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Judgment
O R D E R
22.3.2024 - Learned Senior Counsel for the Appellant as well as learned Counsel for the Respondent appearing. This Appeal has been filed against an interlocutory Order passed on 5th March, 2024 in I.A. No.511 of 2020 which is as follows:-
“1.Mr. Ankur Sood, Advocate a/w Romila Mandal, Uttam Rane, Advocate appeared for the NTADCL.
2.This application is filed for the stay. However, it is clarified that NTADCL shall not exercise any set off right till final disposal of the present application, and the loan shall be paid as falls due.
3.List this CA on 03.04.2024 for hearing.”
Learned Senior Counsel for the Appellant submits that IA No.511 of 2020 was filed by the Appellant themselves in which following prayers were made:-
“a)To permit the Applicant herein to Set Off INR 116.20 Crores (which is the amount payable by IL&FS to the Applicant herein} against INR 172.90 Crores (which is the amount payable by the Applicant herein to IL&FS};
b)To pass an order exempting the applicant herein from servicing any loans to ILFS in terms of the Corporate Debt Restructuring dated 02.12.2011, pending disposal of CA 32 of 2010 in CP 18 of 2007 on the file of NCLT, Chennai;
c)Add interim reliefs in terms of the above prayers.
d)Pass such other or further orders as it may deem fit and proper in the facts and circumstances of the case.”
It is submitted that there was an Application CA 52 of 2024 filed by the Infrastructure Leasing & Financial Services Ltd. (ILFS) in which following prayers were made:-
“A. Declare that the Prepayment Proposal dated December 30, 2022 implemented by New Tirupur Area Development Corporation Limited to the extent of the exclusion of the outstanding debt owed by New Tirupur Area Development Corporation Limited to Infrastructure Leasing & Financial Services Limited under the Master Restructuring Agreement dated March 29, 2012, as illegal and direct New Tirupur Area Development Corporation Limited to reinstate the total outstanding principal debt amount of the IL&FS Senior Loan under the Master Restructuring Agreement dated March 29, 2012 of lNR 52.92 crores (approx.) (along with interest. Penalties, etc. thereon as may be applicable in terms of the Master Restructuring Agreement dated March 29, 2012) owed to Infrastructure Leasing & Financial Services Limited as on date of filing the present application.
B. Direct New Tirupur Area Development Corporation Limited to pay an aggregate amount of lNR 19.72 crores (as on December 1, 2023) to Infrastructure Leasing & Financial Services Limited, being the aggregate of the monthly instalment of principal and interest repayments due by New Tirupur Area Development Corporation Limited to Infrastructure Leasing & Financial Services Limited in terms of Schedule III of the Master Restructuring Agreement dated March 29, 2012 which remain unpaid by New Tirupur Area Development Corporation Limited from December I, 2022 till December 1, 2023.
C. Direct the New Tirupur Area Development Corporation Limited to continue making payments under the Master Restructuring Agreement dated March 29, 2012 to the Applicant as stipulated Schedule III thereof with effect from December l, 2022 in addition to payment of outstanding amounts as per Prayer (B) above in accordance with the order of the Hon'ble NCLAT dated February 11, 2019 in Company Appeal (AT) Nos. 346-347 of 2018.
D. Alternatively, direct New Tirupur Area Development Corporation Limited to prepay to Infrastructure Leasing & Financial Services Limited the entire outstanding amount of the IL&FS Senior Loan i.e., INR 52.92 crores (along with interest, penalties etc. thereon as may be applicable) under the Master Restructuring Agreement dated March 29, 2012.
E. Pending adjudication and final disposal of the present Application direct New Tirupur Area Development Corporation Limited to continue making scheduled repayments to Infrastructure Leasing & Financial Services Limited as stipulated in the Master Restructuring Agreement dated March 29, 2012 in accordance with the order of the Hon'ble NCLAT dated February 11, 2019 in Company Appeal (AT) Nos. 346-347 of 2018.
F. Pending adjudication and final disposal of the present Application direct New Tirupur Area Development Corporation Limited to disclose on affidavit:
a. duly audited financial statements for the F.Y. 2022-23 together with all related statements including but not limited to those of income, retained earnings, cashflows, balance sheet, profit & loss etc.;
b. duly audited financial statements for the 1st, 2nd and 3rd quarter of the F.Y. 2023-24 together with all related statements including but not limited to those of income, retained earnings, cashflows, balance sheet, profit & loss etc.;
c. a report of the management of New Tirupur Area Development Corporation Limited relating to business and operations including in respect of compliance with applicable laws and accounting standards for the F.Y. 2018-19 to F.Y.2022-23 and for the 1st 2nd and 3rd quarter of the F.Y. 2023-24; and
d. no-dues certificate from the statutory auditors of New Tirupur Area Development Corporation Limited certifying that there is no default of repayments to be made by New Tirupur Area Development Corporation Limited to its lenders, including Infrastructure Leasing & Financial Services Limited, as on date;
e. all minutes of the meeting(s) and resolutions of the board of directors of New Tirupur Area Development Corporation Limited approving the preparation and implementation of the Prepayment Proposal dated December 30, 2022 implemented by New Tirupur Area Development Corporation Limited and …………………”
The Adjudicating Authority passed an Order in CA 52/2024 and the matter was listed on 3rd April 2024. IA No.511 of 2020 was also directed to be listed on 3rd April, 2024. The Appellant further states that the Adjudicating Authority passed a direction in Para 2 of the Order “…..and the loan shall be paid as falls due.” It is submitted that the Appellant has not been servicing the loan since December, 2022 and has been contesting the issue, hence, the Adjudicating Authority ought to have considered the contention and then taken a decision. Learned Counsel for the Respondent submits that the Appellant has been throughout servicing the loan upto December, 2022 and they had filed the Application in 2020 but Court did not pass any interim Order and Adjudicating Authority did not commit any error directing that loan shall be paid.
We have considered the submissions of the parties and perused the records. Order dated 5th March, 2024 as extracted above indicate that the direction has been issued in Para – 2. However, the Adjudicating Authority has not given any reason for issuing direction separately when IA 511 of 2020 and CA 52 of 2024 were already pending consideration and the matter was fixed on 3rd April, 2024. In the facts of the present case, ends of justice would be served in observing that both the CA 52 of 2024 and IA No.511 of 2020 which are already fixed for 3.4.2024 be considered and appropriate decision be taken. The direction in para – 2, to the extent “and the loan shall be paid as falls due” needs to be deleted. We make it clear that we are not expressing any opinion on the CA 511 of 2020 and CA 52 of 2024 in the Appeals. It is for the Adjudicating Authority to take decision in both the applications.
Learned Counsel for both the parties pray that Adjudicating Authority may dispose of the Application on an early date. Looking to the fact, the Application IA No.511 of 2020 is pending for long, the same may be disposed of early as well as CA No.52 of 2024.