Infrastructure Leasing And Financial ... vs Union Of India

Infrastructure Leasing and Financial Services Ltd. ...Appellant

Versus

Union of India ...Respondent

Present: For Appellant: Mr. Ramji Srinivasan, Sr. Advocate with Mr. Raunak Dhillon, Ms. Isha Malik, Mr. Nihaad Dewan, Mr. Kartik Pandey, Ms. Namrata Saroge, Advocates. For Respondent: Mr. Aditya Sikka and Ms. Vasudha Vijaysheel, Advocates.

ORDER

15.09.2023: Heard learned counsel for the Appellant as well as learned

counsel appearing for the Union of India. Learned counsel for both the parties

agree that appeal may be disposed of on admission stage.

2. This Appeal has been filed against order dated 14.07.2023 passed by

the National Company Law Tribunal, Mumbai Bench-I on CA No.

1192/MB/2020. An application was filed by the Appellant where reliefs (A)

to (H) were sought, which has been examined by the Adjudicating Authority

in its order dated 14.07.2023, which reliefs are to the following effect:

"A. Approve the sale of the shares of Jorabat Shillong Expressway Limited held by IL&FS Transportation Networks Limited (solely or jointly with its nominees in respect of 50 equity shares of JSEL) to Sekura Roads -2-

Private Limited, free and clear from all encumbrances, liens, security interest and third party claims (including any statutory or tax claims) in terms of the agreed form of the amended Share Purchase Agreement to be executed by and between Jorabat Shillong Expressway Limited, IL&FS Transportation Networks Limited and Sekura Roads Private Limited (the "Agreed Form Revised SPA") upon payment/ discharge of the revised bid value of INR 1323,00,00,000/- (Revised Offer) (subject to the value adjustments and increments as contemplated under the Agreed Form Revised SPA) by Sekura Roads Private Limited as per the terms contemplated under the Agreed under the Agreed Form Revised SPA;

B. Allow the Applicant Group, IL&FS Transportation Networks Limited, Jorabat Shillong Expressway Limited and Sekura Roads Private Limited to execute, enter into, implement and give effect to the terms of the Agreed Form SPA and the Securities Purchase Agreement including but not limited to transfer of the debt securities contemplated in the Securities Purchase Agreement free and clear of all encumbrances;

C. Direct that the Revised Offer amount (subject to the value adjustments and increments as stipulated in the Agreed Form Revised SPA) payable by Sekura Roads Private Limited in accordance with the terms of the Agreed Form Revised SPA be paid or discharged in the manner as contemplated therein.

D. Declare and direct that upon payment or discharge of the Revised Offer amount (in the manner

Company Appeal (AT) No.159 of 2023 -3-

contemplated under the Agreed Form Revised SPA), the following, of Jorabat Shillong Expressway Limited, shall stand extinguished:

a. all claims (disclosed or undisclosed, and whether existing at or relating to a period prior to October 15, 20 18) of all the creditors (including the Central Government, any State Government, statutory, local or regulatory authorities to whom such claim is owed under any law including any claim arising out of regulatory or enforcement action which pertains to a period prior to October 15, 2018)); and

b. all liabilities whether actual or contingent and whether existing at or relating to a period prior to October 15, 2018 including such claims in respect of which arbitration proceedings have been initiated against Jorabat Shillong Expressway Limited)

E. Direct that the Applicant be permitted to utilize and pay an amount of up to INR 7,00,00,000/- from the Revised Offer amount received from Sekura Roads Private Limited towards Resolution Process Costs that have accrued or been incurred or are likely to accrue in connection with the resolution of Jorabat Shillong Expressway Limited;

F. Direct that after paying Resolution Process Costs, the balance Revised Offer amount which has been deposited into the relevant bank/ escrow account shall not be adjusted or set off against any other dues pertaining to any bank/ financial institution and shall be strictly applied/ discharged as per prayer G below

Company Appeal (AT) No.159 of 2023 -4-

and in accordance with the terms of the Agreed Form Revised SPA;

G. Direct and permit the distribution/ discharge of the balance Revised Offer amount (being the Revised Offer amount less the Resolution Process Costs utilized as per prayer E above) to the creditors of JSEL as per the "Revised Distribution Framework" in the manner illustrated in Annexure 7 to the Additional Affidavit dated January 19, 2023 filed by the Applicant in Company Application No. 1192 of 2020.

H. For any further reliefs as this Tribunal deems fit and proper in the facts and circumstances."

3. The transaction has approval of Justice D. K. Jain which is also

recorded in the order. It is submitted that the Adjudicating Authority has

approve the transaction, however, with regard to reliefs (D) to (G), the

Adjudicating Authority observed that the parties are directed to approach the

respective stakeholders for grant of other reliefs claimed in the application.

Learned counsel for the Appellant challenging the order contended that reliefs

(D) to (G) are consequential to reliefs (A) to (C) and above reliefs were claimed

due to clean slate theory and Revised Resolution Framework.

4. In this Appeal, a Reply has also been filed by the Union of India where

in Paras 5 and 12 following has been stated:

"5. In this regard, the Respondent submits that it supports the captioned Appeal and requests that this

Company Appeal (AT) No.159 of 2023 -5-

Hon'ble Tribunal to allow the captioned Appeal on the following facts, circumstances and grounds.

12. It is submitted that once the Hon'ble Tribunal approved the resolution process/sale of JSEL being satisfied with the sale/resolution process and Revised Offer, it ought to have granted reliefs which were in accordance with the Resolution Framework instead of directing the Appellant to seek approval of the respective stakeholders."

5. Learned counsel for the Union of India submits that for the reliefs (D)

to (G) Union of India has no grievance. It is submitted that it was already

indicated in reply filed before the Adjudicating Authority that appropriate

orders may be passed. In the reply which has been filed in this Appeal, it is

stated that reliefs (D) to (G) can be allowed.

6. We, thus, are of the view that the reliefs (D) to (G) being consequential

to reliefs (A) to (C), the application was entitled to have been allowed when

transaction with regard to reliefs (A) to (C) have been approved. We, thus,

partly modify the order of the Adjudicating Authority dated 14.07.2023 and

allow reliefs with regards to prayers (D) to (G). Appeal is allowed accordingly.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical) Archana/nn

Company Appeal (AT) No.159 of 2023