M/s.TVH Energy Resources Private Limited vs Mr. Ebenezar Inbaraj & Anr.

The Corporate Debtor viz. Regen Power Tech Private Limited was admitted into Corporate Insolvency Resolution Process (CIRP) by the order of this Tribunal dated 09.12.2019 passed in IBA/1099/2019 and one Mr. Ebenezer Inbaraj was appointed as the Interim Resolution Professional (IRP). Thereafter the IRP has caused a Public Announcement as per Regulation 12 of the IBBI (Insolvency Resolution process for Corporate Persons) Regulations, 2016 in “Times of India” (English) and “The Hindu” (Tamil) on 15.12.2019 and “Andhra Prabha” (Telugu) on 16.12.2019. It is seen that the IRP took control and custody of the Corporate Debtor and visited the factory premises and it was found that the workers were not paid salary for one and half months. Hence, it was submitted that the IRP had a detailed discussion with the workers and requested them to resume the work and thereafter the factory was brought back into the status of continuous functioning.

Based upon the claims received from the Creditors, the IRP constituted the Committee of Creditors as follows;

The 1st meeting of the CoC was conducted on 10.01.2020 and in the said meeting the CoC did not approve the Resolution to confirm the IRP to act as a Resolution Professional in relation to the Corporate Debtor. It was submitted that on 02.03.2020, the IRP received an email from two Financial Creditors viz. L&T Infra Investment Partners and L&T Finance Limited informing the IRP that they are withdrawing their claim in respect of the Corporate Debtor, with a liberty to file a fresh claim at a later stage. Hence, the IRP had reconstituted the CoC and also filed a Report before this Tribunal on 05.03.2020.

In the 2^nd CoC meeting held on 06.03.2020, the CoC passed a Resolution with a vote of 92.51% to appoint the IRP as an Resolution Professional in respect of the Corporate Debtor. Further, in the said meeting, the CoC has also approved the eligibility criteria for the prospective Resolution Applicants. Also the Form – G along with the timeline i.e. Expression of Interest for invitation of the prospective Resolution Applicants was published on 12.03.2020 in two newspapers “English Daily” (English) and “Dinamani” (Tamil). Thereafter, it is seen that due to Covid – 19 pandemic nationwide lockdown was imposed from 25.03.2020 onwards and hence the prospective Resolution Applicants have requested further time to submit their Expression of Interest and accordingly the CoC extended the time upto 30.04.2020. The EoI was further extended till 15.06.2020.

It is seen that due to the pandemic, the 3^rd CoC meeting was conducted through Video Conferencing mode on 18.06.2020 and in the said meeting the difficulties faced by the RP due the pandemic was discussed. Thereafter, the 4^th CoC meeting was conducted on 24.06.2020 and 25.06.2020 wherein the RP has apprised about the difficulty faced in opening the factory during the lockdown period and also it was observed that there was no business operations from 25.03.2020 to May 2020. It is also seen that the RP has issued the Information Memorandum to the final list of Prospective Resolution Applicants on 30.06.2020. The CoC after considering the travel constraints on account of Covid – 19 lockdown has extended the last date for the submission of the Resolution plan till 19.08.2020, which was further extended upto 20.09.2020 and then upto 15.10.2020.

Thereafter, it is seen that the Prospective Resolution Applicants have submitted their Resolution Plan to the RP on 10.10.2020 and 11.10.2020 and the RP after verifying the same has forwarded the same to the CoC. The CoC made negotiations with the Prospective Resolution Applicants and after several rounds of negotiations, the CoC requested the Prospective Resolution Applicants to submit their revised Resolution Plans to the Resolution Professional. In the meantime, since the 180 days period of the CIRP in relation to the Corporate Debtor came to an end, the RP moved an application seeking exclusion of the lockdown period.

After much discussions and deliberations, the CoC finally fixed 07.01.2021 as the last date for the submission of the revised Resolution Plan by the Prospective Resolution Applicants, which was extended in the 10th CoC meeting till 10.02.2021. One of the Prospective Resolution Applicants submitted the revised plan before the CoC and then in the 12th CoC meeting held on 04.03.2021, 05.03.2021 and 06.03.2021, the CoC discussed about the modifications on the Resolution Plan and finally the CoC with 94.08% has approved the Resolution Plan in the 13th CoC meeting held on 03.04.2021. While things stand thus, the RP has filed IA/460/CHE/2021 for approval of the Resolution Plan by this Adjudicating Authority.

Regen Infrastructure and Services Private Limited ("RISPL") is a wholly owned subsidiary of M/s. Regen Powertech Private Limited ("RPPL"). It is seen that RISPL was admitted into Corporate Insolvency Resolution Process by this Tribunal vide its order dated 19.02.2020 passed in IBA/1424/2019 and one Ms. Renuka Devi Rangaswamy was appointed as Interim Resolution Professional, who was confirmed as the "Resolution Professional" in the 3rd meeting of the CoC held on 21.09.2020.

The Resolution Professional of RISPL has also moved an Application viz. IA/548/CHE/2021 seeking simultaneous CIRP in relation to both RPPL and RISPL. It is also seen from the 8th CoC Meeting in respect of RISPL, that the RP of RISPL has also received certain Resolution Plans from the prospective Resolution Applicants, however has passed a resolution to keep the said Resolution Plan on hold and to file an Application seeking simultaneous CIRP in relation to RPPL and RISPL.

This is an Application filed by the Applicant in respect of RPPL, before this Tribunal on 03.08.2021. The Applicant entered into an Operation and Maintenance (O&M) Agreement with RPPL on 09.11.2010 for a period of 10 years for service of 10 Nos. of WEC. Subsequently, RPPL assigned the O&M Agreement in favour of RISPL. Pursuant thereto, both RPPL and RISPL went into CIRP and the Resolution Plan in respect of RPPL is now pending adjudication before this Tribunal. Hence the Applicant has prayed for consolidation of the CIRP in relation to both RPPL and RISPL.

This is an Application filed by the Applicant in respect of RISPL, before this Tribunal on 03.08.2021. The Applicant entered into an Operation and Maintenance (O&M) Agreement with RPPL on 09.11.2010 for a period of 20 years for service of 10 Nos. of WEC. Subsequently, RPPL assigned the O&M Agreement in favour of RISPL. Pursuant thereto, both RPPL and RISPL went into CIRP and the Resolution Plan in respect of RPPL is now pending adjudication before this Tribunal. Hence the Applicant has prayed for consolidation of the CIRP in relation to both RPPL and RISPL.

This is an Application filed by the Applicant in respect of RISPL, before this Tribunal on 02.08.2021. The Applicant entered into an Operation and Maintenance (O&M) Agreement with RPPL on 18.03.2010 for a period of 20 years for service of 11 Nos. of WEC. Subsequently, RPPL assigned the O&M Agreement in favour of RISPL. Pursuant thereto, both RPPL and RISPL went into CIRP and the Resolution Plan in respect of RPPL is now pending adjudication before this Tribunal. Hence the Applicant has prayed for consolidation of the CIRP in relation to both RPPL and RISPL.

This is an Application filed by the Applicant in respect of RISPL, before this Tribunal on 10.06.2021. The Applicant is the owner of 15 windmills supplied by RPPL and the services of the windmills are done by RISPL. It was submitted that both RPPL and RISPL is now under CIRP and the Resolution Plan in respect of RPPL is now pending adjudication before this Tribunal. It is stated that the Applicant is interested in submitting a consolidated Resolution Plan for both RPPL and RISPL and hence the Applicant has sought for consolidation and simultaneous CIRP of both RISPL and RPPL.

This is an Application filed by the Applicant in respect of RPPL, before this Tribunal on 10.06.2021. The Applicant is the owner of 15 windmills supplied by RPPL and the services of the windmills are done by RISPL. It was submitted that both RPPL and RISPL is now under CIRP and the Resolution Plan in respect of RPPL is now pending adjudication before this Tribunal. It is stated that the Applicant is interested in submitting a consolidated Resolution Plan for both RPPL and RISPL and hence the Applicant has sought for consolidation and simultaneous CIRP of both RISPL and RPPL.

This is an Application filed by the RP of RISPL in respect of RISPL, before this Tribunal on 12.06.2021. It is stated in the Application that the RISPL and RPPL entered into a Memorandum of Understanding dated 31.01.2014 followed by execution of a Business Transfer Agreement (BTA) on 05.03.2014 towards transfer of business of Operations and Maintenance of Wind Energy Generators, Wind Projects and Power Evacuation Facilities for Customers, Utility Boards or own Projects for an agreed Consideration of Rs.310 Crore, settled in by issue and allotment of Equity Shares equivalent to the purchase price, however, it is stated that RPPL retained the business of development and procurement of technology for manufacture, sourcing and supply of WEC. It is seen that, subsequent to the BTA, the customers, RISPL and RPPL entered into a tripartite assignment agreement in respect of the Operation and Maintenance Contract originally entered by RPPL with its respective customers. It is also stated that the RPPL has manufactured and supplied around 1557 Wind Energy Generators to various customers and all the Infrastructure and Intellectual Property Rights (IPR) to manufacture such Wind Energy Generators are owned by RPPL. It is further stated that refurbishment of WEG can be done only by RPPL as it is the sole holder of IPR’s of the Generators sold. It is also stated that RISPL has received a huge sum of Liquidity Damages every year around Rs.15 Crore to 20 Crore solely because RPPL has not refurbished the failed WEG on time. It is stated that RISPL customers have terminated their O&M contract.

The RP of RISPL has stated that during a Joint Resolution Professional Meeting held on 31.03.2021, it was discussed about to appoint a Common Resolution Applicant for both the Corporate Debtors of RPPL and RISPL, however it was submitted that the successful bidder of RPPL has given the lowest quote for RISPL and many conditions in their Resolution Plan are detrimental to the interest of RISPL and its customers. However, the CoC of RPPL did not accede to such a request citing that fresh bid may cause the RPPL’s Resolution Applicant to withdraw and also there is no guarantee of a Resolution Plan for RPPL and as such RPPL will be under the risk of undergoing liquidation.

It is also seen that the RP of RISPL has stated in the Application that there are four Resolution Plans which are received in respect of RISPL i.e. (i) ReNew Services (P) Ltd. Delhi, (ii) Sulochana Cotton Spinning Mills (P) Ltd., Tirupur, (iii) Giriraj Enterprises, Sangamanar and (iv) KKV Agro Powers Limited, Coimbatore, It is stated that thought the Resolution Plan submitted by the aforesaid Resolution Applicants were circulated in the 7^th CoC meeting dated 26.04.2021, the CoC has sought to keep the Resolution Plans in abeyance.

Further, it is stated in the Application that in the 8th CoC meeting of RISPL held on 06.05.2021, the Applicant received 91.9% votes in favour of filing the present Application seeking conducting simultaneous CIRP of the RPPL and RISPL. The RP of RISPL has stated that simultaneous CIRP in respect of both RPPL and RISPL would favour the creditors as it would help them not only to retain their voting share in the CoC meeting but will also allow them to settle the claims present with both Corporate Debtors in a more amicable way. Further, it is stated that simultaneous CIRP will resolve any disputes pending between the Corporate Debtors and hasten the process of CIRP. Hence the Applicant has prayed for simultaneous CIRP in relation to both RPPL and RISPL.

This is an Application filed by the Applicant in respect of RISPL, before this Tribunal on 06.07.2021. The holding Company of the Applicant and RPPL entered into supply agreement for procurement and supply of Wind Turbine Generator and in pursuance of the same, RPPL has supplied 67 Nos. of Wind Turbine to the Applicant. Thereafter, the holding Company of the Applicant sold the entire business to the Applicant herein. Thereafter, the Applicant entered into an various Operation and Maintenance (O&M) Agreement with RPPL on 06.06.2011 for a period of 10 years. Subsequently, RPPL assigned the O&M Agreement in favour of RISPL. In the meantime both RPPL and RISPL went into CIRP and the Resolution Plan in respect of RPPL is now pending adjudication before this Tribunal. Hence the Applicant has prayed for consolidation of the CIRP in relation to both RPPL and RISPL.

This is an Application filed by the Applicant in respect of RISPL, before this Tribunal on 07.05.2021. Pursuant to an Agreement entered into between RPPL and Applicant, RPPL had supplied WEC to the Applicant. Thereafter, the Applicant entered into an Operation and Maintenance (O&M) Agreement with RPPL on 19.09.2011 for a period of 10 years. Subsequently, RPPL assigned the O&M Agreement in favour of RISPL. In the meantime both RPPL and RISPL went into CIRP and the Resolution Plan in respect of RPPL is now pending adjudication before this Tribunal. Hence the Applicant has prayed for consolidation of the CIRP in relation to both RPPL and RISPL.

This is an Application filed by the Applicant in respect of RISPL, before this Tribunal on 14.07.2021. The Applicant and RPPL entered into various supply agreements for procurement and supply of Wind Turbine Generator for which an Agreement had been entered into between RPPL and Applicant, RPPL has supplied 3 Nos. of Wind Turbine to the Applicant. Thereafter, the Applicant entered into a various Operation and Maintenance (O&M) Agreement with RISPL on 12.10.2018 for a period of 10 years. It is stated that the Applicant has paid all the O&M Charges under the Contract which the RISPL has raised. In the meantime, both RPPL and RISPL went into CIRP and the Resolution Plan in respect of RPPL is now pending adjudication before this Tribunal. Hence the Applicant has prayed for consolidation of the CIRP in relation to both RPPL and RISPL.

This is an Application filed by the Applicant in respect of RISPL, before this Tribunal on 14.07.2021. Pursuant to an Agreement entered into between RPPL and Applicant, RPPL has supplied 3 Nos. of Wind Turbine to the Applicant. Thereafter, the Applicant entered into an Operation and Maintenance (O&M) Agreement with RISPL on 12.10.2018 for a period of 10 years. In the meantime both RPPL and RISPL went into CIRP and the Resolution Plan in respect of RPPL is now pending adjudication before this Tribunal. Hence the Applicant has prayed for consolidation of the CIRP in relation to both RPPL and RISPL.

This is an Application filed by the Applicant in respect of RISPL, before this Tribunal on 21.07.2021. The Applicant and RPPL had entered into an agreement dated 19.02.2010 for procurement of 1 Wind Energy Converters (WEC) with full set up for a price of Rs.9,13,87,160/-. Later the Applicant entered into Operation and Maintenance (O&M) Agreement with RISPL. In June 2020, the Applicant came to know about WEC failure and RISPL has not repaired or refurbished the WEC. However, it was submitted that the Applicant has paid the maintenance charges up to June 2020 until the stoppage of functioning of WEC. It was submitted that both RPPL and RISPL are now under CIRP and after much persistence the Applicant ordered spares for the WEC, however the same was not responded by the RISPL. Since, the Resolution Plan of RPPL has no clause to deal with O&M services of the Applicant, the Applicant submitted that only consolidated and simultaneous CIRP will serve the purpose of the Applicant.

IA/709/CHE/2021 – (Premier Mills Pvt. Ltd.) This is an Application filed by the Applicant in respect of RISPL, before this Tribunal on 25.07.2021. The Applicant and RPPL entered into a supply agreement for procurement and supply of Wind Turbine Generator and in pursuance of the same, RPPL had supplied 2 Nos. of Wind Turbine to the Applicant. Thereafter, the Applicant entered into an Operation and Maintenance (O&M) Agreement with RPPL on 12.10.2010 for a period of 10 years. Subsequently, RPPL assigned the O&M Agreement in favour of RISPL. In the meantime, both RPPL and RISPL went into CIRP and the Resolution Plan in respect of RPPL is now pending adjudication before this Tribunal. Hence the Applicant has prayed for consolidation of the CIRP in relation to both RPPL and RISPL.

IA/713/CHE/2021 – (Orbit Exports Limited) This is an Application filed by the Applicant in respect of RISPL, before this Tribunal on 26.07.2021. Pursuant to an Agreement entered into between RPPL and Applicant, RPPL has supplied WEC to the Applicant. Thereafter, the Applicant had entered into an Operation and Maintenance (O&M) Agreement with RISPL on 31.12.2019 for a period of 10 years. It the meantime both RPPL and RISPL went into CIRP and the Resolution Plan in respect of RPPL is now pending adjudication before this Tribunal. Since, the Resolution Plan of RPPL has no clause to deal with O&M services of the Applicant, the Applicant submitted that only and simultaneous CIRP will serve the purpose of the Applicant.

IA/714/CHE/2021 – (Asha Biyani) This is an Application filed by the Applicant in respect of RISPL, before this Tribunal on 29.07.2021. Pursuant to an Agreement entered into between RPPL and Applicant, RPPL has supplied WEC to the Applicant. Thereafter, the Applicant entered into an Operation and Maintenance (O&M) Agreement with RISPL on 03.08.2015 for a period of 20 years. It the meantime both RPPL and RISPL went into CIRP and the Resolution Plan in respect of RPPL is now pending adjudication before this Tribunal. It is stated that the Applicant has paid all the O&M Charges under the Contract which the RISPL has raised. Since, the Resolution Plan of RPPL has no clause to deal with O&M services of the Applicant, the Applicant submitted that only and simultaneous CIRP would serve the purpose of the Applicant.

IA/715/CHE/2021 – (Suchita Biyani) This is an Application filed by the Applicant in respect of RISPL, before this Tribunal on 30.07.2021. Pursuant to an Agreement entered into between RPPL and Applicant, RPPL has supplied WEC to the Applicant. Thereafter, the Applicant entered into an Operation and Maintenance (O&M) Agreement with RISPL on 03.08.2015 for a period of 20 years. In the meantime both RPPL and RISPL went into CIRP and the Resolution Plan in respect of RPPL is now pending adjudication before this Tribunal. It is stated that the Applicant has paid all the O&M Charges under the Contract which the RISPL has raised bills. Since, the Resolution Plan of RPPL has no clause to deal with O&M services of the Applicant, the Applicant submitted that only and simultaneous CIRP would serve the purpose of the Applicant.

IA/716/CHE/2021 – (Radha Biyani) This is an Application filed by the Applicant in respect of RISPL, before this Tribunal on 30.07.2021. Pursuant to an Agreement entered into between RPPL and Applicant, RPPL had supplied WEC to the Applicant. Thereafter, the Applicant had entered into an Operation and Maintenance (O&M) Agreement with RISPL on 03.08.2015 for a period of 20 years. It the meantime both RPPL and RISPL went into CIRP and the Resolution Plan in respect of RPPL is now pending adjudication before this Tribunal. It is stated that the Applicant has paid all the O&M Charges under the Contract which the RISPL has raised. Since, the Resolution Plan of RPPL has no clause to deal with O&M services of the Applicant, the Applicant submitted that only and simultaneous CIRP would serve the purpose of the Applicant.

IA/717/CHE/2021 – (Vinod H Biyani) This is an Application filed by the Applicant in respect of RISPL, before this Tribunal on 30.07.2021. Pursuant to an Agreement entered into between RPPL and Applicant, RPPL had supplied WEC to the Applicant. Thereafter, the Applicant had entered into an Operation and Maintenance (O&M) Agreement with RISPL on 15.10.2018 for a period of 10 years. It is stated that the Applicant has paid all the O&M Charges under the Contract which the RISPL has raised. It the meantime, both RPPL and RISPL went into CIRP and the Resolution Plan in respect of RPPL is now pending adjudication before this Tribunal. Since, the Resolution Plan of RPPL has no clause to deal with O&M services of the Applicant, the Applicant submitted that only and simultaneous CIRP would serve the purpose of the Applicant.

IA/718/CHE/2021 – (Santradevi H Biyani) This is an Application filed by the Applicant in respect of RISPL, before this Tribunal on 30.07.2021. Pursuant to an Agreement entered into between RPPL and Applicant, RPPL had supplied WEC to the Applicant. Thereafter, the Applicant entered into an Operation and Maintenance (O&M) Agreement with RISPL on 15.10.2018 for a period of 10 years. It is stated that the Applicant has paid all the O&M Charges under the Contract which the RISPL has raised bills / invoices. It the meantime, both RPPL and RISPL went into CIRP and the Resolution Plan in respect of RPPL is now pending adjudication before this Tribunal. Since, the Resolution Plan of RPPL has no clause to deal with O&M services of the Applicant, the Applicant submitted that only and simultaneous CIRP would serve the purpose of the Applicant.

IA/719/CHE/2021 – (DGN Faser Pvt. Ltd.) This is an Application filed by the Applicant in respect of RISPL, before this Tribunal on 30.07.2021. The Applicant had purchased one WEC from Giriraj Enterprises. It is stated that the Applicant was given to understand that the said Giriraj Enterprises purchased the WEC from RPPL, since RPPL holds the exclusive licence for production and sale of Vensys Wind Turbine in India. It is stated that RPPL is the exclusive manufacturer of Vensys Wind Turbine, and various agreements were entered into between RPPL and Giriraj Enterprises for carrying on Operation and Maintenance Services. Pursuant to the same, it is seen that the Applicant entered into a fresh Comprehensive Operation and Maintenance Services with the RP of RISPL on 10.03.2021 for a period of 6 years. It is stated in the Agreement that RISPL alone enjoys exclusive right to provide services and no other service provider is allowed to carry out the services during the term of the Agreement. It is stated that the Applicant has paid all the O&M Charges under the Contract which the RP of RISPL has raised bills / invoices. Since, the Resolution Plan of RPPL has no clause to deal with O&M services of the Applicant, the Applicant submitted that only simultaneous CIRP would serve the purpose of the Applicant.

IA/720/CHE/2021 – (Clean Wind Power (Devgarh) Pvt. Ltd.) This is an Application filed by the Applicant in respect of RISPL, before this Tribunal on 03.07.2021. Pursuant to an Agreement entered into between RPPL and Applicant on 26.12.2012, RPPL had supplied a total of 34 WEC to the Applicant at its project site at Rajasthan for a value to the tune of Rs.292,74,00,000/-. The Applicant and RISPL entered into a work order dated 26.12.2012 wherein RISPL was liable to undertake civil works at site, erection, testing and commissioning of WEC. Further the Applicant and RISPL had entered into Land facilitation and Site Development Agreement dated 26.12.2012 in and by which the land is required to be identified, facilitated and procured by RISPL for installation of WEC which was provided by RPPL. Thereafter, the Applicant entered into an Operation and Maintenance (O&M) Agreement with RISPL on 30.03.2013 for a period of 10 years. In the meantime both RPPL and RISPL went into CIRP and the Resolution Plan in respect of RPPL is now pending adjudication before this Tribunal. Hence the Applicant has prayed for consolidation of the CIRP in relation to both RPPL and RISPL.

IA/721/CHE/2021 – (Bhilwara Green Energy Ltd.) This is an Application filed by the Applicant in respect of RISPL, before this Tribunal on 03.07.2021. Pursuant to an Agreement entered into between RPPL and the Applicant, RPPL has supplied WEC to the Applicant. Thereafter, the Applicant had entered into an Operation and Maintenance (O&M) Agreement with RISPL on 31.10.2011 for a period of 10 years. In the meantime both RPPL and RISPL went into CIRP and the Resolution Plan in respect of RPPL is now pending adjudication before this Tribunal. Hence the Applicant has prayed for consolidation of the CIRP in relation to both RPPL and RISPL.

IA/725/CHE/2021 – (Rajesh Kasat & Co.) This is an Application filed by the Applicant in respect of RISPL, before this Tribunal on 30.07.2021. Pursuant to an Agreement entered into between RPPL and Applicant, RPPL had supplied WEC to the Applicant. Thereafter, the Applicant had entered into an Operation and Maintenance (O&M) Agreement with RPPL on 30.06.2016 for a period of 10 years. Subsequently, RPPL assigned the O&M Agreement in favour of RISPL. In the meantime, both RPPL and RISPL went into CIRP and the Resolution Plan in respect of RPPL is now pending adjudication before this Tribunal. Hence the Applicant has prayed for consolidation of the CIRP in relation to both RPPL and RISPL.

IA/727/CHE/2021 – (B. Vijayaragavan) This is an Application filed by the Applicant in respect of RISPL, before this Tribunal on 26.07.2021. The Applicant and RPPL had entered into various supply agreements for procurement and supply of Wind Turbine Generator and in pursuance of the same, RPPL had supplied 2 Nos. of Wind Turbine to the Applicant. Thereafter, the Applicant had entered into a Operation and Maintenance (O&M) Agreement with RISPL on 08.09.2017 for a period of 10 years. In the meantime both RPPL and RISPL went into CIRP and the Resolution Plan in respect of RPPL is now pending adjudication before this Tribunal. Hence the Applicant has prayed for consolidation of the CIRP in relation to both RPPL and RISPL.

IA/728/CHE/2021 – (B. Vijayaragavan) This is an Application filed by the Applicant in respect of RPPL, before this Tribunal on 26.07.2021. The Applicant and RPPL had entered into various supply agreements for procurement and supply of Wind Turbine Generator and in pursuance of the same, RPPL had supplied 2 Nos. of Wind Turbine to the Applicant. Thereafter, the Applicant had entered into a Operation and Maintenance (O&M) Agreement with RISPL on 08.09.2017 for a period of 10 years. In the meantime, both RPPL and RISPL went into CIRP and the Resolution Plan in respect of RPPL is now pending adjudication before this Tribunal. Hence the Applicant has prayed for consolidation of the CIRP in relation to both RPPL and RISPL.

IA/810/CHE/2021 – (Mytrah Vayu (Manjira) Pvt. Ltd.) This is an Application filed by the Applicant in respect of RISPL, before this Tribunal on 09.08.2021. The Applicant and RPPL had entered into a “Wrap Agreement” for the purpose of supply of equipments for the project worth Rs.85 Crore. Thereafter, the Applicant had entered into an Operation and Maintenance (O&M) Agreement with RPPL on 29.01.2013 for a period of 10 years. Subsequently, RPPL assigned the O&M Agreement in favour of RISPL. Pursuant thereto, both RPPL and RISPL went into CIRP and the Resolution Plan in respect of RPPL is now pending adjudication before this Tribunal. Hence the Applicant has prayed for consolidation of the CIRP in relation to both RPPL and RISPL.

The Learned Senior Counsels Mr. P.S. Raman appearing on behalf of the Applicants in IA/694/CHE/2021 submitted that the Applicants have purchased 67 Wind Turbine Generators worth of Rs.610 Crore from RPPL based upon various Supply Agreements and thereafter the Applicant had also entered into a separate Agreement for Erection and Commission of the said Wind Turbine Generators with RISPL. Consequent thereto, the Applicants have entered into "Operations and Maintenance" Contract with RISPL for an initial period of 10 years. It was submitted by the Learned Senior Counsel that as per the Supply Agreement the warranties clause prohibit the Applicants to service their Wind Turbine Generators by a third party and it should be serviced only by providers and if done so, the warranty will become void. The Learned Senior Counsel placed reliance upon the Judgment of the NCLT Mumbai Bench in the matter of State Bank of India Vs. Videocon Industries Ltd. (2018) SCC Online NCLT 13182 decided on 08.08.2019, wherein certain parameters were fixed by the NCLT Mumbai Bench while ordering for consolidation;

In terms of the aforesaid judgment it was argued by the Learned Senior Counsel for the Applicant that the aforesaid parameters fixed by the NCLT Mumbai Bench are all satisfied as to the facts of the present case and it is also seen from the Reply statement filed by the RP of RISPL that they have prepared a comparative chart of the parameters vis-à-vis the substance and elements as contained in both RPPL and RISPL, which is extracted hereunder;

The Learned Senior Counsel for the Applicant in order to bolster his stand has placed reliance upon the decision of the Hon'ble NCLAT in the matter of Radico Khaitan Ltd -Vs- BT & FC Pvt Ltd. & 6 Ors. in Company Appeal (AT)(Ins) No. 919 / 2020, wherein by relying upon the decision of the NCLT Mumbai Bench in Videocon case the Hon'ble NCLAT has ordered for consolidation of CIRP in respect of two companies and set aside the order passed by the Adjudicating Authority which rejected the consolidation and held as follows;

The Learned Senior Counsel for the Applicant also relied upon the Judgment of the Oase Asia Pacific Pte Ltd. –Vs- Axis Bank Ltd & Other Financial Creditors & 2 Ors in Company Appeal (AT) (Ins) No. 783 of 2020, decided on 26.02.2021, wherein it was held that only because the Corporate Debtors do not have common Financial Creditors, would not be sufficient reason to say that the yardsticks laid down in the matter of “State Bank of India –Vs- Videocon Industry Ltd.” were not attracted. Thus, it was argued by the Learned Senior Counsel for the Applicants that ordering for consolidation of CIRP of both RPPL and RISPL would be beneficial to the stakeholders and only when consolidation is ordered there will be maximization of the value of the assets of the Corporate Debtors.

The Learned Counsel Mr. PVS Giridhar appearing on behalf of the Applicant in IA/709/CHE/2021 submitted that RPPL submitted a proposal dated 15.09.2010 to the Applicant for a 15MW Wind Power Project consisting 10 number of Vensys Design Regen R82-1.5MW Wind Energy Converters to be installed at Theni, Tamil Nadu at an estimated cost of Rs.94.50 Crore. It was submitted that pursuant thereto, the Applicant placed a Purchase Order dated 08.10.2020 with RPPL for a 3MW wind Power project for a supply of two (2) number of Vensys Design Regen R82-1.5MW Wind Energy Converters to be installed at Theni, Tamil Nadu. The Learned Counsel for the Applicant submitted that they had entered into a comprehensive Operation and Maintenance (O&M) Contract dated 12.10.2010 for O&M Service with RPPL.

It was submitted by the Learned Counsel for the Applicant that after commissioning of the project, RPPL by their letter dated 09.07.2014 requested the Applicant to transfer the Operations and Maintenance (O&M) part of the contract dated 12.10.2010 to their wholly owned subsidiary, M/s. RISPL as the Operations and Maintenance business of M/s. RPPL was being transferred to their subsidiary Company. Accordingly, a Tripartie Agreement dated 15.09.2015 was executed between the Applicant, RPPL (Assignor) and RISPL (Assignee) wherein the parties agreed that the Operation and Maintenance part of the contract shall be assigned to and performed by RISPL as Contractor and all the other terms and conditions of the contract shall remain same and binding. Subsequently, it was submitted that the Applicant has signed a fresh O&M contract dated 31.03.2021 with the RP of RISPL appointed by this Tribunal.

In the meantime, it is seen that the CIRP in relation to RPPL and RISPL was initiated by this Tribunal on 19.12.2019 and 19.02.2020 respectively. It was submitted by the Learned Counsel for the Applicant that eventhough RPPL and RISPL are two separate entities, they are a single entity by ownership, corporate control, by both functionally and operationally. It was submitted that both the doctrines of substantial consolidation and piercing the corporate veil needs to be applied to the present case. Also, it was submitted that the parameters as laid down by the NCLT, Mumbai Bench in Videocon case (supra) are also fulfilled in the present case. It was further argued that as per the ratio laid down in Videocon case (supra), the burden is on the party objecting to consolidation to demonstrate that prejudice is caused, if consolidation is allowed. It was submitted that if an entity is self – serving, self – dependent and self – sustainable, a view can be taken for not granting consolidation, however in the instant case, both RPPL and RISPL are not self – serving, self – dependent and self – sustainable. The Learned Counsel for the Applicant referred to the Business Transfer Agreement to show that the IP relating to O&M has been transferred entirely by RPPL to RISPL, with the consent of the IP owner, Vensys and RPPL has agreed not to compete in the market space of O&M.

The Learned Counsel for the Applicant further submitted that both RPPL and RISPL are in the business of supplying / operating wind energy turbines / converters, which harness wind, which is a natural resources for purpose of generation of power. Thus, it was argued that natural resources like air, wind, water, natural gas and spectrum are subject to public trust doctrines, as declared by the Hon’ble Supreme Court in various cases including MC Mehta –Vs-Kamal Nath (1997) 1 SCC 388 and that no commercial value has been incorporated in respect of this invaluable public resources and it is a commonly shared resource.

Thus, it was submitted by the Learned Counsel for the Applicant that only if the Resolution Process of the two entities viz. RPPL and RISPL are consolidated in joint proceedings, the same will result in maximization of the value of the assets of the Corporate Debtor and balance the interest of all the stakeholders and as such, it was submitted that it is just and necessary that there should be consolidation of the Resolution Process of RPPL and RISPL.

The Learned Senior Counsel Mr. Om Prakash appeared on behalf of the RP of RISPL also argued in favour of consolidation of CIRP of both RPPL and RISPL. It was submitted by the Learned Senior Counsel that simultaneous CIRP in respect of both RPPL and RISPL would favour the creditors as it would help them not only to retain their voting share in the CoC meeting but will also allow them to settle the claims present with both Corporate Debtors in a more amicable way. Further, it was submitted that simultaneous CIRP will resolve any disputes pending between the Corporate Debtors and speed up the process of CIRP. Reliance was placed upon the Judgment of the Hon'ble NCLAT in the matter of Edelweiss Asset Reconstruction Company Limited -Vs- Sachet Infrastructure Pvt. Ltd. in Company Appeal (AT) (Insolvency) No. 377 of 2019, wherein the Hon'ble NCLAT has allowed for simultaneous CIRP of the Holding Company and its Five Subsidiaries under a common Resolution Professional due to the commonalities established therein.

The Learned Senior Counsel for RISPL further submitted that the object of IBC, 2016 is the Resolution and Rehabilitation of the Companies which turn the Corporate Debtors into going concern as opposed to Liquidation of its assets. It was submitted that the individual CIRP of both the Corporate Debtors viz. RPPL and RISPL has resulted in and is continuously resulting in various litigation disputes and a decrease in the value of the assets of both the Companies. It was submitted that a simultaneous CIRP proceedings, by keeping the assets of each company separate, will increase the coordination between the companies as both the companies will be functioning under one Resolution Professional. This process will provide a better solution to those who have filed their claims before both the Corporate Debtors and have been rejected by both the Resolution Professionals by shifting liabilities on the other Company.

The Learned Senior Counsel for RISPL further submitted that in the 8th CoC meeting conducted on 06.05.2021, the Applicant has received 91.9% votes in favour of filing the Application for simultaneous CIRP of both RPPL and RISPL. The extract of the resolution passed by the CoC of RISPL is captured herewith.

Under such circumstances, the Learned Senior Counsel for the RP of RISPL has prayed for ordering simultaneous CIRP in relation to Corporate Debtors viz. RPPL and RISPL and to appoint a common Resolution Professional.

The Learned Senior Counsel Mr. R. Murari, appeared on behalf of the Applicant in IA/617/CHE/2021 i.e. Echanda Urja Private Limited, advanced his arguments in favour of Consolidation of CIRP of both RPPL and RISPL. It was submitted that the Applicant is engaged in Wind Power Generation business and the Applicant has its 100.5 MW wind farm at Echanda site, Tirunelveli District, consisting of 67 wind turbines of 1.5 MW each. It was submitted by the Learned Senior Counsel that the RPPL has exclusive manufacturing and repaid facility for generators at TADA Andhra Pradesh. Further, it was submitted that RPPL has an exclusive license agreement with VENSYS AG, a Company in Germany for production and sale of Vensys Wind Turbines in India.

The Learned Senior Counsel for the Applicant submitted that NuPower Renewables Pvt. Ltd., a holding Company of the Applicant had purchased 67 Nos. of 'ReGen make Vensys V 77 – 1500 KW Wind Turbines' each from RPPL for its 100.5 MW Echanda wind farm and entered into a Comprehensive Operations and Maintenance Agreement (O&M) dated 06.06.2011 with RPPL for a period of 10 years. The Agreement was amended on 12.02.2014 to provide for additional conditions of service by RPPL. It was submitted that NuPower Renewables Pvt. Ltd. sold its business relating to 100.5MW wind farm at Echanda site at Tirunelveli District to its subsidiary, the Applicant herein in the year 2015 – 2016. Thereafter, it was submitted that the RPPL had transferred the activity of operations and maintenance services to RISPL in the year 2015. Due to the above change, an Assignment Agreement dated 24.07.2015 was entered into between NuPower Renewables Pvt. Ltd. with RISPL and as per the said Agreement, it was agreed in principal that RISPL would provide the operations and maintenance services for the 100.5 MW Echanda wind farm to the Applicant. It was further submitted by the Learned Senior Counsel that on 27.07.2015, RPPL issued a letter admitting its liability and obligations under O&M Agreement and that RPPL shall be the principal obligor for the performance of the assigned obligations to RISPL. Thereafter, it was submitted that an Amendment Agreement was entered between the Applicant and RISPL on 16.08.2019 and by virtue of the same, the tenure of Operations and Maintenance for 100.5 MW Echanda wind farm was extended to 25 years and relevant clauses to give effect to such amendment were amended.

The Learned Senior Counsel submitted that both RIPL and RISPL are now under CIRP on 09.12.2019 and 19.02.2020 respectively and that 42 Wind Generators out of the 80 Wind Generators are procured from RPPL by NuPower Group have reported Generator failure till date and that the Applicant has filed MA/918/2020 against RPPL and RISPL to provide Operations and maintenance Services including replacement of generators within 60 days from the date of failure. It was further submitted that when the said Application was pending before this Tribunal, the Applicant has suffered failure of another 17 Generators.

It was submitted by the Learned Senior Counsel for the Applicant that the Corporate Insolvency Resolution Process of RPPL is required to be combined along with RISPL given the linkages and inherent parent subsidiary relationship between both the companies and that it was submitted that RPPL is proceeding independently with its Resolution and by excluding RISPL. Further, it was submitted that 'State Bank of India' is a common creditor in both RPPL and RISPL. Reliance was placed by the Learned Senior Counsel for the Application in the Videocon case (supra), however for the sake of brevity, the arguments advanced on the said issue are not repeated.

The Learned Senior Counsel for the Applicant further submitted that the CoC of RPPL is proceeding with the Resolution Plan and without considering the above aspects. It was further submitted that State Bank of India which is a part of CoC of RPPL and RISPL is using its majority voting powers in RPPL and is ignoring the interest of RISPL and similarly placed customers. It was submitted that no attempt was made to determine the combined value of RPPL and RISPL and that the CoC of RPPL are pushing ahead with the Resolution Plan. Under such circumstances, the Learned Senior Counsel in order to protect the interest of the stakeholders and the Applicant reiterated that it is necessary to order for joint Corporate Insolvency Resolution Process of both RPPL and RISPL by appointing a single common Independent Resolution Professional.

The CoC of RPPL and the RP of RPPL were the objectors to the consolidation of CIRP of both the Companies. Mr. Arvindh Pandian, Senior Advocate appeared on behalf of RP of RPPL and Mr. M.S. Krishnan, Senior Advocate appeared on behalf of the CoC of RPPL submitted that the relief as sought for by the Applicants in the above applications seeking consolidated CIRP or simultaneous CIRP of RPPL and RISPL is not at all maintainable and that the present Application filed by the Applicants is gross abuse of the process of law and a blatant attempt to frustrate the object of IBC, 2016.

The Learned Senior Counsel submitted that all the Applicants have no business relationship whatsoever with RPPL presently as their business transactions were complete and some of the Applicants are Operational Creditors who have filed their claim with RISPL and their business transactions are only with RISPL. In such a scenario it was submitted that the Applicants have no locus standi at all to maintain these Applications and the IA's are bound to be dismissed in limine. It was submitted by the Learned Senior Counsel that some of the reliefs sought for in the Application are in effect of dictating the terms to this Tribunal so as to direct the Resolution Applicant of RPPL to provide for service and maintenance of Generators in respect of RISPL.

The Learned Senior Counsel submitted that separation of businesses between RPPL and RISPL has not caused any prejudice to the Applicants and in fact only to the lenders of RPPL has suffered irreparable loss and grave prejudice since the assets which were charged to RPPL lenders were given to RISPL without the consent of RPPL lenders. Further, it was submitted that if the business of O&M was not transferred to RISPL, then these Applicants would have no locus to maintain these Applications.

The Learned Senior Counsel further submitted that even in a joint CIRP there is no assurance that the Resolution Applicant will not terminate or re-price the contracts for O&M services of RISPL. It was submitted that the Applicants are only customers of RPPL and that they are not Financial Creditors and they do not have any say over the CIRP of the Corporate Debtor. Further, it was submitted that if every supplier and customer contract is to be protected there would be no Resolution Plan at all and the same would end up in liquidation process. The Learned Senior Counsel submitted that any losses or suffering to the Applicant due to CIRP and Resolution Plan are direct consequence of the state of business affairs of RPPL and RISPL arising out of the commercial risk taken by the Applicants in choosing O&M services with RISPL.

The Learned Senior Counsel submitted that the powers of the CoC of RPPL vested under the provisions of IBC, 2016 cannot be taken away by the Applicants by way of filing the present Application. In any event, it was submitted that, even during consolidation, no such obligation be endowed upon any Resolution Applicant that the Resolution Plan should honour the O&M contracts of RISPL to the persons similar like that of the Applicants herein. Further it was submitted that the present Applicantions are not maintainable in law but also is an abuse of process of law, since the present Application has been filed after a period of 18 to 20 months from the date of commencement of CIRP.

The Learned Senior Counsel for RPPL submitted that the provisions of the Code, do not contemplate any consolidated CIRP of multiple companies. Further, it was submitted that it is a matter of record that the Bankruptcy Law Reforms Committee had considered and deferred the concept of Group Insolvency under the regime of IBC. It was submitted that the present Applications for consolidation of CIRP of both RPPL and RISPL have been filed by the Applicants only to thwart the Resolution Plan of RPPL which is at its final stages and the CoC of RPPL after a comprehensive process duly conducted, approved the Resolution Plan of M/s. Renew Power Service Private Limited and the same is pending approval on the file of this Tribunal in IA/460/CHE/2021. Further, it was submitted that the CoC of RPPL has already exercised its commercial wisdom and approved the Resolution Plan and even rejected the suggestion to allow bidders of RISPL to participate in the Resolution Process of RPPL and the same was a well considered decision made in exercise of the commercial wisdom of CoC.

The Learned Senior Counsel for RPPL submitted the judgments relied on by the Applicants for group CIRP or even simultaneous CIRP passed in few cases, are of no avail, since they are being rendered on totally different facts and that the CoC's are common. However in the present case, it was submitted that only 10% of the CoC members are common among RPPL and RISPL. It was submitted that the CoC of RPPL is completely comprised of public sector banks and two private banks and only one of the banks is part of the CoC of RISPL and even the voting share is less than 10%. Further, it was submitted that the CoC of RPPL has rejected the contention for joint CIRP and the decision is taken in its commercial wisdom and the same has become final and the said decision cannot be interfered with by the Applicants at any stage which, if done so, would have no end at all. In any event, it was argued that there cannot be a forced consolidation or simultaneous CIRP of both the Companies viz. RPPL and RISPL.

The Learned Senior Counsel for RP of RPPL submitted that the cases referred to by the Applicants in Videocon (supra), Radico Khaitan Ltd., (supra) and Oase Asia Pacific Pte Ltd. (supra) all pertain to the facts of that particular case since in certain cases standalone Resolution was not possible and in certain cases the Corporate Debtor was pushed into liquidation. However, in the present case, the Resolution Plans which were received in respect of RPPL way back in November 2020 itself have been approved by the CoC during April 2021 and also the RISPL has received certain Resolution Plans for its consideration. Lastly, it was submitted that the principles of value maximization will apply only with the framework of IBC, 2016 and cannot be allowed to be stretched beyond the framework which has not been stipulated under the provisions of IBC, 2016. Under such circumstances, the Learned Senior Counsel for RPPL sought for dismissal of the Applications filed by the Applicants for consolidation / simultaneous CIRP and also to appoint a common Resolution Professional.

Before we embark upon the merits of the case as to whether this Adjudicating Authority can order for consolidation of CIRP in relation to RPPL and RISPL, it is vital to point out here that this Adjudicating Authority considering the unique issue which has arisen in the present Application, has by way of interim directions issued various order to explore the possibility of conducting a joint CIRP meeting in respect of RPPL and RISPL and has also appointed a Mediator in this regard to oversee the entire process. The direction issued by this Tribunal on 05.04.2021 is extracted hereunder;

However, it is seen that in the meantime on 03.04.2021 itself the CoC of RPPL in its 13^th meeting has proposed a Resolution for approval of Resolution Plan submitted by one M/s. Renew Power Services Private Limited in respect of RPPL and the last date for e-voting for the said voting on the said resolution was fixed as 23.04.2021. Thereafter, it is seen that the CoC of RPPL with a majority of 94.08% have voted in favour of the Resolution Plan submitted by M/s. Renew Power Services Private Limited. While this being the fact, when the matter came up for hearing before this Tribunal on 27.04.2021, for filing of the Report of the Mediator, this Tribunal has observed as follows;

Thus, it is seen that the efforts undertaken by this Tribunal in order to explore the possibility of simultaneous CIRP in respect of RPPL and RISPL did not yield fruitful result. Further, it is seen that the RP of RPPL has not correctly placed on record the events which transpired in the COC meetings and this Tribunal has been kept in the dark as to when the CoC of RPPL has approved the Resolution Plan. The RP of RPPL on hearing before this Tribunal on 05.04.2021 has not disclosed the fact that the e-voting on the Resolution Plan of RPPL was opened on 03.04.2021 itself. The said act of the RP of RPPL would amount to suppression of material facts. Further it was also brought to the knowledge of this Tribunal that an Application has been filed by one of the Financial Creditors objecting to the appointment of the Applicant as RP of RPPL.

Be that as it may, coming to the issue which is required to be adjudicated in the present case, it is seen that a total of 25 Applications, as arrayed in the cause title, have been filed by the Applicants seeking consolidation and simultaneous CIRP and also to consolidate the assets in relation to the Corporate Debtors viz. RPPL and RISPL.

IA/548/CHE/2021 alone is an Application which is filed by RP of RISPL seeking simultaneous CIRP and the remaining 24 Applications are filed by the Applicants who are customers either to RPPL or RISPL.

As already alluded supra, the status of the Applicants who have filed the present Application is that they are the customers of RPPL or RISPL. We have gone through the Application filed by the Applicants and in all the Applications the status of their claim filed with the RP has not been disclosed by the Applicants. Further, from the nature of transactions that happened between the Applicants and the respective Corporate Debtor viz. RPPL and RISPL, it is clear that Applicants herein cannot be treated as an "Operational Creditor" in relation to the Corporate Debtors. Sec. 5(20) and 5(21) of IBC, 2016 defines the term "Operational Creditor" and "Operational debt", which is extracted hereunder;

The term "Operational Creditor" means a person who has provided goods or rendered service to the Corporate Debtor. In the present case, all the Applicants herein have not rendered services to the Corporate Debtor, however, it is that the Corporate Debtor who has rendered services to all the Applicants as per the Operation and Maintenance Agreement. In such a scenario, the Applicants herein cannot be termed as an "Operational Creditor". Thus, these Applicants who are all customers of RPPL and RISPL in the opinion of this Adjudicating Authority has no locus standi to maintain the present Application, since they are not either a 'Financial Creditor' or an 'Operational Creditor' in respect of both RPPL and RISPL. Also these Applicants are not members of the CoC of either RPPL or RISPL. Thus, this Tribunal is of the considered view that except IA/548/CHE/2021, which is filed by the RP of RISPL, the other Applications filed by the customers of either RPPL or RISPL seeking consolidation or simultaneous CIRP in relation to the Corporate Debtors are not maintainable.

Before we give our finding in relation to consolidation of CIRP in relation to RPPL and RISPL, it is imperative to examine the provisions of IBC, 2016 as to how it has dealt with the properties of the Holding Company and Subsidiary Company. Apropos it would be relevant to refer to Section 18 of IBC, 2016 which deals with the duties of the Interim Resolution Professional.

Thus, a reading of Section 18(f)(v) of IBC, 2016 would manifest the fact that the Interim Resolution Professional shall take control over the securities including shares held in any subsidiary of the Corporate Debtor. However, clause (b) to the Explanation to Section 18 of IBC, 2016 would state that the assets of the subsidiary of the Corporate Debtor would not form part of the assets of the holding Company. A similar corollary can be seen in Section 36(4) of IBC, 2016 wherein it is stated that shares held in any subsidiary of the Corporate Debtor would form part of the Liquidation Estate and that the assets of the subsidiary of the Corporate Debtor would not form part of the Liquidation Estate. Thus, it is made clear that IBC, 2016, treats the assets of the holding and subsidiary company independently and expressly excludes the assets of the subsidiary Company to be treated along with that of the holding Company. While this being the position of law in relation to holding and subsidiary company under IBC, 2016, the next question which arises for consideration is that de hors the said statutory provision, whether this Tribunal can order for consolidating the assets of the holding and subsidiary company together and thereby order for consolidated CIRP in relation to RPPL and RISPL.

We have gone through decisions in regard to Consolidation of CIRP ordered by the NCLT Mumbai Bench in the Videocon case (supra) and by the Hon'ble NCLAT in the matter of Radico Khaitan (supra) and also in Oase Asia Pacific Pte. Ltd. (supra). It need not be emphasized that the provisions of IBC, 2016 does not specifically authorize consolidation of CIRP and as already discussed above, the provisions of IBC, 2016 treat the assets of the holding and subsidiary independently. It is seen that the NCLT Mumbai Bench by placing reliance on several US and UK case laws, one of which being the case of Food Fair Inc., In re; 10 BR 123 (1981), where the Bench held that the key factor for granting substantive consolidation of all debtors is required to yield an 'equitable treatment' of creditors without any undue prejudice. However, the provisions of IBC, 2016 do not deal with the 'equitable treatment' when it comes to Operational Creditors and 'Financial Creditor' and this legal position is fortified by the Judgment of the Hon'ble Supreme Court in the matter of Committee of Creditors of Essar Steel India Limited -Vs- Satish Kumar Gupta and Others; (2020) 8 SCC 531, wherein it has been held that the Financial Creditors and Operational Creditors by virtue of their business relations with the Corporate Debtor can never be equally placed and that the IBC itself contemplates Operational Creditors as a separate class of creditors.

It is also required to be noted that the question of consolidation is one arising out of equity. The decision of the NCLT Mumbai Bench, and the Hon’ble NCLAT in certain matters ordering for Consolidation of CIRP, in the absence of specific provisions under IBC, 2016, was only by exercising its equity jurisdiction. At this juncture, this Adjudicating Authority, which is a creature of a statute, is required to carefully examine whether such an ‘equity jurisdiction’ has been conferred upon this Tribunal. In relation to the UK and US law referred by the NCLT Mumbai Bench in Videocon Case (supra), wherein consolidation of CIRP is being ordered, is by exercising equity jurisdiction which is available under the US and UK Bankruptcy Law. The Indian parliament in its ‘legislative wisdom’ has expressly and deliberately omitted to implant the concept of ‘equitable jurisdiction’ upon the Adjudicating Authority under IBC, 2016.

Further, the term 'equity' which is conspicuous by its absence under the provisions of IBC, 2016 has been engrafted in the Indian Insolvency regime by way of judicial intervention by referring to the US and UK Bankruptcy Law, in which the equity jurisdiction has been embedded under the relevant US and UK Bankruptcy Code. Under the US Bankruptcy Code, the power to order for substantial consolidation emanates from Section 105(a) of the US Bankruptcy Code, which is as follows;

Thus, we can see that a broad and equitable power has been conferred under Section 105(a) of the US Bankruptcy Code, which authorizes the Court to issue "any order, process or judgment". However, in so far as the Indian Bankruptcy law is concerned, similar powers have been conferred under Section 60(5)(c) of IBC, 2016, which are as follows;

The powers conferred under Section 60(5)(c) of IBC, 2016 cannot be equated with that of Section 105(a) of the US Bankruptcy Code, since under the latter, broad powers have been conferred to pass “any orders or judgments”, however under provisions of IBC, 2016, powers have been conferred only to decide on the question of priorities or any question of law or facts arising out of or in relation to the insolvency resolution or liquidation proceedings of the Corporate Debtor. Thus, it is seen that the Indian legislative makers have consciously omitted to confer such “equity jurisdiction” upon the Indian Insolvency and Bankruptcy Code, 2016. Also, the Hon’ble Supreme Court while dealing with the provisions of IBC, 2016 had an occasion to deal with the said issue and as early as in the year 2019 while dealing with the approval of a Resolution Plan and the jurisdiction of NCLT and NCLAT, in the matter of K. Sashidhar -Vs- Indian Overseas Bank and Ors; (2019) 12 SCC 150, has held in para 58 as follows;

Also, the Hon'ble Supreme Court recently in the matter of Pratap Technocrats (P) Ltd. and Others -Vs- Monitoring Committee of Reliance Infratel Limited &Anr; 2021 SCC OnLine SC 569, dealt with the equity jurisdiction of NCLT and NCLAT and has held as follows;

Thus, the Hon'ble Supreme Court has vociferously stated that this Adjudicating Authority (NCLT) and also the Appellate Authority (NCLAT) have not been empowered with equity jurisdiction under the provisions of IBC, 2016 and that there is no equity-based jurisdiction with the Adjudicating Authority, under the provisions of the IBC, 2016. Also, it is made clear that, under the Indian insolvency regime, it appears that a conscious choice has been made by the legislature not to confer any independent equity-based jurisdiction on the Adjudicating Authority. Further, an attempt was made by the Learned Senior Counsels arguing in favour of consolidation to state that these decisions were rendered on the issue of approval of Resolution Plan and hence the same cannot be applied to the facts of the present case. However, we are unable to accept the said contention, in view of the fact that the ratio decidendi which has been laid down in the above referred Judgment is that in order to exercise an 'equity jurisdiction', the same has to be conferred under the statutory framework i.e. under the provisions of IBC, 2016.

Further, as emphasised by the Hon’ble Supreme Court in the Judgment referred supra, the Indian Bankruptcy Code, has consciously did not confer any independent equity-based jurisdiction on the Adjudicating Authority. As a corollary thereof, if there is no equity-based jurisdiction available under the provisions of the IBC, 2016, then the consolidation of CIRP of group companies, in the absence of specific provisions under IBC, 2016, cannot be ordered by this Adjudicating Authority.

Further, it is also significant to point out here that, the Hon’ble Supreme Court, while dealing with the Indian Insolvency Laws, after examining the judicial interventions and innovations made under the provisions of IBC, 2016 by the Adjudicating Authority and also by the Appellate Authority, in the matter of Arun Kumar Jagatramka -Vs- Jindal Steel and Power Ltd. &Anr., 2021 SCC OnLine SC 220, has held as follows;

Thus, it is also seen that the Hon’ble Supreme Court after examining the provisions of IBC has stated that IBC is a carefully considered and well thought out piece of legislation which sought to shed away the practices of the past. Further, it has been stated that the legislature has also been working hard to ensure that the efficacy of this legislation remains robust by constantly amending it based on its experience. Consequently, the need for judicial intervention or innovation from the NCLT and NCLAT should be kept at its bare minimum and should not disturb the foundational principles of the IBC.

Another raison d' etre on why this Adjudicating Authority is not in favour of ordering for consolidation is that in the cases referred to by the Learned Senior Counsels for the Applicants are that the major Financial Creditors have moved an application for consolidation of CIRP of group companies, however in stark contrast, in the present case, the Committee of Creditors of RPPL are totally opposing consolidation, since they have a Resolution Plan in the offing. Similar is the case of RISPL, as seen from the 7th and 8th CoC meeting that RISPL is also evincing Resolution Plans from four prospective Resolution Applicants, however the RP of RISPL based upon a Resolution passed in the 8th CoC meeting has moved IA/548/CHE/2021 for simultaneous CIRP of both RPPL and RISPL. Thus, it becomes crucial at this stage for this Adjudicating Authority to decide on the aspect as to whether consolidation can be ordered at this stage, where the Resolution Plan in respect of both the entities are in the offing. Hence, the timing of consolidation is also required to be examined, since ordering of consolidation of CIRP would amount to de novo start of CIRP process and also there is no extant procedure established under IBC, 2016, as to how to conduct the consolidated CIRP in relation to group companies. Further, when the Resolution Plan in respect of both RPPL and RISPL are in the pipeline, ordering for consolidation of CIRP and thereby starting a de novo CIRP process would amount to defeating the provisions of IBC, 2016, since there is always a danger which exists as to whether the Corporate Debtors would fetch a Resolution Plan during the period of consolidation. Also, as per the due process of law, the CIRP period in respect of RPPL came to an end on the day on which it has approved the Resolution Plan and at this point of time, it is not lawfully right under the provisions of IBC, 2016 to force RPPL (which has already fetched a Resolution Plan), to undergo another fresh round of CIRP.

It is also required to be noted at this stage, that one of the essential conditions which is required to be fulfilled for consolidation of CIRP is that the assets of a Corporate Debtor cannot be sold as a standalone unit and that only if consolidation is ordered, the same will maximize the assets of the Corporate Debtor. In the present case, it is seen that the Resolution Plan in respect of RPPL has already been placed before the CoC of RPPL way back in the year November 2020 itself and the CoC has voted in favour of the Resolution Plan in the month of April 2021. Further, it is significant to point out here that, only after the Resolution Plan has been voted by the CoC of RPPL, the Applicants, who are all customers of RISPL have moved the present Application seeking consolidation of CIRP in relation to the Corporate Debtors viz. RPPL and RISPL. As already alluded supra the Resolution Plan in respect of RISPL is also in the offing and it cannot be said that the creditors of RISPL, let alone the customers, would be left in lurch in the present scenario.

One more vital factor in respect of the present case is that the members of the CoC of RPPL who have vehemently raised their objection for consolidation of CIRP of RPPL and RISPL. Further, the State Bank of India, who is a common Financial Creditor in respect of both RPPL and RISPL has also opposed consolidation and the said fact is also evident from the Resolution passed in respect of RISPL in its 8th CoC meeting. Also, it is required to be noted that one of the Financial Creditors of RISPL, viz. Asset Reconstruction Company India Limited, (ARCIL) who is having 70.27% voting share has agreed for simultaneous CIRP only subject to the following conditions;

Even though one RP is appointed for both the companies, the CoC meeting of each Companies will be separate.

Each Resolution Applicant will submit separate Resolution Plan for each company and the CoC for each company will be separate.

The CoC of one Company will have no voting rights on the resolution of the Company.

In case of CoC of RPPL does not agree for simultaneous Resolution, the current process to continue.

Thus, it can be seen from the conditions stipulated by ARCIL, who is a Financial Creditor in respect of RISPL, that ordering for consolidation would render absurd result and would be a futile exercise by this Tribunal. Also, the Applicants herein, who are not even Operational Creditors of RISPL and are not forming part of the CoC of either RPPL and RISPL have moved the present Application for consolidation that too at a belated stage i.e. after the expiry of 3 to 5 months of the approval of the Resolution Plan by the CoC of RPPL. Further, it is pertinent to note here that the erstwhile Board of Directors of both the Corporate Debtors have maintained complete silence throughout the proceedings. 5.24. Further, it is required to be noted that the Report of the Working Group Insolvency was submitted to the IBBI in the month of September 2019, wherein it was observed that IBC, 2016 has provisions for resolving insolvencies of a single company, however it does not have a common framework for resolving situations in which interlinked companies are going through insolvency. By noting the same, the Working Group Committee has proposed and recommended the definition of 'corporate group' including holding and subsidiary companies and has also suggested a comprehensive framework for group insolvency, that would start with a procedural coordination mechanism in the first phase. The Elements of the proposed framework may include: (i) a joint application against all corporate debtors who have defaulted and are part of a group, (ii) a single insolvency professional and a single adjudicating authority (to reduce to litigation and other costs, and save time), (iii) creation of a group creditors' committee, (iv) communication, cooperation and information sharing among all these various members, and (v) group coordination proceedings. Thus, it is seen that even after submitting a comprehensive Report by the Working Group Insolvency Committee, the said recommendation is yet to partake the character of an ordinance or an Act of Parliament. Therefore, the arguments advanced by the Learned Senior Counsels in favour of consolidation cannot be considered since the Report of Working Group Insolvency Committee is only in the form of recommendation and is yet to partake the character of law and as such the recommendations made by the Working Group Insolvency Committee will not have the force of law.

To sum up, the upshot of the above discussions would lead us to the following conclusion;

All the Applicants, except the Application filed by RP of RISPL (IA/548/CHE/2021), being customers of either RPPL and RISPL have no locus standi to maintain the present Application seeking consolidation or simultaneous CIRP of the Corporate Debtors, since they are neither a 'Financial Creditor' nor an 'Operational Creditor'.

Furthermore, on perusal of the Judgment of Videocon (supra) and Radico Khaitan (supra) and Oase Asia Pacific (supra), it emerges that it is a fit case for ordering for consolidation, considering the views expressed by the customers of both the Companies. However, the CoC of RPPL, the suspended Directors of both the Companies or any Operational Creditor have not expressed their support for consolidation. Also, in view of the reasoning stated supra and in the absence of 'equity' jurisdiction being vested upon this Tribunal under the provisions of IBC, 2016 and in the absence of specific provisions under IBC, 2016, this Adjudicating Authority is unable to order for consolidation or simultaneous of CIRP of the Corporate Debtors viz. RPPL and RISPL at the fag end of CIRP.

When the Resolution Plan in respect of RPPL has been approved by the CoC and also the Resolution Plan in respect of RISPL is in the offing, ordering for simultaneous CIRP at this stage would amount to gross delay of Corporate Insolvency Resolution Process of both the Companies.

For the aforestated reasons, all the Applications are arrayed in the cause title stands dismissed. No costs.