TMI Blog2022 (7) TMI 314X X X X Extracts X X X X X X X X Extracts X X X X ..... greement and has given notice to each other which proceeding may take its logical conclusion and the distribution of the 80% debt due is in terms of the Concession Agreement has to be subject to final resolution. The distribution of 80% of debt due deposited in the escrow account of RMGL and RMGSL has to be in accordance with the Direction of this Tribunal dated 12th March, 2020 in paragraph 64 to 66. 80% of debt due as determined by CAG is laying in the Escrow Account of RMGL and RMGSL. The interim distribution of the said amount is permitted on pro rata distribution as suggested by Union of India and approved by this Tribunal in UNION OF INDIA VERSUS INFRASTRUCTURE LEASING FINANCIAL SERVICES LTD., SOMANY PROVIDENT FUND INSTITUTION ORS. [ 2020 (3) TMI 1398 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] . The Interim Distribution of the amount shall be amongst the Financial Creditors of both the Project No. 1 and 2. The Interim Distribution shall abide by the final resolution of ILFS Companies after following due procedure as prescribed in Revised Distribution Framework . Application disposed off. - I.A. No. 1849 of 2021 in Company Appeal (AT) No. 346 of 2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bhangi Tiwari, Advocates for Sapient Consulting EPF and TLG India Pvt. Ltd. EPF. Mr. Dhruv Mehta, Sr. Advocate with Mr. PBA Srinivasan, Mr. Parth Tandon, Keith Varghese, Ms. Nikitha Ross and Ms. Prerana Sabharwal, Advocates for Union Bank of India (I.A. 1849 1982 of 2021). For Intervenors: Mr. Ranjit Prakash, Mr. Amit Anand Tiwari, Ms. Vishalakshi Singh Ms. Devyani Gupta, Advocates (I.A. 516/2022 in I.A. No. 59/2021). Mr. Mahesh Agarwal, Mr. Abhijeet Sinha, Mr. Himanshu Satija and Mr. Shivam Shukla, Advocates for Objectors 63 Moons (I.A. No. 586/2022). Mr. Sanjay Bajaj along with Mr. Rajat Prakash and Mr. Samarth Bajaj, Advocate for Canara Bank, Punjab National Bank and for Mentioning of Jharkhand Infraproject. Mr. Sanjay Bajaj, Advocate for Punjab National Bank and Indian Bank. JUDGEMENT Ashok Bhushan, J: 1. These three Applications being inter-related have been heard together and are being disposed of by this common order. 2. We need to first notice the background facts and sequence of the events leading to filing of above three applications. I.A. No. 1849 of 2021 has been filed by the Union Bank of India , Lender of Project Rapid Metr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roject No. 1 to HSVP on or before 09th September, 2019. By a separate Order on the same date, RMGSL was permitted to handover possession and control of Project No. 2 by the same date. On same date, HSVP filed two Writ Petitions in the Punjab and Haryana High Court being Writ Petition No. 2494 and 2495 of 2019 challenging the Notice of Termination dated 07th June,2019. Punjab and Haryana High Court on 06th September, 2019 while issuing notice adjourned the proceeding to 09th September, 2019 and directed that until then operation of the Rapid Metrorail by the RMGL and RMGSL shall continue. The Order was extended till 17th September, 2019. On 18th September, 2019, certain proposals were submitted on behalf of the RMGL and RMGSL before the Court, it was also submitted on their behalf that they shall continue its operation and management till 20th September, 2019. On 20th September, 2019, response was submitted by HSVP and HRMTC and on 20th September, 2019 High Court recorded a consensus arrived, issued certain directions which direction was subsequently modified 04.10.2019. In pursuance of the Direction of the Hon ble High Court, one of the directions in Order dated 20th September, 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d (b) Allow the consortium lenders lead by Union Bank of India to adjust Rs. 638 deposited by HSVP in the escrow account of RMGL on .......in pursuance of the Supreme Court s order and judgment dated 26.03.2021 towards recovering the dues of the RMGL, one of the subsidiary of the IL FS; and (c) Pass any other such order as this Hon ble Appellate Authority may deem fit in the intent of justice, equity and good conscience. 5. In I.A. No. 1849 of 2021, Reply-Affidavit has been filed on behalf of ILFS as well as on behalf of HMRTC and HSVP. Rejoinder-Affidavit has also been filed by the Union Bank of India. 6. I.A. No. 1982 of 2021 has been filed by HMRTC and HSVP arraying RMGL and RMGSL as Respondent No. 1 and Respondent No. 2. In the Application, following of the prayers made: (a) Allow the present application and permit the Applicants to be impleaded as a party respondents in the present proceedings; (b) Allow the deposit of the amount deposited by the Applicants in the Escrow Account into an interest-bearing account; (c) Allow the Applicants to file detailed objections before passing any substantive orders in any applications by Rapid Metro Rail Gur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India which amount is to protect the interest of Lenders. It is submitted that this Court may permit the Lender to appropriate the amount deposited HSVP in the Escrow Account towards its debt. The Lenders cannot wait indefinitely for receiving the amount to which they are entitled, the amount deposited by the HSVP does not belong to RMGL but the amount belong to Lender. Hon ble Supreme Court in its Judgment dated 26th March, 2021 has also observed that money is paid to the Lender and not to the RMGL. 12. Mr. Ramji Srinivasan, Learned Sr. Counsel appearing for the ILFS submits that the amount deposited in the Escrow Account is to be distributed in accordance with the Revised Distribution Framework as approved by this Tribunal vide its Judgment dated 12th March, 2020. The Revised Resolution Framework shall satisfy all stakeholders i.e. secured lenders, unsecured lenders and Operational Creditor. Some sale amount is also to be given to ILFS. 13. Mr. Chetan Mittal, Learned Counsel submits that in pursuance of the Judgment of the Hon ble Supreme Court dated 26th March, 2021, HSVP and HMRTC have not been handed over documents, assets, transfer having not been taken place as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was envisaged for deposit the amount in Escrow Account, upon the receipt of the audit report. Subsequent to the order dated 20 September 2019, another order was passed by the High Court on 4 October 2019. Clause (ii) of the earlier order was substituted. As substituted, it was envisaged that the auditors would also have to examine the scope of the audit of the debt due suggested by HSVP. Hence, CAG would also examine the scope of the audit of the debt due suggested by HSVP in terms of the Concession Agreements. Moreover, it was envisaged that the rest of the dispute either arising out of the CAG report, the validity of the termination notices issued by both the parties and any past or future claims/liabilities inter se would be agitated in arbitration. On 15 October 2019, there was a further clarification by the Division Bench that CAG would examine the scope of the audit of the debt due suggested by both the parties in terms of the Concession Agreements. Thus, it was understood by both the parties that the determination of the debt due would be in terms of the Concession Agreements. CAG specifically placed before the High Court its understanding of the role to be performed by it. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d (iii) any past or future inter se claims/ liabilities; shall be agitated and decided in arbitration proceedings. 17. The Hon ble Supreme Court in its Judgment has also emphasised that money which are committed by the Finance and Financing Institutions towards Financing Infrastructure Projects had to be secured in terms of Concession Agreement which was also held that HSVP and HMRTC cannot be allowed to resile from their obligations. The Hon ble Supreme Court of India recorded its conclusion in Paragraph 60 which are to the following effect: 60 We accordingly dispose of the appeals in terms of the following directions: (i) HSVP shall within a period of three months from the date of the present judgment deposit into the Escrow Account 80 per cent of the debt due as determined in the reports of the auditors dated 23 June 2020, in the case of RMGL and RMGSL respectively; (ii) The deposit into the Escrow Account shall continue to be maintained in Escrow, subject to any order that may be passed by NCLAT or any competent statutory authority, and shall not be appropriated by the Escrow Bank without specific permission; (iii) RMGL and RMGSL on the one ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd as Annexure R-6 collectively in the Reply filed by the Rapid MetroRail Gurgaon and Rapid MetroRail Gurgaon South Limited in I.A. No. 1982 of 2021. It is useful to extract the letter dated 22.10.2019 written by RMGL to HMRTC which is to the following effect: Ref: RMGL/HMRTC/Project/2019/154 Date: 22.10.19 To Haryana Mass Rapid Transport Corporation Limited C-3, Sector 6, Panchkula, Haryana 134109 Delhi Metro Rail Corporation Limited Metro Bhawan, Fire Brigade Lane, Barakhamba Road, New Delhi 110001 Subject: Handover Package of RMGL. Dear Sirs, Pursuant to order dated October 15, 2019 passed by the Hon ble Punjab and Haryana High Court, RMGL/RMGL is requried to handover the operation and maintenance of the metro link with effect from 00.00 Hours of October 23, 2019. In connection with the aforesaid handover, please find the updated Schedule H of Handover package as on date including updated list of assets (office equipment, furniture and fixtures, plant and machinery, inventory, spares and others) on as is where is basis, together with their respective locations which would be deemed to have been put in your po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly consortium of two lenders i.e. Union Bank of India and Canara Bank. It is submitted that Revised Resolution Framework has been brought on record in the Appeal by an Affidavit submitted by Union of India. It is submitted that this Tribunal having approved the Revised Distribution Framework by its Order dated 12th March, 2020 the termination amount received in the Escrow Account has to be distributed as per Revised Resolution Framework . We may also notice that Learned Counsel appearing for HSVP and HMRTC has submitted that First Information Report (FIR) filed against Officials of RMGL and RMGSL and investigation is also pending against them hence they are not entitled for receiving any amount. The Hon ble Supreme Court has noted above the submissions raised on behalf of HSVP and HMRTC. Hon ble Supreme Court has observed that underlying wrong doing which was allegedly conducted by the promoters in the erstwhile management of the ILFS needs to be investigated. Following observations have been made in Paragraph 57 of the Judgment: 57 The underlying wrongdoing which was allegedly conducted by the promoters in the erstwhile management of IL FS undoubtedly needs to be invest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Creditors are opposing the aforesaid distribution, but wanted the distribution as per Section 53 of the I B Code. However, we are not inclined to follow the procedure of I B Code including Section 53, as this is a case where public interest is involved for the following reasons: - (i) Over the years the IL FS has inducted institutional shareholders to include Life Insurance Corporation of India (LIC), ORIX Corporation- Japan (ORIX), State Bank of India and Abu Dhabi Investment Authority. Besides the above, the IL FS Employees Welfare Trust also holds significant shares in 1st Respondent. The shareholding pattern of the IL FS, as on 31st March, 2018, as already been noticed, which includes share holding of Central Bank of India; State Bank of India; UTI-Unit Linked Insurance Plan,; India Discovery Fund, Housing Development Finance Corporation Limited, apart from Life Insurance Corporation of India and IL FS Employees Welfare Trust. Similarly, six major Group Companies, i.e., IL FS Transportation Networks Limited (ITNL); IL FS Financial Services Limited (IFIN); IL FS Energy Development Company Limited (IEDCL); IL FS Tamil Nadu Power Company Limited (ITNPCL); Noida Toll B ..... X X X X Extracts X X X X X X X X Extracts X X X X
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