Indian Renewable Energy Development Agency Limited vs M/s. Noble Ispat & Energies Limited

O R D E R

I.A.No.276 of 2022:

I.A.No.565 of 2022:

I.A.No.591 of 2022:

a. This Hon’ble Tribunal vide its Order dt. 19.03.2021 in I.A. 454/ 2020 in C.P.(IB) 137/BB/2019 was pleased to approve the Resolution Plan dt. 06.10.2020 unanimously approved by the CoC in respect of the Corporate Debtor M/s. Noble Ispat & Energies Limited. The 3 most salient terms of this Hon’ble Tribunal’s Order sanctioning the Resolution Plan were as follows:

i.

Payments of Rs. 47.50 Crores as per the approved Resolution Plan were to be paid to the Financial Creditors

ii.

Infusion of Rs. 8 Crores as Working Capital and Rs. 30 Lakhs as CIRP Costs; &

iii.

Merger of the Corporate Debtor with the Resolution Applicant.

b. It is submitted that Condition No. (i) has been duly implemented and necessary No Dues Certificates have also been received from both M/s. Canara Bank as well as M/s. IREDA. All payments as contemplated to be paid have been made.

c. In respect of Condition No. (ii), necessary funds have been duly infused towards Working Capital and all CIRP Costs have been paid.

d. However, in respect of Condition No. (iii) only pending obligation to be implemented as per the approved Resolution Plan}, i.e., the contemplated Merger of the Resolution Applicant with the Corporate Debtor, it is submitted that the same faced 3 impediments, viz.:

e. The Ld. RoC Bengaluru refusing to implement this Hon’ble Tribunal’s Order dt. 19.03.2021 on account of the fact that the condition in the Plan approving Merger has not been specifically explicitly in Paragraph 8 of the Hon’ble Tribunal’s Operative Portion and had only been stated in Paragraph 3(I) of the Order which was only a brief overview of the proposed Resolution Plan.

f. Due to delay in obtaining NOC’s from Canara Bank and IREDA {nearly 10 months after the approval by this Hon’ble Tribunal}, the Satisfaction of such Charges could be uploaded on the MCA Portal only on 27.12.2021. Thus, until such time the RoC was not in a position to consider any such request for Merger. It was only after the Satisfaction of Charges was filed that the RoC considered the Application and thereafter did not take action in respect of the proposed Merger due to the reasons stated in the preceding paragraph.

g. Paragraph 3(I) of this Hon’ble Tribunal’s Order dt. 19.03.2021 is reproduced below for the sake of ready reference:

h. In light of the reasons stated above, the Ld. RoC stated that in the absence of a specific order by this Hon’ble Tribunal permitting and directing Merger of the Resolution Applicant with the Corporate Debtor, the RoC merely on the basis of the Order dt. 19.03.2021 was the only reason why despite implementation of all the commercial aspects of the Plan the procedural requirement of Merger could not be implemented by the Applicant despite its best efforts. All attempts and reliance upon this Hon’ble Tribunal’s Order dt. 19.03.2021 with the Ld. RoC, Bengaluru were in vain and thus the Applicant is constrained to file I.A. 565 of 2022 before this Hon’ble Tribunal seeking the approval of the Merger of the Resolution Applicant with the Corporate Debtor.

i.

As this Hon’ble Tribunal was pleased to allow the Resolution Plan on 19.03.2021, the term for implementation of the said Plan was a period of 1 year from such date, i.e. on or before 18.03.2022.

j. Thus, there is no delay in making any payments as per the terms of the Plant or implementing all the conditions prescribed under the plan except for the proposed Merger of M/s. SLD Steels Private Limited with M/s. Noble Ispat & Energies Limited. Further, no person is aggrieved by the delay in implementing the condition regarding the Merger of the Resolution Applicant with the Corporate Debtor.

k. Therefore, this Hon’ble Tribunal in exercise of its powers under S. 60(5) of the I&B Code 2016 read with Rule 11 of the NCLT Rules is fully empowered to pass the Reliefs sought for in the instant I.A. in the interest of Implementation of the Resolution Plan as unanimously approved by the CoC on 06.10.2020 and as duly sanctioned by the Hon’ble Tribunal on 19.03.2021.

l. In the matter of Glix Securities Private Limited {Order dt. 14.06.2021 in IA(IB) 496/KB/2021 in CP(IB) No. 1724/KB/2018}, the Hon’ble Adjudicating Authority, Kolkata was pleased to extend the time period for implementing the terms of the Plan by placing reliance upon Rule 15 of the NCLT Rules 2016:

9.

There is no specific provision in the Insolvency & Bankruptcy Code, 2016, that specifies what should be done in cases where a successful resolution applicant applies to the court for extension of timelines either on account of force majeure circumstances or otherwise. Further, once a resolution plan has been approved by the adjudicating authority, the Committee of Creditors (CoC) ceases to exist. Therefore, there is no way that the Adjudicating Authority can direct the CoC to consider the request. It is upto the Adjudicating Authority to find a way out in such circumstances, by invoking rule 15 of the National Company Law Tribunal Rules, 2016.

m. In the present case, the Applicant is not seeking further time for making any payments to any persons. The Applicant is only seeking extension of time in I.A. 276 of 2022 and Condonation of Delay in I.A. 591 of 2022 due to the procedural delays before the Ld. RoC Bengaluru for reasons beyond its Control. Further, the Merger which was a part of the Resolution Plan and has already been approved by this Hon’ble Tribunal’s Order could not be implemented by the RoC only on account of the Fact that the RoC required specific directions from this Hon’ble Tribunal {for which I.A. 565 of 2022 has been duly filed}.

n. Without prejudice to the above, it is submitted that the Hon’ble Supreme Court in Suo Moto Writ Petition (C) No. 3 of 2020 vide Order dt. 10.01.2022 had inter-alia directed as follows:

It is further clarified that the period from 15.03.2020 till 28.02.2022 shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings.

“I.A.No.565 of 2022:

….3. During the course of hearing, ld. Counsel for the Applicant stated that the Resolution plan proposed the scheme of merger of the Corporate Debtor with the successful resolution Applicant. However, in the operative portion of the approval of Resolution Plan passed by this adjudicating Authority vide Order dated 19.03.2021 in I.A.No.454 of 2020, approval regarding the said Merger is not mentioned and further informed that ROC cannot implement the said order approving the plan, as there is no specific direction for the merger by this Adjudicating Authority. He further stated that he has filed common additional written submissions to I.A.Nos.276, 565 and 591 of 2022 vide Diary No.1154 dated 28.02.2023. The same is taken on record”.

i). As stated in the Written Submissions already filed before this Tribunal, Condition No’s (i) and (ii) have been duly implemented and I.A. 565 of 2022 has been filed by the Applicant before this Tribunal for duly sanctioning the Merger of the Successful Resolution Applicant with the Corporate Debtor.

ii). In the Corporate Insolvency Resolution Process of M/s. Synergies Dooray Automotive Limited, the Hon’ble NCLT Hyderabad vide an Order dt. 2^nd August 2017 was pleased to approve a Resolution Plan which proposed the Merger of the Corporate Debtor and the Successful Resolution Applicant as per the terms of the Plan. When an Appeal was filed before the Hon’ble National Company Law Appellate Tribunal, the Hon’ble NCLAT confirmed the said Order of the Hon’ble NCLT Hyderabad. In doing so, the relevant operative portion of the said Order is reproduced below for the sake of ready reference:

“71.

Section 230 of the Companies Act, 2013 relates to ‘power to compromise or make arrangements with creditors and members’ whereas Section 232 relates to ‘merger and amalgamation of companies’. The question of filing an application before the National Company Law Tribunal under Sections 230-232, does not arise at the stage of filing of the ‘Resolution Plan’ as it is not known as to which of the ‘Resolution Plan’ will be approved. Once a plan is approved, one may argue that in terms of the provisions of the Companies Act, a formal order of amalgamation is required. No such argument can be advanced at the time of approval of the ‘Resolution Plan’ which merely proposes merger. approved.

72.

The ‘I&B Code’ is a code by itself and Section 238 provides over riding effect of it over the provisions of the other Acts, if any of the provisions of an Act is in conflict with the provisions of the ‘I&B Code’. Therefore, the arguments of the Appellant that merger and amalgamation of the companies cannot be proposed in the ‘Resolution Plan’ or such proposal is violative of clause (e) of sub-section (2) of Section 30 is fit to be rejected.

73.

In view of the aforesaid findings and in absence of any merit, we dismiss these appeals. No cost.”

iii). The facts in the above Appeal before the Hon’ble Appellate Tribunal are identical to the instant case, as the Resolution Plan containing the Merger has been duly approved by this Hon’ble Tribunal vide its Order dt. 19.03.2021 in I.A. 454/2020 in CP(IB) 137/BB/2019, consequent to which all other conditions of the Resolution Plan except for Merger have been duly complied with and as the last compliance, I.A. 565 of 2022 has been duly filed for Approval of the Merger {as envisaged by the Hon’ble Appellate Tribunal in the last line of Paragraph 71 of the above Judgment}.

iv). Further, in a Landmark Judgment of the Hon’ble NCLT Chennai Bench dt 3^rd February 2023 {In the matter of Vasan Health Care Private Limited} approving the Resolution Plan containing provisions for Merging the Successful Resolution Applicant M/s. ASG Hospital Private Limited’s Special Purpose Vehicle (SPV) viz. M/s. ASG Eye Hospital Ventures Private Limited with the Corporate Debtor M/s. Vasan Health Care Private Limited. The relevant extract of the said Judgment duly sanctioning the Resolution Plan proposing Merger of the Corporate Debtor with the Successful Resolution Applicant’s Special Purpose Vehicle (SPV) is reproduced below for the sake of ready reference:

v). Thus, it is clearly evident that the Hon’ble National Company Law Tribunal, while exercising its Powers u/s. 30 of the I&B Code, 2016 as the ‘Adjudicating Authority’ is duly competent to approve a Resolution Plan proposing Merger/Amalgamation as per the terms of the Resolution Plan. Thereafter, the Hon’ble National Company Tribunal, while exercising its Powers under the Companies Act, 2013 is duly competent to formally approve the Scheme of Merger {as laid down by the Hon’ble NCLAT in Paragraph 71 of the NCLAT’s Order in Synergies Dooray} under the provisions of Sections 230-232 of the Companies Act, 2013.

vi). In the event the IA’s are not sanctioned, all efforts since 19.03.2021 by the Successful Resolution Applicant to implement the terms of the Plan would be in vain and it is most necessary and expedient that the IA’s be allowed by this Hon’ble Tribunal for the implementation of the Resolution Plan already sanctioned on 19.03.21.

vii). It is thus prayed that as I.A. 276 of 2022, I.A. No. 565 of 222 and I.A. 591 of 2022 all pertain to extension of time and successful implementation of the Resolution Plan of M/s. Noble Ispat & Energies Limited, it is humbly prayed that I.A. No. 276 of 2022 and I.A. 591 of 2022 may be formally allowed and I.A. 565 of 2022 for Merger of the Resolution Applicant with the Corporate Debtor may be sanctioned by this Tribunal in the interest of Justice.