Geopetrol International Inc vs Jekpl Pvt. Ltd. & Anr

Geopetrol International Inc. ...Appellant

Versus

JEKPL Pvt. Ltd. & Anr. ...Respondents

Present: For Appellant : Mr. Arun Kathpalia, Senior Advocate with Mr. Ravi Raghunath, Ms. Aakashi Lodha, Mr. Kauser Hussain and Ms. Diksha, Advocates

For Respondents : Mr. Abhinav Vasisht, Senior Advocate with Mr. Saurav Panda and Ms. Charu, Advocates for 1st Respondent Mr. Arvind Nayar, Senior advocate with Mr. N.P.S. Chawla, Mr. Kaustubh Prakash, Ms. Manishat Karia, Mr. Adarsh Kumar, Ms. Upasana, Mr. Chandrashekaran, Ms. Pragati Banka, Advocates for 2nd Respondent

ORDER

13.03.2020 The 'corporate insolvency resolution process' against the

'JEKPL Private Limited' (Corporate Debtor) was initiated in the year 2017 but it

could not proceed because of different petitions/applications preferred before the

Adjudicating Authority (National Company Law Tribunal), Allahabad Bench and

followed by the appeal before this Appellate Tribunal (National Company Law

Appellate Tribunal) in 'Company Appeal (AT) (Insolvency) No. 254 of 2017' and

this Appellate Tribunal directed the Adjudicating Authority to decide the

question of eligibility of 'Exim Bank' uninfluenced by the opinion of the

'Resolution Professional' and the 'Committee of Creditors'. 2

2. During the pendency of the above appeal, the 'resolution plan' of 'Atyant

Capital India Fund-I' was approved by the Adjudicating Authority on 15th

December, 2017. However, on account of the pendency of the appeal of 'Exim

Bank' before this Appellate Tribunal, the same could not be given effect as this

Appellate Tribunal directed not to give effect to the 'resolution plan' approved by

order dated 15th December, 2017 without prior permission of this Appellate

Tribunal.

3. Finally, this Appellate Tribunal by judgment dated 14th August, 2018

disposed of the matter and made it clear that the 'Committee of Creditors' cannot

go in for 'rebidding' on account of the resolution plans having already opened.

The aforesaid issue was raised because one of the resolution applicant wanted

for rebidding or enhancement of the plan. At that stage 'Hindustan Oil

Exploration Company Limited (HOEC) was one of the 'resolution applicant' which

was second to 'Atyant Capital India Fund-I', whose 'resolution plan' was earlier

approved.

4. The judgment of this Appellate Tribunal dated 14th August, 2018 was

challenged before the Hon'ble Supreme Court in 'Civil Appeal No. 9090-9091 of

2018' titled 'Atyant Capital India Fund I vs. Resolution Professional, JEKPL

Private Limited' whereby the Hon'ble Supreme Court vide order dated 7th

September, 2018 while issuing notice directed for maintenance of status quo as

on the said date. Subsequently the said appeal was dismissed by order dated

23rd January, 2019.

5. The case was re-heard and by order dated 17th January, 2020 the

Adjudicating Authority (National Company Law Tribunal), Allahabad Bench

again approved the resolution plan of the 'successful resolution applicant i.e.

Company Appeal (AT) (Insolvency) No. 410 of 2020 Company Appeal (AT) (Insolvency) No. 411 of 2020 3

'Atyant Capital India Fund-1' wherein facts of some other case were also

recorded. However, it appears that the facts of other case had been recorded in

the order dated 17th January, 2020 which was brought to the notice of the

Adjudicating Authority (National Company Law Tribunal) by the 'Resolution

Professional'. The Adjudicating Authority thereafter by impugned order dated

4th February, 2020 made necessary corrections in the facts of the case with

exclusion of the period and approval of the plan.

6. The Appellant - 'Geopetrol Internation Inc.' has challenged the aforesaid

order dated 4th February, 2020 in these 2 appeals. Learned counsel appearing

on behalf of the Appellant submits that Government of India, in exercise of the

powers conferred under Section 5 and 6 of the 'Oil Fields Act and in supersession

of the 'Petroleum Concession Rules, 1949 framed (PNG Rules) for regulating the

grant of exploration licenses and mining leases in respect of petroleum and

natural gas which belong to the Government of India and for conservation and

development thereof. Rule 5 of the PNG Rules empowers the Central

Government, while granting a license or lease, to prescribe such other additional

terms, covenants and conditions by an agreement between the Central

Government and the licensee or the lessee. It is submitted that Oil India Limited

carried out exploration in the Kharsang Field pursuant to a Petroleum

Exploration License granted under the Oil Fields (Regulation and Development)

Act, 1948 and the Petroleum and Natural Gas Rules, 1959 which led to discovery

of Petroleum in commercial quantities in the Kharsang filed.

7. Since the Government of India desired that the petroleum resources in the

Kharsang field should be exploited with utmost expedition in the overall interest

of India, the Government had invited bids from persons interested in

Company Appeal (AT) (Insolvency) No. 410 of 2020 Company Appeal (AT) (Insolvency) No. 411 of 2020 4

development of the petroleum resources in the Kharsang field. Based on the

representations and bids from the Appellant - 'Geopetrol International Inc.' and

other companies including the 'Corporate Debtor' which had the necessary

financial and technical resources, competence and experience, the Government

of India granted a mining lease to Oil India Limited and the 'Corporate Debtor'

(formerly known as 'Enprol India Limited').

8. Their production sharing contract, the initial participating interest is as

follows:

Oil India Limited 40% Geopetrol International Inc. 25% Enpro (now JEKPL) 25% Geoenpro Petroleum Limited 10%

9. Learned counsel for the Appellant submits that the principal assets of the

'Corporate Debtor' is 25% participating interest in and any direct or indirect sale

of the said participating interest which was strictly governed by the provisions of

the Production Sharing Contract and the Joint Operating Agreement. The

Appellant has first charge of the participating interest of the 'Corporate Debtor'

which rank above the charge holding by any other secured creditor. Further

according to the Appellant pursuant to Article 7.4 of the Production Sharing

Agreement, the Appellant and the Corporate Debtor, Oil India Limited and

Geoenrpo also executed a joint operating agreement dated 16th June, 1995 to

define their respective rights, interest and obligations for the proper regulation

of the Petroleum Operations pursuant to the contract. Therefore, according to

the Appellant, the appellant has pre-emptive right under Article 12.3 of the

Agreement. However, we are not inclined to consider the issue as raised in this

appeal for the reasons mentioned below:

Company Appeal (AT) (Insolvency) No. 410 of 2020 Company Appeal (AT) (Insolvency) No. 411 of 2020 5

10. During the 'corporate insolvency resolution process' against 'JEKPL

Private Ltd.' (earlier known as 'Enpro India Limited') the Appellant did not file

any claim as 'operational creditor' or 'financial creditor'. Appellant does not come

within the meaning of 'creditor' as defined under Section 3(10) of the 'I&B Code'.

The Appellant is neither 'operational creditor' nor 'financial creditor' or 'secured

creditor' or 'unsecured creditor' or a 'decree-holder'. Therefore, in the present

case, the Appellant's claim is not a security interest or any other right as

'operational creditor' or 'financial creditor' and the appeal can be filed against

approval of a plan by any aggrieved person o any ground, mentioned in sub-

section (3) of Section 61 of the 'I&B Code, which reads as follows:

61 (3) An appeal against an order approving a resolution plan under

section 31 may be filed on the following grounds, namely:--

(i) the approved resolution plan is in contravention of the

provisions of any law for the time being in force;

(ii) there has been material irregularity in exercise of the

powers by the resolution professional during the

corporate insolvency resolution period;

(iii) the debts owed to operational creditors of the corporate

debtor have not been provided for in the resolution plan

in the manner specified by the Board;

(iv) the insolvency resolution process costs have not been

provided for repayment in priority to all other debts; or

(v) the resolution plan does not comply with any other

criteria specified by the Board.

Company Appeal (AT) (Insolvency) No. 410 of 2020 Company Appeal (AT) (Insolvency) No. 411 of 2020 6

11. There is nothing on record to show that the approved resolution plan is in

contravention of the provisions of any law for the time being in force or there has

been any material irregularity in exercise of the powers by 'Resolution

Professional' (i) during the corporate insolvency resolution period; it is not the

case of the Appellant that (ii) the 'debt' owed to the operational creditors of the

corporate debtor have not been provided in the resolution plan in the manner

specified by the Board; or (iii) the insolvency resolution process costs have not

been provided for repayment in priority to all other debts; or (iv) resolution plan

does not comply with the criteria specified by the Board. As none of the criteria

fulfils in this appeal, we hold that Section 61(3) of the 'I&B Code' is not attracted.

For this reason, we find the appeal bereft of merit. Both the appeals are

accordingly dismissed.

[Justice S.J. Mukhopadhaya] Chairperson

[ Justice Bansi Lal Bhat ] Member (Judicial)

[ Alok Srivastava ] Member (Technical)

/ns/gc/

Company Appeal (AT) (Insolvency) No. 410 of 2020 Company Appeal (AT) (Insolvency) No. 411 of 2020