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Judgment
Per: Bench
Under consideration is a Company Application filed under Rule 11 read with Rule 154 of NCLT Rules, 2016, by Mr. Anup Kumar Singh (in short “Applicant/Interim Resolution Professional”) for seeking the following reliefs:-
a. To direct rectification of Page no.4 (Point no.7), Page No.5 to 6 (Point no.10(C)) and Page no.12 (Point No.15) of Order dated 01.10.2021 in I.A. 861/2021 wherein the voting percentage of Committee of Creditors in favour of the Resolution Plan erroneously states 97.34% and requires to be modified to 100.00%.
b. To direct rectification of Serial 10(c) of Page 5 of Order dated 01.10.2021 in I.A. 861/2021 so as to state total amount of Resolution Plan as INR 501 crores instead of INR 500 crores;
c. To direct the Effective Date to be 25.10.2021 of Order dated 01.10.2021 in I.A. 861/2021 as order was pronounced on 01.10.2021 but was uploaded on the website of NCLT on 25.10.2021;
d. To direct rectification of Serial No.9 of Page 4 of Order dated 01.10.2021 in I.A. 861/2021 so as to state the correct PBG No. that is 52760IGL0003421 instead of 52760IGL003421.
Brief facts as stated by Applicant are as under:
a) That the instant Application is filed by Mr. Anup Kumar Singh (“Applicant”), who has been appointed as the Resolution Professional for the Corporate Debtor.
b) That the present application is filed in respect of the Order of this Adjudicating Authority in IA No. 861/2020 dated 01.10.2021, approving the Resolution Plan submitted by Earthin Projects Limited in consortium with K. Ramachandra Rao Transmission & Projects Pvt. Ltd. for Indu Projects Limited, (“Corporate Debtor”).
It is stated by the RP that the Resolution Plan of Earthin Projects Limited in consortium with K. Ramachandra Rao Transmission & Projects Pvt Ltd was approved by 100.00% vote in favour of the said resolution.
That this Applicant noticed certain clerical discrepancies in the Order dated 01.10.2021 in the captioned Application. The Applicant in the instant I.A. prays for removal and rectification of such errors that have inadvertently creeped into the said Order. The rectifications sought are as follows –
One of the members of the Committee of Creditors namely, Andhra Bank having voting share of 2.65% had voted against the Resolution Plan submitted by M/s. Earthin Projects Limited in consortium with K. Ramachandra Rao Transmission & Projects Private Limited as they had not received approval on the said Plan till the voting lines were open. However, after receipt of approval on the said Plan, they gave their approval over email and the same was then submitted before the Adjudicating Authority in the form of a Memo dated 17.09.2020 registering their assent to the said Plan. Hence the same shall have to be rectified in aforesaid Order on Page no.4 (Point no.8) and Page no.12 (Point No.15) as presently the order states that the order has been approved by the Committee of Creditors with 97.34% votes in favor of the plan.
In Serial 10(c) of Page 5 of the abovementioned order the total amount of Resolution Plan should be Rs.501 crores instead of Rs.500 crores. The plan submitted by Earthin Projects Limited in consortium with K. Ramachandra Rao Transmission & Projects Private Limited is to the tune of INR 501 crores along with a working capital of INR 40 Crores coupled with Counter A guarantee / FDR to back the Live Bank Guarantee to the tune of INR 77.59 crores.
The definition of the Effective Date mentioned in the approved Resolution Plan is “the date of approval of the Resolution Plan by the Adjudicating Authority” which shall be “the date of receipt of order from the Adjudicating Authority approving the Resolution Plan” reason being the order was pronounced on 01.10.2021 but was uploaded on the website of NCLT on 25.10.2021. Therefore, the Effective Date will be 25.10.2021 for the start of the count for implementation of the approved resolution plan with 90 days for such approval. iv. In Serial No.9 of Page 4 of the aforesaid Order the PBG No. shall be 52760IGL0003421 instead of 52760IGL003421.
In Serial No. 10(C) of the said order, the table to be replaced.
Reiterating above, counsel for the Applicant prayed to allow the Application as prayed for.
Heard. Perused the record.
The instant Application is filed under Rule 11 r/w Rule 154 of NCLT Rules, 2016. To adjudicate the instant matter, it is pertinent herein to refer the said Rules:
“11.Inherent Powers.- Nothing in these rules shall be deemed to limit or otherwise affect the inherent powers of the Tribunal to make such orders as may be necessary for meeting the ends of justice or to prevent abuse of the process of the Tribunal.” ...
“154.Rectification of Order.- (1) Any clerical or arithmetical mistakes in any order of the Tribunal or error therein arising from any accidental slip or omission may, at any time, be corrected by the Tribunal on its own motion or on application of any party by way of rectification. (2) An application under sub-Rule (1) may be made in Form No. NCLT. 9 within two years from the date of the final order for rectification of the final order not being an interlocutory order."
On a conjoint reading of the above Rules, it is clear that nothing shall limit the inherent powers of the Tribunal to make such orders as are necessary for meeting the ends of justice or to prevent abuse of the process of the Tribunal, but according to Rule 154, any order can be rectified only if there is any clerical or arithmetical mistake in any order or error therein arising from any accidental slip or any omission.
On consideration of the facts of the instant case, it is seen that there are following arithmetical mistakes in the said order dated 01.10.2021:-
a. In recording the total amount of Resolution Plan as Rs.500 crores instead of the Rs.501 crores.
b. In Serial No.9 of Page 4, the PBG No. is recorded as 52760IGL0003421 instead of 52760IGL003421.
Apart from above, there is no any arithmetical mistake or accidental slip or omission on part of this Adjudicating Authority in IA No. 861/2020 dated 01.10.2021.
Upon consideration of the Application, it appears that the Resolution Professional in guise of this rectification Application, is seeking to modify the order in IA No. 861/2020 dated 01.10.2021, which is not borne out of record and is beyond the authority of this Adjudicating Authority.
In view of the above, Order in IA No. 861/2020 dated 01.10.2021 stands modified and rectified only to the extent as under:-
Wherever in the order in IA No. 861/2020 dated 01.10.2021, the total amount of Resolution Plan is recorded as "Rs. 500 Crore" shall hereafter stands modified as "Rs. 501 Crore" and shall be read as Rs. 501 Crore in the places wherever it is recorded as Rs. 500 Crore, including in the table at para 10(c).
In Serial No.9 of Page 4, the PBG No. shall be read as "52760IGL003421" instead of "52760IGL0003421".
Rest of the contents in the order in IA No. 861/2020 dated 01.10.2021 shall remain same.
Accordingly, this Application stands disposed of.
Per: Bench
The instant petition is filed under Section 60(5) of IB Code, 2016 read with rule 11 of the NCLT Rules, 2016 seeking the following reliefs:
a)To allow the present Application and grant an extension of 60 days from 23 January 2022 for implementation of the Applicant's Resolution Plan dated 7 August 2020.
b)To pass an order directing the Resolution Professional not to encash and/or forfeit the Applicant's Bank Guarantee No.52760IGL0003421 for INR 5,00,00,000 valid from 24 July 2021 until 23 January 2022 issued by Union Bank of India in favour of the Resolution Professional, pending the present application.
Brief facts of the case as stated by the Applicant are as under:-
a. That the Resolution Applicant herein has submitted its Resolution Plan dated 07.08.2020 and the same was approved by the CoC in its 16th CoC with 97.34% of CoC vote and the Applicant herein has also provided Bank Guarantee for Rs. 5,00,00,000/- as Earnest Money Deposit along with the said Resolution Plan. The said BG is extended from time to time and the same is still alive.
b. That the said Resolution Plan was approved by this Adjudicating Authority vide IA No. 861/2020 on 01.10.2021. That the said Resolution Plan was uploaded on 25.10.2021.
c. That the Resolution Professional has filed an Application seeking direction that the period of 90 days for implementation of the Resolution Plan may be reckoned from the date on which the order of Resolution Plan was uploaded on the website of NCLT i.e., on 25.10.2021 and for rectification of the inadvertent errors. The said matter is pending adjudication by this Adjudicating Authority.
d. That the Applicant herein has addressed a letter dated 22.12.2021 to the RP stating that the Applicant is entitled to pay the entire Resolution Plan amount on or before 23.01.2022, since the news of approval of the Resolution Plan was communicated to the Applicant on 27.10.2021. Thus, it was requested to the Resolution Professional that the Resolution Professional permits Applicant to pay the entire resolution fund amount on or before 23.01.2022.
e. That the Applicant has unfortunately not been able to implement the Resolution Plan even during this 90days period mainly on account of the challenges and difficulties arising as a result of the resurgence of the Covid-19 pandemic globally, because of which the Applicant's Global Investors also delayed disbursal of the funds which were earmarked for the purpose of implementation of the Resolution Plan. That though the funds for the Resolution Plan have now being sanctioned by the investors, due to the resurgence of Covid – 19 Pandemic and the resultant effects of the 3rd wave, the necessary formalities which were to be completed for the purpose of transfer of funds from the foreign investors of the applicant to applicant's account in India have been delayed.
f. That the Applicant managed to open escrow account on 04.12.2021 with Bank of India, Hyderabad Branch, as such, the Applicant remains committed and is taking all the necessary steps to arrange the funds through its investor in order to expeditiously implement the Resolution Plan. However, given the resurgence of the Covid-19 pandemic and the consequent difficulties and disruption in conducting business, particularly with overseas investors, the Applicant is constrained to file the present Application, praying for an additional period of 60 days from 23.01.2022 for implementation of the Resolution Plan.
g. That in view of the delay in implementation of the Resolution Plan and consequent prayer of extension of time, it is imperative that the CoC/RP is restrained from forfeiting the EMD Bank Guarantee submitted by the Applicant along with the Resolution Plan, in terms of Clause 1.9.4 of the RFRP. This is necessary since the Applicant is already in the process of implementation of the Resolution Plan and is merely seeking an additional time period of 60 days.
h. That any forfeiture of the Applicant's EMD at this stage is not only unwarranted but will also severely prejudice the Applicant as well as the other stakeholders in the Corporate Debtor's CIRP.
That the Applicant has already applied for a further extension of the Bank Guarantee in advance of its scheduled expiry.
j. That this Adjudicating Authority may be pleased to grant an additional period of 60 days for implementation of the approved resolution plan, as this additional time period of 60 days is extremely critical and necessary for revival of the Corporate Debtor and in the interest of all the stakeholders in the Corporate Debtor's CIRP inasmuch as the approved Resolution Plan sought to be implemented provides for a resolution fund of approximately INR 501 Crore and a further amount of INR 77.59 Crores, being provided towards counter guarantee/100% fixed deposit against the outstanding bank guarantee and an amount of INR 40 Crores for working capital of the Respondent Company. 2021
k. That if the directions as sought by the Applicant are not passed, then the Applicant will suffer irreparable loss and serious prejudice, despite being the Successful Resolution Applicant and would not be able to implement the Resolution Plan.
Counsel for the Respondent filed counter, inter-alia, denying the allegations made in the Application and has further prayed to dismiss the instant Application.
Heard and perused the record.
The Record is clear and the amount required to be paid is Rs. 501 Crores, which remains unpaid till date. The successful Resolution Applicant, even though sought several extensions for the implementation of Resolution Plan, failed to stick to his commitment in any manner. The Application filed by the Successful Resolution Applicant citing various reasons for granting extension of time for the payment of the necessary amount cannot be accepted at this stage for the reason that practically a period of more than 50 days had already passed off and even though we grant the prayer, the net effect is that the Applicant has got more than sufficient time for the implementation of the Resolution Plan. The counsel appearing for the Successful Resolution Applicant submitted that the money was in the pipeline and will come shortly but to no avail and when the matter came up for hearing on last occasion i.e., on 21.02.2022, it has been made clear that in the event, the Resolution Professional does not file a memo, stating that money has been completely paid, the Application will be dismissed and this Adjudicating Authority, will take appropriate steps in accordance with law. Even though this Adjudicating Authority had approved the Resolution plan on 01.10.2021 and the Successful Resolution Applicant was required to pay the amounts within 90 days, no steps have been taken by the Resolution Professional/ Monitoring Committee, to bring into the knowledge of the Adjudicating Authority the failure on the part of the Successful Resolution Applicant in bringing the money. We are very upset with the manner in which the Monitoring Committee had given a very very long rope to the Applicant in making the payment. We get a doubt on the fairness of the Monitoring Committee with regard to the implementation of the Resolution Plan.
This Adjudicating Authority, is not convinced in any manner to grant any further time. Hence, this Application is rejected. CoC is directed to take appropriate steps in the light of the dismissal of this Application, within a week.
Further the prayer for restraining the Resolution Professional from encashing the EMD cannot be acceded to, in view of the fact that the stipulated time has already elapsed long back.
Accordingly, the amount paid as the EMD by the Applicant shall have to be forfeited and proceedings under Section 74(3) of the IB Code, 2016 have to be initiated as per Law.
With the above, Application bearing IA No. 77/2022 stands dismissed.