TMI Blog2021 (7) TMI 613X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,000/-. The crux and gravamen of the contention being raised by the Applicant in the present Application is that as per the Award the 1st Respondent is entitled only to the Remainder Amount in terms of para 9.66. However, a perusal of the operative portion of the Award posits the fact that the 1st Respondent is entitled to a sum of ₹ 155,32,56,626/- and that the manner in which the said amount is required to be paid as set out in para 9.64. It is to be noted that the claim of the 1st Respondent is not in any manner linked with the Remainder Amount. The concept of the Remainder Amount in the SSA only sets out the details of the amount, how the payments are required to be made to the 1st Respondent when the project is being developed and it does not in any manner change the position, either in fact or in law that as per the said Award the Corporate Debtor is bound and liable to repay the amount which is due to the 1st Respondent - from a conjoint reading of the award and the definition of the term 'claim', and viewed from the said perspective, the contention of the Learned Counsel for the Applicant the extent payable by the Corporate Debtor could be paid only fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also paid necessary fees for booking the flat in respect of the said project. c. For the development of the said project, it is seen that M/s. Real Value Promoters Private Limited which is the holding company of the Corporate Debtor entered into certain agreements with the real estate fund i.e., the 1st Respondent herein namely, M/s. ASK Investment Managers Pvt. Ltd. d. The said agreement which is termed as Subscription and Shareholding Agreement (SSA) dated 23.03.2011 was entered into between the 1st Respondent, the Corporate Debtor, the Real Value Promoters Private Limited, one Mr. V.S. Saravanan, Mr. R. Damodaran and Mr. V.S. Suresh. e. As per the said SSA, the 1st Respondent invested a sum of ₹ 50,00,00,000/- by way of equity shares worth ₹ 50,00,000/- and debentures worth ₹ 49,50,00,000/-. In exchange for such investment, the Corporate Debtor had given certain rights to the 1st Respondent in the management of the affairs of the Corporate Debtor. The rights which were given to the 1st Respondent are as follows:- i. To participate in the board meeting of the Corporate Debtor with certain negative rights. ii. Right to manage the Corporat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is award on the outstanding amounts. The respondents are directed jointly and severally to pay the said amount to the claimant in the manner provided in para-9.66 hereinabove. Till the said liability is discharged, the charge held by the claimant over the Said Land shall continue to be in force and in case of default/non-payment by the respondents, the claimant shall be at liberty to enforce the same in accordance with law. ii) The respondent No. 2 is directed deposit ₹ 20,37,00,000/- in the bank account of respondent No. 1. iii) The Parties shall bear their respective costs; SUBMISSION OF THE APPLICANT 4. It is the contention of the Learned Counsel for the Applicant that as per the award, the 1st Respondent is entitled for its claim only in terms of para 9.66 of the Award. For the sake of brevity para 9.66 of the award is extracted hereunder: 9.66. In terms of Clause - 6 of Schedule 6 of SSA, IRR to the extent payable by Respondent No. 1, could be paid only from the Remainder Amounts as defined under SSA. As per Clause 10 read with Clause 15.5 and Schedule 6 of the SSA the entire Remainder Amount is first to be paid to the claimant so that it achieves I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 09/2019. 9. The Learned Counsel for the Applicant submitted that the 1st Respondent has filed EP. No. 145/2019 on the file of the Hon'ble High Court of Madras and also obtained an order of attachment of shares of the Corporate Debtor on 13.11.2019. While things stand thus, one of the Operational Creditors of the Corporate Debtor viz., M/s. Nuvoco Vista Corporation Ltd. had filed an application under Section 9 of the IBC, 2016, seeking initiation of Corporate Insolvency Resolution Process in relation to the Corporate Debtor. After hearing the parties, this Tribunal vide its Order dated 10.09.2019 initiated the Corporate Insolvency Resolution Process in relation to the Corporate Debtor and appointed the 3rd Respondent herein as the Interim Resolution Professional. Immediately thereupon, the 1st Respondent has filed the claim before the 3rd Respondent based on the Arbitral Award dated 31.01.2018 for a sum of ₹ 182,52,80,395/-. 10. However, since the claim was filed with a delay of one day, the same was not accepted by the 3rd Respondent and immediately the 1st Respondent filed MA/1043/2019 seeking for acceptance of the claim. In the meantime, the said MA/1043/2019 came ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exercising its voting right to the tune of ₹ 182,52,80,395/- without reference to the fact of the Remainder Amount being found in the said Arbitral Award. 14. It is the contention of the Applicant that the 1st Respondent can exercise its voting right only to the Remainder Amount to which they are entitled. In other words, it was submitted that as per the Arbitral Award dated 31.01.2018 the amount payable by the 1st Respondent is circumscribed by the Arbitral Tribunal in para 9.66 of the Award. In the said circumstances, it was submitted by the Learned Counsel for the Applicant that the 1st Respondent cannot claim from the Corporate Debtor a sum of ₹ 182 crore and in view of the same the 2nd and 3rd Respondents ought not to have admitted the claim of the 1st Respondent to the tune of ₹ 182 crore. 15. It was also submitted by the Learned Counsel for the Applicant that they have issued numerous e-mails to the 2nd Respondent stating that the claim of the 1st Respondent has been incorrectly admitted, however, all those representations made by the Applicant were rejected by the 2nd Respondent. 16. It was submitted by the Learned Counsel for the Applicant that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 016 and Regulations framed thereunder stipulate that only the said Authorised Representative can represent the Homebuyers and in the light of the aforesaid submissions being made by the Learned Counsel for the 1st Respondent that the present Application ought to be dismissed in-limine on the ground of maintainability. 21. It was submitted by the Learned Counsel for the 1st Respondent that the present Application is belated and suffers from gross and inexplicable delay and the same has been filed in collusion with the suspended director(s) of the Corporate Debtor. It was submitted that the 1st Respondent has filed its claim before the 3rd Respondent on 25.09.2019 and the same was admitted on 01.10.2019 and the purported members of the association have voted in several meetings of the CoC along with the 1st Respondent. The Applicant was at all times aware of the amount of the claim of the 1st Respondent. However, the Applicant has approached this Tribunal after a delay of seven months and also after conclusion of 6th CoC meeting. 22. The Learned Counsel for the 1st Respondent submitted that the debt owed to the 1st Respondent is crystallized in the Award dated 31.01.2018 and as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the CoC meeting on the ground that the 1st Respondent is a Related Party to the Corporate Debtor. However, the said issue was decided in favour of the 1st Respondent by this Tribunal vide its Order dated 03.01.2020. In any case, the Appeal is pending before the Hon'ble NCLAT against the Order passed by this Tribunal dated 03.01.2020. It was submitted that the Applicant ought to have raised all the issues as part of its objections at that point of time and by not doing so, the Applicant is deemed to have given up this issue. Further it was submitted that there is no whisper of this issue in the Appeal filed before the Hon'ble NCLAT also. Under the said circumstances, Learned Counsel for the 1st Respondent sought for the dismissal of the present Application. REPLY OF 2ND AND 3RD RESPONDENT 25. The 2nd and 3rd Respondents have filed their Written Submissions reiterated upon the decision of the Hon'ble Supreme Court in the matter of Swiss Ribbons Pvt. Ltd. Anr. Vs. Union of India Ors; (2019) 4 SCC 17 and has submitted that the role of the Resolution Professional has no adjudicatory power and that the Resolution Professional being an officer appointed by the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ., Real Value Promoters Pvt. Ltd., who is the holding company of the Corporate Debtor; (iii) The 3rd Respondent viz., Mr. R. Damodaran; (iv) The 4th Respondent viz., Mr. V.S. Saravanan; and (v) The 5th Respondent viz., Mr. V.S. Suresh; The Arbitral Tribunal comprises of Coram; (i) Justice Shivaraj V. Patil, the Presiding Arbitrator, (ii) Justice K. Govindarajan, Co-Arbitrator and (iii) Justice D.K. Deshmukh, Co-Arbitrator. 31. As per the reasons stated in the said Arbitral Award, it is seen that pursuant to the SSA the Claimant i.e., the 1st Respondent herein invested a sum of ₹ 49,50,000/- by way of optionally convertible debentures and also the Claimant acquired 5,00,000/- equity shares of the face value of ₹ 10/- from the Corporate Debtor company. 32. As per the Award, it is seen that there were certain breaches being committed by the Corporate Debtor and aggrieved by the same the Claimant/1st Respondent herein issued a notice dated 01.08.2014 to the Corporate Debtor and thereafter in a meeting between the Claimant and the representatives of the Respondents held on 13.08.2014, the parties have arrived at an Exit Agreement and to settle the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Investors, provides to the Investors, an IRR of 28% (twenty eight percent). It is hereby further clarified that if the Part Sale Consideration due and payable on any of the aforesaid Appointed Date(s) is paid after the respective Appointed Date, then the Part Sale Consideration due and payable on the Fourth Appointed Date shall be increased appropriately such that as on the Closing Date along With all principal sums paid on the Investor Securities, including any premium, and after factoring in all interest paid to the Investors, provides, to the Investors, an IRR of 29.5% (twenty nine point five percent). The Investor Securities shall be delivered pro rata after receipt in full of the interest and Sale Consideration mentioned in the first and second tranches. The Promoters can determine the proportion of Investor Securities to be brought by them, and the ratio thereof, and/or the amounts to be redeemed/bought back by the Company, but shall ensure that all the Investor Securities are bought and/or redeemed on or before the Closing Date and the Investors receive the entire Sale Consideration on or before the Closing Date; Provided that the Investor Representative may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sale Consideration as under: 'Sale Consideration' shall mean an aggregate of all sums paid on each of the Appointed date, which, as on the Closing Date along with all principal sums outstanding on the Investor Securities, including any premium, and after factoring in all interest as may be received by the Investors, provides to the Investors, if all the payments are made on or before the respective Appointed Dates as aforesaid, an IRR of 28% (twenty eight percent) and if any of the payments are made after the respective Appointed Dates as aforesaid, an IRR of 29.5% (twenty nine point five percent), it is clarified that the relevant IRR shall be calculated from the date of first Investment by the Investors and not from the date hereof or further in the case of 29.5% (twenty nine point five percent) IRR not from the respective Appointed Date(s) and all; The first, second, third and fourth Appointed Dates were defined to mean 31/7/2015, 31/8/2015, 30/9/2015 and 30/10/2015 respectively. Thus, in the Exit Agreement the respondents agreed to and acknowledged the entitlement of claimant to IRR. 35. Further in para 9.57, it was also discussed that there is no disput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of para 9.66. However, a perusal of the operative portion of the Award posits the fact that the 1st Respondent is entitled to a sum of ₹ 155,32,56,626/- and that the manner in which the said amount is required to be paid as set out in para 9.64. 40. It is to be noted that the claim of the 1st Respondent is not in any manner linked with the Remainder Amount. The concept of the Remainder Amount in the SSA only sets out the details of the amount, how the payments are required to be made to the 1st Respondent when the project is being developed and it does not in any manner change the position, either in fact or in law that as per the said Award the Corporate Debtor is bound and liable to repay the amount which is due to the 1st Respondent. In this regard, it is significant to refer to Section 3(6) of the IBC, 2016 which defines the terms of claim, the same is extracted hereunder for ready reference: 3(6) claim means-- (a) a right to payment, whether or not such right is reduced to judgment, fixed, disputed, undisputed, legal, equitable, secured or unsecured; (b) right to remedy for breach of contract under any law for the time being in force, if such breach ..... X X X X Extracts X X X X X X X X Extracts X X X X
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