TMI Blog2023 (5) TMI 533X X X X Extracts X X X X X X X X Extracts X X X X ..... rization 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. - Interlocutory Application No.1709 of 2022 in Company Appeal (AT) No. 346 of 2018 - - - Dated:- 11-5-2023 - [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) allow the present Application filed by the Applicant, reject the proposition submitted in the Affidavit under the application, Affidavit being false, frivolous and vexatious, thereby declaring/ retaining the status of the JIICL as Green entity only; (ii) pass such other/ further directions/ order(s) as this Hon ble Appellate Tribunal may deem fit and appropriate in the intent of justice; 2. An affidavit dated 20.10.2022 has been filed by Respondent No.1 to bring on record the recategorization of Jharkhand Road Projects Implementation Company Limited ( JRPICL ) from a Green Entity to a Red Entity. A counter affidavit to the affidavit dated 20.10.2022 has also been filed. An additional affidavit has also been filed by the Objectors and supplementary affidavit was filed by Respondent No.1. 3. IA No.1709 of 2022 relates to Jharkhand Infrastructure Implementation Company Ltd. (hereinafter referred to as the JIICL ) and the Application has been filed by the Lenders, objecting to re-categorization of JIICL. 4. In Company Appeal (AT) No.346 of 2018, after the interim order passed by this Tribunal on 15.10.2018, Union of India has filed an affidavit in the Appeal. Lis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectfully requests that this Hon ble Tribunal be pleased to take on record the change in solvency categorization of JIICL from Green to Red and pass any directions and/or orders that may be fit in the facts and circumstances of the present case. 6. Lenders of JIICL filed objections to the said affidavit and thereafter filed I.A. No.1709 of 2022, objecting to recategorization from Green to Red . In IA No.1709 of 2022, reply on behalf of Respondent No.1 as well as rejoinder affidavit has been filed. 7. Similarly, with regard to JRPICL, an affidavit dated 20.10.2022 has been filed by Respondent No.1, wherein it was stated that Resolution Consultant pursuant to cashflow based solvency test for the period January 1, 2022 to December 31, 2022 observed that JRPICL did not receive any annuity payments since April, 2022. The Resolution Consultant stated that JRPICL would have to be re-categorized from Green Entity to Red Entity for the testing period from January 1, 2022 to December 31, 2022. In paragraph 13 of the affidavit, following has been stated: (13) Under the circumstances, this Respondent humbly and most respectfully requests that this Hon ble Tribunal be ple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Jharkhand. It is submitted that the affidavit dated 10.02.2023 filed by Respondent No.1 as per direction of this Tribunal on 19.01.2023 where it has been stated that from Government of Jharkhand annuities amounting to INR 109,41,11,200/- have been received. It is further submitted that despite the receipt of the above annuity, substantial annuities still remain overdue. It is submitted that outstanding principal of the Senior Lenders as on date is a substantial amount, which JIICL is unable to clear as on date. With regard to JRPICL, Shri Ramji Srinivasan submits that from Government of Jharkhand annuities of INR 232 crores has been received as on 18.03.2023 and on the basis which the solvency test was conducted again by the Resolution Consultant and in view of New Board in its meeting dated 24.03.2023 has provided a conditional approval for re-categorization of JRPICL to Green , subject to receipt of additional annuities of INR 58 crores by March 2023. 11. We have considered the submission of learned Counsel for the parties and have perused the record. 12. We have noticed above that categorization of the IL FS Entities was noticed by this Tribunal in its order dated 11.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icant having itself recommended to categorize the Entity as Green , subject to obtaining certain waivers from the Lenders, we are satisfied that the JIICL be declared as Green Entity, subject to appropriate orders being passed by Lenders as noted in (iii) above. The IA No.1709 of 2022, thus deserves to be allowed in the above manner. 15. Now coming to the JRPICL, it has been brought on record that Government of Jharkhand has released the substantial annuities of INR 232 Crores as on 18.03.2023. An affidavit has been filed on 25.04.2023 and in the note submitted by Respondent No.1 during the course of submission, with regard to affidavit dated 25.04.2023, following has been stated: (i) Pursuant to long drawn discussions with the Government of Jharkhand, JRPICL received annuities of INR 232 Crores as of 18.03.2023, basis which the solvency test was conducted again by the Resolution Consultant. (ii) The solvency assessment conducted by the Resolution Consultant indicated that subject to receipt of additional annuities of INR 58 Crores by 31.03.2023 and regular receipt of future annuities (worth INR 270 Crores before December 2023), JRPICL may be re-categorized to a Gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 . We, however, grant liberty 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. 17. In view of the foregoing discussions, we dispose of the IA No.1709 of 2022 as well as the affidavit and objection with regard to JRPICL in following manner: (I) IA No.1709 of 2022 is allowed, holding that JIICL be treated as Green Entity subject to Lenders of the JICCL taking appropriate decision with respect to waivers regarding DSRA and MMRA and renegotiating interest rate to be linked to MCLR with effect from April 2021, which decision shall be taken within a period of one month from today by the Lenders. (II) JRPICL is to be treated as Green Ent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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