2023 (5) TMI 533 - AT - Corporate Laws

Change of categorization - declaring/ retaining the status of the JIICL as Green entity only - HELD THAT:- The categorization of the IL&FS Entities was noticed by this Tribunal in its order dated 11.02.2019 and 19.09.2019. the categorization was noticed and recorded on the basis of affidavit filed before this Tribunal. The order passed by this Tribunal does not indicate that the categorization could be changed by the Entities themselves, without any reference to the Tribunal. When the Entities are categorized in “Green”, the object is that the Entity should continue to discharge its all obligations, including the obligation to Lenders and the Entities should be incentivize by all including the Lenders to continue the categorization as a “Green”. If the entity is given liberty to change its categorization from “Green” to “Red”, there will be no obligation on the Entity to carry on its categorization as “Green”.

The Entity itself, which is categorized as “Green” cannot be permitted to change its categorization unilaterally. It was open for Respondent No.1 or any such Entity to bring necessary material before the Tribunal and asking leave of the Tribunal to re-categorize the Entity.

The Resolution Consultant having already recommended and the New Board in its meeting dated 24.03.2023 having already decided to grant conditional approval of re-categorization of JRPICL to “Green”, subject to receipt of additional annuities of INR 58 Crores in March 2023, we are satisfied that JRPICL has to be treated as a “Green” Entity. Insofar as the financial liability as referred to on the basis of arbitral award is concerned, suffice it to notice that the note itself mentions that arbitral award is under process of challenge. The arbitral award being under process of challenge, that cannot be any ground to refuse categorization of JRPICL as “Green”.

Liberty granted to Respondent No.1 to seek leave of this Tribunal for re-categorization in event any liability falls on the JRPICL on the basis of arbitral award and it is unable to discharge its liabilities - application allowed.