Jyoti Structures Limited vs State Bank Of India

[Arising out of Order dated 16.06.2023 passed by the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench-I, in IA No. 1094 of 2023 in CP (IB) No. 1137 of 2017]

IN THE MATTER OF:

Jyoti Structures Ltd. having its registered office at Valecha Chambers, 6th Floor, New Link Road, Andheri (West), Mumbai, Maharashtra - 400 053. ....Appellant

Vs.

State Bank of India Assistant General Manager, State Bank of India, AMT-I, INFRA-II SARG, Corporate Centre 21st Floor, Maker Tower - E Cuffe Parade, Mumbai - 400 005. ....Respondent

Present: For Appellant: Dr. Abhishek Manu Singhvi and Mr. Arun Kathpalia, Sr. Advocates, Mr. Abhijeet Sinha, Mr. Malak Bhatt, Ms. Neeha Nagpal and Ms. Samridhi, Advocates.

For Respondent: Mr. Raunak Dhillon, Ms. Ananya Dhar Choudhury, Ms. Aishwarya Gupta, Advocates for SBI.

Mr. Sunil Fernandes, Ms. Diksha Dadu, Mr. Divyansh Tiwari, Advocates for Shareholders.

Cont'd.../ -2-

JUDGMENT

ASHOK BHUSHAN, J.

This Appeal has been filed by the Successful Resolution Applicant

challenging the order dated 06.06.2023 passed by the Adjudicating Authority

(National Company Law Tribunal), Mumbai Bench- I in I.A. No. 1094 of 2023.

The Resolution Plan submitted by the Appellant in the CIRP of the Corporate

Debtor - Jyoti Structure Ltd. was approved by order dated 27.03.2019 and

I.A. No. 1094 of 2023 was filed by the Appellant/ Applicant making following

prayers:

"a) Order and direct exclusion of time period commencing from the repayment timelines stipulated under the Approved Resolution Plan up to the date of release of NFB Limits on account of delay by MIDC in the execution of the New Tripartite Agreement, and the consequent delay in the release of NFB Limits,

b) Pass any other orders and/ or directions as this Tribunal may deem fit and expedient in the facts and circumstances of the present case in the interest of justice, equity and good conscience."

2. The Adjudicating Authority after hearing the parties observing that

"Further, since there a consensus between the lenders and the SRA with

respect to exclusion of timelines and delayed payment, this Adjudicating

Company Appeal (AT) (Insolvency) No.855 of 2023 -3-

Authority does not deem it fit to grant exclusion of time" dismissed the

application. Aggrieved by the order, the Successful Resolution Applicant has

come up in this Appeal.

3. We have heard Dr. Abhishek Manu Singhvi, learned counsel for the

Appellant and Mr. Raunak Dhillon, learned counsel appearing for the

Respondent.

4. The exclusion for the time was asked for by the Appellant for the period

from 09.11.2021 till 23.11.2022 which was time taken for execution of new

Tripartite Agreement by Maharashtra Industrial Development Corporation

(MIDC). Appellant's case before the Adjudicating Authority was that on

account of non-execution of new Tripartite Agreement, the Appellant was

unable to avail NFB facilities. The execution of Tripartite Agreement having

been prayed for by the Appellant and time was taken by the Maharashtra

Industrial Development Corporation in executing the Tripartite Agreement,

the period deserved to be excluded and the Adjudicating Authority committed

error in rejecting the application.

5. An Additional Affidavit has been filed by the Appellant in the appeal

wherein in Paras 2, 3 and 4 following has been stated:

"2. The present Affidavit has been filed to place on record additional factual developments that have occurred after the filing of the captioned Appeal and are relevant for the adjudication of the Appeal by this Hon'ble Appellate Authority. The present Affidavit may be read as a part and parcel of the

Company Appeal (AT) (Insolvency) No.855 of 2023 -4-

Appeal, the contents of which are not repeated herein for the sake of brevity.

3. Pursuant to the hearing on 12 July 2023, a Joint Lenders Meeting of the Appellant ("JLM") was conducted on 17 July 2023 to inter alia discuss the view of the lenders on the captioned Appeal filed by the Appellant before this Hon'ble Appellate Authority. In the JLM, the lenders discussed the progress made in the process of release of NFB Limits as per the Approved Resolution Plan, however, the lenders sought a clarification from the Appellant that the exclusion shall not result in extension/modification of the repayment timelines to the assenting financial creditors. A copy of the minutes of the JLM dated 17 July 2023 are attached herewith as Exhibit A.

4. While the Appellant had, during the JLM, clarified that the captioned Appeal does not in any way seek a modification of the terms of time of redemption of the non convertible debentures ("NCDs") under the Approved Resolution Plan, the Appellant also issued a letter dated 18 July 2023, inter alia clarifying that the exclusion sought in the captioned Appeal does not in any way modify or change the timelines for the repayments of NCDs under the Approved Resolution Plan. A copy of the letter dated 18 July 2023, is attached herewith as Exhibit B."

Company Appeal (AT) (Insolvency) No.855 of 2023 -5-

6. Shri Raunak Dhillon, learned counsel appearing for the State Bank of

India, which is the lead bank, has submitted that the State Bank of India has

no objection in the relief as sought in the present Appeal subject to that there

are no changes in the repayment terms of State Bank of India as envisaged in

the Resolution Plan. It is further submitted that there was no consensus

between the lenders and the Successful Resolution Applicant as has been

observed in Para 16 of the order. Learned counsel for the Respondent has

referred to Para 6 of the Additional Affidavit of the Appellant that Appellant

shall clear all outstanding payments to the dissenting Financial Creditors

within the originally envisaged timeline of four years i.e. November, 2025,

from the date of implementation of the approved Resolution Plan.

7. We have considered the submissions of learned counsel for the parties

and perused the record.

8. The prayer for exclusion was made on account of delay in execution of

Tripartite Agreement by Maharashtra Industrial Development Corporation,

which is an admitted fact. As stated in the Additional Affidavit, in the Joint

Lenders Meeting held on 17.07.2023, the query raised by joint lenders have

been duly satisfied by the Appellant, which is reflected in the Additional

Affidavit filed in this Appeal.

9. In view of the facts as brought on the record in the Additional Affidavit

and the submission made on behalf of the State Bank of India, where the

State Bank of India has expressed its no objection to the prayers made by the

Appellant in the I.A. subject to the conditions as has already been stated in

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the Additional Affidavit, we are of the view that I.A. No. 1094 of 2023 deserves

to be allowed and exclusion of time period commencing from repayment

timeline stipulated in the approved Resolution Plan upto the date when

Tripartite Agreement was executed i.e. 23.11.2022 is allowed (i.e. from

09.11.2021 till 23.11.2022) subject to no modification of final timeline of four

years for repayment. Appeal is disposed of accordingly.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical) NEW DELHI

02nd August, 2023

Archana

Company Appeal (AT) (Insolvency) No.855 of 2023