SKIL Infrastructure Ltd vs Chandra Prakash Jain RP Of E Complex Pvt Ltd

The case is fixed for pronouncement of the order. The order is pronounced in the open court, vide separate sheet.

The present application has been filed by the applicant SKIL Infrastructure Limited against the partial rejection of its claim of financial debt in the Corporate Insolvency Resolution Process (‘CIRP’) of the corporate debtor.

The corporate debtor E-Complex Pvt Ltd was admitted in CIRP vide order dated 09.12.2020 in CP(IB) 563 of 2018. Following that the applicant had filed its claim amounting to Rs 37,87,42,125/- along with 16 % interest thereon. The RP has, however, admitted its claim to the extent of Rs 21,37,53,928/-.

The applicant is one of the group companies of SKIL Group which were erstwhile promoters of Reliance Naval and Engineering Limited (‘RNEL’) (then known as Pipavav Defense & Offshore Engineering Limited) and its 100% subsidiaries including the corporate debtor.

As stated in the application, the applicant as a promoter of the RNEL (then known as Pipavav Defense & Offshore Engineering Limited) and in turn of the corporate debtor had furnished certain securities for and on behalf of the corporate debtor in respect of the financial assistance aggregating to Rs 130 crores availed by the corporate debtor from ECL Finance Limited, JM Financial Products Limited, India Infoline Finance Limited (IIFL), Religare Finvest Limited (hereinafter referred to as “RFL”) and SREI Infrastructure and Finance Limited. The control over these companies RNEL (then known as Pipavav Defense & Offshore Engineering Limited), and its subsidiaries (Including Corporate Debtor) had shifted to Reliance Infrastructure Limited and Reliance Defense System Private Limited (referred to as Reliance Group) as per the purchase agreement dated 4^th March 2015. It is submitted that as per the relevant clause of the said purchase agreement, the Reliance Group was obliged to ensure the release of the securities furnished by the SKIL Group within three months upon change in management, however, that was not done and in the event of default committed by the Reliance Group the said lenders had invoked certain shares of RNEL (then known as Pipavav Defense & Offshore Engineering Limited) owned by the applicant and pledged by it as security for the loan availed of the corporate debtor. The table below reflects the break-up of its total claim of Rs 37,87,42,125/- as stated in the application:

In its reply the RP has stated that he did receive a claim from the applicant on 23.02.2021 amounting to Rs 37,87,42,125/- along with 16% interest thereon, however, after verification and seeking certain clarification he admitted the claim to the extent of Rs 21,37,53,928/-. The table below reflects the details of the amount claimed and admitted/rejected by the RP in respect of the invocation of securities by the concerned financial creditors and in relation to the remittance etc.

In its reply, the RP has also stated that the applicant is a related party of the corporate debtor and thereby could not be considered as a member financial creditor of the CoC.

We have heard learned counsel appearing for both sides and have also perused the relevant documents on record. It is noted that the RP has carried out due verification and sought the required clarification from the applicant. He has admitted the claim in respect of the invocation of securities by the financial creditor to the extent that could be verified on the basis of the credit notes issued by the financial creditor and submitted by the applicant to the RP. It is noted that in the context of the claim of Rs 14,12,31,087/- on account of the invocation of securities by Religare Finvest Limited (RFL), the applicant had not submitted any credit note issued by the Religare Finvest Limited (RFL) for reconciliation. The applicant was given the due opportunity to seek clarification on it. In the absence of the required clarification, the RP has rejected that claim in entirety. We also note that the applicant could not give the required clarification as regards the claim in respect of the various remittances. After having considered the entire facts of the case, we are of considered view that the decision of the RP on the partial rejection of the claim is fully justified and that cannot be faulted with. The applicant was the erstwhile promoter of RNEL & its 100% subsidiaries including corporate debtor and held substantial shares of RNEL and corporate debtor even after, the control was shifted to Reliance Group at the relevant time. Moreover, the loan was taken when the SKIL Group was promoter. Thus, applicants a related party of the corporate debtor and being the related party, it cannot be taken as a member of CoC. As such the various relief sought in para 4 of the application cannot be granted.

Accordingly, IA 537 of 2021 stands dismissed and disposed of.