Srei Multiple Asset Investment Trust vs Idbi Bank Ltd. & Ors

(Arising out of Order dated 14th May, 2019 passed by the Adjudicating Authority (National Company Law Tribunal), Cuttack Bench, Cuttack in TP No. 41/CTB/2019 CP (IB) No. 352/KB/2018)

IN THE MATTER OF:

Srei Multiple Asset Investment Trust ...Appellant

Vs.

IDBI Bank Ltd. & Ors. ...Respondents

Present: For Appellant: - Mr. Abhijeet Sinha, Mr. Arijit Mazumdar, Mr. Aditya Sukla, Mr. Shambo Nandy, Mr. Saikat Sarkar, Mr. Devesh Ajmani and Ms. Akanksha Kaushik, Advocates.

For Respondents: - Mr. Arun Kathpalia, Senior Advocate with Ms. Misha, Mr. Siddhant Kant, Mr. Eklavya Dwivedi, Ms. Bani Brar and Ms. Jasveen Kaur, Advocates.

J U D G M E N T

SUDHANSU JYOTI MUKHOPADHAYA, J.

'IDBI Bank Limited' ('Financial Creditor') filed an application under

Section 7 of the Insolvency and Bankruptcy Code, 2016 ("I&B Code" for

short) for initiation of the 'Corporate Insolvency Resolution Process'

against 'M/s. Odisha Slurry Pipeline Infrastructure Limited'- ('Corporate

Debtor') alleging default in paying financial debt of Rs.471,59,37,171/-

(Rupees Four Hundred Seventy-One Crore Fifty-Nine Lakh Thirty-Seven 2

Thousand One Hundred and Seventy-One only), which has been

admitted.

2. 'M/s. SREI Infrastructure Finance Limited' filed an intervention

petition to oppose the prayer. However, it was not entertained by the

Adjudicating Authority (National Company Law Tribunal), Cuttack

Bench, Cuttack.

3. At that stage, 'M/s. SREI Infrastructure Finance Limited' moved

before this Appellate Tribunal in Appeal No. 126/2019 wherein this

Appellate Tribunal held that 'M/s. SREI Infrastructure Finance Limited'

has no right to intervene at the stage of admission. However, allowed

'M/s. SREI Infrastructure Finance Limited' to file written submissions

not more than three pages before the Adjudicating Authority with

direction to the Adjudicating Authority to consider the same.

4. Before the Adjudicating Authority, 'M/s. SREI Infrastructure

Finance Limited' opposed the application only on the ground that they

also gave loan of Rs.136.50 Crore to the 'Corporate Debtor' on the basis

of the Business Transfer Agreement. However, such submission was not

accepted by the Adjudicating Authority.

5. Learned counsel for the Appellant contended that the claim of the

'IDBI Bank Limited' was considered by the 'Resolution Professional' in the

'Corporate Insolvency Resolution Process' which was initiated against

'Essar Steel India Limited' and was pending before the Adjudicating

Company Appeal (AT) (Insolvency) No. 666 of 2019 3

Authority. Therefore, according to learned counsel for the Appellant, for

the same claim amount the 'IDBI Bank Limited' cannot file application

under Section 7 against 'M/s. Odisha Slurry Pipeline Infrastructure

Limited'- ('Corporate Debtor').

6. The Adjudicating Authority rejected such submission in absence of

any record in support of such plea as was taken by 'M/s. SREI

Infrastructure Finance Limited' (not the present Appellant). The

Adjudicating Authority admitted the application under Section 7 by

impugned order dated 14th May, 2019 which is under challenge.

7. In the present appeal, the Appellant has taken similar plea as was

taken by 'M/s. SREI Infrastructure Finance Limited' before the

Adjudicating Authority. However, as we find that 'IDBI Bank Limited' had

also granted loan to the 'Corporate Debtor'- 'M/s. Odisha Slurry Pipeline

Infrastructure Limited', we hold that the application under Section 7 filed

by the 'IDBI Bank Limited' has been rightly admitted.

8. Similar plea was taken by the 'Corporate Debtor' that the 'IDBI

Bank' had filed its claim before the 'Resolution Professional' of 'Essar

Steel India Limited. However, from the record and the judgment passed

in 'Essar Steel India Limited', we find that no such claim was made by

'IDBI Bank Limited' in respect to the claim amount as shown against

'M/s. Odisha Slurry Pipeline Infrastructure Limited'- ('Corporate Debtor').

Company Appeal (AT) (Insolvency) No. 666 of 2019 4

9. The Appellant has enclosed a copy of 'Business Transfer

Agreement' between 'Essar Steel India Limited' and 'Odisha Slurry

Pipeline Infrastructure Limited'- ('Corporate Debtor') dated 27th February,

2015. From the said 'Business Transfer Agreement', it is clear that

'Odisha Slurry Pipeline Infrastructure Limited'- ('Corporate Debtor') was

treated as integral part for functioning of 'Essar Steel India Limited'.

However, the Agreement shows that the two entities i.e. 'Essar Steel India

Limited' and 'Odisha Slurry Pipeline Infrastructure Limited'- ('Corporate

Debtor') remained separate entities (companies) under the Companies

Act, therefore, separate application under Section 7 was maintainable

against 'Odisha Slurry Pipeline Infrastructure Limited'- ('Corporate

Debtor').

10. The application under Section 7 in Form 1 has also been enclosed

by the Appellant- 'SREI Multiple Asset Investment Trust', wherein the

details of loan taken by 'Odisha Slurry Pipeline Infrastructure Limited'-

('Corporate Debtor') has been shown. The Adjudicating Authority has also

noticed that the loan was taken by the 'Corporate Debtor' was not

refunded and the 'Corporate Debtor' defaulted to pay the debt, which is

not in dispute.

11. The 'Loan Agreement' dated 24th September, 2015 which was

reached between 'Odisha Slurry Pipeline Infrastructure Limited'-

('Corporate Debtor') and 'IDBI Bank Limited' also show that a sum of Rs.

400 Crores was borrowed by the 'Corporate Debtor' from 'Financial

Company Appeal (AT) (Insolvency) No. 666 of 2019 5

Creditor'. The terms of repayment have been shown therein. Admittedly,

the 'Corporate Debtor' has failed to pay the debt.

12. This apart, curiously, the Promoters/ Directors of the 'Odisha

Slurry Pipeline Infrastructure Limited'- ('Corporate Debtor') who are

aggrieved parties have not preferred any appeal under Section 61 of the

'I&B Code'. One of the 'Financial Creditors', namely-- 'SREI Multiple

Asset Investment Trust' (Appellant herein) has challenged the order of

admission under Section 7 who cannot be held to be an aggrieved person.

13. As no case has been made out by the Appellant, the appeal is

dismissed. No costs.

(Justice S.J. Mukhopadhaya) Chairperson

(Justice A.I.S. Cheema) Member(Judicial)

(Kanthi Narahari) Member(Technical) NEW DELHI

25th September, 2019

AR

Company Appeal (AT) (Insolvency) No. 666 of 2019