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TMI Blog2018 (12) TMI 1631X X X X Extracts X X X X X X X X Extracts X X X X ..... to exclude the period spent in negotiating with the Liberty House and the period for which the proceedings remain pending from 02.08.2018 till passing of the final order. 2.The application came up for hearing on 27.11.2018 and the notice of the application was accepted by the Liberty House through its counsel. A copy of the application was furnished. The Liberty House sought and was granted three days' time to file reply. Accordingly reply was required to be filed by 30.11.2018 and the matter was posted for hearing on 03.12.2018. 3.When the matter came up for hearing, Mr. Chandiok, learned Senior counsel for the Liberty House after obtaining instructions made a categorical statement that the Liberty House did not wish to file any reply and that the application may simply be allowed without recording any reasons or discussion. However, Mr. Vashisth, learned senior counsel for Resolution Professional has insisted for hearing of the application and recording of reasons for withdrawal as it would lead to further consequences. 4.It may be highlighted that the Corporate Insolvency Resolution Process in this matter was initiated on 16.03.2018 when the petition was admitted. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r an adverse decision by the COC or by Resolution Plan is the only document and has no other conditions incorporated in it. In that regard our attention has been drawn to Clause 6.3 of the Resolution Plan which stipulates that all earlier discussion oral or written clauses are not applicable and only the conditions mentioned in the Resolution Plan would apply. 7. Mr. Vashisth, learned Senior counsel for the Resolution Professional -applicant, however has controverted the objections raised by the counsel for the Liberty House and has argued that the performance bank guarantee is a sine qua non and duly accepted by the Liberty House as is evident from the document known as 'Process Note' dated 18.05.2018 as modified on 21.06.2018. Learned counsel has drawn our attention to the definition of expression 'Process Note'. Further Mr. Vashisth has drawn our attention to the details under sub-heading 'performance bank guarantee' under Clause 1.9.1. According to the learned counsel within ten business days of the date of issuance of letter of intent the successful resolution plan applicant was to furnish performance bank guarantee of INR 60,00,00,000 in favour of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd the arguments at a considerable length we are of the view that the prayer made by the applicant deserves to be accepted. It has come on record that performance bank guarantee is a sine qua non as has been rightly contended by Mr. Vashisth, learned Senior counsel for the applicant-resolution professional. The 'Process Note' dated 18.05.2018 as modified on 21.06.2018, in categorical terms deals with performance bank guarantee. In Clauses 1.9.1 and 1.9.3 the following clear stipulations have been made and the same read as under:- "1.9.1 Within 1 0(ten) business days of the issuance of a Letter of Intent ("LOI"), the Successful Applicant shall provide a performance bank guarantee of INR 60, 00, 00, 000/- (Indian Rupees Sixty Crores Only) infavour of the State Bank ofIndia, on behalf of COC ("Performance Guarantee") in the format as provided in Annexure Il hereto. The Performance Guarantee shall be valid for an initial period of 9(nine) months from the date of signing of the LOI ("Performance Guarantee Validity Period") and shall be extended/ renewed by the Successful Applicant (not later than 15 days prior to the expiry of the Performance Guarantee Validity Period) for suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30.08.2018 itself when by e-voting COC has approved the Resolution Plan. It is also pertinent to notice that the terms and conditions for submission of binding resolution proposal for company which makes it clear by Clause 1.11.2 that the Liberty House was under obligation to fulfil the terms of the 'Process Note' and the same read as under:- "1.11.2 The applicant acknowledges that it shall fulfil all the terms of the 'Process Note' and the Resolution Plan (as submitted by it and as accepted by the COC), if it is declared as a Successful Applicant upon the completion of the Resolution Plan Process. " 11. A perusal of the aforesaid Clause do not leave any manner of doubt that the Liberty House was under obligation to furnish the performance bank guarantee. Be that as it may. The COC in its meeting dated 15.10.2018 decided not to insist on furnishing of performance bank guarantee as is recorded in our order dated 26.10.2018 which read as under:- "On 11.10.2018, a piquant situation has developed in this case. The Resolution Plan applicant had undertaken to furnish the Performance Bank Guarantee and the COC has insisted upon the aforesaid clause. However, learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that despite the relaxation of the condition concerning furnishing of performance bank guarantee he may be permitted to walk out of the Resolution Plan and no reason on that score be recorded. How can the Adjudicating Authority-NCLT maintain silence? 13.There is another aspect. Incidentally the COC has considered two other different cases. In those two cases also the Resolution Plans were submitted by the Liberty House. In respect of M/S. Amtek Auto Ltd. and M/ s. Adhunik Metaliks Limited again Liberty House has presented its Resolution Plans. It is represented that the Resolution Plans in both the cases have been approved and in the aforesaid two cases also the Liberty House is dragging its feet. We are unable to accept the contention advanced on behalf of the Liberty House that litigation is pending, therefore, no notice of such a fact could have been taken by the COC in its meeting dated 19.11.2018 (Annexure 13). 14.Before parting we must be deal with the submission made on the basis of Clause 6.3 of the Resolution Plan submitted by the Liberty House. On the basis of Clause 6.3 it was argued that the entire understanding is depicted in the Resolution Plan submitted by the Lib ..... X X X X Extracts X X X X X X X X Extracts X X X X
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