M/s Orbis Trusteeship Services Private Limited vs Kindle Infraheights Private Limited

ORAL ORDER

“(A)

The Company is currently engaged in the construction of a residential housing project bearing the name "Sikka Kaamna Greens" (Company Project) situated at Plot No. GH-03/B, Sector-143, NOIDA (admeasuring 50,000 square metres) (Company Project Land) allotted to the Company by NOIDA on a leasehold basis vide lease deed dated 7 July 2011 entered into between the Company and NOIDA (Company Lease Deed).

(B)

The authorised, issued, subscribed and paid-up share capital of the Company as on the Execution Date is INR 1,00,000 (Indian Rupees One Lakh only) divided into 10,000 (Ten Thousand only) equity shares of INR 10 (Indian Rupees Ten only) each.

(C)

The Company is an entity forming part of the Sikka Group, a partial structure chart of which, as on the Execution Date, is annexed along with this Deed as Part A of Annexure 1 (Sikka Group Structure Chart).

(D)

Pursuant to a debenture trust deed dated 27 June 2019 (Original Debenture Trust Deed) entered into among, inter alia, the Company and Orbis Capital Limited, a public unlisted company incorporated under the Companies Act, 1956 having CIN U74991HR2006PLC036951 and registered with the Securities and Exchange Board of India as a debenture trustee under the Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993 pursuant to a certificate of permanent registration no. IND000000587, and others, the Issuer has, in accordance with the Offer Letter dated June 27, 2019 issued and allotted 13,000 (Thirteen Thousand only) secured, unlisted, redeemable, freely Transferable (defined below) non- convertible debentures of a face value of INR 1,00,000 each (Indian Rupees One Lakh only) aggregating to INR 130,00,00,000 (Indian Rupees One Hundred and Thirty Crores only) (Debentures) on the terms and conditions set out under the Original Debenture Trust Deed (Issue).

(E)

The Company is duly empowered by its memorandum of association and articles of association to issue the Debentures, and issued the Debentures pursuant to:

(i)

the authority granted by the resolutions of its board of directors passed at its meeting held on June 21, 2019, authorising the issuance of the Debentures; and

(ii)

the approval of its shareholders in terms of the resolution passed under Section 42 of the Act, read with Rule 14(2) of the Companies (Prospectus and Allotment of Securities) Rules, 2014 at their extraordinary general meeting held on June 27, 2019;

(F)

The proceeds from the Issue were utilized by the Company in accordance with the terms of the Original Debenture Trust Deed.”

“2. APPOINTMENT OF THE DEBENTURE TRUSTEE AND SETTLEMENT OF TRUST

2.1 Appointment of Debenture Trustee

The Company hereby appoints Orbis Trusteeship Services Private Limited to act as the debenture trustee for and on behalf of the Debenture Holders pursuant to the trust created and settled under this Deed, the Scheme, and the OFCL Board Resolution, and Orbis Trusteeship Services Private Limited agrees to act as the debenture trustee for and on behalf of the Debenture Holders in accordance with the provisions of this Deed and any other Amended and Restated Transaction Document, subject to Clause 11.10, until the Final Settlement Date. Notwithstanding anything contained herein, the Parties agree that from the Execution Date until, subject to Clause 11.10, the Final Settlement Date, the Debenture Trustee shall act for and on behalf of, for the benefit of the Subscribers or the Debenture Holders, as the case may be, and take such actions, in connection with the Amended and Restated Transaction Documents, as the Debenture Holders (by way of Majority Resolution, Special Resolution or Unanimous Resolution (as applicable)) or all of the Subscribers, as the case may be, direct.

2.2 Declaration and Settlement of Trust

(a)

The Company hereby settles upon trust a sum of INR 10,000 (Indian Rupees Ten Thousand only) (Initial Contribution) and the Debenture Trustee hereby confirms receipt of and accepts the Initial Contribution.

(b)

The Debenture Trustee hereby declares that it shall hold:

(i)

the Initial Contribution;

(ii)

the benefit of all representations, warranties, covenants, undertakings made by and all other terms agreed by the Obligors and the Subordinated Creditors under the relevant Transaction Documents and the relevant Amended and Restated Transaction Documents;

(iii)

the Security created and maintained hereunder and under the other Transaction Documents and the Amended and Restated Transaction Documents; and

(iv)

all monies received by it under the Transaction Documents or the Amended and Restated Transaction Documents, including pursuant to enforcement of the Security created hereunder and under the Security Documents, the Amended Security Documents (or any part thereof) and/or the exercise of rights and remedies under the Transaction Documents (acting on the instructions of the Debenture Holders by way of Majority Resolution) or the Amended and Restated Transaction Documents (acting on the instructions of the Debenture Holders by way of Majority Resolution) save for any sums received solely for its own account in accordance with the provisions of this Deed, in trust for the benefit of the Debenture Holders in accordance with the provisions of the Amended and Restated Transaction Documents.

2.3 Non-Revocable Trust

Subject to Clause 11.10, the Company declares that it shall not revoke the trust hereby declared until the date of release of Security by the Debenture Trustee in accordance with Clause 31 (Covenant for Release of Security).

3. ACCEPTANCE OF TRUST BY DEBENTURE TRUSTEE

3.1.

The Debenture Trustee hereby declares that it shall take such actions as may be provided in this Deed for the benefit of the Debenture Holders.

3.2.

For the irrevocable and unconditional discharge of the Secured Obligations by the Obligors, the Debenture Trustee shall, for the benefit of the Debenture Holders take such actions as may be required from time to time, in accordance with, or arising out of, the provisions of the Transaction Documents or the Amended and Restated Transaction Documents, to exercise its rights and perform its duties and obligations under the Transaction Documents or the Amended and Restated Transaction Documents and Applicable Law (acting on the instructions of the Debenture Holders by way of Majority Resolution, Special Resolution or Unanimous Resolution (as applicable)).

3.3.

Subject to Clause 6.6 and Clause 11.10, the Debenture Trustee declares that it shall not revoke the trust hereby declared until the date of release of Security by the Debenture Trustee in accordance with Clause 3) (Covenant for Release of Security).

4. POWERS AND OBLIGATIONS OF THE DEBENTURE TRUSTEE

4.1.

The Debenture Trustee hereby agrees that it shall:

(a)

execute and deliver all other documents, agreements, instruments and certificates contemplated by this Deed or any other Transaction Document or any other Amended and Restated Transaction Document to be executed and delivered by the Debenture Trustee or as the Debenture Trustee shall deem advisable and in the best interests of the Debenture Holders (acting on the instructions of the Debenture Holders by way of Majority Resolution);

(b)

execute and deliver documents as are required to be executed by the Debenture Trustee, to keep in its custody, the documents, deeds and writings in relation to the Security and do any other act necessary for creation and perfection of the Security Interests under the Security Documents or the Amended and Restated Security Documents, Without prejudice to the above, the Debenture Trustee may (acting on the instructions of the Debenture Holders by way of Majority Resolution) allow any bank or other institution providing safe custody services or any professional provider of custody services to retain any of those documents in its possession;

(c)

accept the Security until the Final Settlement Date;

(d)

ensure on a continuous basis that the Security is, at all times, until the Final Settlement Date, available and adequate to discharge the Secured Obligations,

(e)

enforce the Security Interests created under the Security Documents and any other rights accruing to the Debenture Holders upon occurrence of an Event of Default or otherwise, in accordance with the provisions of the Transaction Documents, the Amended and Restated Transaction Documents, and Applicable Law and to receive and disburse all monies received from such enforcement in accordance with the relevant Transaction Documents and the Amended and Restated Transaction Documents;

(f)

monitor and require, from time to time, compliance by the Obligors and Subordinated Creditors with the terms, conditions and covenants contained in the Transaction Documents and the Amended and Restated Transaction Documents, and apprise the Debenture Holders of any non-compliance by the Obligors and/or the Subordinated Creditors, with respect to the Transaction Documents or the Amended and Restated Transaction Documents within 1 (One) Business Day of becoming aware of such non-compliance;

(g)

inspect the statutory registers of the Company and to take copies and extracts in the course of such inspection;

(h)

until the occurrence of an Event of Default, act as the authorised signatory of each of the Escrow Accounts in addition to and jointly with authorised representative(s) of the Company, GPPL and NBPL respectively, and deal with the monies lying to the credit of the Escrow Accounts for and on behalf of the Debenture Holders in accordance with the provisions of this Deed and the Amended and Restated Escrow Agreement (acting on the instructions of the Debenture Holders by way of Majority Resolution);

(i)

upon the occurrence of an Event of Default, promptly issue necessary instructions to the Account Bank in accordance with the Amended and Restated Escrow Agreement intimating the Account Bank of such occurrence and requiring the Account Bank to appoint it as the sole authorised signatory of the Escrow Accounts, and deal with the monies lying to the credit of the Escrow Accounts for and on behalf of the Debenture Holders in accordance with the provisions of this Deed and the Amended and Restated Escrow Agreement (acting on the instructions of the Debenture Holders by way of Majority Resolution);

(j)

until the occurrence of an Event of Default, act as the authorised signatory of each of the IndusInd Debenture Trustee Escrow Accounts, and deal with the monies lying to the credit of the IndusInd Debenture Trustee Escrow Accounts for and on behalf of the Debenture Holders in accordance with the provisions of this Deed and the Amended and Restated IndusInd Escrow Account Agreement (acting on the instructions of the Debenture Holders by way of Majority Resolution);

(k)

upon the occurrence of an Event of Default, promptly issue necessary instructions to IndusInd Bank in accordance with the IndusInd Escrow Account Agreement or the Amended and Restated IndusInd Escrow Account Agreement and Applicable Law intimating IndusInd Bank of such occurrence and requiring IndusInd Bank to appoint it or its nominee (including an existing key managerial personnel of the Company, GPPL, or NBPL, as the case may be) as the sole authorised signatory of the IndusInd Escrow Accounts, and deal with the monies lying to the credit of the IndusInd Escrow Accounts for and on behalf of the Debenture Holders in accordance with the provisions of this Deed, Applicable Law, IndusInd Escrow Account Agreement or the Amended and Restated IndusInd Escrow Account Agreement (acting on the instructions of the Debenture Holders by way of Majority Resolution);

(l)

upon the occurrence of an Event of Default, promptly issue necessary instructions to the Account Bank in accordance with the Trust and Retention Account Agreement or the Amended and Restated Trust and Retention Account Agreement intimating the Account Bank of such occurrence and requiring the Account Bank to appoint it as the sole authorised signatory of the accounts established and maintained pursuant to the Trust and Retention Account Agreement and the Amended and Restated Trust and Retention Account Agreement, and deal with the monies lying to the credit of such accounts for and on behalf of the Debenture Holders in accordance with the provisions of this Deed, the Trust and Retention Account Agreement, and the Amended and Restated Trust and Retention Account Agreement (acting on the instructions of the Debenture Holders by way of Majority Resolution);

(m)

communicate to the Debenture Holders all information provided by the Obligors and/or Subordinated Creditors pursuant to Part A (Information Covenants) of Schedule 8 (Information, Financial and Negative Covenants) hereof within 2 (two) Business Days of receipt of such information from the Obligors and/or the Subordinated Creditors, as the case may be, in accordance with the timelines prescribed for each such covenant;

(n)

refrain from any acts and avoid any omissions which might prejudice the value or the validity of the rights and the Security constituted under the Transaction Documents or the Amended and Restated Transaction Documents;

(o)

perform all such acts, deeds and things which the Debenture Trustee may from time to time deem necessary or appropriate for or incidental to the management and administration of the rights vested in it as the Debenture Trustee, pursuant to or in connection with the Transaction Documents (including, without limitation, executing any amendments or re-statements or re-executing the Transaction Documents) or the Amended and Restated Transaction Documents (including, without limitation, executing any amendments or re-statements or re-executing the Amended and Restated Transaction Documents); and

(p)

subject to the terms and provisions of this Deed, take such other action in connection with the foregoing as the Debenture Holders may from time to time direct by way of Majority Resolution.

Provided that, before initiating any action or exercising any right or performing any duty or incurring or imposing any obligations under this Deed or any other Transaction Document or any other Amended and Restated Transaction Document, including approving any form of payment from any of the Escrow Accounts or the IndusInd Escrow Accounts, the Debenture Trustee shall seek prior written instructions from the Debenture Holders by way of Majority Resolution, Special Resolution or Unanimous Resolution (as applicable) and only upon receipt of such instructions shall the Debenture Trustee exercise its rights and perform its duties in accordance with such instructions. In the event that no threshold (i.e. whether an action requires a Majority Resolution, Special Resolution or Unanimous Resolution) has been set for initiating any action or exercising any right or performing any duty under this Deed or any other agreement, the Debenture Trustee should seek instructions from the Debenture Holders by way of Majority Resolution.

4.2.

The powers conferred by each of the Transaction Documents and each of the Amended and Restated Transaction Documents in favour of the Debenture Trustee are cumulative and without prejudice to its respective powers under Applicable Law, equity or under any other Transaction Document or any other Amended and Restated Transaction Document. Subject to Clauses 4.1, the duties and powers of the Debenture Trustee listed above may be performed or exercised as often as the Debenture Trustee deems fit, and the Debenture Trustee may, in connection with the exercise of its powers, join or concur with any Person in any transaction, scheme or arrangement, and the Company acknowledges that the respective powers of the Debenture Trustee shall, in no circumstances, be suspended, waived or otherwise prejudiced by anything.

4.3.

For the avoidance of doubt, the Debenture Trustee shall, before granting any waiver under this Deed or any other Transaction Document or any other Amended and Restated Transaction Document, seek prior approval from the Debenture Holders by way of a Majority Resolution.

4.4.

The Debenture Trustee may act through its personnel and employees and may, with prior approval from the Debenture Holders by way of a Majority Resolution, delegate by power of attorney or otherwise to any Person(s) (whether being a joint trustee or not) all or any of the trusts, powers and authorities vested in it by this Deed, any Transaction Document, any Amended and Restated Transaction Document or any document relating to any of them and such delegation may be made upon such terms and subject to such conditions and subject to such regulations as the Debenture Holders think fit after having due regard to the nature of trusts, powers or authorisations it proposes to delegate,”

“5. ORIGINAL PRINCIPAL AND PURPOSE

5.1. Original Principal

The Debentures constituted and issued under the terms of the Original Debenture Trust Deed and the Offer Letter are secured, unlisted, redeemable, freely Transferable non-convertible debentures of a face value of INR 1,00,000 (Indian Rupees One Lakh only) each, aggregating to INR 130,00,00,000 (Indian Rupees One Hundred and Thirty Crores only), issued on a private placement basis, in dematerialized form.

5.2. Purpose

The entire Original Principal has been utilised/shall be utilised by the Company for the following purposes (collectively, the "Purpose"):

(a)

for paying the IndusInd Outstanding Amount to IndusInd Bank as full repayment and settlement of the IndusInd Facility, including any interests, Taxes or charges applicable thereto, on the Deemed Date of Allotment;

(b)

for paying the Processing Fee to the Subscriber(s) on the Deemed Date of Allotment;

(c)

for paying the Company Reschedulement Application Amount or such other amount as may be approved by the Debenture Trustee (acting on the instructions of the Debenture Holders by way of Majority Resolution) to NOIDA on the Deemed Date of Allotment along with submission of the Company Reschedulement Application;

(d)

for paying the NBPL. Reschedulement Application Amount to NOIDA, for and on behalf of NBPL, along with submission of the NBPI. Reschedulement Application by NBPL, subject to prior approval from the Debenture Trustee (acting on the instructions of the Debenture Holders by way of Majority Resolution);

(e)

for paying the Company Reschedulement Amount and NBPL Reschedulement Amount (net of the Company Reschedulement Application Amount and NBPL Reschedulement Application Amount, respectively) to NOIDA immediately upon receipt of and in accordance with the Reschedulement Approval; and

(f)

any balance thereof for paying the expenses incurred, being incurred or to be incurred with respect to construction of Phase I and Phase II.

It is clarified that, any collection/remittance charges in connection with the Original Principal being received by the Company in the Company Escrow Account shall be borne entirely by the Company. It is further clarified that the Company shall not (a) utilise the Original Principal or any part thereof for construction of Phase III or Phase IV, or (b) permit utilisation of the Original Principal or any part thereof for any purpose other than those expressly set out in this Clause 5.2 (Purpose) unless otherwise approved by the Debenture Trustee (acting on the instructions of the Debenture Holders by way of Majority Resolution).

6. CONDITIONS TO SUBSCRIPTION

6.1.

Subscription to the Issue by the Subscribers is subject to fulfilment of each of the requirements set out in Schedule 6 (Conditions Precedent) (Conditions Precedent) in form and substance satisfactory to the Debenture Trustee (acting on the instructions of all of the Subscribers).

6.2.

The Obligors shall procure that each of the Conditions Precedent is fulfilled by the relevant Obligor no later than within 7 (seven) Business Days from June 27, 2019 (Long Stop Date).

6.3.

Upon satisfaction of all of the Conditions Precedent, the Company shall issue a written notice to the Debenture Trustee (CP Satisfaction Notice) of the satisfaction of such requirements, in the form set out in Part B (Format of CP Satisfaction Notice) of Schedule 3 (Formats).

6.4.

If the Debenture Trustee (acting on the instructions of all of the Subscribers) is not satisfied with the fulfilment of any of the Conditions Precedent, it shall provide written notice thereof to the Company and the Company may re-send the notice under Clause 6.3 above after complying with such requirements within 2 (Two) Business Days (or such further time as may be approved by the Debenture Trustee (acting on the instructions of all of the Subscribers)) of receiving such notice.

6.5.

Each of the Obligors and the Subordinated Creditors hereby covenants and undertakes to take all actions and exercise all rights and powers available to it to give full effect to the provisions of the Transaction Documents, including its obligations under or with respect to any Transaction Documents.

6.6.

If:

(a)

at any time on or after the Execution Date and prior to the Closing Date:

(i)

any Change in Shareholding occurs;

(ii)

the Company, GPPL and/or NBPL cease to have any right, title or interest in (or part thereof) or peaceful possession of the Company Project Land, GPPL, Project Land or the NBPL Project Land, as the case may be, or any part thereof;

(iii)

any of the Obligors or the Subordinated Creditors are in breach of the terms of the Original Debenture Trust Deed or any other Transaction Document; or

(iv)

any insolvency resolution proceedings are initiated against any of the Obligors or Subordinated Creditors under the IBC, whether by IndusInd Bank or any other third party;

(v)

any litigation is commenced, threatened or continuing against any Obligor or Subordinated Creditors that in the sole opinion of the Debenture Trustee (acting on the instructions of all of the Subscribers) leads to or could potentially lead to a Material Adverse Effect, save for the proceedings listed out in Annexure 3 (Litigation Proceedings in relation to the Company) to this Deed; or

(vi)

any Material Adverse Effect occurs; or

(b)

any of the Conditions Precedent are not satisfied or waived by the Debenture Trustee (acting on the instructions of all of the Subscribers) within the Long Stop Date, the Debenture Trustee (acting on the instructions of all of the Subscribers) may, by notice to the Company, terminate this Deed without prejudice to the Subscribers' rights with respect to such breach or a prior breach of the terms of this Deed by any of the Obligors.

7. SUBSCRIPTION

7.1.

Subject to Clause 6.4 and Clause 6.6, Closing shall occur within 7 (seven) Business Days from the date of receipt of the CP Satisfaction Notice by the Debenture Trustee (Closing Commencement Date).

7.2.

On and from the Closing Commencement Date, the Parties shall observe and perform their respective obligations set out in Schedule 2 (Closing Actions) in the sequence set out therein. The Parties agree to take all reasonable measures required to ensure that all the events contemplated in Schedule 2 (Closing Actions) are completed on the Closing Commencement Date or within 3 (Three) Business Days thereafter or such longer period as the Debenture Trustee may approve (acting on the instruction of all of the Subscribers). All actions referred to in Schedule 2 (Closing Actions) shall be, and shall be deemed to be, consummated simultaneously and no actions shall be deemed to have been taken nor documents executed or delivered and no agreements and/or deeds and/or documents shall be deemed to have come into effect until all have been taken, executed, delivered and have come into effect (except the Security Documents, each of which shall have come into effect from the Reference Date and shall continue to remain in effect until the Final Settlement Date).

8. CONDITIONS SUBSEQUENT

8.1.

Upon Closing, the Company shall, unless otherwise approved by the Debenture Trustee in writing (acting on the instructions of the Debenture Holders by way of Majority Resolution):

(a)

within 5 (five) calendar days from the Reference Date, obtain insurance coverage of adequate value from financially sound and reputed insurers satisfactory to the Debenture Trustee (acting on the instructions of the Debenture Holders by way of Majority Resolution), with respect to each of the Projects, with the Debenture Trustee as the loss payee under each of those insurance policies;

(b)

within 7 (seven) calendar days from the Reference Date:

(i)

ensure that the Debentures are credited into the demat account(s) of the Subscriber(s);

(ii)

along with GPPL and NBPL, close each of the Existing Accounts and transfer of all monies lying to the credit of each of the Existing Accounts (as set out in Annexure 2 (List of Existing Accounts)) to the respective Escrow Accounts;

(iii)

obtain the Reschedulement Approval with respect to Company's NOIDA Outstanding Dues;

(iv)

along with GPPI., issue notices to all the existing customers of the Company Project and the GPPL Project specifying the details of the Company Escrow Account and the GPPL Escrow Account and notifying the customers that any payments in relation to the Units allotted to such customers should henceforth be made into the Company Escrow Account or the GPPL Escrow Account, as the case may be;

(v)

amend the standard Unit allotment documents for the potential customers of the Company Project and the GPPI. Project in a form acceptable to the Debenture Trustee (acting on the instructions of the Debenture Holders by way of Majority Resolution);

(c)

within 15 (fifteen) calendar days from the Reference Date, along with GPPL and NBPL, notify UP RERA of the closure of the Existing Accounts and setting up of the Escrow Accounts for its records;

(d)

within 30 (thirty) calendar days from the Reference Date:

(i)

implement and fulfil the terms and conditions set out in the Reschedulement Approval and obtain NOIDA's approval for creating Security Interest over the Company Project Land;

(ii)

obtain approval from NOIDA for extending the time period for construction of the Company Project along with the building plan and commencement certificate;

(iii)

obtain approval from UP RERA for extending the period of registration of the Company Project;

(iv)

along with all the Pledgors, complete the process of dematerialisation of all the Pledged Shares (other than the shares of the Company which shall be in dematerialised form prior to the Closing Commencement Date) in a form and manner acceptable to the Debenture Trustee (acting on the instructions of the Debenture Holders by way of Majority Resolution) and deliver to the Debenture Trustee copies of the Pledge Forms and Pledge Reports submitted to the Depository and the intimation received from the Depository confirming (i) the creation and the noting of the pledge over all of the Pledged Shares held by them in favour of the Debenture Trustee (for the benefit of the Secured Parties); and (ii) the transfer of all of the Pledged Shares held by them from the "free balances" to the "pledged balances" of their respective demat accounts; and

(e)

within 90 (ninety) calendar days from Reference Date:

(i)

take all actions and exercise all rights and powers available to it under Applicable Law and consent of the relevant allottees:

(A)

to allot fresh unsold Units in Phase I and Phase II to all allottees of sold Units in Phase III and Phase IV as on the Execution Date against the sold Units allotted to such allottees in Phase III and Phase IV (Unit Swap); and

(B)

make appropriate changes in its books of accounts to record the Unit Swap, subject to prior approval of the Debenture Trustee (acting on the instructions of the Debenture Holders by way of Majority Resolution); and

(ii)

obtain all relevant licenses/approvals required to be obtained by it with respect to the Company Project revised by the relevant Governmental Authority to reflect the correct Company Project Land specifications, and provide documentary evidence of having complied with each of the above covenants (within the time period prescribed for the respective covenants) to the Debenture Trustee in form and substance satisfactory to the Debenture Trustee (acting on the instructions of the Debenture Holders by way of Majority Resolution).

8.2 NBPL Reschedulement

(a)

Within 30 (Thirty) calendar days from the Reference Date, NBPL shall deliver to the Debenture Trustee a certified true copy of the letter received from NOIDA confirming the NBPL. Reschedulement Application Amount.

(b)

Upon receipt of the letter mentioned in Clause 8.2(a):

(i)

NBPL. shall convene and conduct a meeting of its board of directors to approve the submission of the NBPL Reschedulement Application along with the NBPL Reschedulement Application Amount to NOIDA and record the payment of the NBPL. Reschedulement Application Amount to NOIDA by the Company on behalf of NBPL;

(ii)

the Company, subject to receipt of Debenture Trustee's prior approval (acting on the instructions of the Debenture Holders by way of Majority Resolution), pay the NBPL Reschedulement Application Amount to NOIDA on behalf of NBPL in accordance with the provisions of this Deed and the Escrow Agreement; and

(iii)

NBPL shall submit the NBPL Reschedulement Application with NOIDA and provide a duly acknowledged copy of the NBPL Reschedulement Application to the Debenture Trustee.

(c)

Upon receipt of the Reschedulement Approval with respect to NBPL's NOIDA Outstanding Dues, NBPL shall forthwith implement and fulfil the terms and conditions set out in the Reschedulement Approval and obtain NOIDA's approval for creating Security Interest over the NBPL Project Land.

8.3

Within 60 (Sixty) calendar days from the Reference Date, (a) GPPL shall obtain and provide to the Debenture Trustee a duly acknowledged copy of NOIDA's approval for creating Security Interest over the GPPL Project Land, and (b) the Debenture Trustee shall duly date and execute all Mortgage Documents in respect of the GPPL. Project Land required for creating and perfecting such Security Interest over the GPPL Project Land.”

“4. POWERS AND OBLIGATIONS OF THE DEBENTURE TRUSTEE

4.1.

The Debenture Trustee hereby agrees that it shall:

…..

(h)

until the occurrence of an Event of Default, act as the authorised signatory of each of the Escrow Accounts in addition to and jointly with authorised representative(s) of the Company, GPPL and NBPL respectively, and deal with the monies lying to the credit of the Escrow Accounts for and on behalf of the Debenture Holders in accordance with the provisions of this Deed and the Escrow Agreement (acting on the instructions of the Debenture Holders by way of Majority Resolution);

…..

(m)

…..

Provided that, before initiating any action or exercising any right or performing any duty or incurring or imposing any obligations under this Deed or any other Transaction Document including approving any form of payment from any of the Escrow Accounts, the Debenture Trustee shall seek prior written instructions from the Debenture Holders by way of Majority Resolution, Special Resolution (as applicable) and only upon receipt of such instructions shall the Debenture Trustee exercise its rights and perform its duties in accordance with such instructions. In the event that no threshold (i.e. whether an action requires a Majority Resolution, Special Resolution or Unanimous Resolution) has been set for initiating any action or exercising any right or performing any duty under this Deed or any other agreement, the Debenture Trustee should seek instructions from the Debenture Holders by way of Majority Resolution.”

“14....

…..In our view, the judgment under challenge is liable to be set aside because the respondent had not produced any evidence to prove that Shri Ashok K. Shukla was appointed as a Director of the company and a resolution was passed by the Board of Directors of the company to file suit against the appellant and authorised Shri Ashok K. Shukla to do so. The letter of authority issued by Shri Raj K. Shukla, who described himself as the Chief Executive Officer of the company, was nothing but a scrap of paper because no resolution was passed by the Board of Directors delegating its powers to Shri Raj K. Shukla to authorise another person to file suit on behalf of the company.”

X X X

“70.

Suffice is for this Tribunal to pertinently point out that the Power of Attorney Holder is the Agent of the Guarantor and in respect of an authorisation of a company, the same will mean a specific authorisation by the Board of Directors of the Company through a Resolution being passed as per decision of the Hon'ble Supreme Court in State Bank of Travancore V. Kingston Computer India Fyi Ltd. reported in MANU/SC/0280/2011: (2011) 11 SCC 524.”

“27.03.2023 This appeal is directed against the order dated 02.06.2022 passed by the ‘Adjudicating Authority’ (National Company Law Tribunal, New Delhi Bench) in (I.B.) 143 (ND)/2022 by which an application filed under Section 7 by the Appellant (Orbis Trusteeship Service Pvt. Ltd.) as a Debenture Trustee on behalf of the Debenture Holders, for the Resolution of a debt of Rs. 255,07,26,925/- as on 02.02.2020 against Nobal Buildtech Private Ltd. (Corporate Debtor) has been dismissed on the ground that the application filed at the instance of the Appellant was not maintainable as the amount was not disbursed by the Appellant but by the Debenture Holders.

2.

Senior Counsel for the Appellant has drawn our attention to Form-1 (available at Pg. 913, Volume-V) in which it is averred that Asia Pragati Strategic Investment Fund is the Debenture Holder, Nobal Buildtech Private Limited is the Corporate Debtor and Kindle Infraheights Pvt. Ltd. had issued the debentures. The Appellant is the Debenture Trustee for the benefit of the Debenture Holders.

3.

Since the issue involved in this case is in a very narrow compass that is as to whether the application under Section 7, preferred at the instance of the Appellant being the Debenture Trustee is maintainable or not, Counsel for the Appellant has drawn our attention to a notification dated 27.02.2019 issued by the Ministry of Corporate Affairs as per which the Trustee (including Debenture Trustee) can file an application on behalf of the Financial Creditor. The said notification is reproduced as under:-

4.

Counsel for the Respondent has been fair enough to concede about the existence of the aforesaid notification.

5.

Thus, in view of the aforesaid facts and circumstances, the issue is no more res-integra because of the notification dated 27.02.2019.

6.

In view of the aforesaid facts and circumstances the present appeal is thus allowed. The ‘impugned order’ is set aside. The matter is remanded back to the ‘Adjudicating Authority’ to decide the case on merits. The parties are directed to appear before the ‘Tribunal’ on 1^st May, 2023.

7.

It is needless to mention that the Tribunal shall to decide the matter between the parties expeditiously.”

“3.2 Operation of the Escrow Accounts

(a)

Each of KIPL, GPPL, and NBPL hereby unconditionally and irrevocably delegates to the Escrow Agent the authority to operate the Escrow Accounts in accordance with the terms of this Agreement, Applicable Law, and in accordance with the instructions of the Debenture Trustee (acting at all times in accordance with the Transaction Documents). It is hereby clarified that each of the RERA Designated Accounts shall be operated in accordance with the terms of this Agreement and the RERA Act. Save as provided .for in this Agreement and in the RERA Act no Person shall be entitled to issue instructions in relation to any of the RERA Designated Accounts.

(b)

All transfers from the Escrow Accounts shall be made by the Escrow Agent in India only and the Escrow Agent is not permitted to make any transfers from the Escrow Account in any other jurisdiction, unless such transfer to another jurisdiction is permitted by Applicable Law. Nothwithstanding anything contained in this Agreement, in the event any instruction or directions received by the Escrow Agent from the Uttar Pradesh Real Estate Regulatory Authority pertaining to any of the RERA Designated Accounts, such instruction or direction issued by the Uttar Pradesh Real Estate Regulatory Authority shall prevail over any conflicting instructions provided by the Promoter. The Escrow Agent shall promptly, a having received any such instruction or direction from the Uttar Pradesh Real Estate Regulatory Authority, inform the Debenture Trustee and the Promoter of such instruction or direction.

(c)

The Promoters shall only be entitled to issue instructions to the Escrow Agent in relation to the RERA Designated Accounts and for the limited purpose of transferring any and all sums of money from the RERA Designated Accounts to the corresponding Debenture Trustee Escrow Account. Any such. instruction issued by any Promoter shall be in the format as set out in Schedule III hereto and shall mandatorily be accompanied by (i) a certificate in the format as prescribed under the RERA Act from the project engineer of the specific RERA Project: (ii) a certificate in the format as prescribed under the RERA Act from the project architect of the specific RERA Project; and (iii) a certificate in the format as prescribed under the RERA Act from the chartered account of the specific RERA Project. It is clarified that any sum of money withdrawn from any RERA Designated Account shall mandatorily be transferred to the corresponding Debenture Trustee Escrow Account only.

(d)

It is clarified that neither the Promoters nor any of their Affiliates will be permitted to issue any instructions or operate in any manner whatsoever the Debenture Trustee Escrow Accounts or the Collection Escrow Accounts. Any transfer of sums from the Collection Escrow Accounts to the corresponding RERA Designated Account and the corresponding Debenture Trustee Escrow Account will strictly be in accordance with this Agreement and Schedule II hereto. Any transfer of sums from the Debenture Trustee Escrow Accounts will strictly be in accordance with the instructions issued solely by the Debenture Trustee (acting at all times in accordance with the Transaction Documents) to the Escrow Agent.

(e)

Prior to the occurrence of an Event of Default, the names of the authorised signatories of each of KIPL, GPPL, and NBPL for the sole purpose of issuing instructions in relation to withdrawal of sums from the RERA Designated Accounts to the corresponding Debenture Trustee Escrow Account and their specimen signatures for the purpose of standing instructions, notices and other related instructions to the Account Bank or to the Escrow Agent for this limited purpose shall be in accordance with the resolutions passed by the board of directors of each of the Promoters and annexed to this Agreement hereto.

Notwithstanding anything to the contrary stated in this Agreement, upon the occurrence of an Event of Default under the Debenture Trust Deed, in case of each of the RERA Designated Accounts, the Account Bank shall, immediately upon being informed of the occurrence of any such Event of Default by the Debenture Trustee (acting at all times in accordance with the terms of the Transaction Documents) and after having received a board resolution passed by the respective Promoter in this regard, revoke the authority granted to the existing signatories of each of KIPL, GPPL, and NBPL under Clause 3.2(e) above. On and from the occurrence of an Event of Default, each of the RERA Designated Accounts shall be operated solely by such director or key managerial personnel of the Promoter that is in accordance with the Transaction Documents, and each Promoter undertakes to submit a board resolution to the Account Bank and to the Escrow Agent in this regard. The signatory of each of the Promoters authorised to operate the RERA Designated Accounts upon the occurrence of an event of default and thereafter shall issue instructions substantially in the form set out in Schedule III hereto. On and from the occurrence of an Event of Default, the Escrow Agent and the Account Bank shall act on the sole instruction of only the authorised signatory of the Promoters so specified in the board resolutions passed by the Promoters upon the occurrence of an Event of Default, and the Escrow Agent and the Account Bank , shall in no way be bound by or act as per any other instructions received from any other Person, including any other signatory of KIPL, GPPL or NBPL, their Affiliates or their authorised representatives.

(f)

The name of the authorised signatory of the Debenture Trustee for the purpose Debenture of issuing instructions in relation to withdrawal of sums from each of the Debenture Trustee Escrow Accounts and his specimen signature for the purpose of standing instructions, notices and other related instructions to the Account Bank or to the Escrow Agent shall be in accordance with the resolution passed by the Debenture Trustee and annexed to this Agreement hereto.

(g)

The Debenture Trustee and the Promoters undertake to give the Escrow Agent. 5 (five) clear Business Days' notice in writing of any change to their authorised signatories.

(h)

Amounts shall only be withdrawn from the Escrow Accounts to the extent such withdrawal does not cause any of the Escrow Accounts to have a negative balance and the Account Bank shall not have any obligation to monitor any of the Escrow Accounts for this purpose or incur any liability whatsoever from any non-distribution in such circumstances. Notwithstanding the above, the Account Bank shall be liable in an event of wilful default, gross negligence. and fraud.

(i)

Upon the receipt of an occupancy certificate in relation to the Sikkd Kaamna Project, the Account Bank shall. and the Escrow Agent shall procure that the Account Bank does, transfer all funds lying, from time to time, to the credit of the KIPL RERA Designated Account and the KIPL Collection Escrow Account to the KIPL Debenture Trustee Escrow Account on a daily auto-sweep basis at the close of each Business Day during the term of this Agreement. It is hereby clarified that required instruction shall be provided by the Debenture Trustee to the Account Bank for activating such auto-sweep. The Account Bank and the Escrow Agent.shall not take instructions from any other Person or entity in this regard. Upon the transfer of all funds from the KIPL RERA Designated Account and the KIPL Collection Escrow Account to the KIPL Debenture Trustee Escrow Account, the Debenture Trustee, upon receiving such request from KIPL and subject to clause 7.6 below, shall be entitled to (but not obliged to) issue a confirmation to the Account Bank to close the KIPL RERA Designated Account only. It is hereby clarified that upon the closure of the KIPL RERA Designated Account. all amounts lying, from time to time, to the credit of the KIPL Collection Escrow Account shall be transferred only to the KIPL Debenture Trustee Escrow Account on a daily auto-sweep basis at the close of each Business Day during the term of this Agreement.

(j)

Upon the receipt of an occupancy certificate in relation to the Sikka Karmic Project, the Account Bank shall, and the Escrow Agent shall procure that the Bank does, transfer all funds lying, from time to time, to the credit of the GGPL RERA Designated Account and the GPPL Collection Escrow Account to the GPPL Debenture Trustee Escrow Account on a daily auto-sweep basis at the close of each Business Day during the term of this Agreement. It is hereby clarified that required instruction shall be provided by the Debenture Trustee to the Account Bank for activating such auto-sweep. The Account Bonk and the Escrow Agent shall not take instructions from any other Person or entity in this regard. Upon the transfer of all funds from the GPPL RERA Designated Account and the GPPL Collection Escrow Account to the GPPL Debenture Trustee Escrow Account, the Debenture Trustee, upon receiving such request from GPPL, and subject to clause 7.6 below, shall be entitled to (but not obliged to) issue a confirmation to the Account Bank to close the GPPL RERA Designated Account only. It is hereby clarified that upon the closure of the GPPL RERA Designated Account, all amounts lying, from time to time, to the credit of the GPPL Collection Escrow Account shall be transferred only to the GPPL Debenture Trustee Escrow Account on a daily auto-sweep basis at the close of each Business Day during the term of this Agreement.

(k)

Upon the receipt of an occupancy certificate in relation to the Sikka Kirat Project, the Account Bank shall, and the Escrow Agent shall procure that the Account Bank does, transfer all funds lying, from time to time, to the credit of the NBPL RERA Designated Account and the NBPL Collection Escrow Account to the NBPL Debenture Trustee Escrow Account on a daily auto-sweep basis at the close of each Business Day during the term of this Agreement. It is hereby clarified that required instruction shall be provided by the Debenture Trustee to the Account Bank for activating such auto-sweep. The Account Bank and the Escrow Agent shall not take instructions from any other Person or entity in this regard. Upon the transfer of all funds from the NBPL RERA Designated Account and the NBPL Collection Escrow Account to the NBPL Debenture Trustee Escrow Account, the Debenture Trustee, upon receiving such request from NBPL, and subject to clause 7.6 below, shall be entitled to (but not obliged to) issue a confirmation to the Account Bank to close the NBPL RERA Designated Account only. It is hereby clarified that upon the closure of the NBPL RERA Designated Account, all amounts lying, from time to time, to the credit of the NBPL Collection Escrow Account shall be transferred only to the NBPL Debenture Trustee Escrow Account on a daily auto-sweep basis at the close of each Business Day during the term of this Agreement.”

“5. Definitions.—

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(8)

financial debt means a debt along with interest, if any, which is disbursed against the consideration for the time value of money and includes— …..

(c)

any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;”