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TMI Blog2024 (12) TMI 410X X X X Extracts X X X X X X X X Extracts X X X X ..... I Bank to initiate CIRP process against the Corporate Debtor is not relevant for determining default by Corporate Debtor within meaning of Section 3(12) of the IBC? - HELD THAT:- Application by Financial Creditor has to be filed in Form-1. Part V of Form-1 refers to financial debt documents, records and evidence of default. Thus, Financial Creditor is fully entitled to file documents, records and evidence of default. When direction has been issued by the RBI which is a regulator of banking companies directing for initiation of the CIRP against the Corporate Debtor, the said direction cannot be disregarded or ignored while determining application under Section 7 filed by the Financial Creditor against the Corporate Debtor. The direction issued under Section 33AA of the Banking Regulations Act by the RBI are relevant for determining default by Corporate Debtor within the meaning of Section 3(12). Whether under the Resolution approved in JLF meeting held on 22.06.2017 for debt of Rs.11833.55 Crore (including interest) a scheme of arrangement was framed to transfer the above debt along with land parcel of equivalent value to an SPV, namely Jaypee Infrastructure Development Ltd., which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, hence the application under Section 7 did not merit admission? - Whether there were sufficient material brought on record by Financial Creditor to prove debt and default on the part of the Corporate Debtor? - HELD THAT:- MRA dated 31.10.2017 did not cover the facilities for which Section 7 application was filed. Clause 2.2 of the MRA has no applicability and the default for which Section 7 application was filed cannot be treated to be waived by the lenders - The OTS having been submitted by the Corporate Debtor offering upfront amount and the total amount, it does not lie in the mouth of the Corporate Debtor to contend that no default has been committed by the Corporate Debtor. In the OTS proposal submitted on 23.06.2024 to the ICICI Bank, lenders have offered to give upfront payment of Rs.500 Crores (200+300) and total amount of Rs.16,016 Crores. The copy of the OTS proposal dated 23.06.2024 submitted on behalf of the Corporate Debtor has been filed as Annexure R- 18 to the Reply of the Respondent No.1. The OTS proposal submitted both before the Adjudicating Authority as well as before this Tribunal on behalf of the Corporate Debtor contains the clear acknowledgment of debt and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IA 263/2024 was filed by the Corporate Debtor for replacement of Interim Resolution Professional (IRP) proposed in the Application to Sh. Bhuvan Madan, as IRP, which Application has been allowed by the Adjudicating Authority. IA 291/2024 was filed by the Corporate Debtor to defer the pronouncement of the Judgment which has also been dismissed by separate Order dated 03.06.2024. All the aforesaid Orders passed in the above IAs as well as Order dated 03.06.2024, admitting Section 7 Application are under challenge in these Appeals. 3. Brief background facts, which gave rise to filing of Section 7 Application by the ICICI Bank against the Corporate Debtor are: i. The Corporate Debtor is Company registered on 15.11.1995. ii. The Corporate Debtor is engaged in large number of businesses including Infrastructure Development. Corporate Debtor for carrying out its various business activities has obtained financial facilities from ICICI Bank and several other Banks (ICICI Bank being the lead Bank). iii. On 03.10.2014, the Corporate Debtor was classified under SMA II category by Banks. iv. A Joint Lender Forum (JLF), comprising of all Banks financial institutions was constituted as per Reser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on (Civil) No.744/2017, where an Interim Order was passed on 11.09.2017 by the Hon ble Supreme Court. The JAL, who was a parent Company was directed to deposit amount of ₹2000 Crores. It further directed that if any Assets or Property of JAL have to be sold that should be done after obtaining prior approval of the Court. xvii. The RBI filed an Application in the Writ Petition (Civil) No.744/2017, on 10.01.2018, praying to allow the RBI to follow the recommendation of Independent Advisory Committee (IAC) regarding JAL. xviii. Hon ble Supreme Court passed an Order in the Writ Petition (Civil) No.744/2017 on 09.08.2018, accepting the request made on behalf of the RBI to allow it to follow the recommendation of IAC to initiate a CIRP against the JAL under IBC. After the Order of Hon ble Supreme Court dated 09.08.2018, the RBI vide letter dated 14.08.2018, directed the ICICI Bank to initiate the Insolvency against JAL within 15 days from the date of direction. xix. On 30.08.2018, RBI again wrote a letter to the ICICI Bank that restructuring of JAL has become null and void. xx. JAL filed a Writ Petition No.31329/2018 in the Allahabad High Court challenging the letter dated 14.08.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as security to a Special Purpose Vehicle (SPV). xxix. First Motion pertaining to Scheme of Arrangement was filed before the NCLT Allahabad on 20.11.2017. NCLT Allahabad in CP (CAA) No.174/2017 approved the First Motion Petition on 08.12.2017. xxx. On 23.01.2018, Second Motion Petition CP 19/2018 was filed before the NCLT. xxxi. On 30.04.2019, Corporate Debtor filed CA No.120/2019 in Section 7 Application filed by the ICICI Bank seeking dismissal of Company Petition. xxxii. On 22.08.2023, IA 406/2023 was filed by the Corporate Debtor, seeking adjournment of the hearing of all matters before the Adjudicating Authority, as discussions were being made between the ICICI Bank and the Corporate Debtor regarding consultation of the restructuring proposal submitted by the Corporate Debtor. xxxiii. An IA 263/2024 was filed by ICICI Bank seeking replacement of proposed IRP with Bhuvan Madan. xxxiv. Adjudicating Authority heard Learned Counsel for the Financial Creditors and Learned Counsel for the Corporate Debtor on 17.05.2024 and reserve the Orders on C.P. (IB) No. 330/ALD/2018 being CA 120/2019, IA 406/2023 IA 263/2024. Arguments were also heard on Second Motion Petition filed in the Schem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Intervention Application filed by the SBI. Reply to the Intervention Application has also been filed. The Appeals were heard by this Tribunal on several dates and on 04.11.2024, hearing was completed and Judgment was reserved. Parties were also permitted to file Notes of Submissions. 4. We have heard Learned Sr. Counsels Dr. Abhishek Manu Singhvi Mr. Abhijeet Sinha appearing for the Appellant, Mr. Krishnendu Dutta appearing for the ICICI Bank, Mr. Gopal Jain appearing for the SBI, Intervenor and Mr. Sunil Fernandes appearing for the Resolution Professional (RP). 5. Learned Counsel for the Appellant in support of the Appeal contends that Impugned Order suffers from legal infirmities as there is no debt or default committed by the Corporate Debtor. It is submitted that CRRP was approved on 22.06.2017, thereafter, MRA was executed on 31.10.2017, which MRA resolved all debt. As per MRA, the previous default and the remedies were specifically waived by the Lenders. The binding nature of sanction letter dated 19.05.2017 issued by ICICI Bank and the MRA has not been questioned by the Lender at any stage, whereas, the Corporate Debtor has taken irreversible steps in terms of the approve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and letter dated 14.08.2018 by the RBI is misplaced. Hon ble Supreme Court was not examining the question of default by Corporate Debtor and has only allowed the Application filed by the RBI to act in accordance with the recommendation of IAC. Adjudicating Authority in the Impugned Order has considered the default on the part of Corporate Debtor pertaining to Bucket 2B debt only, which came into existence pursuant to the restructuring of debt by way of CRRP. Section 7 Application although refers to the earlier financing documents executed between the parties, but it does not even mention about the restructuring of the facilities by way of various documents such as CRRP, sanction letter dated 19.05.2017 and MRA dated 31.10.2017. Sanction letter dated 19.05.2017, does not confine to only Bucket 2A rather it covers all the dues shown in all the Buckets. Sanction letter novated all the existing facilities pertaining to the erstwhile debt. The argument of the Lenders that MRA is not relevant for the purposes of Bucket 2B is misconceived. Restructuring document superseded all previous understanding between the Parties. Sanction letter deals with the entire restructuring, including creati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lication under Section 7. RP has no locus to participate in the merits of the Appeal, which is matter solely between the Financial Creditor and the Corporate Debtor. It is submitted that again the Cancellation Order dated 12.02.2020 issued by Yamuna Expressway Industrial Development Authority, Writ Petition has already been filed by the Corporate Debtor in the Allahabad High Court, where an Order of Status Quo passed on 25.02.2020 by the High Court, which Writ Petition is still pending, where Orders have already been reserved by the High Court. 10. It is submitted that NCLT has rejected the Scheme Petition by Order of the same date dated 03.06.2024, whereas the Scheme Petition which was approved by the Lenders ought to have been approved. Order rejecting the Scheme Petition has already been questioned by the Appellant by filing a Comp. App. (AT) No. 197 199/2024, which is pending consideration before this Tribunal. The report of Credit Information Bureau (India) Limited (CIBIL) and Central Repository on Information on Large Credits (CRILIC) relied by Financial Creditors are unconfirmed/qualified reports which cannot form any finding with regard to default of the Scheme of Arrangeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he High Court vide its order dated 24.09.2018. SLP against the said judgment of the High Court was also dismissed by the Hon ble Supreme Court. High Court in its judgment dated 24.09.2018 has held that the directions issued by the RBI vide letter dated 14.08.2018 were in exercise of powers under Section 35 AA of the Banking Regulation Act. It is submitted that the directions of the RBI as well as the judgment of the Hon ble Supreme Court dated 09.08.2018 in Chitra Sharma s case are relevant material to consider default on the part of the Corporate Debtor. Shri Krishnendu Datta further submits that the Section 7 application which was filed by the ICICI Bank related to facilities of Bucket 2B. It is submitted that the MRA did not relate to Bucket 2B default. Section 7 application in Annexure 6 has listed the six facilities extended by the ICICI Bank to the Corporate Debtor in which default was committed by the Corporate Debtor. Six facilities on the basis of Section 7 application was founded were not part of the MRA. Submission of the Appellant that MRA covers debts of all the Buckets is misleading and false. The submission of the Appellant that MRA was never revoked by the lender ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for approval, the scheme has become infructuous and unworkable due to several subsequent events. The ICICI Bank has also filed an Affidavit in the scheme petition stating that the scheme is no more viable and ICICI Bank has objected the sanction of the Scheme of Arrangement. The ICICI Bank has also filed CIBIL Report dated 19.09.2018 before the Adjudicating Authority as well as NeSL Report which proved default on the part of the Corporate Debtor. There was substantial evidence before the Adjudicating Authority proving debt and default on the part of the Corporate Debtor. Adjudicating Authority after considering all materials on the record has returned finding of debt and default. Counsel for the Respondent further submits that the very fact that the Corporate Debtor during pendency of Section 7 application has filed application before the Adjudicating Authority stating that it has submitted an OTS proposal dated 29.05.2024 to the Financial Creditor to settle the outstanding dues and has made upfront payment of Rs.200 Crore itself indicate clear acknowledgment of debt and default by the Corporate Debtor. Even during pendency of this Appeal, Appellant expressed its willingness to sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould not be created due to the various orders passed in Chitra Sharma vs. Union of India including the order dated 11.09.2017. Security having not been created even the implementation of the MRA stood frustrated. Corporate Debtor itself admitted that restructuring failed since it has submitted revised re- structuring proposal on 29.05.2023. In the disclosure submitted by JAL before BSE that it has serviced its debt till November, 2018 and partly for December, 2018 under MRA. Counsel for the SBI submits that there being huge debt of the SBI which is public money, CIRP against the Corporate Debtor be not interdicted. It is submitted that the lenders have granted loans running into thousands and thousands of crores with the current outstanding running close to more than Rs.50,000 Crores which have been waiting for resolution since 2016. The twin test for admission of Section 7 being fully satisfied in the case of JAL, Adjudicating Authority rightly admitted Section 7 application. 13. Shri Sunil Fernandes, Learned Senior Counsel for the Resolution Professional submits that in pursuance of publication issued by the IRP inviting claims, the Resolution Professional has received claims fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otion petition, CP (CAA) No.174/ALD/2017 was approved vide order dated 08.12.2017 by NCLT and Second motion petition CP (CAA) No.19(ALD)2018 filed on 23.01.2018 being pending, there shall be no default on part of the Corporate Debtor with regard to debt under Bucket 2B and Section 7 application filed by the ICICI Bank on 06.09.2018 deserved to be rejected? (VI) Whether the Corporate Debtor before Adjudicating Authority by filing reply to Section 7 application and other materials had proved that there was no default on part of Corporate Debtor, hence the application under Section 7 did not merit admission? (VII) Whether there were sufficient material brought on record by Financial Creditor to prove debt and default on the part of the Corporate Debtor? (VIII) Whether sufficient grounds have been made out in this Appeal to interfere with the impugned order dated 03.06.2024? 15. Before we enter into questions, as noticed above, we need to first notice directions issued by the RBI and the order of the Hon ble Supreme Court in Writ Petition filed by Chitra Sharma vs. Union of India . We have noticed both the above while noticing the background facts which led to filing of Section 7 appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss Release dated 22.05.2017 and 13.06.2017. Paragraphs 3, 4, 5 and 6 of the Press Release dated 13.06.2017 is as follows:- 3. The IAC also arrived at an objective, non- discretionary criterion for referring accounts for resolution under IBC. In particular, the IAC recommended for IBC reference all accounts with fund and non-fund based outstanding amount greater than 5000 crore, with 60% or more classified as non- performing by banks as of March 31, 2016. The IAC noted that under the recommended criterion, 12 accounts totaling about 25 per cent of the current gross NPAs of the banking system would qualify for immediate reference under IBC. 4. As regards the other non-performing accounts which do not qualify under the above criteria, the IAC recommended that banks should finalise a resolution plan within six months. In cases where a viable resolution plan is not agreed upon within six months, banks should be required to file for insolvency proceedings under the IBC. 5. The Reserve Bank, based on the recommendations of the IAC, will accordingly be issuing directions to barks to file for insolvency proceedings under the IBC in respect of the identified accounts. Such cases will be acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of JAL by which letter the RBI did not accede to the letter dated 07.12.2017 written by ICICI Bank asking that the plan of JAL be treated as resolved. Letter dated 30.08.2018 issued by the RBI is as follows:- DBR.No.BP. 1818/21.04.048/2018-19 August 30, 2018 Ms. Vishakha Mulye Executive Director ICICI Bank Ltd., Corporate Office, ICICI Bank Towers, Bandra-Kurla Complex, Mumbai 400 051 Madam, Initiation of CIRP in respect of Jaiprakash Associates Limited ( JAL ) Please refer to your letter No. CGO023Aug18 dated August 29, 2018 addressed to Shri Sudarshan Sen, Executive Director on the captioned matter. 2. In this context, it may be recalled that on the same resolution plan, we had previously received your request vide letter CG0003Dec17 dated December 7, 2017 for treating the plan as implemented, which was not accepted by us since the plan did not satisfy the requisite implementation conditions before December 13, 2017. Our response of December 27, 2017 to the above letter clearly mentioned that, ... the reasons cited by you for not initiating insolvency action against the said borrower are not acceptable . It was only in the context of certain directions made by the Hon'b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng directions were issued to JAL:- d) JAL which is not a party to the insolvency proceedings, shall deposit a sum of Rs.2,000 crores (Rupees two thousand crores) before this Court on or before 27.10.2017. For the said purpose, if any assets or property of JAL have to be sold, after obtaining prior approval of this Court that should be done Any person who was a Director or Managing Director of JIL or JAL on the date of the institution of the insolvency proceedings against JIL as well as the present Directors/Managing Director shall also not leave the country without prior permission of this Court. The foregoing restraint shall not apply to nominee Directors of lending institutions (IDBI/ ICICI / SBI) 25. The above order put a restraint on the JAL to alienate its assets which was required to be done on obtaining prior approval of the Hon ble Supreme Court. After the order of the Hon ble Supreme Court dated 11.09.2017, RBI vide letter dated 27.12.2017 has stayed its direction to initiate proceedings under the IBC against JAL. An application was filed by the RBI in the W.P. (C) 744 of 2017 on 18.01.2018 seeking leave of the Hon ble Supreme Court to allow RBI to follow the recommendatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Court to direct the banks to initiate corporate insolvency resolution proceedings against JAL under the IBC. 26. It was after the order of the Hon ble Supreme Court dated 09.08.2018 direction was issued by the RBI dated 14.08.2018 to the ICICI Bank to initiate CIRP against the JAL as noted above. In reference to the direction dated 14.08.2018 issued by the RBI to the ICICI Bank, we may also notice challenge which was raised by the Appellant by filing a Writ Petition in Allahabad High Court being W.P. No.31329 of 2018- Jaiprakash Associates Limited vs. Reserve Bank of India Ors. which was filed on 12.09.2018 subsequent to filing of Section 7 application. The above Writ Petition came to be dismissed by Allahabad High Court on 24.09.2018. It is relevant to notice that in the Writ Petition, Jaiprakash Associates Ltd. has also in addition to praying for quashing the direction dated 14.08.2018 has also prayed for writ quashing the order dated 10.09.2018 and all proceedings and orders passed in C.P. No.330 of 2018 i.e. Section 7 application filed by the ICICI Bank. It was contended before the Allahabad High Court that Jaiprakash Associates Ltd. is not a defaulter. An argument was als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above, the Central Government authorises the RBI to issue directions to any banking company to initiate insolvency resolution process in respect of a default under the provisions of the Insolvency and Bankruptcy Code, 2016. Explanation to Section 35AA provided:- Explanation--For the purposes of this section, default has the same meaning assigned to it in clause (12) of section 3 of the Insolvency and Bankruptcy Code, 2016. 29. Thus, the statutory provision of Section 35AA read with above explanation clearly contemplated exercise of statutory powers on default within the meaning of Section 3(12) of the IBC. Thus, it is a default within the meaning of IBC which is the foundation for issuing any direction by the RBI to a banking company to initiate proceedings under the IBC. We have already noticed the letter dated 28.08.2017 of the RBI, Jaiprakash Associates Limited was mentioned in Annexure-1 of the letter as an account where more than 60 per cent of the total outstanding of which had been NPA since 30.06.2016. Annexure 1 of the letter is as follows:- List of Accounts ICICI BANK LTD. 1 JAIPRAKASH ASSOCIATES LIMITED *# 2 MONNET POWER COMPANY LIMITED* # 3 ESSAR POWER (JHARKHAND) LIMI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the RBI issued letter dated 14.08.2018 directing the ICICI Bank to initiate CIRP process against the Jaiprakash Associates Ltd. within 15 days. The letter dated 14.08.2018 was brought before the Adjudicating Authority by the Corporate Debtor itself in its reply and which letter has been noticed and considered by the Adjudicating Authority in the impugned order. As noted above, the RBI being regulator in Banking Regulation Act, 1949 and in exercise of its statutory powers under Section 35AA has issued direction which direction presupposes default within the meaning of Section 3(12) of the IBC as per the provisions of Section 35AA explanation. Direction to initiate is relevant material to determine the default on the part of the Corporate Debtor while determining an application under Section 7. Counsel for the Appellant contended that neither the Hon ble Supreme Court in Chitra Sharma s case (supra) nor the RBI were to determine the default on the part of the Corporate Debtor which needs to be decided and adjudicated only in proceedings under Section 7 by the Adjudicating Authority. There can be no two opinions on the above submission. It is the Adjudicating Authority who has to det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers as per MRA dated 31.10.2017 which payment have been accepted by the lenders. It is not open for the lenders to contend that the default has been committed by the Corporate Debtor. Counsel for the Appellant referring to clause 2.2 of the MRA has further contended that as per the said clause, the lenders have waived all existing events of default which MRA having been entered on 31.10.2017, no application under Section 7 was maintainable on the basis of any default prior to 31.10.2017. It is contended that the default period for Section 7 application was 30.04.2016 to 15.05.2016 and the application was not maintainable and default between the periods 30.04.2016 to 15.05.2016 could not be basis for any Section 7 application. 36. The Appellant s case in the Appeal is that the performance of the Corporate Debtor started deteriorating from financial year 2014-15 due to various reasons beyond the control of management and there has been pressure on liquidity which resulted in delay in meeting the obligation towards lenders and others and with a view to overcome the liquidity problem, a joint lender forum was constituted on 18.12.2014 as per the RBI Circular dated 26.02.2014. A Draft C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 and the Corporate Debtor. It is further submitted that the Remaining 8 Lenders have agreed either to continue on the existing terms or have entered into individual arrangement like. Debt Assets Swap/re- schedulement of repayment terms. The terms of the MRA are being duly complied with and the Corporate Debtor is regularly meeting its obligation towards payment of interest without a single day's default, repayment of principal and maintaining the Fixed Assets Coverage Ratio (FACR) etc. as contemplated under the MRA. The personal Guarantee of Mr. Manoj Gaur, Executive Chairman of the Corporate Debtor and the Deed of Hypothecation over assets as stipulated in the MRA were also executed. iii. Implementation of Bucket 2b: Out of the debt of Rs. 13,590 crores placed in this Bucket, the debt aggregating Rs. 2543.55 Crores stands settled through direct Debt Assets Swap. For the remaining debt of Rs.11,833.55 Crores (including Interest), a Scheme of Arrangement has been framed in consultation and with the approval of banks/Fls. Under this Scheme, the above debts are to be transferred with equivalent security to an SPV for which the Scheme of Arrangement has also been dismissed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MRA has been executed by 32 Lenders including the Applicant and the Corporate Debtor. Remaining 8 Lenders have agreed either to continue on the existing terms or have entered into individual arrangement like Debt Assets Swap/re-schedulement of repayment terms. The terms of the MRA are being duly complied with and the Corporate Debtor is regularly meeting its obligation towards payment of interest without a single day's default, repayment of principal and maintaining the Fixed Assets Coverage Ratio (FACR) etc. as contemplated under the MRA. The personal Guarantee of Mr. Manoj Gaur, Executive Chairman of the Corporate Debtor and the Deed of Hypothecation over assets as stipulated in the MRA have also been executed. A copy of the Master Restructuring Agreement dated 31.10.2017 is annexed hereto marked as ANNEXURE -16. For sake of convenience, the Corporate Debtor is annexing a summarized Chart showing the details of restructured debt of ICICI Bank Limited under different categories, security provided, revised rate of interest, repayment schedule, payments made towards principal and interest becoming due etc., which is marked as ANNEXURE - 17. From the perusal of the MRA and the su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ahabad Bench, for sanction is already annexed as ANNEXURE - 13. 38. From the above pleadings of the Appellant made before the Adjudicating Authority as well as in this Appeal, it is fully proved that the debt of Rs.11,833.55 Crores which was bifurcated in Bucket 2B was to be transferred with equivalent security to an SPV. 39. Now we come to MRA dated 31.10.2017 to find out as to MRA captured which facilities. Counsel for the ICICI Bank has referred to certain clauses of MRA to contend that the real estate debt which was to be hived and transferred to an SPV was not in the ambit of MRA. Clause 1.1.94 defines Real Estate Debt which clause is as follows:- 1.1.94. Real Estate Debt means the amounts of an aggregate amount of approximately Rs. 14,000,00,00,000/- (Rupees Fourteen Thousand Crore only) forming part of the Existing Loans, and which does not and shall not fall within the ambit of this Agreement. 40. Now we need to notice as to what were the facilities which were covered by the MRA. Schedule II of the MRA referred to the facilities. Schedule II of the MRA contained particulars of lenders and existing financial assistance . The ICICI Bank is mentioned at Serial No.13 of the Sch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thousand Two Hundred Crore Only) ( Facility 4 ) under the Facility Agreement dated September 30, 2011 ( Facility Agreement 4 ); (v) Rupee term loan to the tune of INR 1200,00,00,000 (Rupees One Thousand Two Hundred Crore Only) ( Facility 5 ) as part of corrective action plan under Corporate Rupee Loan Facility Agreement dated May 25, 2015 read with the General Conditions GC-C-08 dated May 25, 2015 read with Addendum Agreement dated May 25, 2015 (collectively Facility Agreement 5 ); (vi) Rupee term loan to the tune of INR 150,00,00,000 (Rupees One Hundred and Fifty Crore Only) ( Facility 6 ) to Jaypee Sports International Limited ( JSIL ), which was subsequently amalgamated into the Corporate Debtor pursuant to the Order of the Hon'ble High Court of Judicature at Allahabad dated September 14, 2015 approving the Scheme of Amalgamation between the Corporate Debtor and JSIL and their respective shareholders and creditors ( JSIL Scheme of Arrangement ). Facility 6 was granted under the Rupee Term Loan Facility Agreement dated June 30, 2012 read with the General Conditions dated June 30, 2012 (collectively Facility Agreement 6 ). Pursuant to the aforesaid Order sanctioning the JSIL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Only). This includes the defaulted amounts of principal, interest and overdue interest. The computation relating to the defaulted amount and days of default under each of the Loan Agreements have been annexed hereto and marked as Annexure- 6. 43. Annexure 6 gave the details of all six facilities with amount of the loan account number has been mentioned in Annexure 6 to Section 7 application which Annexure 6 is as follows:- Total amount of default and days of default Sl. No Principal overdue Interest Overdue 1 Rupee Term Loan of Rs. 400 Crores Loan account number: J005161002 363,946,960.23 148,739,147.0 0 15-05- 2016 83 9 2 Rupee Term Loan of Rs. 500 Crores Loan number: account J005163001 462,447,559.32 282,771,778.9 0 30-04- 2016 85 4 3 Rupee Term Loan of Rs. 1200 Crores Loan account number: J005165001 1,572,964,731.24 1,616,684,830.48 647,679,560.0 2 30-04- 2016 85 4 4 Rupee Term Loan of Rs. 1200 Crores (under corrective action plan) Loan account number: 0000002297 857,142,856.00 3,554,092,369.0 0 592,831,778.0 0 30-04- 2016 85 4 5 Rupee Term Loan of Rs. 1300 Crores Loan account number: J005164001 1,627,692,567.8 1 863,958,686.2 3 30-04- 2016 85 4 6 Rupee Term Loan of Rs. 150 Cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ICICI Bank Limited as above, under different categories, revised rate of interest, repayment schedule, payments made towards principal and interest becoming due etc., is already annexed as ANNEXURE- 17. From this chart it is evident that the restructured debt is repayable in quarterly instalments commencing from 31.03.2018 only. This chart further show that the repayments of principal amount of loans and interest becoming due and payable have been paid and there is nothing which is in arrears. Hence, the question of default in respect of this part of the loan also does not arise. (vii) Bucket 2b debt is to be transferred with equivalent security to an SPV for which the Scheme of Arrangement is pending for final sanction before this Hon'ble Tribunal. The Scheme is effective from 01.07.2017 and upon sanction of the Scheme the entire loan and the land parcels of equivalent value will stand transferred to the SPV. As per terms of the sanction letter dated 19.05.2017, interest on this part of the debt has ceased with effect from 01.10.2016 and no part of the debt is repayable as the entire amount is to be transferred to SPV in terms of the approved Scheme. Hence, in respect of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich ICICI Bank filed the application under Section 7, hence, the debt under the MRA which relate to Bucket 2A which was being serviced by the Corporate Debtor is not relevant for the facilities for which Section 7 application was filed by the Financial Creditor. We, thus, answer Question Nos. (II) and (III) in following manner:- (II) Under the Restructuring Plan approved in JLF meeting held on 22.06.2017 for debt of Rs.11833.55 Crore (including interest) a scheme of arrangement was framed to transfer the above debt along with land parcel of equivalent value to an SPV, namely Jaypee Infrastructure Development Ltd., which debt was referable to Bucket 2B, and the Section 7 application filed by the ICICI Bank related to debt of Bucket 2B only. (III) Master Restructuring Agreement entered on 31.10.2017 between JAL and lenders did not cover the facilities, default of which was claimed by the ICICI Bank in application under Section 7 filed against the Corporate Debtor on 06.09.2018. QUESTION NOS. (IV) (V) 48. As noticed above, for debt of Rs.11833.55 Crore (including interest), a scheme of arrangement was prepared to transfer the debt to SPV w.e.f. 01.07.2017. Scheme of arrangement was ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the shareholders or the creditors shall be necessary for giving effect to the provisions contained in this clause. 51. The Scheme petition also came to be rejected by the Adjudicating Authority by the order of the same date dated 03.06.2024 which is under challenge in this Tribunal as noted above. 52. The argument of Corporate Debtor on the strength of scheme of arrangement was considered and not accepted. In paragraph 82 of the order, following was observed:- 82. Another plea of the Corporate Debtor is that default on repayment of debt that occurred earlier in 2014-15, has ceased to exist after CRRP under DRP has been approved and an Scheme of Arrangement for Bucket 2B loan has been finalised. This Scheme has been made for the resolution of the debt in Bucket 2B keeping in view the direction of the RBI in its letter dated 22.08.2017, as per which the JLF including ICICI as a lead Bank was required to finalise a resolution plan for JAL and it has also been provided that in the event that a viable resolution plan is not finalised and implemented before 13.12.2017, insolvency proceedings under the provisions of the IBC may be initiated before 31.12.2017. There is no dispute that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns (P) Ltd. v. Union of India, (2019) 4 SCC 17] [ Swiss Ribbons ], it is clear that the IBC is a special statute dealing with revival of companies that are in the red, winding up only being resorted to in case all attempts of revival fail. Vis- -vis the Companies Act, which is a general statute dealing with companies, including companies that are in the red, the IBC is not only a special statute which must prevail in the event of conflict, but has a non obstante clause contained in Section 238, which makes it even clearer that in case of conflict, the provisions of the IBC will prevail. 25. A conspectus of the aforesaid authorities would show that a petition either under Section 7 or Section 9 IBC is an independent proceeding which is unaffected by winding-up proceedings that may be filed qua the same company. Given the object sought to be achieved by the IBC, it is clear that only where a company in winding up is near corporate death that no transfer of the winding-up proceeding would then take place to NCLT to be tried as a proceeding under the IBC. Short of an irresistible conclusion that corporate death is inevitable, every effort should be made to resuscitate the corporate deb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecedent. The mere fact that the proceeding for approval of scheme of arrangement which was initially approved by the lenders remains pending from 2018 to 2024, there being no default on the part of the Corporate Debtor qua the debt which was owed by it cannot be accepted. As per the scheme of arrangement, the scheme was to come into effect from 01.07.2017. Scheme never came into operation nor the debt which was bifurcated in Bucket 2B came to be transferred to the SPV. The debt continued with the Corporate Debtor and default for the aforesaid debt was clearly made out. 55. Counsel for the Respondent has also placed reliance on the judgment of this Tribunal in Company Appeal (AT) (Insolvency) No.690 of 2023- State Bank of India vs. Abhijeet Ferrotech Limited where application under Section 7 filed by the State Bank of India was rejected. Relying on proceedings which were initiated in the DRT by the Bank and pending in the High Court in Appeal filed by the Corporate Debtor before the Calcutta High Court, Adjudicating Authority held that the proceeding under Section 7 is barred in view of the order passed by the DRT Calcutta. The Appeal filed by the SBI challenging the order of the Ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ON COMPANY The details of records available with the credit information companies are listed below: The status classification reports of the Corporate Debtor maintained by TransUnion CIBIL could not be made available on account of technical issues. The Financial Creditor craves leave to refer to and rely upon such reports, as and when available. Correspondence with Trans Union CIBIL are annexed hereto and marked as Annexure-36 60. Appellant has obtained necessary credit information and filed before the Adjudicating Authority which credit information was obtained and filed which has been noted by the Adjudicating Authority in the impugned order. It is also brought on the record that an order was passed by the NCLT directing for filing the record from the information utility for the year 2020 in the pending petition as well as in the petition to be filed in the NCLT under Section 7 filed. In pursuance of the order passed by the NCLT, NeSL records were also obtained by the Financial Creditor on 08.06.2020 and were filed before the Adjudicating Authority. In paragraph 63 of the judgement, Adjudicating Authority has returned a finding that an amount of Rs.1,269 Crores is defaulted out o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been framed... 86. After considering the entire facts of the case so far discussed and taking into account the decision of the Apex Court in the above mentioned cases, we find that in the present case, default has occurred and ICICI Bank's Section 7 Petition is complete providing all the details of debts and default as required in Part IV of the Application and attaching all the necessary supporting documents including ROD from NeSL along with CIBIL Report and CIRLC Report from RBI portal as required in Part V of the Application and there is no disciplinary proceeding against the proposed IRP. Considering that all the above elements are fulfilled as required under IBC, we find that this Application deserves to be admitted u/s 7 for starting CIRP against the Corporate Debtor. 62. The submission of the Appellant is that since the scheme of arrangement under Section 230-232 of the Companies Act, 2013 was filed with the consent of the lenders which remains pending and was rejected by NCLT only on 03.06.2024, hence, there is no default on the part of the Corporate Debtor and the Scheme matter being kept pending, there will be no adverse consequences on the Corporate Debtor. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the lenders in their meeting held on 01.07.2024 and communication was sent by the lenders to the Corporate Debtor that OTS proposal cannot be accepted which has also been noticed in the proceedings of this Appeal. The OTS having been submitted by the Corporate Debtor offering upfront amount and the total amount, it does not lie in the mouth of the Corporate Debtor to contend that no default has been committed by the Corporate Debtor. In the OTS proposal submitted on 23.06.2024 to the ICICI Bank, lenders have offered to give upfront payment of Rs.500 Crores (200+300) and total amount of Rs.16,016 Crores. The copy of the OTS proposal dated 23.06.2024 submitted on behalf of the Corporate Debtor has been filed as Annexure R- 18 to the Reply of the Respondent No.1. The OTS proposal submitted both before the Adjudicating Authority as well as before this Tribunal on behalf of the Corporate Debtor contains the clear acknowledgment of debt and default. Hence, we are of the view that the findings returned by the Adjudicating Authority on the debt and default are based on materials on record and are affirmed by us. QUESTION NO. (VIII) 66. In view of the above reasons and answers given to the ..... 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