TMI Blog2019 (11) TMI 1495X X X X Extracts X X X X X X X X Extracts X X X X ..... sing like an octopus holding the prey, the limbs of the SAIML are all around the TRUST and ITS SCHEMES. It is also to bear in mind that the SAIML is THE FUND MANAGEMENT ARM of the applicant. The SAIML is the wholly owned subsidiary of the applicant. The SAIML plays the roles of Creator, Settlor, Management, administration, appointment Removal of Trustee, contributor, Investment Manager and Manager of the Scheme IGOF. Hence, the applicant is related party as defined under Section 5(24) of the Insolvency and Bankruptcy Code, 2016. The decision of the RP that the applicant is related party is right - Application dismissed. - IA No. 85/CTB/2019, TP No. 41/CTB/2019 and CP (IB) No. 352/KB/2018 - - - Dated:- 29-11-2019 - Sucharitha R., Member (J) And Satya Ranjan Prasad, Member (T) For the Appellant : Ashok Parija, Sr. Adv., Tarun Patnaik, Parth Gokhale, Swati Lal, Advs., S.S. Das, Sr. Adv., Rishav Banerjee and Rajarshi Banerjee, Advs For the Respondents : Deep Roy, Saswat K. Acharya, Ashish K. Dey, Advs. and Arun Gupta, C.A. ORDER Sucharitha R., Member ( J ) 1. The application was filed on 13th of August, 2019 under Section 60(5) of the Insolvency and B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed in the first meeting of the Committee of Creditors of the Corporate Debtor. (v) Interim Order stay holding of any further meeting of the Committee of Creditors of the Corporate Debtor till the adjudication of this instant application. (vi) An interim order of status quo in respect of the Corporate Insolvency Resolution Process of the Corporate Debtor. (vii) An interim Order be passed directing the respondent Resolution Professional not to give effect to or further effect to any resolution adopted in the meeting of the Committee of Creditors till the adjudication of the instant application. (viii) An interim order directing the respondent Resolution Professional to include the applicant Financial Creditor in the meeting of the Corporate Debtor and to allow the applicant Financial Creditor to exercise its voting rights till the adjudication of this instant application. (ix) Ad-interim orders in terms of prayers (d), (e), (f) and (g) above. (x) Cost of an incidentals to this application be borne by the respondent Resolution Professional. (xi) Such further or other Orders be passed and/or direction or directions be given as this Hon'ble Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IGOF is linked to this applicant. Hence, declare the applicant as a related party . Hence, we have to look at the nexus between IGOF and the applicant. 9. Before we go into the details, it is important to understand the following legal entities. (i) M/s. SREI Infrastructure Finance Ltd., the applicant herein. The applicant is a company registered under the Companies Act, 1956. As per the Master Data, the Registered Office of the Company is situated at Vishwakarma, 86C, Topsia Road (South), Kolkata - 700 046, W.B. There are 08 Directors of the Company and date of incorporation is 29.03.1985. The applicant has given loan to the Corporate Debtor. (ii) Srei Alternative Investment Manager Limited (hereinafter referred as 'SAIML'): - SAIML is a company incorporated on 31.10.1994. This company is the Fund Management arm of Srei Infrastructure Finance Limited, the applicant herein. This SAIML is the wholly owned subsidiary of the applicant. (iii) M/s. SREI Multiple Asset Investment Trust (hereinafter referred to as TRUST) registered Trust under the Trust Deed dated 08th April, 2013, Registered No. 1650 of 2013 before Additional Registrar of Assurance, Kolkata is run b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Settlor hereby appoints the Trustee as the Trustee of the Fund hereby created, and the Trustee hereby agrees and declares that it is willing to act and shall act as Trustee hereunder, subject to all the provisions contained herein and to signify such appointment and willingness to aforesaid Parties have executed this Indenture. 3.2. Management of the Trust Fund: The Trustee shall appoint the Investment Manager to manage and administer each scheme in consultation with the Settlor and shall execute with it the Investment Management Agreement to record the terms and conditions of such appointment. The Trustee shall pay the Investment Manager the management fee in accordance with the terms set out in the Investment Management Agreement. The Trustee in consultation with the Settlor may appoint different Investment Managers with respect to different Schemes. 4.2.6. Power to delegate: The Trustee may, from time to time, delegate to any committee or any other person, any powers and duties vested in it under this Indenture including management of the Trust Fund or any Scheme thereof; provided, however, the Trustee shall remain responsible and liable for any such persons acts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preme Court in Arcelor Mittal India Private Limited Vs. Satish Kumar Gupta, (2019) 2 SCC 1 where at paragraph 50, page 62 of the said decision, the Hon'ble Court made reference to the definition of 'control' as provided under the Companies Act, 2013 and made the following observations - The expression of control is therefore defined in two parts. The first part refers to de jure control, which includes the right to appoint a majority of the Directors of a Company. The second part refers to de facto control. So long as a person or person acting in concert, directly or indirectly, can positively influence, in any manner, management or policy decisions, they could be said to be in control . A management decision is a decision to be taken as to how the corporate body is to be run in its day to day affairs. A policy decision would be a decision that would be beyond running day to day affairs, i.e., long term decisions. So long as management or policy decisions can be, or are in fact, taken by virtue of shareholding, management rights, shareholders agreements, voting agreements or otherwise, control can be said to exist. 12. The Hon'ble Supreme Court also re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agers Ltd., a Company incorporated under the Companies Act, 1956. IGOF is organised as contributory trust under Indian Trusts Act, 1982 and as a scheme of SMAIT. SMAIT is an Alternative Investment Fund registered under the Securities Exchange Board of India (Alternative Investment Fund) Regulations, 2012. 19. The applicant states that SMAIT is a Trust for the object and purpose carry on the activity by an Alternative Investment Fund through various schemes. The Trust by an Investment Management Agreement dated 22.05.2013 appointed SREI Alternative Investment Managers Ltd. for acting as the Investment Manager of the fund under the Trust. IGOF is one of the schemes of SMAIT. 20. The applicant states that SAIML i.e. SREI Alternative Investment Management Ltd. is an investment manager who is appointed by the Trustee for the purpose of managing and administering IGOF which is the scheme of SMAIT. In other words, SAIML is an investment manager who is to act as a professional to render professional services to the Trust in managing the fund. The scope of services of SAIML under the Investment Management Agreement is to solicit, arrange, negotiate, manage, monitor or sale or otherwis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Placement Memorandum of such Schemes and the Contribution Agreement of such Schemes. The Investment Manager agrees and acknowledges that the Trustee may choose to appoint different Investment Managers for different Schemes, at its sole discretion. 3. Investment Manager's Power - 3.1 The powers conferred by the Trustees on the Investment Manager shall be delegated powers to facilitate the management and administration of the relevant Scheme, and as detailed in Schedule A hereto. The Investment Manager shall not hold and exercise the aforesaid powers independent of the Trustees but shall derive the same from the Trustees. 3.2 The Investment Managers shall invest the Contribution Fund monies in accordance with the Indenture, the provisions of the Fund Documents. 3.3 The Investment Manager shall advise on decisions as to investment, divestment and distribution of the Contribution Fund monies in accordance with the provisions of the Fund Documents. 3.4 The Investment Manager shall have available to it sufficient personnel in order to identify and structure transactions contemplated by each Scheme of the trust. 4. Contributions - The Investment Mana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... butor by cheque or by demand draft drawn on the bankers and cause to be sent to the registered address of each Contributor. 9.4 The Investment Manager shall advise the Trustees in respect of the day to day administration and management of the Contribution Fund and in particular, with respect to all tax related registrations, record keeping, filings and the payment of necessary taxes in accordance with Applicable Laws. Powers of the Investment Manager - The Trustees do hereby appoint, nominate, constitute and grant to the Investment Manager as the true and lawful attorney of the Scheme for all powers and privileges given to the Trustees under the Indenture except as otherwise limited under this Agreement on its own name to do, execute and perform any or all the following acts, deeds and things for the management of the Trust for such Scheme that is to say. 25. Under Investment Management Agreement, the SAIML has right to exercise all rights, powers, privileges over IGOF. It is also clear that IGOF is a majority shareholder of the Corporate Debtor and the Investment Manager directly controls more than 20 % of the voting rights of the Corporate Debtor. It is also impor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd discharged as Trustee under - (iii) If all the contributors jointly decided to remove the Trustee. Who are contributors? SAIML is Contributor No. 1. 29. The role of contributors under the Deed of Trust - The SAIML is one of the Contributor No. 1. The other being Essar Steel India Ltd. Under clause 7. Provisions relating to contributors - 7.1 The beneficial interest of each Contributor in the Trust Fund other than the Initial Settlement shall extend to and be limited to the aggregate value of the Contribution made by that Contributor in the Trust Fund. 7.2 The Contributors of the Fund shall have no right to make decisions with regard to the Fund, save and except to the extent provided in the Contribution Agreement. Notwithstanding anything contained in this clause, the Trustee shall continue to have all the rights and powers conferred upon it under this Indenture, in its capacity as Trustee to the fund. 7.3 The Contributors shall not participate or take part in the control of the Fund's affairs and shall have no right or authority to act for, or bind, the Fund save and except to the extent provided in the Contribution Agreement. 7.4 In no event sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a contributor No. 1. (ii) The contributors appoint Trustee. Hence, by Deed dated 01.04.2014 executed by SAIML Contributor No. 1, Essar Oil Ltd. Contributor No. 2 appointed the present sole Trustee. By Deed of Appointment and Retirement dated 01.04.2014, R.N. Ghose, the present Trustee was appointed. The SAIML as contributor No. 1 had weightage in the appointment of the present Trustee. The date of appointment is 01.04.2014. The Corporate Debtor was incorporated on 17.01.2014. The loan agreement was executed on 28.03.2015 30.03.2015. 33. Hence the above diagram concludes the role of SAIML in the TRUST. Like an octopus SAIML is holding the TRUST. 34. The SAIML is the wholly owned subsidiary of the applicant. The SAIML plays the roles of Creator, Settlor, Management, administration, appointment Removal of Trustee, contributor, Investment Manager and Manager of the Scheme IGOF. Hence, the applicant is related party as defined under Section 5(24) of the Insolvency and Bankruptcy Code, 2016. The decision of the RP that the applicant is related party is right. 35. In view of the same, this IA No. 85/CTB/2019 is DISMISSED. 36. Registry is hereby directed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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