Infrastructure Leasing And Financial ... vs Sadbhav Engineering Limited & Anr

IN THE MATTER OF: Union of India ... Appellant Versus Infrastructure Leasing and Financial Services Ltd. & Ors. ... Respondents

Interlocutory Application No.1288 of 2024

IN THE MATTER OF:

Infrastructure Leasing & Financial Services Ltd. & Anr. ... Applicants

Versus

Sadbhav Engineering Ltd. & Anr. ...Respondents

With Interlocutory Application No.2006 of 2024 in Interlocutory Application No.1288 of 2024

IN THE MATTER OF:

Edelweiss Alternative Asset Advisors Limited ... Applicant/Intervenor

With Interlocutory Application No.3262 of 2024

IN THE MATTER OF:

Sadbhav Engineering Ltd. & Anr. ... Applicants

Versus

Infrastructure Leasing & Financial Services Ltd. & Anr. ...Respondents

Interlocutory Application Nos.1288, 2006 and 3262 of 2024 in Company Appeal (AT) No.346 of 2018 1 Present: Mr. Rakesh Dwivedi, Sr. Advocate with Ms. Rajreeta Ghosh, Mr. Rahul Kumar, Advocates for Applicants in IA No. 1288 & 3262 of 2024. Mr. Ramji Srinivasan Sr. Advocate with Mr. Raunak Dhillon, Ms. Isha Malik, Mr. Nihaad Dewan, Mr. Namrata Sarogi and Mr. Rakesh Chatterjee, Advocates for ILFS Mr. Gopal Jain, Sr. Advocate with Mr. Gaurav Juneja, Mr. Aayush Jain, Mr. Gaurav Lavania and Mr. Soorya B, Advocates for Edelweiss.

JUDGMENT

ASHOK BHUSHAN, J.

Interlocutory Application No.1288 of 2024

This IA has been filed by Infrastructure Leasing and Financial

Services Ltd. ("IL&FS") and Jharkhand Road Projects Implementation

Company Ltd. ("JRPICL") praying for clarification of the order dated

26.05.2022 passed by this Tribunal in IA No.2114 of 2021 and it is further

prayed that Respondent - Sadbhav Engineering Ltd. be restrained from

taking any further action to enforce or execute the Arbitral Awards dated

06.08.2020 and 28.03.2023.

Interlocutory Application No.2006 of 2024

2. This IA has been filed by Edelweiss Alternative Asset Advisors

Limited ("Edelweiss") claiming to be Financial Creditor of JRPICL and

IL&FS entity. The Applicant Edelweiss support the reliefs sought in IA

No.1288 of 2024 by IL&FS and JRPICL.

Interlocutory Application No.3262 of 2024

Interlocutory Application Nos.1288, 2006 and 3262 of 2024 in Company Appeal (AT) No.346 of 2018 2

3. This IA has been filed by Sadbhav Engineering Ltd. & GKC Projects

Ltd. in IA No.1288 of 2024 praying for certain reliefs. Reliefs claimed in IA

No.3262 of 2024 are opposing the prayers, whcih have been made in IA

No.1288 of 2024 filed by the IL&FS and JRPICL.

4. Brief facts to be noticed for deciding these Applications are:

(i) In a petition under Section 241 and 242 of the Companies Act,

2013 filed by Union of India against IL&FS and its existing

Board of Directors, in which for Resolution of debt of

approximately Rs.94246 crores, which has been claimed from

IL&FS Group. NCLT passed order on 01.10.2018 superseding

the existing Board of Directors of IL&Fs with a Board

appointed on the recommendation of the Central Government.

NCLT, however, did not grant any interim order. An appeal

was filed by the Union of India against the order dated

01.10.2018 in this Tribunal and this Tribunal on 15.10.2018

passed an interim order. Relevant paragraphs of which are as

follows:

"Taking into consideration the nature of the case, larger public interest and economy of the nation and interest of the Company and 348 group companies, there shall be stay of

(i) The institution or continuation of suits or any other proceedings by any party or person or Bank or Company, etc. against 'L&FS' and its 348 group companies in any Court of Law Tribunal / Arbitration Panel or Arbitration Authority;" and

Interlocutory Application Nos.1288, 2006 and 3262 of 2024 in Company Appeal (AT) No.346 of 2018 3

(ii) Any action by any party or person or Bank or Company, etc. to foreclose, recover or enforce any security interest created over the assets of 'IL&FS' and its 348 group companies including any action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002;

(iii) The acceleration, premature withdrawal or other withdrawal, invocation of any term loan, corporate loan, bridge loan, commercial paper, debentures, fixed deposits, guarantees, letter of support, commitment or comfort and other financial facilities or obligations vailed by 'IL&FS' and its 348 group companies whether in respect of the principal or interest or hedge liability or any other amount contained therein;

(iv) Suspension of temporarily the acceleration of any term loan, corporate loan, bridge loan, commercial paper, debentures, fixed deposits and any other financial facility by the 'IL&FS' and its 348 group companies by any party or person or Bank or Company, etc. as of the date of first default;

(v) Any and all banks, financial institutions from exercising the right to set off or lien against any amounts lying with any creditor against any dues whether principal or interest or otherwise against the balance lying in any bank accounts and deposits, whether current or savings or otherwise of the 'IL&FS' and its 348 group companies."

(ii) In the Company Appeal (AT) No.346 of 2018, Ministry of

Corporate Affairs filed Progress Report with Addendum with

proposed Resolution Framework for the IL&FS Group was also

filed. The Resolution Framework provided for revised

distribution mechanism. The Resolution Framework was

Interlocutory Application Nos.1288, 2006 and 3262 of 2024 in Company Appeal (AT) No.346 of 2018 4 approved by this Tribunal vide order dated 12.03.2020 and by

the same order this Tribunal also affirmed the interim order

dated 15.10.2018. By an order dated 15.10.2018, this

Tribunal stayed the institution or continuation of suits or any

other proceedings against the IL&FS and its group entities.

(iii) An Application for modification of order dated 15.10.2018 was

filed by GKC Projects Limited, in which Application an order

was passed on 11.01.2019 by this Tribunal, where this

Tribunal permitted arbitration proceeding between IL&FS

group companies and other parties, including the arbitration

proceedings of Applicant No.2 and Respondent to continue,

which was however with a caveat that final award, if any,

against the IL&FS group shall be kept in sealed cover. The

order dated 11.01.2019, paragraph-2 is as follows:

"2. So far as the pending arbitration proceedings are concerned, if any pending before one or other Arbitral Tribunal in which the 'ILFS' or any of its 348 Group Companies are parties, in such case, the Arbitral Tribunal may proceed with to determine the claim and counter claim, if any, made by the parties and may pass the award, and keep it in a seal cover. The Arbitral Tribunal are also prohibited to pass any order under Section 17 of the Arbitration & Conciliation Act, 1996 against 'ILFS' or any of its Group Companies. Sealed cover will be kept till the final decision of the petition under Sections 241 & 242 of the Companies Act, 2013 pending before the National Company Law Tribunal, Mumbai Bench. However, if the award is given in favour of the 'ILFS' or any of its Group Companies, in such case, the

Interlocutory Application Nos.1288, 2006 and 3262 of 2024 in Company Appeal (AT) No.346 of 2018 5 award need not be kept in a sealed cover, even during the pendency of the Company Petition."

(iv) Pursuant to the order dated 11.01.2019, arbitration

proceedings in the JRPICL resumed and resulted in concluding

the Award dated 06.08.2020 being passed in favour of

Sadbhav Engineering Ltd. and the GPL second arbitration

concluding with an Award dated 28.03.2023 being in favour of

GPL. However, in terms of order dated 11.01.2019, the Awards

were kept in the sealed cover. Sadbhav Engineering Ltd. filed

an Application being IA No.2114 of 2021.

(v) Application, IA No.2114 of 2021 came for consideration before

this Tribunal on 26.05.2022, in which IA, This Tribunal

observed that the award which is kept in the sealed cover need

to be opened by the Arbitrators and parties may be

communicated the award. This Tribunal did not enter into the

issues and submissions raised by the parties regarding the

future actions in consonance with the award and only

observed that all contention and the course of action shall be

open to the parties to be taken in accordance with law.

(vi) In pursuance of the above order of this Tribunal, Award was

opened from sealed cover and intimated to the parties. The

Award passed in favour of Sadbhav Engineering Ltd. was

challenged by JRPICL before the Delhi High Court by filing

application under Section 34 of the Arbitration and

Interlocutory Application Nos.1288, 2006 and 3262 of 2024 in Company Appeal (AT) No.346 of 2018 6 Conciliation Act, 1996 on 21.09.2022. The Sadbhav

Engineering Ltd., Respondent No.2 to the Application has filed

an Application for enforcement of the Award before Civil Court,

(Commercial Division) at Ranchi being Execution Case No.12

of 2023 and 13 of 2023. Sadbhav Engineering Ltd. has also

filed enforcement petition seeking the execution of Award in

their favour. When the proceedings for enforcement of the

Award was going on before the Civil Court (Commercial

Division), IA No.1288 of 2024 was filed by the Applicants -

IL&Fs and JRPICL praying for following reliefs:

"(a) Clarify that the order dated May 26, 2022 passed by this Hon'ble Appellate Tribunal in LA. No. 2114 of 2021 only allowed the Arbitral A ward dated August 6, 2020 passed in favour of Sadbhav Engineering Limited to be opened from its sealed cover, and does not in any manner_ allow or permit award holders of the IL&FS Group (such as Sadbhav Engineering Limited and GKC Projects Limited) to initiate any recovery actions against IL&FS Group entities (such as the Applicant No. 2), including taking any action for the execution and/or enforcement of the Arbitral Awards;

(b) Permanently restrain Sadbhav Engineering Limited and GKC Projects Limited from taking any further action to enforce and/ or execute the Arbitral A wards dated August 6, 2020 and March 28, 2023;

5. The reply has been filed to the IA No.1288 of 2023 by Sadbhav

Engineering Ltd. and Anr., where the Respondents contend that Award

holders, i.e. Respondent was entitled to execute the Award. It is submitted

that JRPICL was categorized as 'Green Entity' and it has been making

Interlocutory Application Nos.1288, 2006 and 3262 of 2024 in Company Appeal (AT) No.346 of 2018 7 payment of interest to its related Entities. The Respondent has referred to

Audited Financial Report of JRPICL for Financial years 2017-18 to 2022-

23, which clearly shows that Applicant No.2 has been making payment of

substantial funds towards interest and principal repayment to IL&FS

Transportation Ltd. ("ITNL") against an unsecured loan, who also happens

to be the majority shareholder of Applicant No.2. It is pleaded by the

Respondent that when JRPICL is Green Entity and is able to meet all its

obligation both financial and operation, there was no impediment in

making payment to Respondent as per Arbitral Award in favour of the

Respondent. It is further pleaded that Applicant No.2 has been earning

annuity to the tune of Rs.163.64 crores, annually in respect of two projects,

which were completed by Respondent herein. Applicant No.2, although

received annuity from the State of Jharkhand because of completion of

project by the Respondent, but the amounts which are due to the

Respondent from the Arbitral Award is not being discharged by the

Applicant.

6. Shri Ramji Srinivasan, learned Senior Counsel for the Applicant in

rejoinder submitted that JRPICL is Red Entity and an IA has already been

filed in this Tribunal being IA No.5033 of 2023, which is pending

adjudication. It is submitted that as per the revised resolution mechanism

resolution framework approved by this Tribunal, the process for resolution

of JRPICL and the Respondent shall be paid their dues as per the resolution

framework at the time of final resolution of the entity.

Interlocutory Application Nos.1288, 2006 and 3262 of 2024 in Company Appeal (AT) No.346 of 2018 8

7. We have heard Shri Ramji Srinivasan learned Senior Counsel; Shri

Rakesh Dwivedi, learned Senior Counsel and Shri Gopal Jain, learned

Senior counsel appearing for the respective parties.

8. Learned Counsel for the Applicant in support of IA No.1288 of 2024

has contended that the order passed by this Tribunal on 26.05.2022, only

modified paragraph 2 of the order dated 11.01.2019, i.e., directing for

opening the sealed cover in which the Award was kept, but the stay order

was not modified, hence, it cannot entitle the Respondent to proceed to

execute the Award, which is being sought to be done by the Respondent.

It is submitted that order dated 15.10.2018, which contained the interim

directions, are still continuing, which were affirmed by this Tribunal on

12.03.2020, which clearly restrain institution of any proceedings or

continuation of suits or any other proceedings by any party against IL&FS

and its group companies. The order dated 15.10.2018 having not been

modified or tinkered with by order dated 26.05.2022, the enforcement

proceedings filed by Respondent in Civil Court (Commercial Division)

Ranchi is not maintainable and the same is prohibited by order dated

15.10.2018. As per the resolution frame work the IL&FS and its group

entities has to be resolved and the Respondent, who is an Operational

Creditor or other creditors have to receive their dues as per the resolution

framework and the que cannot be breached by any Respondent by

prosecuting enforcement proceedings. It is submitted that JRPICL is now

being reclassified as Red Entity, in pursuance of which, IA for re-

classification has already been filed and pending, being IA No.5033 of 2023

Interlocutory Application Nos.1288, 2006 and 3262 of 2024 in Company Appeal (AT) No.346 of 2018 9 is pending consideration. JRPICL is not able to discharge its debt as the

JRPICL has not received its annuity, which was payable by the Government

of Jharkhand from April to September 2023. It is submitted that prayers

made in the Application need to be allowed and this Tribunal may clarify

that order dated 26.05.2022 does not entitle the Respondent to enforce the

Arbitral Award against IL&FS and its group entities and the Respondent be

permanently restrained from taking further action to enforce or execute the

Arbitral Award dated 06.08.2020 and 28.03.2023.

9. Learned Senior Counsel appearing for Respondent refuting the

submissions, contends that order passed by this Tribunal on 26.05.2022,

while directing the opening of the Award from sealed cover has further

directed that all contentions and the course of action shall be open to the

parties to be taken in accordance with law. When this Tribunal observed

that all course of action shall be open for the parties to be taken in

accordance with law, the Respondent is fully entitled to file an Application

for execution of enforcement of petition for execution of the Award. It is

submitted that the Applicant has already in pursuance of the order dated

26.05.2022 has challenged the award before the Delhi High Court under

Section 34 of the Arbitration of Conciliation of Act, in which no interim

order has been passed in favour of the Applicant by Delhi High Court.

Rather, the Delhi High Court has observed that the question of enforcement

has to be gone into before the Court, where enforcement petitions have

been filed and all contentions of the parties were left open. The Respondent

has completed the projects, due to which the Applicants are earning

Interlocutory Application Nos.1288, 2006 and 3262 of 2024 in Company Appeal (AT) No.346 of 2018 10 annuity of Rs.163.64 crores annually and it is unfair on the part of the

Applicants not to discharge their obligation to the Respondent, which is

crystalized in an Award in favour of the Respondent. It is further submitted

by the Respondent that now the Applicants have called for EoI from the

interested parties to acquire 100% stake in JRPICL. It is submitted that

Applicant has been making payment of interest to its related entities like

ITNL, which is reflected from the annual financial statement of the JPRICL,

which shows that huge amount in crores have been paid by the Applicant

No.2 to its related entities, whereas no payment has been received by the

Respondent. It is further submitted that moratorium dated 15.10.2018,

did not apply to Green Entities, since Green Entities are able to meet all

their payment obligations, both financial and operation, as and when they

become due. The Respondent, who has completed the projects and their

huge dues are pending and due to non-clearance of dues by the Applicant,

the Respondent is suffering great hardship. The Applicant No.2 has

generated thousands of crores of revenue from the Financial Year 2018-19

to Financial Year 2022-23. It is submitted that order dated 26.05.2022,

does not need any clarification.

10. Learned Senior Counsel for the Sadbhav Engineering Ltd., Shri

Rakesh Dwivedi also referred to IA No.3262 of 2024 in which several

prayers have been made by the Applicant, i.e., Sadbhav Engineering Ltd.

and Anr. In IA No.3262 of 2024, it is submitted that various effective

figures have been brought, including the release of amount of Rs.362.7

crores to a related party since Financial Year 2017-18, i.e. ITNL. JRPICL

Interlocutory Application Nos.1288, 2006 and 3262 of 2024 in Company Appeal (AT) No.346 of 2018 11 was declared as 'Green Entity' on 19.09.2019. It is submitted that with

several other entities, whose dues were payable by JRPICL, they have

entered into a settlement and made their payments.

11. We have considered the submissions of learned Counsel for the

parties and perused the records.

12. We need to first notice the extent and remit of the order dated

26.05.2022, clarification with regard to which order is sought by the

Applicant in IA No.1288 of 2024. We have already noted above that by

order dated 11.01.2019, this Tribunal directed for continuation of pending

proceedings before Arbitral Tribunals, which was with a caveat that

Arbitral Tribunals are prohibited to pass any order under Section 17 of the

Arbitration & Conciliation Act, 1996 against IL&FS or any of its Group

Companies. Award passed, if any was to be kept in sealed cover till final

decision of the petition under Section 241 and 242 of the Companies Act,

2013 pending before the NCLT. It was further observed that after the

Award is given in favour of the IL&FS or any of its Group Companies, in

such case, the Award need not be kept in sealed cover, even during the

pendency of the Company Petition. An IA No.2114 of 2021 was filed by

Respondent - Sadbhav Engineering Ltd. in which following prayers were

made:

"In view of the aforesaid facts and circumstances, the Applicant most respectfully prays to this Hon'ble Tribunal to:

(i) allow the present application;

Interlocutory Application Nos.1288, 2006 and 3262 of 2024 in Company Appeal (AT) No.346 of 2018 12

(ii) modify the order dated 11.01.2019 passed by this Hon'ble Tribunal and allow the Arbitral Tribunal and/or the member(s) of the Arbitral Tribunal to open the Signed Award dated 06.08.2020 from the sealed cover and deliver the same to the parties to the arbitration proceedings;

(iii) direct one of the two members of the Arbitral Tribunal namely Justice VK. Gupta (Retd.) and Mr. V Murahary Reddy to collect the original Award and the arbitral record of the case, collected from the office of Late Justice M.Y. Eqbal (Retd.);

(iv) pass such other or further order as may deem fit and appropriate by this Hon'ble Tribunal in the facts and circumstances of the case."

13. On IA No.2114 of 2021, this Tribunal passed order on 26.05.2022,

which order is prayed to be clarified. The relevant portion of order dated

26.05.2022 is to the following effect:

"Sri Ramji Srinivasan, Learned Counsel for the Respondent opposing the prayer submits that Order was passed by this Tribunal on 11/01/2019, keeping in view the Resolution of the ILFS and its entities and further to freeze all claims on the cut-off date 15/10/2018. He submits that the Orders passed in the Appeal stopping enforcement and recovery or any execution are still in force. Hence, even if the award in sealed cover is directed to be opened. The Applicant shall not be entitled to enforce the award or make recovery from the ILFS or its subsidiary.

Sri Arun Kathpalia submits that he is entitled to take all action in pursuance of the award. Since, the entity i.e., Jharkhand Road Project Implementation Company Limited is a green entity.

Sri Ramji Srinivasan submits that even though it is green entity, it may fall in the red category.

We have considered the submissions of the Parties. The Order dated 11/01/2019 which was passed for keeping the award in sealed cover is now more than three years ago. It has

Interlocutory Application Nos.1288, 2006 and 3262 of 2024 in Company Appeal (AT) No.346 of 2018 13 submitted by Counsel for the Applicant that the award was prepared and signed more than two years ago.

We are of the view that the award which is kept in the sealed cover need to be opened by the Arbitrators and parties may be communicated the award. We without entering into the issues and submissions raised by the parties regarding the future actions in consonance with the award, only observe that all contention and the course of action shall be open to the parties to be taken in accordance with law.

We make it clear that this Order should be treated as only modification of para 2 of the Order dated 11/01/2019."

14. The order dated 26.05.2022 only directed that Award, which is kept

in the sealed cover need to be opened by the Arbitrators and the parties

may be communicated the award. It was noted that Award in sealed cover

are more than two years ago. This Tribunal in order dated 26.05.2022,

clearly observed - "We without entering into the issues and submissions

raised by the parties regarding the future actions in consonance with the

award, only observe that all contention and the course of action shall be open

to the parties to be taken in accordance with law.".

15. The observation of this Tribunal was that all contention and course

of action shall be open to the parties to be taken in accordance with law.

The issue to be noticed is as to whether by order dated 26.05.2022, the

injunction which was issued on 15.10.2018 stood modified, which entitled

the Respondent to proceed for enforcement of Award. It is to be noted that

when the Application IA 1288 of 2024 came for consideration on

06.03.2024, after noticing all IAs order in paragraph 12 to 14, this Tribunal

observed as follows:

Interlocutory Application Nos.1288, 2006 and 3262 of 2024 in Company Appeal (AT) No.346 of 2018 14 "12. By order dated 11.01.2019, this Tribunal has directed with regard to pending arbitration proceedings, if the Arbitral Tribunal may pass an award, the award shall be kept in a sealed cover. It was further directed that the sealed cover shall be kept till the final decision of the petition under Sections 241-242 of the Companies Act, 2013 pending before the NCLT, Mumbai Bench. Paragraph 2 of the order dated 11.01.2019 was modified by order of this Tribunal dated 26.05.2022. This Tribunal noticed the submissions of the parties that the award is kept in a sealed cover for more than three years and ward was prepared and signed more than two years. In the above circumstances, this Tribunal directed that the sealed cover to be opened by the Arbitrator and parties may be communicated the award. In the order dated 26.05.2022, submissions on behalf of the IL&FS was noticed that in view of the order dated 11.01.2019, the applicant shall not be entitled to enforce the award and make recovery from the IL&FS and subsidiary whereas submissions of the applicant (Sadbhav Engineering Ltd.) that applicant is entitled to take all actions in pursuance of the award as was also noticed. After noticing submissions of both the parties, this Tribunal in order dated 26.05.2022 made following directions:-

"We are of the view that the award which is kept in the sealed cover need to be opened by the Arbitrators and parties may be communicated the award. We without entering into the issues and submissions raised by the parties regarding the future actions in consonance with the award, only observe that all contention and the course of action shall be open to the parties to be taken in accordance with law.

We make it clear that this Order should be treated as only modification of para 2 of the Order dated 11/01/2019.

Interlocutory Application Nos.1288, 2006 and 3262 of 2024 in Company Appeal (AT) No.346 of 2018 15 I.A. No. 2114 of 2021 is disposed of accordingly."

13. The above order clearly indicate that this Tribunal did not enter into issue raised by respective parties as noted in the order. What was observed that "the course of action shall be open to the parties to be taken in accordance with law". The observations made in the order dated 26.05.2022 cannot be read to mean that it has in any manner varied the interim order dated 15.10.2018 passed in the Appeal which was operating till date. Neither this Tribunal vide its order dated 26.05.2022 varied or modified the entire order dated 11.01.2019. Only modification was made in paragraph 2 of the order by which this Tribunal has directed that the sealed cover be kept till the final decision of the petition under Sections 241-242 of the Companies Act, 2013. Direction to open the sealed cover was issued noticing the submissions of the parties, but the order dated 26.05.2022 cannot be read to mean that any of the contention of the parties have been decided or this Tribunal has pronounced on the continuance of the interim order dated 15.10.2018 or restrained which was imposed by order dated 11.01.2019.

14. Learned Counsel for the Respondents having prayed time to file Reply, we allow one-week time to the Respondent to file Reply to the application. Application be listed on 19.03.2024 for consideration. by directing the matter be listed on 19.03.2024, we clarify the order dated 26.05.2022 as indicated above."

16. This Tribunal in the order has observed that the order dated

26.05.2022 clearly indicate that Tribunal did not enter into the issues

raised by the respective parties. It was further observed that the

observations made in the order dated 26.05.2022 cannot be read to mean

that it has in any manner varied the order dated 15.10.2018 passed in the

Appeal, which was operating till date. We reiterate that order dated

Interlocutory Application Nos.1288, 2006 and 3262 of 2024 in Company Appeal (AT) No.346 of 2018 16 26.05.2022 neither vary, nor modified the order dated 15.10.2018 or the

entire order dated 11.01.2019. The only modification was made in

paragraph 2 of the order dated 11.01.2019 that sealed cover be opened,

which was directed to be kept till the final decision of the Company Petition

filed under Section 241 and 242. When the order dated 15.10.2018 has

not been varied or modified, even if an Award has been opened from the

sealed cover and communicated to the Respondents, the Respondents are

not entitled to enforce the Award during the continuation of the interim

direction dated 15.10.2018, which was subsequently affirmed by this

tribunal on 12.03.2020. We, thus, clarify our order dated 26.05.2022 to

the effect that the said order do not modify the interim injunction order

issued on 15.10.2018 and the enforcement of Award, which is declared

against the IL&FS was also prohibited by the issue of the order dated

15.10.2018. We have noticed the prayers made in IA No.2114 of 2021 as

quoted above, which clearly indicate that what was prayed was that to allow

Arbitral Tribunal to open the signed Award from the sealed cover and

deliver the same to the parties to the arbitration proceedings. No other

prayer was made in the IA 2114 of 202. The rival contentions of the parties,

which was noticed in order dated 26.05.2022 was not decided, nor this

tribunal intended that by opening of the sealed cover, the Respondents can

proceed to enforce the Award against the IL&FS and its group entities.

17. In view of the above the prayer (a) in IA No1288 of 2024 is allowed as

per the above clarification.

Interlocutory Application Nos.1288, 2006 and 3262 of 2024 in Company Appeal (AT) No.346 of 2018 17

18. Now, we come to the other prayers in IA No.1288 of 2024 and the

prayers made in IA No.3262 of 2024. From the facts of the present case, it

is clear that the interim order was passed by this Tribunal on 15.10.2018,

prohibiting institution or continuation of suits or any other proceedings by

any party or person or Bank or Company against IL&FS and its group

companies in any Court of Law, Tribunal/ Arbitration Panel or Arbitration

Authority.

19. In IA No.1288 of 2024, prayer (b) of the Applicant is that Respondent

be permanently restrained from taking any further action to enforce or

execute the Arbitral Awards dated 06.08.2020 and 28.03.2023.

20. More than five years have been elapsed when the order dated

15.10.2018 was passed. Even in the statutory scheme of IBC for resolution

of a Corporate Debtor mechanism, 330 days are allowed. When the order

dated 15.10.2018 was passed, it was passed with an intent to protect the

IL&FS and its group entities from actions of various creditors to protect the

corpus of the IL&FS and its group entities for appropriate resolution. It

was never intended that the order dated 15.10.2018 shall continue

infinitely and there will be prohibition for all time to come against all

persons to institute proceedings or suit against IL&FS and its group

companies. We are of the view that sufficient time has elapsed and

sufficient time has been given to the Board of IL&FS to take steps to resolve

its group companies. It is true that several entities of IL&FS has already

been resolved and some are at the final stages of resolution, hence, the

protection under order dated 15.10.2018 cannot be allowed to continue for

Interlocutory Application Nos.1288, 2006 and 3262 of 2024 in Company Appeal (AT) No.346 of 2018 18 all time to come. We, thus, for considering other prayers made in IA

No.1288 of 2024 and IA No.3262 of 2024 deem it proper to put the IL&FS

and its group entitles on notice to show cause as to why the order dated

15.10.2018 be, not allowed to continue, after reasonable time, i.e. with

effect from 15.10.2024.

21. In result, while granting prayer (a) in IA No.1288 of 2024, for

consideration of other prayers, we direct this Application to be listed again

on 14th October, 2024.

22. As directed above, the IL&FS and its group entities may show

cause, as to why order dated 15.10.2018, may be allowed, not to

operate with effect from 15.10.2024.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical)

NEW DELHI

28th August, 2024

Ashwani

Interlocutory Application Nos.1288, 2006 and 3262 of 2024 in Company Appeal (AT) No.346 of 2018 19