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TMI Blog2024 (11) TMI 998X X X X Extracts X X X X X X X X Extracts X X X X ..... P (IB) No.- 4541/(MB)/2019, whereby the Adjudicating Authority has dismissed the application filed by the appellant under Section 7 of the Code. GTL Infrastructure Limited, the Corporate Debtor against whom Section 7 application was filed by the Appellant, is the Respondent ('Respondent'). 2. Heard the Counsel for the Parties and perused the records made available including the cited judgements. We have also updated the figures based on Written Submission of the Parties based on liberty granted by this Appellate Tribunal on 24.09.2024 while reserving order for judgment. 3. The Appellant submitted that he is the Financial Creditor who lent money to the Corporate Debtor. The Appellant further submitted that there was a consortium of banks who gave different financial facilities to the Corporate Debtor. 4. Giving the background of the case, the Appellant submitted that the Corporate Debtor was set up somewhere around 2006 for providing approximately 23,700 passive telecom towers comprising 3,218 rooftop sites and 20,487 ground bases sites as Phase-I at various locations across India and for this purpose executed several finance and security documents ('Phase-I financing documents) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n terms of RBI Prudential Norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances ('IRAC Norms'). 10. The Appellant submitted that on 20.09.2016, the Appellant and other Consortium Lenders met and noted inability of the Respondent and CNIL to service the principal repayments of the lenders and decided to classify their accounts as ASM-II, however also decided to further help the Respondent and CNIL through Strategic Debt Restructuring (SDR) in accordance the RBI Master Direction- 'Review of I * Prudential Guidelines - Revitalising Stressed Assets in the I ' Economy' dated 25.02.2016. The Appellant stated that lenders agreed for participation in equity under SDR, merger of CNIL with Respondent and induction of New Investor post-merger. The Appellant communicated the sanction of SDR vide his letter dated 31.03.2017. 11. The Appellant submitted that in terms of this SDR, the CNIL was merged with the Respondent w.e.f. Appointed Date i.e., 01.04.2016, which was approved by the NCLT, Chennai and as per this merger, the assets and liabilities of CNIL were merged into the Respondent and the Respondent became liable for the payments of the loa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cular as ultra vires under Section 35 AA of the RBI Regulation Act, 1949. 18. The Appellant filed another Section 7 application on 05.12.2019 before the Adjudicating Authority bearing CP (IB) No. 4541/2019 for outstanding amount of Rs. 646,38,062,711- as on 30.11.2019. 19. The Appellant stated that in the meanwhile, Respondent approached the Hon'ble Bombay High Court vide its Writ Petition No. 1893 of 2019 seeking a writ of mandamus against the Appellant and four others lenders to assign their respective debts owed by the Respondent/ Corporate Debtor in favour of EARC as the Appellant and few other lenders were not assigning their debts to EARC. This writ petition of the Respondent was dismissed by the Hon'ble Bombay High Court on 03.02.2020. The Appellant submitted that the Respondent challenged the same before the Hon'ble Supreme Court of India vide Special Leave Petition No. 5256/2020 which was also dismissed by the Hon'ble Supreme Court of India on 06.12.2021 mentioning that each bank/ financial institution must make its own assessment of the value offered by the borrowers for the financial assets and decide whether to accept or reject the offer. 20. The App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wledgments including letter of Respondent dated 02.07.2016. Further the debt is also recorded in the Report of Information Utility (NeSL) dated 05.12.2019 and the Record of default under the report of the Central Repository of Information on Large Credits ("CRILC") dated 04.12.2019. 25. The Appellant stated that the Respondent and CNIL have created several charges on their properties in favour of the lenders for various facility management and the same are undisputed facts. 26. The Appellant emphasized that according to their commercial wisdom, it would be realistic to seek resolution of the Corporate Debtor under the Code and the same was communicated to Union Bank of India (Leader of Consortium) vide letter dated 03.08.2018 not to assign Appellant's debts in favour of EARC. The Appellant sated that he issued notice dated 23.08.2018 to the Respondent recalling the entire financial assistance granted to the Respondent and demanded payment of Rs. 540.35 Crores (Approx.). 27. The Appellant assailed the conduct of the Respondent for taking several frivolous grounds including that the application of the Appellant under section 7 of the Code has been rejected earlier and by doctrine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titled as Rajesh Kedia v. Phoenix ARC Private Limited, Company Appeal (AT) (Insolvency) No. 996 of 2021 and judgment passed by Hon'ble Supreme Court of India in the matter of Arun Kumar Jagatramka v. Jindal Steel & Power Ltd, Civil Appeal No. 9664 of 2019 in support of his arguments. 32. The Appellant submitted that the reliance on the Vidarbha Industries (Supra) by the Adjudicating Authority is patently illegal in light of the order passed by the Hon'ble Supreme Court of India in Axis Bank Limited v. Vidarbha Industries Power Limited Review Petition [(Civil) No. 1043 of 2022 in Civil Appeal No. 4633 of 2021 ("Vidarbha Review Order")], where the same judges of the Hon'ble Supreme Court of India who gave the original judgment of Vidarbha Industries (Supra), clearly stipulated that 'it is well settled that judgments and observations in judgments are not to be read as provisions of statute. Judicial utterances and/or pronouncements are in the setting of the facts of a particular case'. (Emphasis Supplied) 33. The Appellant reiterated that in the present appeal, conduct of the Respondent has been grossly unfair and questionable and has been defaulting its paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Appellant treating these as misleading and malicious. 39. The Respondent submitted that the Adjudicating Authority has examined the various issues and pleadings and has gone into details of the records and facts before passing the Impugned Order which is legal and correct in given circumstances. 40. The Respondent submitted that the Corporate Debtor is successfully running its operations and is viable going concern and has been generating sufficient revenue. The Respondent submitted that in March, 2023 it was generating almost monthly revenue of Rs. 120 Crores and as such in spirit of the Code, the Corporate Debtor should be allowed to continue as a going concern in interest of all stakeholders including the lenders and for economic welfare of public at large. 41. The Respondent gave the background of the business of the Corporate Debtor and subsequent events leading to merger of CNIL with the Corporate Debtor and stated that the Corporate Debtor has been providing huge infrastructure network required for telecom business and has been pioneer in this sector. The Respondent stated that due to external circumstance, beyond its control, the Respondent has been facing financia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing for such industries. 46. The Respondent also refuted the claims of the Appellant that Vidarbha Industries (Supra) is not a substantial law and is limited to its own fact and rather Innoventive Industries Ltd. (Supra) is the only good law in deciding cases of debt and default. The Respondent submitted that this position is not correct and Vidarbha Industries (Supra) is a correct and latest law which is pronounced after judgment of Innoventive Industries Ltd. (Supra) . 47. The Respondent submitted that judgment in Innoventive Industries Ltd. (Supra) rendered at the time when the IBC was in nascent stage and laid down of law relating to IBC and subsequently large number of litigations have helped IBC to evolve itself and came to correct path for benefit of all stakeholders including the borrowers and the lenders along with other stakeholders and in this background Vidarbha Industries (Supra) is a path breaking judgment which allows the Corporate Debtor to flourish and continue as going concern and only the errant and unscrupulous companies are to be sent to the CIRP, which is not the case with the Respondent. 48. The Respondent submitted that the decision of Vidarbha Industries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide IBC. 51. The Respondent submitted that the Adjudicating Authority in para 11 gave reasoning of the judgment, as earlier the pleadings were complete and only for brevity purpose, the Adjudicating Authority has restricted its rationale in Para 11 and rather has given its clear reasoning in para 11. The Respondent assailed the conduct of the Appellant for generating unnecessary controversy on such trivial and hyper technical grounds. 52. The Respondent strongly emphasized that it has been paying to all creditors since its inceptions and stated that it has paid Rs. 17,394 Crores between the year 2011 to 24.09.2024 i.e., (updated figures based on Written Submission) i.e., paid in kind as debt converted into equity of Rs. 8,892 Crores (updated till 2022-23) and remaining amount in cash and thus, total repayment made to lenders (Cash + Conversion) is of Rs. 17,394 Crores from 2011 to 24.09.2024. 53. The Respondent submitted that it is hopeful of getting Rs. 900 Crores from Aircel which is biggest customer of the Respondent and now since Aircel has itself come under CIRP and the Respondent had filed a total claim of Rs. 13,393.83 Crores against the Aircel before the Resolution Profe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent gave the background under which the lenders initiated the proposal for assignment to its debt to suitable EARC and during the time the Respondent submitted the Resolution Plan vide letter dated 27.04.2018, however, the same was not considered by the lenders and finally the majority of the lenders decided to assign their Debts to EARC valued 79.34% (by value) as on 01.07.2019. 59. The Respondent stated that the Corporate Debtor has paid around Rs. 17,400 Crores to the lenders which included principal, interest, conversion to equity, direct debited and amounts realized by sale of pledged shares indicating that the Respondent has been making payments of its debts and has been meeting its commitment towards financial facilities. 60. The Respondent submitted that by treating the SDR Scheme as having "failed", the Appellant is seeking to disregard the conversion of a specific portion of debt of the Applicant Bank into equity of the Respondent and demanded repayment of the debts owed by the Respondent to Appellant prior to the implementation of the CDR Scheme way back in 2011. The Respondent submitted that there is no provision in the CDR Notification, or SDR Notification, the SDR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tan Construction Corp. v. Mazgaon Dock, 1998 SCC Online Bom 32, in support of his arguments. 64. The Respondent brought out that during the final stage of pleadings before this Appellate Tribunal when the Respondent raised issue regarding non- admissibility of Rejoinder submissions of the Appellant, the Senior Learned Counsel for the Appellant has categorically stated that the Appellant would not be pressing or relying upon the Rejoinder. The Respondent requested this Appellate Tribunal to disregard the Rejoinder filed by the Appellant. 65. Concluding his remarks, the Respondent submitted that the Corporate Debtor is viable company and was serving nation by providing telecom infrastructure and is a serious player as evident by the fact that the EBITA was positive and it has paid more than Rs. 17,000 Crores to its lenders in last several years. The Respondent reiterated that due to several factors happening in the economy and particularly in the telecom sector after 2G scam and failure on the part of the telecom companies, the Respondent came under financial distress and therefore the CDR and SDR become unsuccessful for no fault of the Respondent. The Respondent reiterated in view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 7 Application, total amount has been shown as default Rs. 646,38,06,271/- as on 01.07.2011 and one table for working of computation of accounts and date of default was attached in annexures Part IV as Exhibit (C-1). * We further note that there was a consortium of lenders which financed GTL Infrastructure Ltd. and CNIL. We also observe that CNIL was later emerged into GTL Infrastructure Ltd. the Respondent herein. The financial facilities started since July 2008 by lenders, and continued over the time including sanctioning of financial facilities by the lenders of Rs. 2829 Crores + Rs. 5000 Crores + Rs. 700 Crores to these two entities. * We have already noted that due to financial distress of the Corporate Debtor the lenders and the Respondent agreed for CDR and the portion pertaining to the Appellant for this CDR package was Rs. 93.05 Crores + Rs. 631.08 Crores. We note that the CDR failed and the account of Respondent became NPA on 17.06.2016. * Later SDR package was sanctioned by the lenders in favour of the Respondent which also failed since the Respondent defaulted on 19.03.2018 and the account of the Respondent was classified as NPA w.e.f. 01.07.2011 based o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause there is debt and default has in any manner been affected by the subsequent judgements in the case of M. Suresh Kumar Reddy v. Canara Bank & Ors. and Sunder Nagar Co-operative Housing Societies Union Ltd. v. SBI? B. Having filed the appeal only on the limited ground of non-applicability of Vidarbha Industries, can the Appellant be heard on grounds other than those raised in the memo of appeal? C. Having failed to file a rejoinder to the Affidavit in Reply and the Additional Affidavit in Reply filed by Respondent before NCLT, can the Appellant be permitted to raise or dispute issues of facts directly before the Appellate Authority without any challenge to the facts before NCLT? D. Can the Rejoinder filed by the Appellant before this Hon'ble Tribunal, without leave, containing a challenge to findings of facts beyond the grounds taken in the memo of appeal as per NCLAT Rules, 2016 be taken on record in view of the decisions of this Hon'ble Tribunal in Central Bank of India v. Himmat Steel and SBI v. India Power Corporation Ltd.? E. Absent an application to amend the memo of appeal and the grounds therein, in view of the judgements of the Hon'ble Bombay Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the Impugned Order while rejecting the application of the Appellant under Section 7 of the Code. * We note that the Impugned Order is entirely based on the ratio of Vidarbha Industries (Supra) and therefore it would be desirable to look into the ratio and the relevant facts, Vidarbha Industries (Supra) which reads as under :- " 24. Mr Jaideep Gupta, Senior Advocate appearing on behalf of the appellant submitted that the appellant had applied for stay of the proceedings before NCLT, Mumbai in extraordinary circumstances, where the appellant had not been able to pay the dues of the respondent, only because an appeal filed by MERC, being Appeal No. 372 of 2017, against an Order dated 3-11-2016 [Vidarbha Industries Power Ltd. v. Maharashtra Electricity Regulatory Commission, 2016 SCC OnLine Aptel 137] passed by APTEL in favour of the appellant, was pending in this Court. Since the aforesaid appeal is pending in this Court, the appellant is unable to realise a sum of Rs 1730 crores, which is due and payable to the appellant, in terms of the order of APTEL. 37. Mr Mehta argued that the application under Section 7 IBC was filed by the respondent financial creditor before NCLT, M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corporate debtor by the operational creditor and no notice of dispute has been received by the operational creditor. The IBC does not countenance dishonesty or deliberate failure to repay the dues of an operational creditor. 81. The title "Insolvency and Bankruptcy Code" makes it amply clear that the statute deals with and/or tackles insolvency and bankruptcy. It is certainly not the object of the IBC to penalise solvent companies, temporarily defaulting in repayment of its financial debts, by initiation of CIRP. Section 7(5)(a) IBC, therefore, confers discretionary power on the adjudicating authority (NCLT) to admit an application of a financial creditor under Section 7 IBC for initiation of CIRP. 88. The adjudicating authority (NCLT) has to consider the grounds made out by the corporate debtor against admission, on its own merits. For example, when admission is opposed on the ground of existence of an award or a decree in favour of the corporate debtor, and the awarded/decretal amount exceeds the amount of the debt, the adjudicating authority would have to exercise its discretion under Section 7(5)(a) IBC to keep the admission of the application of the financial creditor in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ionary was not in issue in any of the judgments cited on behalf of the review applicant. What was in issue in Krishnamurthy case [E.S. Krishnamurthy v. Bharath Hi-Tecch Builders (P) Ltd., (2022) 3 SCC 161 : (2022) 2 SCC (Civ) 129] was whether the adjudicating authority could foist a settlement on unwilling parties. That issue was answered in the negative. 6. The elucidation in para 90 and other paragraphs [of the judgment under review] [Vidarbha Industries Power Ltd. v. Axis Bank Ltd., (2022) 8 SCC 352 : (2022) 4 SCC (Civ) 329] were made in the context of the case at hand. It is well settled that judgments and observations in judgments are not to be read as provisions of statute. Judicial utterances and/or pronouncements are in the setting of the facts of a particular case. 7. To interpret words and provisions of a statute, it may become necessary for the Judges to embark upon lengthy discussions. The words of Judges interpreting statutes are not to be interpreted as statutes." (Emphasis Supplied) * We observe that this judgment was delivered by the same Hon'ble Judges who gave original Vidarbha Industries (Supra) judgment and it has been made clear that ratio was given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the out of total claimed amount of Rs. 37,034 Crores, only Rs. 56.01 Crores has been provided in the Resolution Plan, which is 0.15% of the amount claimed, in the Resolution Plan of the Aircel entities and the Appellant is likely to get the same amount aggregating which is Rs. 20.08 Crores i.e., 0.15% of his claims of Rs, 13393.83 Crores, whereas the Adjudicating Authority has merely recorded "Corporate Debtor's claims aggregating to Rs. 13,393.83 Crores against the Aircel entitled", without taking into account the approved Resolution Plan of Aircel only provided 0.15% of claims. Incidentally, as noted from pleadings, the Resolution Plan of Aircel entities was approved much earlier i.e., on 09.02.2020 whereas the present Impugned Order was passed on 18.11.2022. We note that the approved Resolution Plan of Aircel is pending in appeal. * We observe that the provided amount in favour of the Corporate Debtor is very meagre and does not support rational of the Adjudicating Authority in justifying the viability and sustainability of the Corporate Debtor. * We note that the Respondent has pleaded that Rs. 900 Crores has been directed to be paid to the Respondent as CIRP cost by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng as per original loans along with interest which would have been payable to lenders to understand the depth of payment i.e., Rs. 17,394 Crores paid to all lenders including converted portion of debt to equity. * We consciously note that both CDR and SDR failed due to default of the Respondent in meeting its agreed obligations. As such we feel that the Adjudicating Authority should have gone into details and should have analysed all facts and figures before rejecting the application of the Appellant under Section 7 of the Code and should have taken all figures, based on numerators as well as denominators, into consideration rather than quoting Rs. 16915 Crores as paid to all Lenders by the Corporate Debtor contained in the Impugned Order (updated figure 17,394 Crores upto 24.09.2024). * The Adjudicating Authority has not even discussed the nature of this repayment of Rs. 16915 Crores i.e., whether it was paid in cash component as per loan agreements or major chunk as deemed payable due to conversion of debt into equity as per CDR/ SDR in terms of RBI Guidelines, which Lenders/ Bank had to follow without any option. We note that both the CDR/SDR failed due to default of the Res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Forty-Nine Only) amounting to 6.56% of the total debt of the Corporate Debtor..." (Emphasis Supplied) (iii) As regarding default the same has been reflected in annual report of the Corporate Debtor for the financial year 2017-2018 where the admitted default in repayment in rupee term loan has been reflected. (iv) We also note that the GTL Infrastructure Limited has further admitted its default in payment of facilities which led to CDR/SDR as evident from GTL Infrastructure Limited's affidavit in reply to Section 7 petition before the Adjudicating Authority which has been reproduced as Annexure A-24 in Volume-IV of the present appeal. (v) Similarly, we note that the record of default of the account of GTL Infrastructure Limited classify as "doubtful restructured" and has been recorded in CRILC report dated 04.12.2019 as made available to us in Annexure A-12 of Volume - III of the present appeal. (vi) Furthermore, default has been acknowledged and identified in the report of information utility, national e-services limited dated 05.12.2019 which has been produced before us in the present appeal in Annexure A-13. (vii) We note that in additional affidavit in reply da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Authority despite acknowledgements of the debt and default on the part of the Respondent was the ratio contained in Vidarbha Industries (Supra). * As such, the ratio of the Vidarbha Industries (Supra) is required to be looked into, which is the prime reason for the present appeal. * We have already noted the relevant para of Vidarbha Industries (Supra), Innoventive Industries Ltd. (Supra), Vidarbha Review Order and further we have already noted the various financial facts and figures regarding viability of the Corporate Debtor in our earlier analysis, as such the contentions raised by the Respondent does not hold good. * We feel that even without considering the Rejoinder filed by the Appellant, the ratio and applicably of Vidarbha Industries (Supra) is in the present appeal is required to be taken into consideration along with various financial facts which are found in the pleadings made before us as well as written submissions and which are based on the financial statements of the Corporate Debtor which are in public domain. 72. Issue (v) Whether, the Appellant was duty bound to agree with majority of the lenders to assign its debts to EARC. * We have already noted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the grounds set out in the petition. In ground B, reliance is placed upon para 6.4 of the IRAC guidelines, which reads as under:- "6.4 Procedure for sale of Bank's/ FI's financial assets to ARC including valuation and pricing aspects..... (d) (i) ..... (ii) In the case of consortium/ multiple banking arrangements, if 75% (by value) of the banks/ FIs decide to accept the offer, the remaining banks/ FIs will be obligated to accept the offer" (Emphasis supplied). 46. The averment in the petition is that respondent Nos.1 to 6 are bound by the said guidelines issued by Reserve Bank of India. In the present case, since more than 75%(by value) of the lenders of the petitioner have assigned all their rights, title and interest in the financial facilities granted by them to the petitioner, in favour of respondent No.7, by executing Assignment Agreements, all other lenders of the petitioner are also obliged to accept the offer of respondent No.7 for assignment of their respective rights, title and interest in the financial facilities granted to the petitioner. In view of the IRAC guidelines, respondent Nos.1 to 6 are not entitled to treat themselves as creditors of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tors. There has to be a inspecting officer of the Reserve Bank of India whose assessment furnished to the bank will assist it and statutory auditors in taking a decision with regard to making adequate and necessary provisions in terms of prudential guidelines. The prudential norms, the classification of assets would then enable the provisioning. Now, the argument of the learned senior counsel is based on para 6.4 of this circular. This para sets out the procedure for sale of banks/financial institutions' financial assets to Securitisation Company and Reconstruction Company, including valuation and pricing aspects. This paragraph reads as under :- "6.4 Procedure for sale of banks'/FIs' financial assets to SC/RC, including valuation and pricing aspects ...(d) (i) Each bank/FI will make its own assessment of the value offered by the SC/RC for the financial asset and decide whether to accept or reject the offer. (ii) In the case of consortium/multiple banking arrangements, if 75% (by value) of the banks/FIs decide to accept the offer, the remaining banks/FIs will be obligated to accept the offer.... 75. Mr. Kamdar would submit by relying upon clause (d)(ii) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at this circular ought to be followed and must be directed to be followed by respondent Nos.1 to 6, even if that is containing a caution, advise and guidance. It is common ground that the petitioner says that these guidelines/norms should be applied and there is no choice not to abide by it. The argument is that since more than 75% (by value) of the lenders of the petitioner have assigned all their rights, title and interest in the financial facilities granted by them to the petitioner in favour of respondent No.7 by executing assignment agreements, by virtue of the IRAC guidelines, all other lenders of the petitioner are obligated to accept the offer of respondent No.7 for assignment of their respective rights, title and interest in the financial facilities granted to the petitioner. To our mind, this understanding of the senior counsel is flawed and erroneous simply because there is an obligation only when the guidance is adhered to and all precautions are taken before the assignment arrangement for sale. Once these are guidelines and they cannot be elevated or placed at the level of a binding rule, regulation and statute, then, we cannot accept the arguments of Mr. Kamdar. Assum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght in this writ petition. If we make a reference to grounds (N), (O) and (P), then, it is evident that the petitioner say that it has fulfilled its part of promise or obligation and respondent Nos.1 to 6 have refused to comply with the guidelines despite the same. Now, what the reciprocal or corresponding obligations qua the dues of the lenders are and whether they are contractual or statutory in character would have to be established and proved. If these are contractual obligations, then, whether there is absolute refusal to perform the obligations or discharge the duties or that the duties and obligations allegedly attributed to the lenders have been performed only in part and not in full are matters, which would have to be established and proved by the petitioner either in substantive legal proceedings or in defence to the proceedings instituted against it by respondent No.7. To our mind, it would be highly risky and unsafe to rely on the version of the petitioner and issue the writ of mandamus as prayed. 81. ...The standstill clause available under the SDR expired on 19 th March, 2018. Therefore, by the Reserve Bank of India guidelines, the petitioner's accounts were cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh Court in great detail as seen from above paragraphs on merits and the Writ Petition was dismissed accordingly. * We note that the Hon'ble Bombay High Court have heard both the GTL Infrastructure Limited and GTL Limited in common order and one of the main issue was regarding mandatory applicability of paragraph 6.4 of the RBI Master Circular. The Hon'ble Bombay High Court categorically held that this is not mandatory and ultimately this is discretion vesting in the financial institutions. The Hon'ble Bombay High Court also held that RBI Guidelines only advise, caution and provide on sale of financial assets to ARC and cannot be held mandatory. * The Hon'ble Bombay High Court also rejected the arguments of the Respondent herein that since more than 75% (by value) of the Lenders have assigned their rents to ARC the Appellant herein is also duty bound to do so. * The Hon'ble Bombay High Court held that RBI Circular dated 01.07.2015 are only Guidelines and these cannot be elevated or placed at the level of binding rule, regulations and statute. * The Hon'ble Bombay High Court categorically stated that they cannot direct the Appellant herein who is the Financial Institution/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssigning their respective debts in favour of Respondent No. 7; (b) pending the hearing and final disposal of the Petition, the Respondent Nos. 1 to 6 be restrained from taking any coercive steps against the Petitioner for recovery of their purported dues under the financial facilities granted by the Respondent Nos. 1 to 6 to the Petitioner including but not limited to filing or prosecuting any proceedings under the IBC and/or Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; (c) grant and interim relief in terms of prayer clause (c); (d) grant costs in favour of the Petitioner;" 11. We have heard Dr. Abhishek Manu Singhvi, learned Senior Advocate in support of the appeal and Mr. Salman Khurshid, learned Senior Advocate in support of the Writ Petition. 12. We have also heard Mr. Harish Salve and Mr. Amit Sibal, learned Senior Advocates for Respondent Nos. 2, 3 and 4 in the Writ Petition; Mr. Neeraj Kishan Kaul, learned Senior Advocate for Edelweiss Asset Reconstruction Company Limited and Mr. Abhishek Singh, learned Advocate for Canara Bank. 13. Paragraph No. 6.4 (d)(i) itself makes the position quite clear that e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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