency Resolution Process (hereinafter, the CIRP ) filed by State Bank of India (hereinafter, SBI ) in respect of Jet Airways (India) Limited (hereinafter, the Corporate Debtor ) in accordance with Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter, the IBC, 2016 ). The total admitted claim of the Financial Creditors was Rs. 7800 Crore (approx.). Pursuant to the aforesaid Order, Mr. Ashish Chhawchharia, was appointed as the Interim Resolution Professional and was appointed as the Resolution Professional (hereinafter, the RP ) as well. 3. On 02.06.2020, the RP issued the 4th Round of the Request for Resolution Plan (hereinafter, the RFRP ) as approved by the Committee of Creditors (hereinafter, CoC ) which invited submissions of Resolution Plans for the Corporat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . any of the condition under the Letter of Intent or the Successful Resolution Plan are breached; ii. if the Resolution Applicant fails to re-issue or extend the Performance Security (if provided as a PBG), in accordance with the terms of this RFRP; or iii. failure of the Successful Resolution Applicant to implement the Approved Resolution Plan to the satisfaction of the CoC, and in accordance with the terms of the Approved Resolution Plan. 3.13.8 The Performance Security shall be returned to the Successful Resolution Applicant within a period 7 (seven) Business Days (based on the request received from the Successful Resolution Applicant) upon 100% (one hundred percent) of the completion of the implementation of the Approved Resolution Plan by the Successful Resolution Applicant. 3.13.9 The Performance Security shall not be set-off against or used as part of the consideration that the Successful Resolution Applicant proposes to offer in relation to the Company, even if expressly indicated as such by the Successful Resolution Applicant in the Successful Resolution Plan. (emphasis supplied) 4. On 21.09.2020, the Consortium of Murari Lal Jalan and Florian Fritsch (hereinafter, the Res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rport and parking charges Savings on Contingency Fund All payments are secured against tangible security Dissenting FCs will be paid in priority as per IBC Savings on CIRP Costs Positive Cash Balance Workmen Employees Rs. 52 Crores 52 Cr 100% - OCs Rs. 15,000 to each of the Operational Creditors, irrespective of their claim 10 Cr 100% - OC (Dutch Admin) 10,000 100% - Other Creditors (other than FCs and OCs) 10,000 100% - Shareholder s (promoters, Etihad and PNB) 10,000 100% - Contingency Fund 8 Cr 100% Established JPPL Offer from RA to acquire 50.01% shareholding in JPPL from Etihad. The said sum of Rs. 25 Crores will be infused by the RA in addition to the abovementioned amounts. 25 Cr - 100% TOTAL 475 Cr + 25 Cr *THIS IS A SUMMARY OF THE FINANCIAL PROPOSAL. PLEASE REFER TO THE DETAILED PROVISION UNDER THE RESPECTIVE HEAD. xxx xxx xxx (d) PROPOSAL FOR RESOLUTION OF OUTSTANDING AIRPORT AND PARKING DUES (RS. 240 CRORES AS OF AUGUST 31, 2020) [ ] BKC Property not part of resolution - If CoC decides to retain the BKC Property as a non-core asset and not offer it as part of this resolution process as proposed above, then the Resolution Applicant will not pay the upfront sum of Rs. 10 C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lined in advancing any payment timelines Year 2 - 175, 00,00,000 Remaining payment to FCs.; Misc. expenses for general corporate and day-to-day operations, in compliance with the extant ECB Regulations. After Year 2 - 600,00,00,000 Working capital for business Sub-Total 600,00,00,000 775,00,00,000 TOTAL 1,375,00,00,000 xxx xxx xxx 6.4. Treatment of Stakeholders 6.4.1. Treatment of outstanding CIRP Costs (a) In terms of Section 30(2)(a) of the IBC, the CIRP Costs are to be paid in priority to any other creditor of the Corporate Debtor. (b) As per the information disclosed by the Resolution Professional on August 14, 2020, the CIRP Costs includes: i. Operating and Process Costs (Rs. 27.16 Crores, as of August 31, 2020) which includes fees, charges, salaries of Asset Protection Team (APT) of the Corporate Debtor and other costs incurred by the Resolution Professional in running the operations of the Corporate Debtor as a going concern; ii. Interim Finance Cost (Rs. 54.4 Crores, as of August 31, 2020). [ ] (d) The Resolution Professional has also disclosed to the Resolution Applicant that the Corporate Debtor has a positive bank balance of approx. Rs. 92 Crores and estimates to collect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amounts reserved for them this Resolution Plan. However, if the CIRP Cost exceeds the current estimates, then the CIRP Costs will be paid by the Resolution Applicant as per actuals in compliance with the provisions of the IBC and commercial proposal for other creditors of the Corporate Debtor will be adjusted accordingly, subject however to a maximum of Rs. 475 Crores. It is clarified that on account of such payments from the amounts infused by the Resolution Applicant in the Corporate Debtor, the pay-outs towards other claimants as currently stated will be reduced proportionately to account for such additional CIRP Costs, subject to a minimum payment of liquidation value to the Operational Creditors and Dissenting Financial Creditors of the Corporate Debtor and subject to a maximum of Rs. 475 Crores. (k) The outstanding CIRP Costs shall be paid by the Resolution Applicant out of funds infused by the Resolution Applicant in the Corporate Debtor and as per the Implementation Schedule set out in Clause 7.7 below. [ ] (m) Priority of Payment CIRP Cost shall be fully paid and discharged after the Effective Date before payment is made to any of the Creditors as per the Resolution Plan. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxes in nature of employment owed or payable to, (including any demand for any penalty, penal interest already accrued/ accruing or in connection with any claims) and all rights and entitlements of present or past, direct or indirect, permanent or temporary, employees and/or workmen of the Corporate Debtor, whether admitted or not, due or contingent, asserted or unasserted, crystalized or uncrystallized, known or unknown, secured or unsecured, disputed or undisputed, present or future, whether or not set out in the balance sheet of the Corporate Debtor or the profit and loss account statements of the Corporate Debtor or the List of Creditors, claim submitted or not submitted, claim admitted or not admitted, in relation to any period prior to the ICD will be written off in full and shall be deemed to be permanently extinguished and waived off subject to Clause 9.9 of this Resolution Plan by virtue of the order of Adjudicating Authority approving the Resolution Plan and neither the Corporate Debtor nor the Resolution Applicant shall, at no point of time be, directly or indirectly, held responsible or liable in relation thereto. [ ] (i)(xi) For the avoidance of doubt it is hereby cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide on Spares Rs. 50 Crores + upside as per terms of Series D ZCB Aircraft Spares BV of Rs. 600 Cr Effective Date On sale of Spares on relevant redemptio n date, whichever is earlier. (a) COMMITTED CASH PAYMENTS (i) The Resolution Applicant will pay the Assenting Financial Creditors a total sum of Rs. 185 Crores on 180th day from the Effective Date. If the BKC Property is not provided to the Resolution Applicant as per the proposal stated in Clause 6.3.1(d), then the Resolution Applicant will pay the Assenting Financial Creditors, a total sum of Rs. 175 Crores on 180th day from the Effective Date. The said amounts shall be paid on the following principal terms: Amount Payable Up to Rs. 185 Crores/ up to Rs. 175 Crores Payable By Jet Airways (India) Limited Payable To Financial Creditors against conversion of admitted claims of equivalent amount. Date of Payment 180th day from the Effective Date. Security Performance bank guarantee of Rs. 47.5 Crores Mortgage over BKC Property (if given to the RA). Mortgage over Dubai Property No. 1 valued at more than Rs. 100 Crores. Date of creation of security Effective Date Date of release of Security BKC Property - On sale of BKC Property (if g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng conditions after the Approval Date ( Conditions Precedent ): (a) Validation of AOP of the Corporate Debtor by DGCA MoCA - The AOP of the Corporate Debtor shall have been validated by the DGCA, the MoCA and any other relevant Government Authority and grant of all other mandatory approvals to the Corporate Debtor to enable it to recommence flying operations (including commercial/ cargo operations) and related on-ground services. (b) Submission and approval of the Business Plan to DGCA MoCA - The Business Plan of the Resolution Applicant shall have been submitted after the Approval Date to the DGCA and MoCA for their review, and approval. The Resolution Applicant agrees to modify its business plan to incorporate all reasonable changes required by the DGCA/ MoCA, which otherwise does not make the business unviable for the Resolution Applicant. (c) Slots Allotment Approval - The DGCA and MoCA shall have approved the reinstatement of all the suspended slots (including the bilateral rights and traffic rights) back to Jet Airways/ Corporate Debtor. The slots (along with related bilateral rights and traffic rights) can be allotted to the Corporate Debtor gradually as per its Business Pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the procedure, timelines and the sequence of steps listed below are only indicative and that they may be re-arranged/ changed as may be required or directed based on discussions with the necessary Governmental Authorities/ stock exchange (on account of past non-compliances of the Corporate Debtor or otherwise) or for the purposes of advancing any payments to the stakeholders, and at all times in compliance with Applicable Laws: Step Activity Days 1. Receipt of approval from the Competition Commission of India under the provisions of the Competition Act, 2002 read with the provisions of the IBC. Before approval of Resolution Plan by CoC 2. Declaration of the Successful Resolution Applicant and Receipt of LoI from the CoC X 3. Unconditional acceptance of the LoI X + 3 4. Issuance of Performance Security Bank Guarantee X + 7 5. Finalization of the members of the Monitoring Committee Between X and Approval Date 6. Approval Date Y 7. Monitoring Committee to take control as per Clause 7.8.2. Y 8. Fulfilment of Conditions Precedent as per Clause 7.6.1 After Y 9. Filings of the certified copy of the Order of Approval received from Adjudicating Authority sanctioning the Resolution P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fail to fulfill all the Conditions Precedent within 90 days. The relevant observations are reproduced hereinbelow: 33. During the hearing, the uncertainty of the time frame for implementation of the Resolution Plan was discussed. It is stated by the SRA in clause no. 7.6.2 (pdf 276) of the Resolution Plan that the effective date would mean the date of the fulfilment of all the conditions precedent as stated in clause 7.6.1 thereof. The SRA, at clause no. 7.6.4, has gone on to add that the consortium would make all endeavor to ensure all the compliances are done for the fulfillment of the conditions precedent within a period of 90 days. In the unlikely event that the conditions precedent are not complied within this period, SRA would require a maximum of 180 days more to fulfil the conditions. Failing which the Resolution Plan would stand automatically withdrawn without any further act, deed or thing. In view of such uncertainty in the effective date the Bench suggested that let the effective date be the 90th day from the Approval Date (clause 3.1 at pdf page 201). The SRA as well as the Applicant (RP of the Corporate Debtor) had agreed to the suggestion. This in our opinion is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und and gratuity which was unpaid as on the insolvency commencement date and that the balance of the above dues should be paid by the Successful Resolution Applicant i.e., Respondent No.1, in order to satisfy its statutory obligations. It was further stated that Non-payment of full PF and Gratuity shall lead to violation of Section 30(2)(e) and hence, to save the plan, the above payments have to be made . On 20.12.2022, Respondent No.1 preferred Civil Appeal Nos. 465-469 of 2023 against the aforesaid order dated 21.10.2022 passed by the NCLAT, before this Court. 9. It is the case of Respondent No.1 that between May 2022 and October 2022, the Appellants disputed the fulfilment of the Conditions Precedent by Respondent No.1 on one ground or another. Therefore, on 18.10.2022, Respondent No.1 filed two Interim Applications First, IA No. 3398 of 2022 (hereinafter, Implementation Application ) before the NCLT seeking necessary directions for the implementation of the Resolution Plan and a declaration that all the Conditions Precedent have been fulfilled; Second, IA No. 3508 of 2022 requesting that the period from 20.05.2022 till the date on which the Implementation Application would be d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the Appellants from encashing or appropriating the Performance Bank Guarantee and Earnest Money deposited by Respondent No.1 in favor of the Appellants under the Resolution Plan. 14. The NCLAT vide its common order dated 26.05.2023, stated that the period between 16.11.2022 and 03.03.2023 (107 days) be excluded from the calculation of 180 days for the infusion of first tranche of funds under the Resolution Plan and also held that the Appellants could invoke the PBG only with the leave of the NCLT. This, effectively, extended the period to infuse Rs. 350 Crore under the first tranche till 31.08.2023 (2nd implementation extension). Soon thereafter, on 13.06.2023, the Appellants filed Civil Appeal Nos. 4131-4134 of 2023 against the common order dated 26.05.2023 passed by the NCLAT. 15. On 16.06.2023, Respondent No. 1 filed two other IA Nos. 3789-3790 of 2023 (hereinafter, Gratuity Application ) in the Company Appeal requesting that they be allowed to discharge the gratuity claims of the employees and workmen of the Corporate Debtor in three tranches and also allow them to approach the EPFO authorities in order to reduce or waive off the claim towards damages amounting to Rs. 24.4 C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liance of all Conditions Precedent by the Respondent and would withdraw the Company Appeal pending before the NCLAT along with the Civil Appeals filed before this Court. The Lender s Affidavit also provided that, upon failure to comply with the aforesaid conditions, the Corporate Debtor should be directed to go into liquidation. This opportunity was given to Respondent No.1/SRA as a one-time measure. Para 8 of the Lender s Affidavit which stipulates these conditions is reproduced hereinbelow: 8. In the present appeal, the lenders are agreeable that in case; a) SRA infuses Rs. 350 Crores by 31.08.2023, the date by which said payment is to be made as per the Resolution Plan, read with Order dated 26.05.2023 passed by this Hon ble Tribunal; and b) SRA Undertakes to scrupulously follow the other terms and conditions of the resolution plan and c) SRA complies with the liabilities relating to payment to the employees as per order of NCLAT dated 21.10.2022 which has been upheld by the Hon ble Supreme Court in its order dated 30.01.2023, the Lenders would not contest the issues relating to granting of exclusion/extension of time (in terms of the orders dt. 13.01.2023 passed by NCLT and ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 6427-6428 of 2023 before this Court against the aforesaid order dated 28.08.2023 passed by the NCLAT. 20. Meanwhile, on 03.09.2023, the conditional AOC issued by the DGCA came to an end. Before the expiry of the 3rd implementation extension i.e., 30.09.2023, Respondent No. 1 had deposited an amount of Rs. 200 Crore. However, it is the case of the Appellants that the manner of infusion of the same was in contravention of the Resolution Plan, specifically Clause 2.1.5, since Respondent No.1 infused a portion of the funds through a third party, thereby inducting them into the Resolution Plan as a shareholder. 21. Before this Court, the following three Interim Orders passed by the NCLAT came to be challenged by the Appellants over a period of time: i) Civil Appeal Nos. 3736-3737 of 2023 challenging the Interim Order dated 03.03.2023 passed by the NCLAT by which it declined to stay the NCLT Order dated 13.01.2023 which held that all the Conditions Precedent had been fulfilled; ii) Civil Appeal Nos. 4131-4134 of 2023 challenging the Interim Order dated 25.05.2023 passed by the NCLAT through which the NCLAT restrained the Appellants from invoking the PBG and extended the time for infus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31.01.2024 as directed by this Court. Therefore, on 31.01.2024, Respondent No.1 filed Misc. Application Nos. 216-217 of 2024 in the Civil Appeal Nos. 6427-6428 of 2023 seeking an extension of time for making the deposit of Rs. 150 Crore. The same was dismissed by us vide order dated 02.02.2024 as being misconceived in view of our previous order dated 18.01.2024. This order is reproduced hereunder: ORDER 1. The Miscellaneous Application is misconceived in view of the final order passed by this Court on 18 January 2024. 2. The Miscellaneous Application is accordingly dismissed. 3 Pending applications, if any, stand disposed of. 24. Later, the NCLAT, vide its impugned order dated 12.03.2024, dismissed the Company Appeal filed by the Appellants against the order of the NCLT dated 13.01.2023 while holding that Respondent No.1 had fulfilled all the Conditions Precedent and had also complied with all the other terms of the Resolution Plan. The following were the concluding observations in the impugned order of the NCLAT: 129. In view of our foregoing discussions and conclusions, we dispose of these Appeals in the following manner: 1. The impugned order passed by the Adjudicating Authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Section 62 of the IBC, 2016. B. SUBMISSIONS ON BEHALF OF THE APPELLANTS 27. Mr. N. Venkataraman, learned ASG appearing for the Appellants broadly classified his submissions into the following issues: i. That the direction of the NCLAT in the impugned order dated 12.03.2024 allowing Respondent No.1 to adjust the PBG of Rs. 150 Crore towards the first tranche payment of Rs. 350 Crore, runs counter to the judgement of this Court dated 18.01.2024. The Resolution plan mandates a cash infusion and the question of PBG adjustment would arise only when the three Dubai properties valued at Rs.250 crores are mortgaged by Respondent No.1. ii. That the NCLAT, through its impugned order dated 12.03.2024 erroneously limited the Airport Dues to Rs. 25 Crore and further categorising it as a part of the CIRP costs especially when the Resolution Plan obligates an upfront payment of Rs. 475 Crore towards Airport Dues. Such an error is glaring since the Resolution Plan clearly excludes the Airport Dues from the ambit of CIRP costs. iii. That the NCLAT while approving the Resolution Plan vide its Order dated 21.10.2022 increased the workmen s dues from Rs. 52 Crore to Rs. 289.2 Crore (which accordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11 under this table specifically requires the infusion of Rs.350 Crore in the Corporate Debtor by the SRA within Z+150 days where Z represents the Effective Date. The expression infusion has been interpreted by this Court vide its judgement dated 18.01.2024 to mean payment in cash . 31. Reference was made by the learned ASG to the RFRP, more particularly to Clauses 3.13.1, 3.13.2, 3.13.7(iii) and 3.13.9 which mandate the execution of a PBG for an amount of Rs. 150 Crore and also provide that the PBG cannot be set-off against or used as a part of the consideration which the SRA proposes to offer in relation to the company even if expressly indicated as such in the successful Resolution Plan. It also provides for an automatic right to invoke the PBG without any reference to the SRA, should the SRA fail to implement the approved Resolution Plan in accordance with the terms of the Resolution Plan and to the satisfaction of the CoC. It was also submitted that vide Clauses 7.3 and 9.4 of the Resolution Plan respectively the spirit and intention of the RFRP stood translated into the Resolution Plan. Under Clause 7.3 of the Resolution Plan, the SRA undertook to provide the PBG as per the R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pliance with the Conditions Precedent. In the said affidavit, the Appellants also agreed to withdraw the Company Appeal pending before the NCLAT along with the Civil Appeal Nos. 4131-4134 of 2023 and Civil Appeal Nos. 3736-3737/2023 filed before this Court. However, this would be subject to the fulfilment of the three conditions imposed vide Para 8 by the SRA. The conditions were that firstly, the SRA infuses an amount of Rs. 350 Crore by 31.08.2023 i.e., the date by which the said payment is to be made as per the Resolution Plan read with order dated 26.05.2023 passed by the NCLAT; secondly, the SRA undertakes to scrupulously follow the other terms and conditions of the resolution plan and; thirdly, the SRA complies with the liabilities in relation to the payment to be made to the employees as per the order of NCLAT dated 21.10.2022, which has been upheld by this Court vide order dated 30.01.2023 35. It was submitted that in terms of Serial No. 11 under Clause 7.7.1 read with Clause 6.1.3(g), the SRA had to infuse cash amounting to Rs 350 Crore and it was for this reason alone that Para 8(a) of the Lender s Affidavit refers specifically to the infusion of Rs. 350 crore in cash by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the consequences of non-deposit of Rs. 350 Crore was that the SRA was not entitled to take any benefit of the offer is contrary to the Resolution Plan and the order of this Court dated 18.01.2024. 37. This Court had directed a cash payment of Rs. 150 Crore on or before 31.01.2024 and the SRA had admittedly failed to remit the same. Realizing that this would lead to the initiation of the consequences under the Resolution Plan, Respondent No.1 had applied for an extension before this Court which was declined outright as being misconceived vide order dated 02.02.2024. Therefore, the SRA having failed to make the payment and having breached this Court s order dated 18.01.2024, the NCLAT ought to have concluded that the Resolution Plan had failed. 38. In the alternative, the ASG argued that, assuming without admitting that the non-compliance of this Court s Judgement dated 08.01.2024 would only have the consequence of bringing a closure to the offer made in the Lender s Affidavit dated 16.08.2023 and not have any effect on the Appeal that was pending before the NCLAT, the NCLAT while passing it s final order dated 12.03.2024 ought to have insisted on the payment of Rs. 150 Crore in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date. (c) That, instead of remitting the amount for creation of security as already advised, the SRA was sending an email that it had no objection with the MC lenders immediately proceeding with the security creation of the Dubai properties . (d) It was also brought to the notice of the SRA that 11.04.2024 would be the last date for complying the impugned order of the NCLAT and that the SRA was well aware of the fact that the cost of creation of securities is Rs. 2,36,00,767 and not Rs. 76.07 lakh. This shows the SRA s clear disinclination to execute the mortgage. It was further brought to the SRA s notice that they had failed to comply with the Resolution Plan and the impugned order of the NCLAT dated 12.03.2024. Further, on the same day, at 21:05 hours, the SRA sent an email referring to 12 acres of contiguous land situated in Aligarh, Uttar Pradesh which had been valued in excess of Rs. 250 Crore, owned by a reputed individual entrepreneur resident in India and that the SRA was ready to offer this property as an alternative security in India. The Appellants replied to the said email on 16.04.2024 and stated that the period of 30 days had already expired on 11.04.2024, the expens ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to restrict the Airport dues to a mere Rs. 25 Crore and has erroneously construed it to be a part of the CIRP cost. The counsel drew specific attention to Para 53 of the impugned order wherein the NCLAT had referred to Clause 6.4.1(h) and stated that CIRP cost of the Corporate Debtor (excluding parking charges, rental charges, employees dues, taxes etc.) Accordingly, the Resolution Applicant has set aside a sum of Rs 25 crores as CIRP cost towards payment of any such cost until the approval date . Thus, despite the fact that Clause 6.4.1(h) on treatment of Outstanding CIRP Costs excludes the parking charges, rental charges, employees dues, taxes etc., the NCLAT has surprisingly read the same to mean as inclusive of/included in the CIRP costs while directing the payment of a mere Rs. 25 Crore. Therefore, this is an error apparent on the face of it which requires interference by this Court. 44. It was submitted that, in case the argument of the SRA that a maximum of only Rs. 475 Crore is to be paid by the SRA under the Resolution Plan, is accepted, then the entire amount of Rs. 475 Crore shall go towards the airport dues and as a consequence, nothing would become payable to the fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated in Clause 7.6.1, shall be the Effective Date for the purposes of the Resolution Plan. A failure to fulfill the Conditions Precedent within 270 days of the Approval Date would lead to an automatic withdrawal of the Resolution Plan as per Clause 7.6.4. However, the NCLT, vide its order dated 22.06.2021, expressed its opinion that there was uncertainty with respect to the achievement of the Effective Date under the Resolution Plan and therefore, modified Clause 7.6.4. As a consequence, it fixed the Effective Date to be the 90th day from the Approval Date of 22.06.2021 and stated that this could be extended for a maximum period of another 180 days. The Effective Date, therefore, became 22.09.2021 i.e., 90 days from 22.06.2021. Subsequently, three extensions were given to the SRA with respect to the achievement of the Effective Date First, vide order dated 29.09.2021, the NCLT extended it to 22.12.2021; Secondly, vide order dated 20.01.2022, the NCLT extended to 22.03.2022 through which the maximum extension of 270 days that could be provided under the Resolution Plan had been reached and; Thirdly, vide order dated 11.04.2022, the NCLT further extended it to 25.05.2022 by excluding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rly stated that the extension is only for the limited purpose of completing the ongoing CIRP process and the Corporate Debtor would be required to undergo fresh re-certification in accordance with the prescribed procedure for issuance of an AOC and also submit a firm action plan for the revival of its operations. The AOC expired on 03.09.2023 and the same was never extended by the SRA. 52. It was submitted that the NCLT in its order dated 13.01.2023 had recorded a finding that the Condition Precedent with respect to the AOC was fulfilled but it must be noted that this was an observation made during a time when the SRA had a valid subsisting AOC, which subsequently expired. 53. It was further submitted that vide letter dated 26.12.2023, the Director General of Civil Aviation confirmed that no further extension of the AOC was granted to the Corporate Debtor beyond 03.09.2023. The NCLAT in its impugned order dated 12.03.2024 required the SRA to submit an application for reissuance of the AOC within 90 days from the date of its order and the deadline for the same had expired on 12.06.2024. It was submitted that, even today, the Respondents do not have a valid AOC and the fact that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the NCLAT in Paras 56 to 58. These findings are in clear contradiction to the express stipulation in the Resolution Plan and therefore, this condition too stands breached by the respondents. 57. One more aspect that the learned ASG highlighted through his submissions was that, the Circular F.No.AV.14027/17/2018-AT-1 issued by the Office of Director General of Civil Aviation provides certain requirements for undertaking aerial work. Para 6 of the said Circular deals with Security Clearance and the same requires the Applicant or Company and its Board of Directors to obtain Security Clearance from the Ministry of Home Affairs (MHA) if they are foreign nationals. It was submitted that according to the communications dated 09.07.2024 issued by the Ministry of Civil Aviation, it had been confirmed that Security Clearance had not been conveyed in respect of Mr. Florian Fritsch. Hence, the threshold requirement of security clearance has not yet been obtained by one of the Resolution Applicants, who according to Clause 2.1.4 of the Resolution Plan, is the other partner to the Consortium along with Mr. Murari Lal Jalan. The ASG also placed reliance on news items which suggested that Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the SRA sought benefit of the offer made in the Lender s Affidavit. 61. The counsel submitted that the NCLAT in its impugned order dealt with this Court s order dated 18.01.2024 at length and concluded that the direction issued by this Court to deposit the amount of Rs. 150 Crore peremptorily on or before 31.01.2024 was in reference to the Lender s Affidavit dated 16.08.2023. Meaning thereby, the order of the NCLAT dated 28.08.2023 to adjust the PBG of Rs. 150 Crore was substituted by the direction of the Supreme Court. Therefore, the SRA would render itself disentitled to take benefit of the offer of the Appellant that they would withdraw the Company Appeal and the appeals before the Supreme Court. As such, the pending Company Appeal was to be heard on merits and decided in accordance with law by the NCLAT. In short, the entire issue before this Court was confined to an interpretation as to how the condition of Rs. 150 Crore in the affidavit was to be interpreted and if the condition was complied with, the Appeals would stand withdrawn, if not, they would be decided on their own merits. 62. It was further submitted that the NCLAT rightly observed that, the submission of the Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the Appellants. It is the case of the SRA that the Appellants did not reply to the reminder emails sent between the months of May and October 2023 and the issue was also discussed during the 37th MC Meeting dated 09.10.2023. However, after more than a year of sharing the transaction documents, the Appellants sent their comments on the same on 08.04.2024 i.e., three days before the expiry of the 30-day timeline given under the impugned order of the NCLAT. 66. It was further submitted that, only in the 42nd MC Meeting that took place on 02.04.2024 the SRA was informed for the first time that, as per the recent valuation, the valuation of the Balance Security worked out at Rs. 236 Crore and that there was a shortfall of Rs. 14 Crores. In the same meeting, the SRA suggested that a property in India valued at Rs. 250 Crore could be provided as an alternate security. Vide email dated 10.04.2024, the SRA provided details of the alternate security equivalent to Rs. 250 Crore in India. However, the Appellants responded to the above vide their email dated 16.04.2024 stating that providing an alternate security would tantamount to modification of the Resolution Plan. 67. The counsel submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gned order of the NCLAT dated 12.03.2024. Clause 7.6.1 of the Resolution Plan sets out five Conditions Precedent. It was submitted that two of the five Conditions Precedent were admittedly complied with. On the remaining three, both the Tribunals have rendered concurrent findings, which ought not to be interfered with in an appeal under Section 62 of the IBC, 2016, which is effectively a Second Appeal. 72. The counsel submitted that the SRA cannot suo moto infuse funds into the Corporate Debtor since such infusion necessarily requires steps/actions to be taken by the Appellants and the Corporate Debtor acting through the MC. These steps include the appointment of directors on the board of the Corporate Debtor and seeking in-principal approval from the relevant stock exchanges under the SEBI LODR Regulations by the Corporate Debtor. However, despite constantly following up with the Appellants, the same has not been received yet and therefore, they have not allowed the SRA to undertake such a funding. 73. The Counsel submitted that the first Condition Precedent is the Validation of AOC by DGCA and MoCA as provided under Clause 7.6.1(a). The SRA had a valid AOC until 03.09.2023 and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Clause 6.4.12 of the Resolution Plan which stated that the PBG will bring financial flexibility for the SRA and help the SRA to advance the committed payments and achieve its goal of recommencing the operations of the Corporate Debtor at the earliest. 77. It was submitted that the NCLAT order dated 28.08.2023 rightly recognized that Regulation 36B(4A) of the 2016 Regulations only provides for the PBG requirement for the purposes of the RFRP and the same has been complied with by the SRA. Further, the counsel pointed out that Clause 6.4.4 (a)(i) elaborates on the Committed Cash Payments to be made to the Financial Creditors. In the table, under the heading Date of release of Security , the PBG of Rs. 150 Crore was not mentioned while the other two forms of security find a mention. Thus, the intention was that, the PBG be adjusted in making the first tranche payment. 78. The counsel further submitted that there is no specific consequence provided under the Resolution Plan for a default in the creation of security. It was reiterated that the SRA had undertaken all possible steps to further the execution of the mortgage of the Dubai properties as per the Resolution Plan and it is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osal and not a condition of the Resolution Plan. 82. On workmen and employees dues, it was submitted that, as per Clause 6.4.2 on the Summary of Financial Proposal the amount demarcated for all the claims related to employees or workmen was Rs. 52 Crore and as per the Implementation Schedule, these claims were to be paid within 175 days from the Effective Date. However, the NCLAT vide its order dated 21.10.2022 increased it to Rs. 113 Crore since it was the minimum liquidation value that they were entitled to as per the estimates of the RP. The final directions issued by the NCLAT in the aforesaid order conveyed that the workmen and employees are entitled to the payment of unpaid PF and gratuity till the Insolvency Commencement Date and the RP was directed to compute such payment within 30 days. The RP had calculated such amounts to be Rs. 14 Crore towards PF and Rs. 188.7 Crore towards gratuity. It was submitted that neither the NCLAT order dated 21.10.2022 nor the order of this Court dated 30.01.2023 had provided any specific timelines for fulfillment of these additional liabilities which were cast upon the SRA. This is precisely why the SRA proposed to pay Rs. 14 Crore towards P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellate Tribunal may file an appeal to the Supreme Court on a question of law arising out of such order under this Code within fortyfive days from the date of receipt of such order . 30. The jurisdiction is restricted to a question of law akin to a second appeal. The law does not envisage unlimited tiers of scrutiny and every tier of scrutiny has its own parameters. Thus, the lis inter se the parties has to be analysed within the four corners of the ambit of the statutory jurisdiction conferred on this court. 31. We are thus of the view that the appeal does not raise any such question of law and that the findings of the courts below are in accordance with settled principles. ( emphasis supplied ) 86. Section 100 of the Code of Civil Procedure, 1908 is the provision related to a second appeal and it reads as thus: 100. Second appeal (1) Save as otherwise expressly provided in the body of this Code or by any other law for the time being in force, an appeal shall lie to the High Court from every decree passed in appeal by any Court subordinate to the High Court, if the High Court is satisfied that the case involves a substantial question of law. (2) An appeal may lie under this secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cases, the substantial question of law arises not because the law is still debatable, but because the decision rendered on a material question, violates the settled position of law. (iii) The general rule is that the High Court will not interfere with findings of facts arrived at by the courts below. But it is not an absolute rule. Some of the well-recognised exceptions are where (i) the courts below have ignored material evidence or acted on no evidence; (ii) the courts have drawn wrong inferences from proved facts by applying the law erroneously; or (iii) the courts have wrongly cast the burden of proof. When we refer to decision based on no evidence , it not only refers to cases where there is a total dearth of evidence, but also refers to any case, where the evidence, taken as a whole, is not reasonably capable of supporting the finding. ( emphasis supplied ) This Court recapitulated that a substantial question of law would also arise in a situation where the legal position is clear, either on account of express provisions of law or binding precedents, but the Court below has ignored or acted contrary to such legal principles while deciding the matter. In such circumstance, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ooking vital documents would also give rise to a substantial question of law. The relevant observations are reproduced hereinbelow: 10. A substantial question of law ordinarily would not arise from the finding of facts arrived at by the trial court and the first appellate court. The High Court's jurisdiction in terms of Section 100 of the Code is undoubtedly limited. 11. The question as to whether the plaintiff was ready and willing to perform its part of contract by itself may not give rise to a substantial question of law. Substantial question of law should admittedly be formulated relying on or on the basis of findings of fact arrived at by the trial court and the first appellate court. 12. However, there cannot be any doubt whatsoever that consideration of irrelevant fact and non-consideration of relevant fact would give rise to a substantial question of law. Reversal of a finding of fact arrived at by the first appellate court ignoring vital documents may also lead to a substantial question of law. In Vidhyadhar v. Manikrao [(1999) 3 SCC 573] this Court held : (SCC p. 586, para 23) 23. The findings of fact concurrently recorded by the trial court as also by the lower appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... larly when all the courts below reached the same conclusion. But where the finding of fact is based on no evidence or opposed to the totality of evidence and contrary to the rational conclusion to which the state of evidence must reasonably lead, then this Court will in the exercise of its discretion intervene to prevent miscarriage of justice. (See also P. Chandrasekharan v. S. Kanakarajan [(2007) 5 SCC 669] .) (emphasis supplied) Therefore, what would constitute a substantial question of law would differ in each case. When material and relevant facts have been ignored and legal principles have not been applied while appreciating the evidence, a substantial question of law can be said to have arisen. Additionally, even in a case where evidence is misread, the power to interfere under Section 100 would exist. 90. In our considered view the impugned order of the NCLAT directing the SRA to adjust the PBG of Rs. 150 Crore against the first tranche payment of Rs. 350 Crore was in flagrant disregard of the order of this Court dated 18.01.2023, the terms of the Resolution Plan and established law. Such an order was perverse for having not properly considered several material and relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder dated 11.04.2022 by the NCLT until 25.05.2022, by allowing an exclusion of 65 days. 93. Upon receiving the AOC from the relevant authorities on 20.05.2022 i.e., within the extended time period as allowed by the NCLT, the SRA asserted that the Effective Date had been achieved. The SRA had approached the NCLT seeking a declaration from the Tribunal that all the Conditions Precedent have been met and that the SRA be allowed to begin the implementation of the Resolution Plan. Vide order dated 13.01.2023, the NCLT held that all the Conditions Precedent had indeed been met and that 20.05.2022 would be considered as the Effective Date for the purposes of implementation of the Resolution Plan. The findings of the NCLT in the aforesaid order are reproduced hereinbelow: Findings: 122. [ ] However, having considered the rival submissions and on perusal of record with regards to satisfactory compliance of conditions precedent (CPs) it is noted that there is no dispute so far as satisfactory compliance of CPs at serial no. (i) and (v) as per approved plan i.e.:- (i) Validation of Air Operator Certificate by Directorate General of Civil Aviation (DGCA) and Ministry of Civil Aviation (MoCA) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epting the fact that all the approval issued upfront cannot be reinstated. Accordingly, this condition precedent needs to be read with plan approval order. Even otherwise there is no dispute that under the approved plan, SRA has to re-commence with operation of six aircrafts. The International Traffic Rights clearance is required to be obtained in compliance with the applicable laws which stipulates that minimum twenty aircrafts are required to be deployed before applying for such clearance. In view of this, we find that this condition cannot be satisfied upfront and needs to be satisfied in compliance with applicable laws i.e., after the SRA has twenty aircrafts in operation which can only be achieved once the operation is re-commenced successfully. Accordingly, this condition can only be fulfilled after the SRA/Applicants re-commences its business and not prior to its commencement. It goes without saying that plan approved by this Tribunal has to be implemented without any modification much less than on satisfaction of any other undertaking and thus, the effective date and completion date of condition precedent under the plan shall have to be read as 20th May, 2022. 126. In the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the payment towards airport charges which are a part of CIRP costs must be made as per the terms of the Resolution Plan when its implementation had begun. Therefore, it was declared that the Condition Precedent on Slot Allotment Approval was fulfilled despite the non-payment of Airport Dues by the SRA. On International Traffic Rights Clearance, the NCLAT echoed the opinion of the NCLT that it could not have obtained this clearance without commencing and amplifying the operations of the Corporate Debtor. It was observed that this Condition Precedent should not come in the way of the implementation of the Resolution Plan. As regards the AOC, it was contended by the Appellants that the same had lapsed after 03.09.2023 and no extension was granted by the DGCA thereafter. However, the NCLAT was of the view that the AOC was valid on the date when the SRA had approached the NCLT for a declaration that the Conditions Precedent were fulfilled and also when the order dated 13.01.2023 of the NCLT was passed. The expiry of the validity period of the AOC during the pendency of the Company Appeal was not considered sufficient grounds to hold that the Condition Precedent was not fulfilled. The N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the IBC, 2016 to ensure a successful and time-bound revival of the Corporate Debtor. This places a higher obligation on the SRA to act in an expeditious manner. b. Whether the NCLAT could have directed the Performance Bank Guarantee (PBG) to be adjusted against the first tranche payment which was to be made within 180 days of the Effective Date? 98. There is no dispute to the fact that the Effective Date was frozen on 20.05.2022. Therefore, as per Clause 6.3.1(g) on the Infusion of Funds and Timelines , and Serial No.11 under Clause 7.7, the first tranche payment of Rs. 350 Crore had to be made by the SRA, upfront, within a period of 180 days from the Effective Date i.e., 20.05.2022. As per the Resolution Plan, this 180-day timeline otherwise would have expired on 16.11.2022. Several extensions were granted to the SRA to infuse this amount, at different stages of this litigation, by the NCLT, the NCLAT and this Court as well - First, by the NCLT vide order dated 13.01.2023, by which the timeline for infusion of first tranche payment was extended till 15.05.2023; Secondly, by the NCLAT vide order dated 25.05.2023, where the timeline of 180 days was further extended up to 31.08.202 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eference to the SRA upon the occurrence of any of the following conditions; i. If any of the conditions under the Letter of Intent or the Resolution Plan are breached; ii. If the SRA fails to re-issue or extend the PBG in accordance with the terms of the RFRP; or iii. Failure of the SRA to implement the Resolution Plan to the satisfaction of the CoC, and in accordance with the terms of the Resolution Plan. Clause 3.13.8 provides that the PBG shall be returned to the SRA within a period of 7 days, upon 100% completion of the implementation of the Resolution Plan by the SRA. Finally, Clause 3.13.9 states in categorical terms that, the PBG shall not be set-off against or used as part of the consideration that the SRA proposes to offer in relation to the Corporate Debtor, even if expressly indicated as such by the SRA in the Resolution Plan. 101. It is of vital importance that the aforementioned clauses of the RFRP are read conjointly with Clauses 7.3 and 9.4 of the Resolution Plan. Clause 7.3 of the Resolution Plan deals with the Compliance with respect to Regulation 36B(4A) and states that the SRA undertakes to provide the PBG as per the terms of the RFRP in favor of the SBI within 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the CoC - The Resolution Applicant shall provide a performance security bank guarantee for a total sum of Rs. 47.5 Crores, which will bring financial flexibility for the Resolution Applicant and help the Resolution Applicant advance the committed payments and achieve its goal of re-commencing the operations of Jet Airways at the earliest. However, the aforesaid Clause 6.4.12 of the Resolution Plan was deleted in its entirety and replaced with the following: 6.4.12. Request for the consideration of the CoC - As required under the RFRP, the Resolution Applicant shall provide the performance security bank guarantee ( PBG ) for a total sum of Rs. 150 Crores. The PBG will be provided in two parts, with the first PBG of Rs. 47.5 Crores provided within 7 (seven) days from the date of receipt of LOI; and PBG for the remaining sum of Rs. 102.5 Crores provided on the Effective Date. A reading of the amended Clause 6.4.12 of the Resolution Plan indicates that the parties had mutually agreed to do away with the phrase which will bring financial flexibility for the Resolution Applicant and help the Resolution Applicant advance the committed payments and achieve its goal of recommencing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... live and was to be returned to the SRA only upon 100% completion of the implementation of the Resolution Plan. This binding nature of the RFRP was transferred onto the Resolution Plan through Clauses 7.3 and 9.4 respectively of the Resolution Plan. 106. The NCLAT in one of its orders i.e., the order dated 26.05.2023, had restrained the Appellants from invoking the PBG without the leave of the NCLT. While saying so, the following observations were made; 19. When the Resolution Plan of the Corporate Debtor has received approval up to Hon ble Supreme Court and the Monitoring Committee is constituted under the Plan to oversee implementation, the Monitoring Committee has to act as a facilitator for implementation of the Resolution Plan instead of finding fault and taking steps, which does not facilitate the implementation, rather delay the implementation. There is no doubt that Performance Bank Guarantee can be invoked by the MC Lenders, but the said invocation can only take place when SRA has failed to implement the Plan. Present is a case where directions have been issued to both MC Lenders and SRA to implement the Plan and the event of failure of the Plan has not yet arrived. When th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Guarantee within the time specified. Sub-Section 4A provides that if Resolution Applicant after approval fails to implement Performance Security it shall stand forfeited. Present is a case, where Performance Security has already been provided in compliance of sub- Regulation 4A and present is not a case that any power to forfeit the Performance Bank Guarantee to be exercised under sub-Regulation (4A). On Explanation I, attention of the Court was drawn by Learned Counsel for SRA, which indicates that the performance security which is contemplated, can be of such nature, value, duration and source as may be specified. Thus, Performance Security can be of a particular duration and when the Resolution Plan provides release of security at the time of first tranche of payment of Rs. 350 Crores, no exception can be taken to adjustment of the Performance Bank Guarantee. The request of SRA to adjust Performance Bank Guarantee of Rs. 150 Crores is thus according to Clause 6.4.4 of the Resolution Plan on which no exception can be taken. 27. Submission was made by Learned Sr. Counsel for the Appellant that performance Bank Guarantee has to be maintained till the completion of the plan. The su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Explanation I to Regulation 36B(4A). 111. Now, if the intention under the RFRP, the Resolution Plan (under Clauses 7.3 and 9.4) and Regulation 36B(4A) was that the PBG had to be kept alive till the completion of implementation of the Resolution Plan by the SRA and that it cannot be set-off against any payment obligation, then how do we reconcile such an intention with the expression PBG adjusted mentioned under Clause 6.4.4 of the Resolution Plan? As mentioned above, Clauses 7.3 and 9.4 respectively of the Resolution Plan incorporated the terms of the RFRP into the Resolution Plan. Clause 3.13.9 of the RFRP states that the PBG shall not be set off against any payment or consideration which is to be made by the SRA, even if expressly provided so under the Resolution Plan. Clause 6.4.4 is quite ambiguous in its construction regarding the question whether the PBG can be specifically adjusted against the first tranche payment. Although in the Summary of Payments and Security Package, under the column titled Date of release of security , the expression PBG adjusted exists, yet Clause 6.4.4(a)(i) which furnishes some additional clarity on the Summary of Payments and Security Package p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under sub-section (4) of section 30 meets the requirements as referred to in sub-section (2) of section 30, it shall by order approve the resolution plan which shall be binding on the corporate debtor and its employees, members, creditors,[including the Central Government, any State Government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force, such as authorities to whom statutory dues are owed,] guarantors and other stakeholders involved in the resolution plan. ( emphasis supplied ) 115. This Court in Ebix Singapore Private Limited v. Committee Of Creditors of Educomp Solutions Limited and Another reported in (2022) 2 SCC 401 was faced with the issue whether withdrawals or modifications by successful resolution applicants were permissible under the IBC, 2016 i.e., whether a resolution applicant is entitled to withdraw or modify its Resolution Plan, once it has been submitted by the Resolution Professional to the Adjudicating Authority and before it is approved by such authority under Section 31(1) of the IBC, 2016. It was unequivocally held that, based on the plain terms of the IBC, 2016, the Adjudicating Auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r approval to the adjudicating authority. Even the CoC is not permitted to approve multiple resolution plans or solicit EoIs after submission of a resolution plan to the adjudicating authority, which would possibly be in contemplation if the resolution applicant was permitted to withdraw from, or modify, the plan after acceptance by the CoC. Regulation 36- B(4-A) requires the furnishing of a performance security which will be forfeited if a resolution applicant fails to implement the plan. This is collected before the adjudicating authority approves the plan. Notably, the Regulations also direct forfeiture of the performance security in case the resolution applicant contributes to the failure of implementation , which could potentially include any attempts at withdrawal of the plan. xxx xxx xxx 172. Based on the plain terms of the statute, the adjudicating authority lacks the authority to allow the withdrawal or modification of the resolution plan by a successful resolution applicant or to give effect to any such clauses in the resolution plan. Unlike Section 18(3)(b) of the erstwhile SICA which vested the Board for Industrial and Financial Reconstruction with the power to make mod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ancial information of the corporate debtor through the informational utilities and perusing the IM, is assumed to have analysed the risks in the business of the corporate debtor and submitted a considered proposal. A submitted resolution plan is binding and irrevocable as between the CoC and the successful resolution applicant in terms of the provisions of IBC and the CIRP Regulations. In the case of Kundan Care, since both, the resolution applicant and the CoC, have requested for modification of the resolution plan because of the uncertainty over the PPA, cleared by the ruling of this Court in Gujarat Urja [Gujarat Urja Vikas Nigam Ltd. v. Amit Gupta, (2021) 7 SCC 209 : (2021) 4 SCC (Civ) 1] , a one-time relief under Article 142 of the Constitution is provided with the conditions prescribed in Section K.2. ( emphasis supplied ) 116. In light of the aforesaid, it is clear that the existing insolvency framework does not provide any scope for effecting further modifications or withdrawals of the Resolution Plan approved by the CoC, at the behest of the successful resolution applicant, once the plan has been submitted to the adjudicating authority. The submitted Resolution Plan is bin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the arguments put forth by the SRA, before the NCLAT and before this Court respectively, which dealt with the issue of whether the adjustment of the PBG was possible under the terms of the Lender s Affidavit. The following were the submissions made by the SRA in the order dated 28.08.2023 as recorded by the NCLAT: 20. Learned Sr. Counsel for the SRA has submitted that approved Resolution Plan provides adjustment of Performance Bank Guarantee towards first tranche of payment whereas Learned Counsel for the Appellants has referred to certain clauses of RFRP and also provisions of Regulation 36B (4A) to support his submission that performance bank guarantee cannot be permitted to be invoked towards payment of first tranche. ( emphasis supplied ) 119. The submissions made by the SRA as recorded in the order of this Court dated 18.01.2024 are as follows: 18. The submission which has been urged on behalf of the lenders has been opposed on behalf of the SRA by Mr. Krishnendu Datta, senior counsel, On behalf of the SRA it has been submitted that: (i) The Resolution Plan specifically contemplates the adjustment of the PBG (originally of Rs. 47.5 crores, subsequently enhanced to Rs. 150 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f this Court dated 18.01.2023 must be seen understood in the aforesaid background. While the appeal before us had resulted from several interim orders of the NCLAT, the question before us was whether the adjustment of the PBG of Rs. 150 Crore was permissible under the Lender s Affidavit as well as the terms of the Resolution Plan, being one and the same. We interpreted the term infuse as mentioned in the affidavit and under the Resolution Plan, and arrived at the conclusion that it demonstrably meant payment in cash . Therefore, the directions that were issued by this Court, especially the direction that - the SRA shall peremptorily on or before 31 January 2024, deposit an amount of Rs. 150 crores into the designated account of SBI, failing which the consequences under the Resolution Plan shall follow , must have been necessarily seen in the context of the Resolution Plan as well. The phrase failing which the consequences under the Resolution Plan shall follow was a mandatory direction that should have been taken into account by the NCLAT in its impugned order dated 12.03.2024. There was no escape for the NCLAT in this regard. There was no option which was given to the SRA to devia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cash, as required by Clause 6.3.1(g) and the Implementation Schedule under Clause 7.7 of the Resolution Plan. It is now to be seen if this has resulted in the contravention of other terms of the Resolution Plan as well. a. Whether Respondent No.1/SRA had failed to implement the Resolution Plan on non-payment of the Airport Dues as per the terms of the Resolution Plan? 126. With respect to the Airport dues, the impugned order of the NCLAT had taken into consideration Clauses 6.4.1(e), 6.4.1(h) and 6.4.1(m) respectively. Specifically dealing with Clause 6.4.1(h), it said that this provision dealt with the treatment of outstanding CIRP costs which included parking charge i.e., Airport Charges. While considering so, the following observations were made: 54. The provisions of Resolution Plan as noted above clearly indicates that CIRP costs includes Airport Charges. SRA is also entitled to use funds available with the Corporate Debtor as on effective date to meet any portion of CIRP costs. The submission of the Appellants that the entire Airport Charges have to be borne by the SRA upfront cannot be accepted nor non-payment of Airport Charges by SRA as on date makes the allotment of slot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntal charges etc which also form a part of the CIRP costs. Since such a bank balance would not cover the parking charge, rental charges, employee dues, taxes etc, the Resolution Plan had set apart a separate sum of Rs. 25 Crore for the payment of any such CIRP costs which might have accrued till the Approval Date. Further, the other expenses including parking charges, rental charges etc. which have been incurred post the Approval Date but within the Effective Date i.e., the period during which the Conditions Precedent would be fulfilled, would also be incurred out of the positive bank balance of the Corporate Debtor. This is what Clause 6.4.1(h) provides for. To hold that Clause 6.4.1(h) excludes airport dues from the scope of CIRP costs altogether would also question the placement of clauses such as Clauses 6.4.1(f) (which provides for an estimate of Rs. 240 Crore towards parking charges) under the larger umbrella of Clause 6.4.1 which deals with the Treatment of Outstanding CIRP Costs in totality. 129. Therefore, what the Resolution Plan contemplates is that the Airport Charges be subsumed within the CIRP Dues and since all of the different CIRP dues cannot be satisfied through t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Applicant in the manner stated hereinabove . ( emphasis Supplied ) The contention of the SRA is that the aforesaid qualification applies equally to the part of Clause 6.3.1(d) under the heading BKC Property not part of resolution and that the entire Clause 6.3.1(d) would remain a proposal and not a binding condition on the SRA. Irrespective of a determination on the same, even as per Clause 6.4.1, the payment towards CIRP costs including Airport Charges had to be made in full, in priority, within 180 days from the Effective Date. This is evident from (a) Clause 6.4.1(a) which states that the CIRP Costs are to be paid in priority to any other creditor of the Corporate Debtor in terms of Section 30(2)(a) of the IBC, 2016; (b) Clause 6.4.1(k) which states that the outstanding CIRP costs shall be paid by the Resolution Applicant out of the funds infused by the Resolution Applicant in the Corporate Debtor and as per the Implementation Schedule set out in Clause 7.7 below; (c) Clause 6.4.1(m) which states that the CIRP cost shall be fully paid and discharged after the Effective Date before payment is made to any of the creditors as per the Resolution Plan; (d) Clause 6.4.1(n) which state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... full amount of provident fund and gratuity till the date of commencement of the insolvency which amount is to be paid by the Successful Resolution Applicant consequent to approval of the Resolution Plan in addition to the 24 months workmen dues as the workmen is entitled to under Section 53(1)(b) of the Code. It is made clear that in addition to part amount of provident fund and gratuity as proposed in Resolution Plan to workmen, Successful Resolution Applicant is obliged to make payment of balance unpaid amount of provident fund and gratuity to workmen and employees. 72. Our answer to Question II and III is as follows: (i) The workmen and employees are entitled to receive the amount of provident fund and gratuity in full since they are not part of the liquidation estate under Section 36(4)(b)(iii). (ii) The workmen are entitled to receive their dues from the Corporate Debtor for period of 24 months as per provision of Section 53(1)(b) at least to minimum liquidation value envisaged under Section 32(2)(b) read with Section 53(1). xxx xxx xxx 80. As observed above, in admitted claim of workmen provident fund, gratuity and leave encashment was included, and payment proposed in plan p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Debtor in the EPFO. (d) Employees shall also be entitled for the gratuity, which fell due up to insolvency commencement date. (e) The rest of the prayers of the workmen and employees are denied. (f) The Chairman of the Monitoring Committee, erstwhile Resolution Professional is directed to compute the payments to be made to workmen and employees within one month from today and communicate the same to the Successful Resolution Applicant to take steps for payment. ( emphasis supplied ) 135. Thus, it was held in clear terms that the workmen and employees are entitled to full payment of Provident Fund and Gratuity. The non-payment of these amounts shall lead to a violation of Section 30(2)(e) of the IBC, 2016 which requires that the Resolution Plan must not contravene any of the provisions of the law for the time being in force. Further, it was held that the workmen and employees are entitled to a liquidation value of Rs. 113 Crore instead of Rs. 52 Crore as contemplated in the Resolution Plan. The NCLAT directed the Chairman of the Monitoring Committee (the erstwhile Resolution Professional) to compute the payments to be made to the workmen and employees within one month and to com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y are entitled to under the Resolution Plan. There is no specific direction as regard the payment obligations related to Gratuity nor any decision rendered on the two aforesaid IAs filed by the SRA in the Company Appeal. The NCLAT committed a serious error in failing to consider these IAs filed by the SRA and has given the impression that the SRA is liable to pay only the Provident Fund dues upfront. 139. According to the SRA, the dues relating to the Provident Fund would be paid upfront in compliance with Section 11 of the Employees Provident Fund and Miscellaneous Provisions Act, 1952. However, the Gratuity Dues could be paid in tranches since neither the order dated 21.10.2022 of the NCLAT nor the order dated 30.01.2023 of this Court had imposed any timelines for the payment of the Gratuity Dues. Furthermore, it was submitted that the provisions of the Payment of Gratuity Act, 1972 were not so stringent. However, such a proposal cannot be allowed especially in light of the fact that the order dated 21.10.2022 of the NCLAT is unambiguous in its declaration that both Provident Fund and Gratuity dues have to be paid by the SRA in order to save the Resolution Plan from being hit by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... precedent by the SRA by 20.05.2022. Further submission of the Appellant that this Tribunal may exercise jurisdiction under Section 33, sub-section (3) in directing liquidation of the Corporate Debtor due to noncompliance of deposit on INR 150 crores also cannot be accepted. For passing an order under Section 33, subsection (3), there has to be adjudication that Resolution Plan approved by the Adjudicating Authority has been contravened by the Successful Resolution Applicant. We do not accept the submission of the Appellant that by nondeposit of INR 150 crores by 31.01.2024, the SRA has contravened the Resolution Plan and order be passed under Section 33, sub-section (3). In view of our above observations and conclusions, we answer Question Nos. v, vi, and vii in following manner: Question No. v: Direction of Hon ble Supreme Court permitting the Successful Resolution Applicant to infuse INR 150 crores by 31.01.2024 was in reference to offer made by Appellant in affidavit dated 16.08.2023 Question No. iv: The Successful Resolution Applicant having not been able to infuse funds by 31.01.2024 as directed by Hon ble Supreme Court vide its judgment dated 18.01.2024, it cannot be held tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to in sub-clauses (i), (ii) and (iii) of clause (b) of sub-section (1). ( emphasis supplied ) 144. The non-deposit of Rs. 150 Crore had in fact lead to a failure of the Resolution Plan on several counts as elaborated herein. In addition to the breach of Clauses 6.3.1(g), 6.4.4 and S. No. 11 of the Implementation Schedule under Clause 7.7, the non-infusion of the first tranche payment in accordance with the terms of the Resolution Plan has also led to an infraction as regards Clause 6.4.1 on the payment of CIRP costs and Clause 6.4.2 on the payment of workmen/employees dues. Further, the payment of the Provident Fund and Gratuity dues of the workmen/Employees as mandated by the order dated 21.10.2022 of the NCLAT which was confirmed by this Court on 31.01.2023, has also not been made by the SRA. 145. The SRA was given multiple extensions, post the Effective Date i.e., 20.05.2022 in order to implement the Resolution Plan and infuse the first tranche payment of Rs. 350 Crore into the Corporate Debtor. This includes the extensions granted by (a) the NCLT vide order dated 13.01.2023, by which the timeline for infusion of the first tranche payment was extended till 15.05.2023; (b) the NC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quest of the appellant reduces itself to, is that it would raise funds on a mortgage of the assets of the Company and unless the Company is brought out of liquidation, it would not be in a position to raise the funds. This is unacceptable. At this stage, the order of liquidation has only been stayed, but a final view was, thus, to be taken by this Court. Sufficient opportunities were granted to the appellant earlier during the pendency of the proceedings both before the NCLT and NCLAT. The orders of the NCLT and Nclat make it abundantly clear that despite the grant of sufficient time, the appellant has not been able to comply with the terms of the resolution plan. Since 9-10-2020, despite the passage of almost five months, the appellant has not been able to deposit an amount of Rs 50 crores. Time is a crucial facet of the scheme under IBC [Innoventive Industries Ltd. v. ICICI Bank, (2018) 1 SCC 407, paras 12-16 : (2018) 1 SCC (Civ) 356] . To allow such proceedings to lapse into an indefinite delay will plainly defeat the object of the statute. A good faith effort to resolve a corporate insolvency is a preferred course. However, a resolution applicant must be fair in its dealings as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Clause 3.13.7(iii) of the RFRP is that the Appellants are entitled to invoke the PBG automatically without any reference to the SRA. Therefore, it is directed that the PBG may be invoked by the Appellants in accordance with the terms of the Resolution Plan. iii. Whether the timely implementation of the Resolution Plan is also one of the objectives of the IBC, 2016? 150. The Preamble to the Insolvency and Bankruptcy Code, 2016 reads as thus: An Act to consolidate and amend the laws relating to reorganisation and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximisation of value of assets of such persons, to promote entrepreneurship, availability of credit and balance the interests of all the stakeholders including alteration in the order of priority of payment of Government dues and to establish an Insolvency and Bankruptcy Board of India, and for matters connected therewith or incidental thereto. ( emphasis supplied ) 151. The Report of the Bankruptcy Law Reforms Committee, 2015 (hereinafter, the 2015 Report ) also serves to provide valuable insight into the several purposes for which the Code was enacted. Upon highli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Limited v. ICICI Bank and Another reported in (2018) 1 SCC 407 held that the Maharashtra Relief Undertakings (Special Provisions) Act, 1959 was repugnant to the IBC, 2016 and elaborated on the scheme of the IBC, 2016 by placing reliance on the 2015 Report as aforementioned. The relevant observations are reproduced hereinbelow: 13. One of the important objectives of the Code is to bring the insolvency law in India under a single unified umbrella with the object of speeding up of the insolvency process. As per the data available with the World Bank in 2016, insolvency resolution in India took 4.3 years on an average, which was much higher when compared with the United Kingdom (1 year), USA (1.5 years) and South Africa (2 years). The World Bank's Ease of Doing Business Index, 2015, ranked India as country number 135 out of 190 countries on the ease of resolving insolvency based on various indicia. xxx xxx xxx 16. At this stage, it is important to set out the important paragraphs contained in the Report of the Bankruptcy Law Reforms Committee of November 2015, as these excerpts give us a good insight into why the Code was enacted and the purpose for which it was enacted: xxx xxx xx ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extend time, have to be discussed. Rule 15 of the NCLT Rules, 2016 reads as thus: 15. Power to extend time.- The Tribunal may extend the time appointed by these rules or fixed by any order, for doing any act or taking any proceeding, upon such terms, if any, as the justice of the case may require, and any enlargement may be ordered, although the application therefore is not made until after the expiration of the time appointed or allowed. 156. Rule 15 of the NCLAT Rules, 2016 reads as thus: 15. Power to extend time.- The Appellate Tribunal may extend the time appointed by these rules or fixed by any order, for doing any act or taking any proceeding, upon such terms, if any, as the justice of the case may require, and any enlargement may be ordered, although the application therefore is not made until after the expiration of the time appointed or allowed. 157. Rule 15 of the NCLT and NCLAT Rules, 2016 grants power to the NCLT and NCLAT respectively, to extend the time limits for doing any act which have been fixed, either by the rules or by an order, as the justice of the case may require. However, such power must not be exercised mechanically without any application of mind. An ext ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... work and its underlying objective. The adjudicating mechanisms which have been specifically created by the statute, have a narrowly defined role in the process and must be circumspect in granting reliefs that may run counter to the timeliness and predictability that is central to IBC. Any judicial creation of a procedural or substantive remedy that is not envisaged by the statute would not only violate the principle of separation of powers, but also run the risk of altering the delicate coordination that is designed by IBC framework and have grave implications on the outcome of the CIRP, the economy of the country and the lives of the workers and other allied parties who are statutorily bound by the impact of a resolution or liquidation of a corporate debtor. ( Emphasis supplied ) 161. We are conscious of our recent decision Glas Trust Company LLC v. Byju Raveendran and Others reported in 2024 SCC OnLine SC 3032, taking the view that the Court must be circumspect in deviating from the prescribed procedure, especially in the context of the IBC, 2016. However, if such a deviation is made, then the Court must justify as to why the deviation was necessary to prevent the abuse of the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r a particular purpose, then that particular thing must be done only in the manner prescribed. It no way lays a dictum that even where cogent reasons exist warranting such deviation, the court would be powerless to exercise such inherent powers. In other words, Glas Trust (supra) only went to the extent of saying that in the absence of any exceptional circumstances or extraordinary reasons necessitating a deviation from the procedure laid down, the court should refrain from invoking its inherent jurisdiction to do something which otherwise could have been validly done in accordance with the procedure. 163. We are of the considered view that where there exists extraordinary circumstances warranting the exercise of such powers in order to ensure that the very salutary purpose of the Code, 2016 is not frustrated, then the Court would be well-within its prerogative to exercise them to secure the object of the IBC, 2016. If the proposition that there ought to be no exercise of the inherent powers where a procedure is laid down were to be blanketly accepted then it may have a very chilling effect whereby the very purpose of vesting this Court with inherent powers under Article 142 and tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certain deficiencies in the IBC, 2016 which require immediate attention. We would also like to definitely say something as regards the functioning of the NCLTs and NCLAT. 167. Given the importance of the IBC, 2016 for the betterment of the economy at large, it is imperative that the insolvency ecosystem be continuously strengthened through a regular identification of its shortcomings and a quick redressal of its practical deficiencies. This would significantly improve its implementation and yield better results for all the stakeholders involved. While the receptiveness of the regime to the incorporation of novel and relevant recommendations is important, it is paramount that there also be strict adherence to the existing provisions of the Code, both in letter in spirit. 168. Scrupulous following of the provisions of the Code along with behavioural and ethical discipline is especially required from the key participants of the IBC who are central to its design i.e., the Adjudicating Authorities, Corporate Debtor, Resolution Professionals, Committee of Creditors, potential and Successful Resolution Applicants, Approved valuers and Liquidators. 169. A Resolution Plan evolves through t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , for ensuring completion of the stated processes within the timelines prescribed by the I B Code. There is an intrinsic assumption that financial creditors are fully informed about the viability of the corporate debtor and feasibility of the proposed resolution plan. They act on the basis of thorough examination of the proposed resolution plan and assessment made by their team of experts. The opinion on the subject-matter expressed by them after due deliberations in CoC meetings through voting, as per voting shares, is a collective business decision. The legislature, consciously, has not provided any ground to challenge the commercial wisdom of the individual financial creditors or their collective decision before the adjudicating authority. That is made non-justiciable. ( Emphasis supplied ) 171. Thus, there is no doubt that the commercial wisdom of the CoC cannot be subjected to judicial review. However, in order to foster a much more effective and time-bound decision making by the members of the CoC in the interests of maximization of value of the assets of the Corporate Debtor, certain selfregulating guidelines were issued by the IBBI on 06.08.2024 with immediate effect. The G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e CoC (p) regularly monitor the activities of the Insolvency Professional and seek rationale of decisions/actions taken by him. (q) diligently recommend for the inclusion or otherwise of the belated claims collated by the Insolvency Professional and categorised as acceptable, in the list of creditors and its treatment in the resolution plan, if any. (r) actively participate in the presentation of valuation methodologies made by the Registered Valuers. (s) ensure the conduct of the meeting at regular intervals as specified in the regulations. Sharing of information (t) proactively share the latest financial statements, relevant extract from the audits of the corporate debtor, conducted by the creditors such as stock audit, transaction audit, forensic audit, etc. and other relevant information available, with the Insolvency Professional to enable efficient conduct of the process. (u) seek details of all litigation filed against or by the corporate debtor from Insolvency Professional and recommend necessary actions to Insolvency Professional to safeguard the interest of the corporate debtor. Feasibility and viability of corporate debtor (v) carefully review and assess the information ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional, nor can it abdicate its responsibility in the face of unforeseen obstacles. Its efforts must reflect a determination to implement the plan fully and to rejuvenate the debtor company, as this is integral to the success of the IBC framework and the spirit of economic revival it seeks to foster. The approach, therefore, must not be frugal or narrowly profit-driven, limited to viewing the transaction through a purely commercial lens. Instead, it must recognize that rescuing a distressed company is a responsibility of significant social and economic value, demanding a holistic and responsible strategy. This involves a dedication to long-term outcomes, where the Successful Resolution Applicant adopts measures that genuinely support the debtor s rehabilitation, rather than making minimal or half-hearted attempts at implementation. Courts and tribunals have consistently underscored that the Successful Resolution Applicant s role transcends commercial interest and embodies a commitment to the larger purpose of corporate revival. Consequently, it must make thoughtful and sustained efforts, demonstrating adaptability and resilience even when faced with obstacles or operational impedime ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Debtor. However, this has unfortunately led to the consequence of giving excessive leeway to the Successful Resolution Applicants to act in flagrant violation of the terms of the Resolution Plan in a lackadaisical manner. The SRAs repeatedly approach the Adjudicating Authority or the NCLAT for the grant of reliefs in relation to relaxation of the strict compliance to the terms of the Plan, including the timelines imposed therein. The NCLT and NCLAT more often than not, accede to such requests in exercise of their inherent powers under Rule 11 or their power to extend time under Rule 15 of the NCLT and NCLAT Rules, 2016 respectively. It is reiterated that the NCLT and NCLAT must not entertain such repeated attempts at violating the integrity of a CoC approved Resolution Plan by accommodating the incessant requests of the Successful Resolution Applicants. The exercise of discretion as regards altering the binding terms of the Resolution Plan, including the timelines imposed, must be kept at a minimum, at best. The NCLTs/ NCLATs need to be sensitised of not exercising their judicial discretion in extending the timelines fixed under IBC, 2016 or the Resolution Plan, in such a way t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been prescribed for such a contravention. In light of such strict consequence provided for the contravention of the resolution plan envisaged under the scheme of the Code itself, there is good reason for us to ensure that the successful resolution applicants abide by their commitments made under the resolution plan. Therefore, it is suggested that the authorities including the NCLT and NCLAT must not aid the successful resolution applicants in circumventing the strict mandates of the law by acceding to their requests to relax the terms of the plan itself. 180. One another suggestion at our end that may aid in a coordinated and nonadversarial implementation of the Resolution Plan by all the stakeholders is that the Adjudicating Authority while approving a Resolution Plan under Section 31 of the IBC, 2016, should record the next steps which are to be taken by the respective parties for commencement of implementation of the approved Resolution Plan. This will ensure that the parties are ad idem about the next round of their obligations that each of them is required to discharge under the approved Resolution Plan and that they do not delay the implementation by initiating any furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rety, erode investor confidence and hinder all corporate restructuring efforts. 183. The Members often lack the domain knowledge required to appreciate the nuanced complexities involved in high-stake insolvency matters in order to properly adjudicate such matters. It has been noticed that the benches of NCLT(s) and NCLAT don t have the practice of sitting for the full working hours. They are particularly lacking in the capacity to manage the growing number of cases and giving undivided attention required in such matters. There are serious issues in the manner in which the insolvency matters are listed. There is no effective system in place before the NCLTs for urgent listings. The staff of the Registry is given wide power to list or not to list a particular matter. One of the salutary objects of the Code, 2016 is to protect the assets of the corporate entity in timely manner and taken prompt decisions, however, it has become a practice of the NCLT(s) and NCLAT to ignore the urgent mentionings and listings of time-sensitive matters and show no deference to long-pending matters resulting in value erosion of the assets of the corporate debtor and rendering their insolvency resolution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the Ministry of Finance. G. CONCLUSION 186. For all the foregoing reasons, we have reached the conclusion that the impugned order passed by the NCLAT is perverse and unsustainable in law. It has led to further complications. As a result, the appeals succeed and are allowed. The impugned order passed by the NCLAT is set aside. 187. In the peculiar and alarming circumstances as discussed in this judgment and also keeping in mind the fact that almost five years have elapsed since the Resolution Plan was duly approved by the NCLAT and there being no progress worth the name, we are left with no other option but to invoke our jurisdiction under Article 142 of the Constitution and direct that the corporate debtor be taken in liquidation. The NCLT, Mumbai shall now take appropriate steps for appointment of liquidator and all other necessary formalities for commencement of liquidation of the corporate debtor. 188. The amount of Rs 200 Crore already infused by the SRA stands forfeited. The Lenders/ Creditors are further permitted to encash the performance bank guarantee of Rs. 150 Crore furnished by the SRA. We accordingly order so. 189. These appeals are disposed of in the aforesaid term ..... X X X X Extracts X X X X X X X X Extracts X X X X
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