SREI Infrastructure Finance Ltd. vs Arcelor Mittal India Pvt. Ltd. & Ors.

[PER BENCH]

In IA 245 of 2020, following prayers have been made:

Elaborate contentions have been made by respective parties; therefore, parties were requested to provide their written submissions. Such written submissions are reproduced as under:

This Interlocutory Application No. 245 of 2020 ("the said Application") is filed by SREI Infrastructure Finance Limited ("the Applicant") under Section 33(3) and (4) read with Section 60(5) of the Insolvency and Bankruptcy Code, 2016 ("the Code") on the ground that the Respondent No.1 and 3 have contravened the Resolution Plan dated 2.4.2018 restated and resubmitted on 22.10.2018 by the Respondent No.1 ("the Final Resolution Plan") as finally approved by Hon'ble Supreme Court of India vide Judgment and Order dated 15.11.2019 ("the Approval Judgment").

The Applicant submits that Right to Use Charges payable for the use of the pipeline belonging to Odisha Slurry Pipeline Infrastructure Limited ("OSPIL") during the Corporate Insolvency Resolution Process ("CIRP") of Essar Steel India Limited ("ESIL"), constitute CIRP Cost, within the meaning of Section 5(13)(c) of the Code.

Further, the Deed of Cancellation dated 24.6.2016 is not effective since the liabilities of OSPIL were never transferred to ESIL and the part purchase consideration paid by OSPIL to ESIL also continues to remain with ESIL.

The Final Resolution Plan provided for payment of CIRP Cost through internal accruals or by Respondent No.1 without any cap or limitation. The said Right to Use Charges remained unpaid despite repeated demands by OSPIL, the Applicant and the Resolution Professional of OSPIL and found to be recoverable by Hon'ble National Company Law Tribunal, Cuttack Bench in its Order dated 2.3.2020. Hence, the said Application is filed under Section 33(3) read with Section 60(5) of the Code for a direction to pay the CIRP Cost, failing which, for an order of liquidation of the Respondent No.3.

(Emphasis Supplied)

(Emphasis Supplied)

The Declaration Order, therefore, in Paragraph no. 81(2) clearly holds that the by virtue of the status quo order passed by Hon'ble High Court of Calcutta operates as a stay of unwinding of the BTA. The same is, therefore, clearly a stay of the Deed of Cancellation. The said order has never been challenged and has attained finality.

(Emphasis Supplied)

(Emphasis Supplied)

(Emphasis Supplied)

Further, under Chapter X and XI of the Initial Plan, the following statements were made (Page No. 640 and 650 of Vol. III – Petition):

(Emphasis Supplied)

Under Chapter XIII (Key assumptions), the Respondent No.1 limited its liability to pay CIRP Cost as under (Page No. 665 Vol. III – Petition):

Since the statement made under Clause 5.8(g) was in contravention of the Declaration Order, the Applicant objected to the same and demanded that the terms of the Initial Plan be brought in line of the Declaration Order. The Respondent No.1 and the CoC of ESIL accepted the stand of the Applicant. Accordingly, the Respondent No.1 resubmitted an amended plan, which was nothing but the Final Resolution Plan.

The Respondent No.1 deleted clauses 2(d) of the Key Assumptions (by which CIRP cost was capped), while retaining the statements made in Chapter X and XI (extracted above), as a recognition of the position that the Pipeline Asset is an asset of OSPIL (and not an asset of ESIL) and that it would have to pay RTU Charges (as CIRP Cost). Thus, the limit / cap on the cost was removed. The Final Resolution Plan was approved by the CoC on 25.10.2018 and by this Hon'ble Tribunal on 8.3.2019.

It would, therefore, be apparent that the approval of OSPIL Plan is not determinative of the rights of the Applicant and any implementation of the OSPIL Plan cannot take effect to the detriment of or prejudice the Applicant. The Respondent No.3 has relied upon the judgment reported in 1994 (Supp) (3) SCC 73 – Collector of Customs v/s Krishna Sales Private Limited, to contend that mere filing of an appeal by the Applicant herein challenging the OSPIL Plan does not operate as stay thereof. The said judgment has no application in facts of the present case, in light of the above extracted orders of the Hon'ble Appellate Tribunal.

Affidavit in Company Application No. 12 of 2020 (Page No. 156 to 179 at Page No. 167 of Rejoinder to Reply of Respondent No.1):

Annexure - B to the said Circular, inter alia, describes reasonable cost as under:

All of the above criteria are satisfied with regard to RTU Charges payable during CIRP of ESIL.

- (c) Annexure - B to the said Circular refers to the Statement of Best Practices issued by SIPL. The said statement is a guidance document for IRPs and RPs with respect to CIRP cost. The relevant extracts read as under:

Therefore, it is apparent that the RTU Charges payable during CIRP of ESIL would constitute CIRP Cost.

Therefore, it can hardly be contended that the said Application is an attempt to re-open or unscramble the Final Resolution Plan as approved by Hon'ble Supreme Court of India. The said Application, on the contrary, seeks to enforce and implement the terms of the Final Resolution Plan, as approved by Hon'ble Supreme Court of India.

SECTION 33(3) OF THE CODE IS A PROVISION OF WIDE IMPORT AND ITS APPLICATION CANNOT BE RESTRICTED:

(Emphasis Supplied)

Without prejudice to the foregoing submission, and assuming, without admitting, that somehow the AMIPL Resolution Plan has been contravened, SREI could never be a party entitled to agitate such contravention under Section 33 on the basis averred by it.

The Application has been preferred under Sections 33(3) and 33(4), read with Section 60(5) of the IBC. The text of Section 33 is reproduced below:

For the Application to be maintainable, SREI will have to show that it is a person whose "interests are prejudicially affected" by an alleged contravention of the Resolution Plan submitted by ArcelorMittal India Private Limited ("AMIPL"), in the Insolvency Resolution Process of Essar Steel India Limited ("ESIL Resolution Plan"). SREI claims that its interests are prejudicially affected because under ESIL's Resolution Plan, CIRP costs were not paid to a third party/supposed creditor of ESIL, i.e. OSPIL (The question of whether such costs are CIRP costs and whether they are due to OSPIL at all is dealt with on merits – the Respondent says they are not). Importantly, that third party, OSPIL, never claimed any usage charges either as operational debt (for the pre-CIRP period) or as costs, during the CIRP period. Therefore, the present Application is nothing but purportedly a misconceived derivative action on part of the SREI, as a creditor of a third party.

SREI's Application proceeds on the basis that the scope of the words "person whose interests are prejudicially affected" is so wide to include even third-party creditors of supposed (but not actual) creditors. SREI has no direct contractual or financial interest in ESIL apart from its separate interest as a creditor of ESIL, where SREI was a part of the committee of creditors and approved this plan, accepted payments under and is now seeking to impugn it. The question to be determined is whether the language of Section 33(3) can and should be stretched to bestow standing on such remote persons.

Ex – facie, the claim does not pertain to the CIRP of ESIL, but that of a third party i.e. OSPIL. As a rule, only the management of OSPIL would be able to undertake an action for dues to OSPIL from any third party including ESIL. Reference may be had to the judgment of the Supreme Court in Chiranjit Lal Chowdhuri v. Union of India, 1950 SCR 869:

(emphasis added)

OSPIL has been fully capable of representing itself, either through its management (until May 14, 2019, i.e. till insolvency admission) or through the OSPIL resolution professional thereafter. As stated, OSPIL never lodged a claim for usage charges with the ESIL RP. SREI is not entitled to agitate claims on behalf of OSPIL. The only exception in the common law is that accorded to derivative actions, where shareholders sue directors to protect the company's interests, which exception is not pertinent here. In the present case, clearly SREI has approached this Hon'ble Adjudicating Authority in the capacity of a financial creditor of OSPIL and not as a member. Further, the present application has been admittedly filed by SREI merely for maximizing its own gains and not to protect the interest of OSPIL, which runs contrary to the intent of the IBC and the law settled by the Supreme Court i.e. that resolution proceedings are for rehabilitation of a corporate debtor and are not in the nature of recovery proceedings.

SREI says that it is seeking to better its rights vis-à-vis OSPIL through the present Application. Such a theory is beyond the pale of reason, and has absurd and extremely undesirable consequences. In its essence, SREI's theory is that a financier of Party A can proceed against a debtor of Party A absent any privity with that debtor, on the premise that if Party A's debtor were to fulfill its contractual obligation to Party A, this would be to the financier's benefit. Such a notion spells an end to privity and has grave implications. On this theory, no Resolution Applicant would ever have quietus even long after implementing a Resolution Plan – there would always be a possibility that a creditor of one of its operational creditors would emerge like a "hydra head popping up". Quite apart from the IBC, such an interpretation would upset the entire law of contract in a more general sense.

It is submitted that the scope of Section 33(3) cannot be interpreted to permit such remotely placed third parties to upset a concluded resolution process by claiming to be 'prejudicially affected' by non-payment to other third parties who have themselves not claimed the very amounts from which the Applicant derives standing. Accepting such a wide scope of the phrase "prejudicially affected" would lead to absurd and undesirable consequences contrary to the object of the IBC: to resolve insolvency in a final sense. SREI's interpretation would open the floodgates for finally resolved insolvency processes to be under constant siege by rank strangers and would lead to vexing consequences for Resolution Applicants.³ As an example, following SREI's theory, workmen or employees of a third party could also initiate such proceedings against a Resolution Applicant that any payments made to that third party would in turn enable them to receive outstanding wages or salaries, which is impermissible. Clearly, it cannot be the object or effect of Section 33(3) to bestow locus standi on such remotely placed parties. Such a wide interpretation is rife with consequences that militate against the stated object of the insolvency process: to bring resolution to the corporate debtor, and to assure the Resolution Applicant that it is taking over the corporate debtor free of such vexatious claims.

It is submitted that the proper meaning of the phrase "persons whose interests are prejudicially affected" would not be a literal interpretation of the words in their general and most liberal sense, but that the phrase should be interpreted in the context of the statute. In this context, reference may be had to the following judgements:

a. Utkal Contractors and Joinery Pvt. Ltd. v. State of Orissa, (1987) 3 SCC 279, paragraphs 9 – 13.

b. Central India Spg., Wvg. & Mfg. Co. Ltd. v. Municipal Committee, 1958 SCR 1102 at paragraphs 22 & 29.

Thus, the proper meaning of the phrase "persons whose interests are prejudicially affected" must derive from the object, the pattern, and the context of the IBC. In that sense, it is submitted, that the phrase refers to only those persons who are recognized stakeholders in a corporate debtor, i.e. persons who are involved in and bound by the Insolvency Resolution Process of the corporate debtor (and therefore, who may claim to be prejudicially affected by its non-implementation) i.e. the corporate debtor's employees, members, creditors, guarantors

A.P. Gas Power Corpn. Ltd. v. A.P. State Regulatory Commission, (2004) 10 SCC 511 (Paras 50, 53 and 55) and the like. The IBC clearly defines the stakeholders, who may claim to be interested in the resolution process. Section 31(1) of the IBC provides:

(emphasis added)

To this effect also, Regulation 38 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (“CIRP Regulations”) provides:

(emphasis added)

Similarly, under Section 53 of the IBC, read with Section 35, the “stakeholders” who are entitled to distribution of proceeds are the workmen, creditors, employees, etc. of the corporate debtor itself. The IBC provides no rights to, and does not protect the interests of third parties, who have no direct relationship with the corporate debtor.

In the context of the present case, the ESIL Resolution Plan identifies the stakeholders under various heads such as workmen and employees, financial creditors, operational creditors and it is clear that the Applicant (in its present capacity as lender of OSPIL) is not a stakeholder under the Plan.

Reference may also be had to the judgment of the Supreme Court dated November 15, 2019 in Committee of Creditors of Essar Steel India Limited v. Satish Kumar Gupta, 2019 SCC Online SC 1478, finally approving the ESIL Resolution Plan ("SC Judgment"): "88. For the same reason, the impugned NCLAT judgment in holding that claims that may exist apart from those decided on merits by the resolution professional and by the Adjudicating Authority/Appellate Tribunal can now be decided by an appropriate forum in terms of Section 60(6) of the Code, also militates against the rationale of Section 31 of the Code. A successful Resolution Applicant cannot suddenly be faced with "undecided" claims after the Resolution Plan submitted by him has been accepted as this would amount to a hydra head popping up which would throw into uncertainty amounts payable by a prospective Resolution Applicant who successfully take over the business of the corporate debtor. All claims must be submitted to and decided by the resolution professional so that a prospective Resolution Applicant knows exactly what has to be paid in order that it may then take over and run the business of the corporate debtor. This the successful Resolution Applicant does on a fresh slate, as has been pointed out by us hereinabove. For these reasons, the NCLAT judgment must also be set aside on this count."

(emphasis added)

Thus, a proper interpretation of Section 33 would seek to balance the interests of such stakeholders in the proper implementation of a Resolution Plan, with the interest of the Resolution Applicant to not have to deal with vexatious proceedings initiated by mischievous third parties such as the Applicant who are deriving their standing -several degrees removed - from their contractual relationship with other third parties who have never even held themselves out as stakeholders to the ESIL resolution proceedings. Such a party is ipso facto not a stakeholder in ESIL as a corporate debtor since it has no interest in the successful resolution of ESIL, but has, on its own pleadings and arguments sought to connect the outcome of this Application with the OSPIL resolution.

In fact, SREI has, in earlier proceedings (connected with the ESIL CIRP filed pleadings) has taken a similar position while suggesting that this Adjudicating Authority has no jurisdiction under Section 60(5) (which has also been invoked by SREI) to deal with the rights of third parties who are not the corporate debtor or a lender to the corporate debtor. The relevant extract from SREI's reply to IA No. 419 of 2017 filed by the ESIL RP is reproduced below [AMNS Reply @ Page 86]:

(emphasis added)

This Adjudicating Authority vide its order dated 7 February 2018 [See IA 245/2020 Vol. 3 @ p. 436] in the said matter referred above has already taken the view that it would not adjudicate matters that have a bearing on the title over the Slurry Pipeline in these proceedings. It stands to reason that if the Adjudicating Authority cannot deal with rights of third parties during the CIRP, it cannot then be approached on the plea that such third parties have an interest in the Resolution Plan itself. The Applicant is bound by the order dated February 7, 2018 of this Adjudicating Authority and is estopped from filing this Application, contradicting its stand on the jurisdiction of this Adjudicating Authority and urging the same issue of title and consequent issues once again.

The Applicant has relied on the observations made by this Hon'ble Adjudicating Authority in the order dated 7 February 2018 to contend that the RP was directed to proceed on the basis that the slurry pipeline was an asset of OSPIL. In this regard, it is submitted that as far as this Hon'ble Adjudicating Authority's statement in paragraph 81(4) of the order that "There is no hindrance for potential Resolution Applicant for filing Resolution Plans in view of right of Corporate Debtor to use pipeline under RTUA" is concerned, this observation was not with respect to AMIPL's Resolution Plan, but a general observation concerning "potential Resolution Plans". It is an admitted position of the RP, that the Slurry Pipeline was appearing as an asset of ESIL, was in the possession of ESIL and was also being maintained by ESIL, accordingly this statement of the Adjudicating Authority has to be read in that context. Such being the case, this resolution process in fact proceeded on the basis that the title to the Slurry Pipeline belonged to ESIL (subject to certain disputes) and not OSPIL.

Therefore, the said observation cannot be read to mean that potential Resolution Plans should proceed on the basis that the slurry pipeline belongs to OSPIL. The said observation was rendered in the context of the stand taken by the ESIL RP regarding the lack of clarity as to the title of the Slurry Pipeline resulting in a hindrance to the resolution process of ESIL. The observation in paragraph 81(4) of the said order was rendered to allay the apprehensions of the ESIL RP and clarifying that ESIL's access and unhindered right to use would not be disturbed even if the pipeline is ultimately adjudicated to be owned by OSPIL. This observation was limited to aiding the ESIL RP in preparing the Information Memorandum, as is evident from the following paragraphs of the order [Application, Vol. III, @pg. 469 and 481]:

Without prejudice to the aforesaid, the SC Judgment brought quietus to a long-drawn-out resolution process, that spanned over two years. In its earlier judgment of October 4, 2018 (ArcelorMittal India Private Limited v. Satish Kumar Gupta, (2019) 2 SCC 1) the Supreme Court had invoked its powers under Article 142 of the Constitution while assessing AMIPL's eligibility under 29A of the IBC and permitted it to participate as a Resolution Applicant. The intent of the Supreme Court was clearly to avoid pushing ESIL into liquidation. However, the Application seeks to do just that. Under the scheme of Section 33, the Adjudicating Authority lacks the jurisdiction to compel payment of usage charges to OSPIL. If SREI were to succeed in this Application, and the Respondents are directed to make payment of Usage Charges to OSPIL, then such payment would upset the viability of the resolution that AMIPL has proposed for erst. ESIL, which viability was approved by the COC and then by Hon'ble Supreme Court with a view to keep the corporate debtor alive. ESIL cannot be directed to be liquidated on account of such frivolous claims, an eventuality that the Supreme Court has sought to prevent twice over.

While the claim of INR 1300 crores towards the purported RTU Charges is in itself frivolous, assuming without admitting that the said claim was payable, it is submitted that the ESIL Resolution Plan contemplated a one-time settlement of the resolution debt towards the creditors uptill the Effective Date. Admittedly, AMIPL made the payment of the resolution amount (including the CIRP Cost date as well as the pay out to the Applicant SREI), as informed to it by the ESIL RP. No further payments for a period prior to the Effective Date of ESIL Resolution Plan were envisaged and accordingly, could not be permitted in terms of Section 31(1) of the I&B Code.

The ESIL CIRP, after more than 830 days (i.e. 3 times the stipulated 270-day period under the Code) and 2 rounds of protracted litigations, concluded with the approval of AMIPL's Resolution Plan by the SC Judgment. The Application seeks to unscramble the ESIL Resolution Plan, under which AMIPL has made upfront payments of over INR 42,000 crores [Para 4, Application Vol. 1 @ Page 3] and is binding on all stakeholders pursuant to Section 31(1) of the IBC.

The Application is nothing but a fresh money claim that has been filed after the successful completion of CIRP. This is in the teeth of the SC Judgment, which expressly held that no fresh claims could be entertained by the Adjudicating Authority against a successful Resolution Applicant under Section 60(5) of the IBC, after the acceptance of a Resolution Plan and that the Resolution Applicant starts on a fresh slate [Para 5(iv), Application Vol. 1 @ Page 6]:

Importantly, OSPIL chose not to file any claim for usage charges for the period prior to the commencement of the ESIL CIRP (i.e. from January 2016 to August 2017). There is no explanation for OSPIL's failure to do so. Whatever be the reason, it is evident that OSPIL did not believe it was owed any usage charges pre-CIRP. Any claim for usage charges on OSPIL's behalf, after the conclusion of the ESIL CIRP is unsustainable.

The SC Judgment brought quietus to a long-drawn-out resolution process, that spanned over two years. Even the review filed against the said judgment of the Hon'ble Supreme Court by Dakshin Gujarat Vij Co. Ltd. to reagitate certain claims (including certain alleged costs incurred during the resolution process) towards electricity charges was dismissed as being devoid of any merit. ^{44.Review Petition (Civil) Diary No. 240/2020}The Adjudicating Authority has no jurisdiction to now re-open the ESIL Resolution Plan and determine whether usage charges are payable by ESIL to OSPIL, which it has itself approved in its order.

SREI, being a part of the Committee of Creditors of ESIL cannot now challenge the entire process after conclusion of the entire CIRP and successful implementation of the ESIL Resolution Plan by AMIPL. Reliance in this regard is placed on the judgment of Prashant Properties Pvt. Ltd. v. Vijaykumar V. Iyer, RP⁶ wherein the Hon'ble NCLAT held as under:

⁵ Order dated 05.06.2020 passed by NCLAT in Company Appeal (AT) (Insolvency) No.513 of 2020; See also Allahabad Bank v. SPS Steels Rolling Mills Ltd. (Order dated 26.02.2020 passed by NCLT, Kolkata Bench in C.A.(IB) No. 937/KB/2018) mouth that the proceedings qua the validity or otherwise of the permitted User Agreement of the brand name were conducted behind its back. If at all there were any apprehensions in the mind of the Appellant, same have been allayed by the Adjudicating Authority by observing in Para 33 of the impugned order that decision as regards plea of Resolution Professional on there being an undervalued transaction does not have any bearing on the applicability of this Agreement in future in either way."

As a matter of fact, SREI's purported reliance on COC minutes to claim the alleged RTU Charges is totally misplaced, and the same cannot be accepted / permitted. Admittedly, AMIPL was not a party to the COC meetings when the purported discussions were made. In fact, it would not be incorrect to state here that SREI ought to have made the ESIL COC a party here which could have made things clear. SREI, as the Applicant before this Hon'ble Adjudicating Authority could have made ESIL COC a party, but did not. Needless to mention, it is the Resolution Plan alone which was submitted by AMIPL, and which has been approved by the Hon'ble Supreme Court, that is binding on AMIPL as well as all other stakeholders (including SREI) and not the COC minutes.

Further, as stated by the Resolution Professional (and also its advisor i.e. Alvarez & Marshal), all CIRP costs had been paid and no CIRP costs were pending. Basis the above, the working capital adjustments as required under the AMIPL plan were calculated and each of member of ESIL COC was paid their proportionate share of the working capital amounts, including SREI. Without prejudice, and without admitting anything in this behalf, assuming that any RTU charges are to be paid, then it is for the banks to pay such amounts as the beneficiaries of the working capital in ESIL process, including SREI. [Application Vol. IV @ p. 694 - 696]

It is evident from a plain reading of the Application that SREI is aggrieved by the OSPIL Resolution Plan, which allegedly does not provide for the payment of usage charges. Reference may be had to the following extracts from the Application:

SREI's challenge to the OSPIL Resolution Plan cannot be agitated before this Adjudicating Authority. SREI's recourse as OSPIL's financial creditor is only before the Adjudicating Authority at Cuttack, which is seized of the OSPIL CIRP. The OSPIL Plan has been approved by NCLT Cuttack and payments thereunder made to creditors, including SREI. SREI has agitated the above grounds in an appeal challenging the OSPIL Resolution Plan. In any event, this Adjudicating Authority lacks the jurisdiction to entertain the Application.

The Application is premised on SREI's belief that usage charges are actually payable by ESIL to OSPIL. But this assumption is incorrect. Thus, in reality, in asking the Adjudicating Authority to direct that usage charges be paid, the Applicant really seeks an adjudication on the issue of title. The Adjudicating Authority does not have jurisdiction to make an adjudication on questions of title. Further it also has no jurisdiction since this question is not a matter concerning the CIRP of ESIL.

Even the NCLT Cuttack has, in the OSPIL resolution proceedings, held that an Adjudicating Authority under the IBC does not have the jurisdiction to decide the issue of ownership of the Slurry Pipeline. Extracts from the NCLT Cuttack's order of May 14, 2019 are set out below [Application Vol. V @ Page 849]:

SREI has, in its Reply to I.A. No. 348 of 2020, sought to improve on its case, by alleging that "the Main Application is maintainable both as a creditor of Odisha Slurry-Pipeline Infrastructure Limited ("OSPIL", for short) and as creditor of the Corporate Debtor. In any case, it is of no significance whether OSPIL is undergoing CIRP or not...". Having expressly predicated its standing to file the Application on its position as OSPIL's financial creditor, SREI cannot be permitted to alter its case.

Assuming but not admitting that SREI has preferred the Application in its capacity as ESIL's financial creditor, even that status stands extinguished, on the successful implementation of the ESIL Resolution Plan. As ESIL's financial creditor, SREI participated in the COC of ESIL and approved the ESIL Resolution Plan submitted by AMIPL. It has sought to rely on minutes of the COC meetings when the COC is not even a party in this Application and despite being aware that the present Respondent was not privy to such meetings. For the present Respondent the only binding document is the ESIL Resolution Plan, under which SREI has received INR 159 crores in full and final satisfaction of all its claims against ESIL. SREI has admittedly not challenged the ESIL Resolution Plan, which has been finally approved by the Hon'ble Supreme Court in the SC Judgment of November 15, 2019. If creditors of COC do not consider their own approved plan as binding, then process is left with no sanctity and such actions are in direct contravention to SC judgment.

SREI has received significant funds under the Corporate Insolvency Resolution Process of ESIL (Rs. 159 crores approximately). In the ESIL CIRP, SREI was a member of the Committee of Creditors ("COC") that approved the ESIL Resolution Plan. As such, SREI was a stakeholder in, and a direct beneficiary of, the resolution of ESIL. Having approved and benefitted from the ESIL Resolution Plan, and bound itself to the terms of the plan, SREI now seeks to upset it, knowing full well that the Resolution Applicant, after painstaking 800 plus number of days of the process and two rounds of litigations leading upto the Apex Court, has disbursed more than Rs. 42,000 crores under the AMIPL Resolution Plan to give the creditors one of their largest recoveries under the IBC regime. Now it seeks to upset the plan on the basis of being a creditor of OSPIL while being aware of the entire ESIL proceedings as a creditor and taking no steps at any prior time to seek redressal of its present alleged frivolous claim.

In the context of the ESIL CIRP, there were ample occasions for SREI to raise the issues, as are being raised in the present Application, before the Adjudicating Authority. However, despite being fully aware of the stand taken by the Resolution Professional of ESIL ("ESIL RP") that no right to use charges ("RTU Charges") were payable by ESIL under the purported Right to Use Agreement ("RTU Agreement") and also the fact that the AMIPL Resolution Plan did not provide for usage charges, SREI, as a member of the ESIL COC, approved the AMIPL Resolution Plan on October 25, 2018. Furthermore, SREI chose not to raise any objection or issue pertaining to the alleged non – payment of the RTU Charges as CIRP costs or otherwise during the plan approval proceedings, either before the Adjudicating Authority or before National Company Law Appellate Tribunal ("Hon'ble NCLAT") or before the Hon'ble Supreme Court of India. It is a matter of record that the ESIL Resolution Plan was first before the Adjudicating Authority, followed by Hon'ble NCLAT and finally before the Hon'ble Supreme Court which decided it on November 15, 2019 (SC Judgment). Needless to mention, SREI had ample opportunities at each of the above stages to raise the purported issue sought to be raised now by way of this ex – facie misconceived application.6 Hence, SREI, both by its express conduct, and by its stoic silence on the purported issue, is now estopped by making any claim to the contrary. As such, the present Application is liable to be dismissed on this ground alone.

It is not as though SREI was unaware earlier that usage charges were not being demanded or considered as payable. To begin with, OSPIL itself never filed any claim in the ESIL CIRP claiming alleged RTU charges. SREI was well aware of ESIL RP's stand that usage charges were not payable to OSPIL. The documents on record reveal that SREI has written several letters to the ESIL RP, challenging the ESIL RP's views on the issue of usage charges, and claiming that it was due to be paid to OSPIL. Reference may illustratively be had to SREI's:

a. objections to IA No. 419 of 2017 [AMIPL Reply @ Page 51]

b. letter dated September 5, 2017 [Rejoinder to AMIPL Reply @ Page 103]; Bharat Petroresources Ltd. Vs. Monnet Ispat & Energy Ltd., 2019 SCC Online NCLAT 1038 (Paras 40, 51, 52, 58 to 66)

c. letter dated December 18, 2017 [Rejoinder to AMIPL Reply @ Page 107];

d. letter dated February 9, 2018 [Application Vol. V @ Page 893]; and

e. letter dated June 20, 2018 [Application Vol. V @ Page 895].

Despite all this, SREI approved the AMIPL Resolution Plan and took no steps to seek clarity from a court or tribunal on a contentious issue, where it had been made clear to it by the ESIL RP that he did not consider usage charges payable either as operational debt or as CIRP costs.

Crucially, not only did SREI know that the ESIL RP did not consider the usage charges payable, but also knew that the Resolution Applicant was proposing the Resolution Plan on the basis that the Slurry Pipeline was an asset of the Corporate Debtor, i.e. ESIL, subject to certain disputes. [Application Vol. IV @ Pages 708, 714 and particularly Page 763]. The Applicant had a privileged vantage point in the ESIL CIRP: it was a member of the CoC. It was privy to the ESIL Resolution Plan. It had occasion to object to the Plan, but it did not. Instead, it voted to affirm the Plan. It allowed all stakeholders to believe that it had affirmed all contents of the Plan

The reliance on the statement made by AMIPL in the ESIL Resolution Plan regarding working with the lenders of OSPIL was a statement of intent. AMIPL, in fact, has actually upheld this intent by submitting the OSPIL Resolution Plan, which has been approved by the Hon'ble Adjudicating Authority, Cuttack. The exercise having been concluded to the satisfaction and acceptance of COC of OSPIL, no issue thereof can now be raised, much less in the manner sought to be raised by the Applicant and especially before this Hon'ble Adjudicating Authority. [Application Vol. IV @ p. 740]

More importantly, SREI allowed the AMIPL Resolution Plan to be implemented by receiving the payment of INR 160 crores approximately thereunder. Having benefitted from the implementation of the AMIPL Resolution Plan, SREI is now estopped from questioning the implementation at this stage, knowing fully well that the ESIL RP never contemplated paying usage charges to OSPIL (either as CIRP Cost or otherwise).

SREI is conveniently today relying on the Section 5(13)(c) of the IBC and IBBI Circular (IBBI circular No. No. IBBI/IP/013/2018) to argue that the purported RTU Charges form part of CIRP Costs. However, the said provisions were always in the knowledge of the SREI and are being given a misconceived interpretation. The said IBBI Circular clearly provides that it is the duty of the RP to determine the CIRP Costs payable by the Resolution Applicant, which once done cannot be altered at a later date after the successful disbursement of the amount due and payable as CIRP Costs. In the present case, there was no such determination by the ESIL RP with respect to RTU Charges, which SREI was aware of. Further, the advisors of the RP had confirmed to AMIPL that all process costs were paid at the time of implementation of the ESIL Resolution Plan and as such, this determination of RP is now not open to challenge at this stage.

SREI's silence in allowing the ESIL Resolution Plan to be implemented without any objection, is estoppel by acquiescence, explained in the following terms by the House of Lords in Republic of India and Others v. India Steamship Company Ltd^{77.[1997] UKHL 40 (@ Pg. 8); See also Spencer and Bower: Reliance Based Estoppel, p. 61, Piers Feltham et.al., 5th ed. 2017}:

This requirement to speak and to act honestly can also be inferred from the SC Judgment:

It is therefore amply clear from the above that the Hon'ble Supreme Court mandated a fair disclosure to a prospective Resolution Applicant at the time of stepping into the shoes of the Corporate Debtor. Since OSPIL, the only party having the right, chose not to raise a claim for the alleged RTU Charges, then such act amounts to relinquishment of its right to make any further claims in the matter. Further, SREI, being a participating stakeholder of ESIL process and a member of the ESIL COC, was aware that the usage charges were not considered payable and that the Resolution Plan proceeded on the express basis that the Slurry Pipeline was an asset of ESIL (subject to an ongoing dispute). SREI, by its conduct is estopped from claiming or asserting otherwise. It would not be incorrect to state that there is an element of deception to SREI's conduct in as much as it, despite being aware of purported issue, benefitted from a plan, bound itself to a plan, allowed the implementation of the plan, and then chose to challenge the very same plan. In this regard, the Respondent No.1 seeks to place reliance on the following judgments -

a. Bijan Kumar Barman v. Bhaskar Chandra Barman⁸:

2000 SCC OnLine Cal 424 "When the person acquiesced in the family arrangement and accepts the benefits given thereby is estopped from disputing the arrangement."

b. H.R. Basavaraj v. Canara Bank⁹:

It is therefore submitted that SREI's failure to object to the ESIL Resolution Plan, which admittedly did not spell out that usage charges would be paid to OSPIL, operates as estoppel against SREI. Reference may be had to the Hon'ble Supreme Court's judgment in

(2010) 12 SCC 458; See also Sunderabai v. Devaji, AIR 1954 SC 82 at paras 14, 18 and 19 Pravesh Kumar Sachdeva v. State of U.P., (2018) 10 SCC 628: 2018 SCC Online SC 1779^{1010.See the judgment of the Supreme Court in Manak Lal v. Dr Prem Chand Singhvi, 1957 SCR 575 : AIR 1957 SC 425 at paras 8 and 9}:

(emphasis added)

Without prejudice to the fact that SREI has lost the locus standi as a financial creditor of OSPIL by virtue of implementation of AMIPL’s Resolution Plan for OSPIL on July 08, 2020, it is submitted that OSPIL itself was never either a financial creditor or an operational creditor of ESIL. Further, OSPIL never participated in the ESIL CIRP to claim any usage charges as an operational debt, or otherwise, though these charges were allegedly due since January 2016. Even today, OSPIL has not come before this Adjudicating Authority to claim the alleged RTU Charges. Such a derivative action is nowhere provided for under the scheme of the IBC.

It is important to note that OSPIL was admitted into Corporate Insolvency Resolution Process for OSPIL commenced only on May 14, 2019, i.e. much after the conclusion of ESIL’s resolution process. During the period prior to May 14, 2019, OSPIL was under the control of its majority shareholder, SREI Multiple Asset Investment Trust, a related party of SREI. The record reveals that SREI had written several letters to the ESIL RP, alleging that usage charges were due to OSPIL since January 2016. OSPIL had also written to the ESIL RP on June 15, 2018, claiming that usage charges were payable [Rejoinder to AMIPL Reply @ Page 293].

Yet, OSPIL did not lodge any claim, in accordance with the procedure prescribed under I&B Code with the ESIL RP for the purported RTU Charges, either as operational debt (for the period from January 2016 till July 2017) or as CIRP Costs (for the period from August 2017 till November 2019). In addition, as informed by the RP, during the course of present proceedings, OSPIL did not even raise any invoice towards the purported RTU Charges. Also, the operation and maintenance cost of the pipeline was being borne by erstwhile ESIL (now AMNSI). Therefore, such express omission on part of OSPIL operates as an estoppel, and no further claim or plea can be raised in this regard. To this extent, the ESIL Resolution Plan expressly extinguishes any claims upto 16.12.2019, including those claims that were not filed during the CIRP.

Pertinently, the alleged RTU Charges were in the nature of recurring monthly payments. Since no claim was ever raised for usage charges during the entire resolution process of ESIL, the same was never a part of the ESIL Resolution Plan. Having represented to AMIPL that it did not intend to lodge a formal claim for usage charges, OSPIL is estopped from raising a claim belatedly, at this stage.

The Hon'ble Supreme Court has, while approving the ESIL Resolution Plan, cautioned against claims of this very nature from being raised. The Supreme Court has held:

(emphasis added)

Far from raising a claim for usage charges (which is premised on the Deed of Cancellation being ineffective), in a bid to resist the commencement of the OSPIL CIRP, OSPIL has, in its pleadings before the NCLT Cuttack, claimed that the title to the Slurry Pipeline vested in ESIL. The NCLT Cuttack's order of May 14, 2019 admitting OSPIL to insolvency reveals that Mr. Subrata Ghosh, a director of OSPIL filed an affidavit contending that since IDBI had advanced loans for the purpose of the Slurry Pipeline, no insolvency should lie regarding those loans vis-à-vis OSPIL, because the title to the Slurry Pipeline vested in ESIL [Para 3, Application Vol. V, @ Page 845]. The extracts from the NCLT Cuttack's order of May 14, 2019 are reproduced below:

Thus, in order to resist the insolvency admission of OSPIL, in which the SREI Group is the majority shareholder, OSPIL contended that the Slurry Pipeline was never transferred to it. If the Slurry Pipeline was never transferred to OSPIL, there arises no question of ESIL paying usage charges - to use an asset that it owns.

It is the Respondent No.1's submission that OSPIL has waived its rights (if at all they existed), to make a claim for usage charges. Reference may be had to the judgment of the Hon'ble Supreme Court in P. Dasa Muni Reddy v. P. Appa Rao, (1974) 2 SCC 725 at page 729, which lays down the ingredients of waiver in the following terms:

(emphasis added)

It is a matter of fact that SREI objected to the OSPIL Resolution Plan, on the ground that it did not provide for payment of usage charges from ESIL. In its application CA(IB) No. 194/CTB/2019 before the Adjudicating Authority at Cuttack, the Applicant had raised all the contentions that have been raised in this Application, to justify that usage charges were due and payable by ESIL to OSPIL.

The Applicant's objections were expressly rejected by the Adjudicating Authority at Cuttack. The Applicant is therefore barred in law from instituting a fresh proceeding to agitate the same cause of action. Reference may be had to the following extracts from the judgment of the Adjudicating Authority dated March 2, 2020 [Application Vol. V @ Page 1007]:

(emphasis added)

Accordingly, SREI is barred by the principle of res judicata^{1111.Committee of Creditors of Educomp Solutions Ltd. Vs. Ebix Singapore Pte. Ltd. 2020 SCC Online NCLAT 192 (23, 77, 78, 86 & 89)} from challenging the non-payment of usage charges to OSPIL. It had expressly sought directions from the Adjudicating Authority, Cuttack against the Resolution Professional of OSPIL for taking steps to ensure recovery of the RTU Charges. SREI's objections were expressly rejected by the Adjudicating Authority at Cuttack. SREI is therefore barred in law from instituting a fresh proceeding to agitate the same cause of action.

As a point of law, the issue regarding title/ ownership of the Slurry Pipeline is also barred by the rule of res judicata as far the Applicant is concerned./ In the proceedings relating to the ESIL CIRP itself, the Adjudicating Authority has held that it has no jurisdiction to declare who has title to the Slurry Pipeline. By an order dated February 7, 2018 in the ESIL RP's IA No. 419 of 2017, this Adjudicating Authority effectively declined to exercise jurisdiction on the issue of ownership of the Slurry Pipeline (and consequently, it is submitted, all connected issues, including the payment of usage charges) [Application Vol. 3]:

Therefore, this Adjudicating Authority has already taken the view that it would not adjudicate matters that have a bearing on the title over the Slurry Pipeline in these proceedings. The Applicant is bound by the order dated February 7, 2018 of this Adjudicating Authority and is estopped from filing this Application, contradicting its stand on the jurisdiction of this Adjudicating Authority and urging the same issue of title once again.

In the ESIL CIRP proceedings in IA 419 of 2017 the Applicant has asserted at all times until now that the Adjudicating Authority does not have jurisdiction on this issue. It has done this while being fully aware that the issue of whether usage charges are payable, involves a determination on the validity of the Deed of Cancellation and consequently the title to the Slurry Pipeline. A perusal of SREI's Interim Application CAN No. 5599 of 2018 filed before the Calcutta High Court makes this clear. For instance, at paragraph 49, it is stated that [AMNS Reply @ Page 147]:

Even in objecting to the ESIL RP's LA No. 419 of 2017, seeking a declaration that the Slurry Pipeline was an asset of ESIL [Application Vol. II @ Page 420], SREI objected and unequivocally claimed that this very Adjudicating Authority had no jurisdiction in view of the pendency of the Title Suit and the interim order dated December 22, 2016 passed by the Calcutta High Court. Some relevant extracts from the preliminary reply of the Applicant dated January 16, 2018 to the ESIL RP's application are set out below [AMNS Reply @ Page 86]:

OSPIL had also taken similar pleas, while objecting to the jurisdiction of this Adjudicating Authority, in its detailed reply dated January 17, 2018 to the ESIL RP's application [AMNS Reply @ Page 92-123]. Notably, this reply was filed prior to the commencement of the OSPIL CIRP, when OSPIL was under the control of the SREI Group and not its resolution professional.

It is also worth mentioning that the issue of title to the Slurry Pipeline was next raised before the Adjudicating Authority at Cuttack at the time of commencement of the OSPIL resolution proceedings. In those proceedings (to which the Applicant was a party), OSPIL, in a bid to resist the commencement of insolvency resolution, contended that the Slurry Pipeline belonged to ESIL and in any event, the OSPIL insolvency resolution could not commence till the title dispute was decided by the courts in Calcutta. However, it was held that an Adjudicating Authority under the IBC does not have the jurisdiction to decide the issue of ownership of the Slurry Pipeline. Extracts from the order of the Adjudicating Authority Cuttack dated May 14, 2019 are set out below [Application Vol. V

In view of the contentions made earlier before every forum, it is extraordinary that SREI has through the Application now sought a determination of the issues pending in the Title Suit.

As a matter of law, the determination of whether usage charges are payable or not, and therefore, the question of who has title to the Slurry Pipeline, does not lie within the Adjudicating Authority's jurisdiction. The issue does not arise out of the CIRP process of ESIL, and the order dated February 7, 2018 makes the position res judicata between parties that the question of title is not to be determined by this Adjudicating Authority.

Pertinently, the Applicant has sought to make out a case relying on the observation in the NCLT Cuttack Order dated 2 March 2020, that "We are of the view that this amount is receivables, subject to certain/ various eventuality". It is respectfully submitted that this statement has no meaning, since the Adjudicating Authority at Cuttack has not clarified what it meant by "certain/ various eventuality". Further, the Applicant's application was rejected by the Adjudicating Authority. This statement is, at best, an obiter, and cannot be relied upon by the Applicant to contend that there is a categorical finding that usage charges are payable. Accordingly, during the course of arguments, Applicant's counsel expressly conceded that no meaning could be given to the said statement [SREI's Written Submissions, Para V(F)(i)(6) @ Page 29]

In any event of the matter, this Hon'ble Adjudicating Authority cannot get the correctness and/or validity of this observation made by Hon'ble Adjudicating Authority, Cuttack. SREI itself has challenged the said judgment by way of an appeal, being Comp. Appeal No. 591/2020 before the NCLAT, which is pending adjudication. It would therefore be judicially inappropriate for this Hon'ble Adjudicating Authority to sit in appeal over an observation made by another Adjudicating Authority. Without prejudice, it is submitted that the risk of the eventualities was assumed by the Resolution Applicant i.e. AMIPL herein and accordingly AMIPL, as the successful resolution application for OSPIL, has paid for that risk (in fact AMIPL has paid for the risk of such eventualities in both the processes). AMIPL, as the successful Resolution Applicant was committed to make payment irrespective of where the asset lies.

Without prejudice to the above, it is stated in most unambiguous terms that no RTU charges are payable by ESIL (now AMNSI) to OSPIL, as alleged or at all, in view of the Cancellation Deed. It is submitted that the entire case of SREI is premised on the fact that the pipeline is an asset of OSPIL and the same has been utilized by ESIL during the ESIL CIRP and hence the charges towards the same are due and payable. It is respectfully submitted that the entire premise is incorrect as if the Cancellation Deed has completely evaporated and is not in existence. The Applicant tends to completely ignore the successful unwinding of the BTA and the RTU Agreement by way of Cancellation Deed dated 24.06.2016. Pertinently, the said Cancellation Deed came into effect from 30.06.2016. Pursuant thereto, the slurry pipeline came to be vested back with ESIL. It is a matter of record that the pipeline, during the ESIL CIRP, was maintained by ESIL RP. Hence, any and every claim, either of OSPIL or SREI or OSPIL RP, to purportedly claim RTU Charges, was denied by ESIL RP on the ground that each of the agreements i.e. BTA and RTU Agreement, stood cancelled by the Cancellation Deed. Admittedly, this position was never challenged or disputed by SREI in any forum. It is a matter of record that lately when SREI sought to challenge the Cancellation Deed in November / December of 2016 (after about 06 months of its having come into effect), no stay was granted by the District Court, Sealdah and the Hon'ble High of Kolkata, vide Order dated 22.12.2016, granted only a limited protection i.e. status quo on transfer of pipeline. Most importantly, no stay was granted on the effect and operation of the Cancellation Deed. It is further also a matter of record that vide Order dated 11.02.2020, passed by the Hon'ble Kolkata High Court, the aforesaid position became absolutely clear that the stay granted was limited to 'further transfer and alienation of the pipeline' and the no stay was granted upon the effect or operation of the Cancellation Deed. In view of the foregoing, any purported claim seeking RTU Charges, in terms of the RTU Agreement, is ex – facie incorrect and legally untenable.

At this juncture it is pertinent to mention that an argument or stand to state Respondent No. 1 is seeking to rely on the Deed of Cancellation in a selective manner to its benefit, is a wholly misconceived argument. Assuming without admitting that the present Application is maintainable, the RTU Charges are not payable as the Deed of Cancellation is still operational and as such, has not been set aside by any court of competent jurisdiction and in view of the express provisions of the Deed of Cancellation, the Pipeline is an asset of Respondent No. 3. In any event, assuming without admitting that the RTU Charges are payable, the same would not go to SREI. It would be to OSPIL, which is now in control of AMIPL. The purported reliance placed upon the Balance Sheets of the Corporate Debtor for previous years is wholly misplaced and the same cannot be relied upon to saddle a liability on the incumbent entity which has come to acquire the same through a court approved resolution process.

The present written submissions are being filed on behalf of the Respondent No. 2, i.e. erstwhile Resolution Professional ("RP") of Essar Steel India Limited ("ESIL/Corporate Debtor") in relation to the captioned Interlocutory Application No. 245 of 2020 ("Interlocutory Application") filed by SREI Infrastructure Finance Limited (the "Applicant") before this Hon'ble National Company Law Tribunal ("Hon'ble Tribunal").

It is humbly submitted that the Respondent No. 2 acted in accordance with the provisions of the Insolvency and Bankruptcy Code, 2016 and the regulations thereunder and the direction of this Hon'ble Tribunal. Therefore, the Interlocutory Application is liable to be dismissed qua the Respondent No. 2.

Treatment of usage charges prior to and as on the date of commencement of the Corporate Insolvency Resolution Process ("CIRP") against ESIL

On February 27, 2015, Business Transfer Agreement ("BTA") was executed between ESIL and Odisha Slurry Pipeline Infrastructure Limited ("OSPIL") for transfer of 253 km pipeline from Paradeep to Dabuna ("Pipeline Asset") to OSPIL for against a total consideration of INR 4000 Cr. (Vol I, page 29-39 of the Interlocutory Application).

Thereafter, ESIL and OSPIL entered in a right to use agreement dated March 30, 2015 ("RTU Agreement") (Vol I, page 173 of the Interlocutory Application) whereby ESIL was permitted to use the Pipeline Asset on payment of usage charges as specified therein (Vol I, Clause 2.1.1 at page 182 of the Interlocutory Application). Notably, OSPIL was responsible to ensure proper maintenance and to keep the pipeline insured (Vol I, Clause 6.1 and 7.1.1 of at page 186-187 of the Interlocutory Application). On account of the failure to make payment of the purchase consideration as specified in the BTA, ESIL and OSPIL entered into an Addendum to RTU Agreement dated August 31, 2015 ("RTU Addendum") wherein it was agreed that the monthly usage charges will be in direct proportion to the % of the purchase consideration (Vol II, page 317-322 of the Interlocutory Application).

Thereafter, ESIL and OSPIL executed a deed of cancellation dated June 24, 2016 ("Deed of Cancellation") where the parties agreed to unwind the BTA and cancel subsisting rights and obligations under BTA, RTU Agreement and RTU Addendum with effect from effective date (i.e. June 30, 2016) (Vol II, page 349-361 of the Interlocutory Application). It is submitted that pursuant to the Deed of Cancellation, the erstwhile management of ESIL had recorded the Pipeline Asset as an asset in the books of ESIL, i.e. fixed asset register and had possession of the Pipeline Asset. Further, no invoices were submitted by OSPIL post the Deed of Cancellation demanding payment of usage charges or any payments were made in respect of the same by ESIL prior to CIRP.

Meanwhile, the Applicant herein filed Title Suit No. 177 of 2016 before the LD. Civil Judge (SD), Sealdah against OSPIL and ESIL inter alia seeking (a) declaration that the Deed of Cancellation is null and void and be delivered up and cancelled; (b) perpetual injunction restraining defendants therein from giving any further effect to any instrument of unwinding of the sale of the Pipeline Asset contained in the BTA including the Deed of Cancellation (Vol II, page 383-384 of the Interlocutory Application). It is submitted that the main grievance of the Applicant was that OSPIL was not servicing its debts and the unwinding of the asset may therefore cause prejudice. There was no prayer in the suit in relation to the RTU Agreement or payment of the RTU charges. It is humbly submitted that the Applicant therefore has relinquished its right to make any claim as to the RTU charges on the principle of constructive res - judicata as contained in Order 2 Rule 2 of Code of Civil Procedure.

Pursuant to the order dated November 21, 2016, the Ld. Trial Judge did not grant any relief and therefore the Applicant moved before the Hon'ble High Court of Calcutta by filing an appeal being appeal No. 1310 of 2016. However, no relief was prayed in respect of payment of usage charges (Page 126-163 of the Note submitted by the Respondent on October 7, 2020). Vide order dated December 22, 2016, the Hon'ble Calcutta High Court granted an interim relief and passed the following order: "status quo with regard to alienation, transfer in respect of 253 km pipeline which is the subject matter of the suit will be maintained till three weeks after the reopening of the court after the Christmas vacation." (Vol II, Page 388 of the Interlocutory Application). The status quo order was extended from time to time till the final disposal of the appeal.

On August 2, 2017, by way of a common order, this Hon'ble Tribunal admitted the Company Petitions and CIRP was initiated in respect of the Corporate Debtor under the provisions of the Insolvency and Bankruptcy Code, 2016 ("Code"). The Respondent herein was appointed as the interim resolution professional ("IRP"). (Annexure P of Vol II at page 387-38) and was later confirmed as the resolution professional ("RP") by the committee of creditors constituted in relation to the Corporate Debtor ("COC").

It is submitted that, as on the insolvency commencement date the status of the Pipeline Asset and treatment of usage charges was as follows:

It is submitted that as per Section 18(1)(f) of the Code read together with Section 23(2) and Section 25(2)(a) of the Code, the IRP/RP is duty bound to take control and custody of any asset over which the corporate debtor has ownership rights as recorded in the balance sheet of the corporate debtor, or with information utility or the depository of securities or any other registry that records the ownership of assets including assets subject to the determination of ownership by a court or authority.

Therefore, the Respondent acted in accordance with the provisions of Code (including Section 18(1)(f) read with Section 23(2) and Section 25(2)(a) of the Code) and continued control and custody of the assets of the ESIL appearing in the books, including the Pipeline Asset, the ownership of which was subject to the determination by the Hon'ble Calcutta High Court.

Payments, if any, to OSPIL required COC approval

Section 5(24) of IBC defines the term "related party". As per sub-clause (k) related party includes "(k) any person in whom the corporate debtor controls more than twenty per cent. of voting rights on account of ownership or a voting agreement;"

As per Section 28(1)(f) of the Code, RP shall not take any action including undertake any related party transactions without approval of COC. Infact, as per Section 28(4) of the Code, where any such action is taken by the RP without approval of COC such action shall be void.

It is submitted that as earlier, OSPIL was a 100% subsidiary of ESIL. OSPIL ceased to be subsidiary w.e.f. September 11, 2015. However, ESIL (now known as AMNSI) continued to hold 30.20% shares in OSPIL during the CIRP. [Page 29 of the Annual Report for F.Y. 2016-17; Page 26 of the Annual Report for F.Y. 2017-18; See also Page 17 of AMIPL Reply]. Therefore, prior to and during the CIRP, OSPIL was a related party of ESIL under Section 5(24)(k) of the Code. On account of the OSPIL being a related party of ESIL, any payments to OSPIL required COC approval under Section 28(1)(f) of the Code. The RP could not have unilaterally decided to make any payments to the related party which could have diluted title issue of ESIL.

It is a matter of record that during CIRP, pursuant to the letter dated June 20, 2018, the Applicant had requested the RP to include payment of usage charges as an agenda item so that COC members (including the Applicant) are adequately briefed on the repercussions arising from non-payment of usage charges (Vol V, page 895-896 of the Interlocutory Application).

Based on the request of the Applicant (as the COC member of ESIL), the Respondent had included the letter dated June 20, 2018 and the request made pursuant thereto as part of the agenda items for the seventeenth meeting of the COC held on August 9, 2018 ("Seventeenth COC Meeting"). During the said meeting, the COC members were also apprised legal views from legal advisor of RP, Cyril Amarchand Mangaldas (CAM) as follows: "As an RP the status quo has not altered, however, if there is any court order directing the RP to make payment of the usage charges post decision on title determination, the same will be dealt as per provisions of law. It was also mentioned that all details regarding the OSPIL litigation and orders passed by NCLT and Calcutta High Court have been provided to the prospective Resolution Applicants who will take into consideration all such facts while submitting their Resolution Plans." [Page 22 of the minutes of the Seventeenth COC Meeting]

Further relevant extract of minutes of Seventeenth COC Meeting are as follows:

While the COC deliberated as stated above, COC made no decision in respect of the payment of the usage charges to OSPIL or approved its payment under Section 28(1)(f) of the Code. Infact, based on the request and deliberation with the COC (through its counsel) had recommended as follows: "...the contingent liability classification is required if the Court passes such an order, then ESIL will have to make the payment of RTU charges." [Page 23 of the Seventeenth COC Meeting]

Based on discussions during the Seventeenth COC meeting and request by COC members, RP had duly intimated the management of ESIL and auditors to include point on OSPIL contingent dues in ESIL's annual account. Financial Statements for the Year ended March 31, 2019 clearly reflects this position. [Annual Report for Financial Year 2018-19 at page 70 and 107-submitted alongwith the Note dated 22.09.2020].

During the 18th CoC Meeting, the CoC Counsel further apprised the members as follows: "The order had also been uploaded on the virtual data room, which was accessible to the Resolution Applicants. Therefore, it can be stated that the Resolution Applicants are well aware that depending on the outcome of the High Court proceedings, the title of the asset would be decided. The CoC Counsel clarified to CoC members that the disputed claim can continue with the change in management. The Resolution Applicants or the CoC do not have powers to the write down the claims of the OSPIL lenders. Although currently there is a moratorium in place, upon resolution, there would be only change in shareholding and ESIL will continue. The dispute may be revived once the moratorium period is over. The successful Resolution Applicant will take over the asset on "as is" basis" (submitted alongwith the Note dated 22.09.2020). Based on the deliberations of the 17th and 18th COC meeting, the requisite disclosures were made in the Annual Accounts as stated above.

There was no dissent by the Applicant to above decisions of COC. In view of above, the RP could not have taken decision to unilaterally pay usage charges. In case the Applicant had grievance either as financial creditor of ESIL or OSPIL, it had remedy of approaching this Hon'ble Tribunal during CIRP of ESIL. It is submitted that it is a matter of record that the Applicant approached Hon'ble Calcutta High Court for seeking clarification in relation to the status quo order during the CIRP of ESIL and in respect of the alleged payment of usage charges. It is submitted that the matter was sub-judice during the CIRP of ESIL and the RP could not have made any adjudication in relation to the payments given that the matter was pending before the Hon'ble Calcutta High Court and no order was passed in relation to the same until approval of the Resolution Plan by this Hon'ble Tribunal post which the RP became functus officio.

It is submitted that the Applicant did not challenge the COC decision for treating usage charges as contingent liability until now as it did not challenge it during the COC meetings, before this Hon'ble Tribunal, the Hon'ble National Company Law Appellate Tribunal or the Hon'ble Supreme Court of India. After agreeing to treat it as contingent charges by COC subject to decision of courts and thereafter approval of plan by the COC and this Hon'ble Tribunal wherein issue of pipeline was to be resolved by the Respondent No. 1 with lenders of OSPIL, the Applicant cannot have any grievance with RP either as ESIL or OSPIL creditor. RP did not have any role how OSPIL lenders (including SREI) have resolved the issue with the Respondent No. 1.

It is further submitted that the litigation in relation to CIRP of the Corporate Debtor continued for more than 13 months, however, the Applicant did not approach this Hon'ble Tribunal or NCLAT or the Hon'ble Supreme Court of India but decided to approach this Hon'ble Tribunal only after the passage of more than 5 months of implementation of the Resolution Plan to seek inclusion of the usage charges (as alleged) as CIRP Cost. Therefore, the Applicant is now estopped from raising any grievance after the Resolution Plan, as approved by the Hon'ble Supreme Court of India has been implemented.

Without prejudice to the above submissions, it is submitted that:

- (i) Invoices raised by the OSPIL on ESIL from time to time after signing of the Deed of Cancellation; - (ii) Audited balance sheet of OSPIL showing that above invoices were booked as income in its balance sheet; - (iii) Details about payment made under RTU Agreement; and - (iv) Actions taken by OSPIL for non-payment of usage charges by ESIL under RTU Agreement before 02 August 2017, i.e., the date of commencement of CIRP of ESIL. [Page 22 of the Note submitted by Respondent No. 2 on September 22, 2020]

Inspite of opportunity given as per the principles of natural justice, no response to the above was ever provided by OSPIL or the Applicant to RP or COC. In the aforesaid circumstances, it is illegal of the Applicant to contend that the RP shall have paid or would have to pay the alleged liabilities or alleged dues of another entity jointly and severally with Respondent No. 1 and therefore is liable to be dismissed.

It is submitted that the RP could not have violated the status quo order and adjudicated/determined RTU dues beyond his role which is to act as a facilitator, as has been held by the Supreme Court in Swiss Ribbons v. Union of India 2019 4 SCC 17. The relevant excerpt of the judgment is set-out below:

Section 5(13) of the Code defines "insolvency resolution process cost" as follows:

Further, Regulation 31 of the CIRP Regulations, 2016 specifies the following costs to be CIRP Cost:

As such, in terms of Section 5(13)(c) of the Code, the claim of contingent usage charges can never form part of CIRP costs as the asset was appearing in the books of ESIL and the alleged usage charges were never actually incurred in running the business of the ESIL as a going concern. Absent such incurrence, only way in which the usage charges could be considered as part of the CIRP Costs is if COC had determined and approved of the same. However, as mentioned above, COC never approved payment of usage charges and treated such charges, if any, contingent.

The RP has acted in a bona fide manner and in compliance with the provisions of the Code

The Resolution Professional had made complete disclosure of the information in relation to the OSPIL transaction to the COC and the potential Resolution Applicants

Pursuant to the requirements specified under Section 29 of the and Regulation 36 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 ("CIRP Regulations"), an information memorandum was provided to the committee of creditors of the Corporate Debtor and the prospective Resolution Applicants.

The relevant information in relation to the Corporate Debtor was uploaded in an electronic data room (which forms a part of the information memorandum) in accordance with the Code and CIRP Regulations.

All the documents (including court documents) in relation to the sale and cancellation of the OSPIL pipeline transaction were made available to the potential Resolution Applicants, including but not limited to the order of the Hon'ble Calcutta High Court dated December 22, 2016 in respect of status quo on transfer and alienation of the pipeline asset (as extended from time to time). The documents provided to the COC and the potential Resolution Applicants as part of the Information Memorandum was submitted to this Hon'ble Tribunal on October 7, 2020.

It is submitted that the Applicant has incorrectly stated that this Hon'ble Tribunal had stated that pipeline asset to be an asset of OSPIL. It is submitted that that while this Hon'ble Tribunal had provided its observations in relation to the said property in paragraph 64 and 72, it had also clearly held that it cannot grant declaratory reliefs to the corporate debtor on the title when a civil suit is pending and in view of the interim order passed by the High Court of Calcutta restraining cancellation of the BTA and the RTUA. The Hon'ble Tribunal pursuant to the dated February 7, 2018, at paragraph 81 while concluding the findings/views clearly held as follows:

Therefore, the Hon'ble Tribunal did not decide in respect of the validity of the Deed of Cancellation and the same was subject to the proceedings pending before the Hon'ble Calcutta High Court. Since the matter pertaining to the ownership of the Pipeline Assets. Therefore, the validity and effectiveness of the Cancellation Deed along with the BTA and the RTU Agreement were sub-judice.

Without prejudice to the above submissions, it is submitted that based on the directions of the Hon'ble Tribunal pursuant to the order dated February 7, 2018, the RP had provided the complete copy of the said order to the potential Resolution Applicants in the electronic data room as well as to COC to take actions thereof.

The RP acted in compliance with IBBI Circular dated June 12, 2018 ("IBBI Circular") and SIPI Statement of Best Practices: Payment of Corporate Insolvency Resolution Process Cost ("Best Practices Statement")

The Applicant had placed reliance on the IBBI Circular and SIPI Best Practices Statement to state that usage charges ought to have been paid during the CIRP and no COC approval was required in relation to the same [Submitted by SREI on September 9, 2020].

It is submitted that the RP had acted in accordance with the IP Regulations, IBBI Circular and SIPI Best Practices Statement. However, in respect of usage charges, as detailed above, (a) since the pipeline asset was shown as an asset in the books of ESIL (although subject to determination of the court) no cost was incurred by ESIL towards usage charges and therefore could not be classified as an Insolvency Resolution Process cost; (b) since OSPIL was a related party, it would fall under category 2 of the cost [Paragraph C(ii) of the SIPI Best Practices Statement read together with Section 28(1)(f) of the IBC] and therefore payment of usage charges required mandatory COC approval and RP could not have unilaterally decided to pay the usage charges. The COC (including the Applicant) decided to include the same as contingent liability, which was duly complied with. During the Eighteenth COC meeting, when one of the COC members stated that the OSPIL issue has been discussed multiple times and it should be made an agenda item, the RP requested members to provide agenda item with note for discussion on the next meeting in relation to the same so that healthy and constructive discussion can be conducted. However, no further discussion was conducted by COC in relation to the same. [Page 11 of the minutes of Eighteenth COC Meeting]

As highlighted above, the Resolution Applicants and COC were at all times during the CIRP were aware of the status quo order, the order of the Hon'ble Tribunal and the treatment of the pipeline asset in the books of the corporate debtor.

It is submitted that it is undisputed that the Applicant was also a member of the COC. It is further submitted that the COC (including the Applicant) negotiated the Resolution Plan with Respondent No. 1 and when the Resolution Plan was approved by the COC, the Applicant herein did not only participate in the COC meetings but also voted in favour of the Resolution Plan without raising any protest or demur in respect of allegations being levelled today.

The Resolution Plan, as approved by the COC (including the Applicant) provides as follows [Page 740 of Vol. IV]

It is submitted that based on the description provided above, the COC members (including the Applicant), negotiated the Resolution Plan keeping in view the above position. The RP was not involved in the negotiation process of Resolution Plan. Based on the same, the Resolution Plan was approved by the CoC of ESIL in its commercial wisdom after considering the feasibility and viability of the Resolution Plan.

The discussions on resolution of issues between the Resolution Applicant and the OSPIL lenders (including the Applicant) as per the approved Resolution Plan of ESIL was expected to resolve this issue subsequent to CIRP in which RP had no role.

The Hon'ble Supreme Court of India in Committee of Creditors of Essar Steel India Limited v. Satish Kumar Gupta & Ors. (2019 SCC OnLine SC 1478) held that:-

A reference is also made to decision of Hon'ble NCLAT in the matter of RGG Vyapar Private Limited vs. Arun Kumar Gupta & Anr. (order dated 31.8.2018) whereby the Hon'ble NCLAT held as follows:-

It is submitted that CIRP of the Corporate Debtor has concluded with the approval of the Resolution Plan by the Hon'ble Supreme Court on November 15, 2019 (Pg.9 and 78 of Reply of RP). The Hon'ble Supreme Court was pleased to observe as under:-

The Applicant (as the creditor of OSPIL) cannot invoke the provisions contained in Section 33(3) of the Code.

It is reiterated that the Resolution Plan was approved by the COC of ESIL which also included the Applicant without any objection or rider.

It is submitted that Section 33(3) of the Code which has been relied upon by the Applicant which provides as follows:

It is submitted that the Section 33(3) cannot be read in isolation and has to be read in alongwith Section 31 of the IBC which provides as follows:

It is submitted that reference to "any person" stated in Section 33(3) of the Code has to be limited to stakeholders involved in the Resolution Plan. It is submitted that the Applicant as the creditor of OSPIL cannot raise the claim under Section 33(3) of the Code. As such, it cannot be said that there has been any contravention warranting an order of liquidation under sub-Section (3) and (4) of Section 33 of the Code.

It is submitted that the ESIL Resolution Plan is already finally approved and implemented. The amount payable to the Applicant under the Resolution Plan is already paid. In this regard, the Resolution Plan provides as follows “Once the payments are made to a creditor under and as per the Plan, the same shall be treated as full and final payment of all dues of the Corporate Debtor. Any claim of any creditor other than the payments/ settlements covered by the Resolution Plan will stand extinguished on and from the approval date.” (Pg.651 Chapter-XII, Pg. 653 Chapter XIII, Vol-III). As such, the Applicant is no longer a creditor of ESIL. The Applicant therefore cannot be said to be an “aggrieved person” in relation to the Resolution Plan. The present application at the instance of Applicant therefore also is not maintainable.

Without prejudice and without admitting any contravention, Applicant has also not been able to legally establish any prejudice. The Applicant therefore also cannot invoke the provisions contained in Section 33(3) of the Code. [Submitted as part of the Note dated September 22, 2020]

It is humbly submitted that upon approval of the Resolution Plan by the Hon’ble Supreme Court of India and terms of the provisions of the Code, the Respondent No. 2 has become functus officio as the Resolution Professional of the Corporate Debtor. Further, the Respondent has also forwarded all the records relating to the conduct of the Corporate Insolvency Resolution Process to the Insolvency and Bankruptcy Board of India in terms of the order of this Hon'ble NCLT dated March 8, 2019. In this regard, reference of this Hon'ble Tribunal is drawn to Section 31 of the Code which provides as follows:

As per the Resolution Plan once the Resolution Plan was approved, a Monitoring Committee was constituted as specified below:

"A Monitoring Committee shall be constituted under Part C of this Section comprising representatives of State Bank of India, ICICI Bank, IDBI Bank and Edelweiss Asset Reconstruction Company being the Financial Creditors of the Corporate Debtor (who may not be officers of such institutions) and the Resolution Applicant ("Sub-committee")." [Vol. IV, Page 819 of the Interlocutory Application].

The RP was subsequently appointed as a member of the Monitoring Committee pursuant to the NCLAT order, however, he had no decision-making powers whatsoever.

It is submitted that the Applicant or ArcelorMittal have relied on certain proceedings or orders after the Resolution Plan of ESIL was implemented and the RP became functus officio. Further, the RP was not privy to or a party to the CIRP of OSPIL or its proceedings before the NCLT, Cuttack or subsequent proceedings of High Court, Kolkata and therefore is unable to comment on same.

In light of the above, it is humbly submitted that the Respondent No. 2 acted in accordance with the provisions of the Insolvency and Bankruptcy Code, 2016 and the regulations thereunder and the direction of this Hon'ble Tribunal. It is further submitted that the Respondent No. 2 has acted in an independent and bona fide manner. Therefore, the Interlocutory Application is liable to be dismissed qua the Respondent No. 2 and the Hon'ble Tribunal may be pleased to pass appropriate orders in the Applications.

The present written submissions are being filed by, and on behalf of, ArcelorMittal Nippon Steel India Limited ("AMNSI") in terms of Order, dated 13.10.2020, passed by this Hon'ble Adjudicating Authority. At the very outset, without prejudice to any of the submissions made on merits of the application during the course of hearing or as stated in the present written submissions, it is submitted that I.A. No. 245/2020 filed by SREI Infrastructure Finance Limited (hereinafter referred as "SREI") is ex – facie non-maintainable, both on law and on facts, and therefore ought to be summarily dismissed on this ground alone. In this regard, the directions passed by Hon'ble National Company Law Appellate Tribunal ("NCLAT") in Comp. Appeal No. 747/2020 dated 31.08.2020, inter alia, directing the "Adjudicating Authority to proceed on merit addressing the issue of jurisdiction raised before it..." is amply clear and begs no interference.

The Applicant, SREI Infrastructure Finance Limited ("SREI") has expressly predicated its locus standi on the fact that it is a financial creditor of Odisha Slurry Pipeline Infrastructure Limited (“OSPIL”), and that usage charges are due from erstwhile Essar Steel India Limited (“ESIL”) to OSPIL [Para 39, Application Vol. I @ Page 26]. The Applicant has, in a letter dated October 22, 2018 to the resolution professional (“RP”) of ESIL categorically stated that “...SIFL has no legal interest in OSPIL except financial assistance granted towards the pipeline acquired by OSPIL.” [Application Vol. III @ Page 672] [SREI’s Written Submissions, Para 5 @ Page 1].

OSPIL itself has not been recognized by the ESIL RP as either a financial or operational creditor of ESIL. Quite apart from whether the Applicant’s status as OSPIL’s ‘financial creditor’ would make it a person whose “interests are prejudicially affected” under Section 33(3) of the Insolvency and Bankruptcy Code, 2016 (“IBC”), even at the time of filing this Application, the Applicant did not have the status of a financial creditor. The Application was filed on March 5, 2020. On March 2, 2020 [Application Vol. V @ Page 1007] (“OSPIL Plan Approval Order”), with the conclusion of the OSPIL Corporate Insolvency Resolution Process (“CIRP”) and the approval of the OSPIL Resolution Plan by 100% of the Committee of Creditors (“CoC”) and consequently the Hon’ble Adjudicating Authority at Cuttack, the Applicant’s status as OSPIL’s financial creditor stood extinguished subject only to the payments under the plan.

The Applicant has in fact received and continues to enjoy the benefit of (albeit “under protest”) INR 321.6 crores in full and final satisfaction of its claims as OSPIL’s financial creditor, under the OSPIL Resolution Plan [AMIPL Additional Affidavit dated July 17, 2020]. Therefore today, the Applicant cannot assert any right in its capacity as OSPIL’s financial creditor. In fact, the OSPIL Resolution Plan expressly disentitles the Applicant from instituting a proceeding of this nature [Application Vol. V, Para 3(vi) @ Page 955].

The OSPIL Resolution Plan is in force and operates in rem [Swiss Ribbons Private Limited v. Union of India, (2019) 4 SCC 17, Para 82]. Even during rejoinder arguments, the Applicant did not challenge the fact that the OSPIL Resolution Plan extinguished its status as OSPIL's financial creditor and also barred both the Applicant's right and any Applications such as the present one connected with liabilities arising from the slurry pipeline. In its written submissions, the Applicant has stated that "The locus of the Applicant will continue till the OSPIL Plan attains finality" [SREI's Written Submissions, Para V(B)(i)(4) at Page 26]. The only contention advanced by the Applicant is that the OSPIL Resolution Plan is "at large" due to an appeal that is pending before the Hon'ble NCLAT against the OSPIL Plan Approval Order. This notion of an "at large" plan, though inventive, is unknown to law. It is pertinent to note that the Applicant and its group entity are the only parties that have objected to the OSPIL Plan Approval Order.

It is well settled that absent a stay, the pendency of an appeal against the OSPIL Plan Approval Order does not affect the operation of the OSPIL Resolution Plan which is binding on all stakeholders in terms of Section 31 of the IBC. Reference may be had to the Supreme Court judgment in Collector of Customs v. Krishna Sales (P) Ltd., 1994 Supp (3) SCC 73, at paragraph 6.

In the absence of a stay on the OSPIL Plan Approval Order, judicial discipline mandates that the said order be respected by this Hon'ble Adjudicating Authority, which is a coordinate bench of the Adjudicating Authority at Cuttack. Reference may be had to the following judgments:

a. Abhijit Guhathakurta v. Royale Partners, 2020 SCC OnLine NCLAT 48, Paras 6-7, 34-40; and

b. Sub-Inspector Rooplal v. Lt. Governor, (2000) 1 SCC 644, Paras 12-13.

The Applicant has relied on two orders of the Hon'ble NCLAT dated December 6 and December 19, 2019 whereby the Hon'ble NCLAT directed that "The Adjudicating Authority may pass appropriate order under Section 31 of the I&B Code uninfluenced by the order passed by this Appellate Tribunal, which may be subject to the decision of this Appeal" [SREI's Written Submissions, Para V(B)(1)(3) @ Page 26]. The Applicant has submitted that in view of these orders, no finality can be attached to the OSPIL Resolution Plan. The Applicant has also sought to distinguish the above judgment of the Hon'ble Supreme Court, on the strength of these two orders of the Hon'ble NCLAT [SREI's Written Submissions, Para 3(d) @ Page 13].

The Applicant's submissions have no merit. It is an admitted position that there is no stay on the OSPIL Resolution Plan. On the contrary, the above orders of the Hon'ble NCLAT clearly establish that the Adjudicating Authority at Cuttack was expressly permitted to go ahead with the resolution process and approve or reject the OSPIL Resolution Plan.

Since the OSPIL Resolution Plan was not stayed, ArcelorMittal India Private Limited ("AMIPL") (the Resolution Applicant in the OSPIL CIRP) has already disbursed payments thereunder, which have been accepted by all of OSPIL's creditors, including the Applicant (albeit under "protest"). None of the OSPIL COC members have challenged the OSPIL Resolution Plan or any terms thereof. Therefore, the status of all of OSPIL's creditors, including that of the Applicant, was severed to enable AMIPL to acquire OSPIL on a clean slate.

In conclusion, the undisputed position is that the Applicant's status as OSPIL's financial creditor stood determined on March 2, 2020, subject only to the payments under the approved OSPIL plan, which payments have also been made by AMIPL. Therefore, even on the date of filing this Application, on the Applicant's own averments, it had no locus standi to approach this Hon'ble Adjudicating Authority.

This Application has been filed under Section 33(3), read with Sections 33(4) and 60(5) of the IBC.

For the Application to be maintainable, the Applicant will first have to show that it is a person whose "interests are prejudicially affected" by an alleged contravention of the Resolution Plan dated October 22, 2018 ("ESIL Resolution Plan") that was approved by the Hon'ble Supreme Court by its judgment of November 15, 2019 ("ESIL SC Judgment"). It is undisputed that the Applicant has no direct contractual or financial interest in ESIL apart from its separate interest as a creditor of ESIL. On December 16, 2019, even this relationship stood extinguished with the Applicant receiving payments in the sum of INR 159.4 crores under the ESIL Resolution Plan - a plan which was approved by it, and which it now seeks to impugn.

In any event, it is not the Applicant's case that any money is due and payable to it directly under the ESIL Resolution Plan [SREI's Written Submissions, Para V(G)(ii)(2) @ Page 32]. The Applicant's locus standi is only predicated on its relationship with OSPIL, as OSPIL's financial creditor. The Application therefore proceeds on the basis that the scope of the words "person whose interests are prejudicially affected" is so wide to include even third-party creditors of supposed (but not actual) creditors - i.e. OSPIL.

A. The Applicant's interpretation of Section 33(3) would lead to absurd consequences and render the IBC a dead letter.

It is submitted that the scope of Section 33(3) cannot be interpreted to permit such remotely placed third parties to upset a concluded resolution process by claiming to be 'prejudicially affected' by non-payment to other third parties who have themselves not claimed the very amounts from which the Applicant derives its standing.

Accepting such a wide scope of the phrase "prejudicially affected" would lead to absurd and undesirable consequences contrary to the object of the IBC: to resolve insolvency in a final sense. The Applicant's interpretation would open the floodgates for finally resolved insolvency processes to be under constant siege by rank strangers and would lead to vexing consequences for Resolution Applicants.

The Applicant's case is that it is seeking to better its rights vis-à-vis OSPIL through the present Application. Such a theory is beyond the pale of reason, and has absurd and extremely undesirable consequences. In its essence, the Applicant's theory is that a financier of Party A can proceed against a debtor of Party A absent any privity with that debtor, on the premise that if Party A's debtor were to fulfil its contractual obligation to Party A, this would be to the financier's benefit. Such a notion spells an end to privity and has grave implications. On this theory, no Resolution Applicant would ever have quietus even long after implementing a Resolution Plan – there would always be a possibility that a creditor of one of its operational creditors would emerge like a "hydra head popping up". Quite apart from the IBC, such an interpretation would upset the entire law of contract in a more general sense.

It is submitted that the proper meaning of the phrase "persons whose interests are prejudicially affected" would not be a literal interpretation of the words in their general and most liberal sense, as the Applicant has sought to argue, but that the phrase should be interpreted in the context of the statute. Reference may be had to the following judgments of the Hon'ble Supreme Court:

a. Utkal Contractors and Joinery Pvt. Ltd. v. State of Orissa, (1987) 3 SCC 279, at paragraphs 9-12; and

b. Central India Spg., Wvg. & Mfg. Co. Ltd. v. Municipal Committee, 1958 SCR 1102, at paragraph 22.

C. The proper meaning of the phrase "person whose interests are prejudicially affected" refers to only those persons who are recognized stakeholders in a corporate debtor.

Thus, the proper meaning of the phrase "person whose interests are prejudicially affected" must derive from the object, the pattern, and the context of the IBC. In that sense, it is submitted, that the phrase refers to only those persons who are recognized stakeholders in a corporate debtor. These are persons who are involved in and bound by the Insolvency Resolution Process of the corporate debtor (and therefore, who may claim to be prejudicially affected by its non-implementation), i.e. the corporate debtor's employees, members, creditors, guarantors and the like. Section 31(1) of the IBC provides that a Resolution Plan approved by the Adjudicating Authority shall be binding on the corporate debtor and its employees, members, creditors, guarantors and other stakeholders involved in the Resolution Plan.

To this effect also, Regulation 38 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 ("CIRP Regulations") provides that a Resolution Plan must mandatorily include a statement as to how it has dealt with the interests of all stakeholders, including financial creditors and operational creditors, of the corporate debtor.

Similarly, under Section 53 of the IBC, read with Section 35, the "stakeholders" who are entitled to distribution of proceeds are the workmen, creditors, employees, etc. of the corporate debtor itself. The IBC provides no rights to, and does not protect the interests of, third parties who have no direct relationship with the corporate debtor.

The above interpretation of Section 33(3) also finds support in the most relevant aid to construing the IBC – the UNCITRAL Legislative Guide on Insolvency Law, 2005 ("UNCITRAL Guide"). The Supreme Court has consistently relied on the UNCITRAL Guide, while interpreting the IBC, recognizing it to be the starting point of the statute:

a. Mobilox Innovations (P) Ltd. v. Kirusa Software (P) Ltd., (2018) 1 SCC 353- Paras 9-17 [Traces the legislative history of the IBC and recognizes the UNCITRAL Guide as the starting point];

b. Swiss Ribbons Private Limited v. Union of India, (2019) 4 SCC 17- Para 76;

c. Committee of Creditors of Essar Steel India Limited v. Satish Kumar Gupta, 2019 SCC Online SC 1478- Paras 7, 9, 13, 29, 36, 56 and 70; and

d. Anuj Jain Interim Resolution Professional for Jaypee Infratech Ltd. v. Axis Bank Limited, 2020 SCC Online SC 237- Paras 83 and 175.

Even the Report of the Bankruptcy Law Reforms Committee of November 2015 ("BLRC Report") relies on the UNCITRAL Guide as a 'useful benchmark' for the IBC [Page 27]. Similarly, the Report of the Insolvency Law Committee of February 2020 also relies on the UNCITRAL Guide, to interpret and recommend amendments to the IBC.¹²

The UNCITRAL Guide supports the interpretation that the phrase 'person ... whose interests are prejudicially affected' in Section 33(3): (a) does not include remotely placed parties like the Applicant; and (b) is limited to the 'stakeholders' as defined in the IBC. The relevant extracts of the UNCITRAL Guide, which discuss this very issue – i.e. conversion of Insolvency Resolution Process into liquidation are set out below:

(emphasis added)

The words 'party in interest' used in the UNCITRAL Guide are similar to the words 'person whose interests are prejudicially affected' under Section 33(3) of the IBC. The UNCITRAL Guide clarifies that this phrase:

a. Does not include persons with "remote or diffuse interests", though they may be "affected" by the insolvency proceedings;

b. Includes only those persons "whose rights, obligations or interests are affected by insolvency proceedings";

c. Refers to persons like "debtor, the insolvency representative, a creditor, an equity holder, a creditor committee, a government authority" – in the IBC, these are the 'stakeholders', who are involved in and bound by the CIRP, as provided under Sections 31(1), 35 and 53 of the IBC, read with Regulation 38(1-A) of the CIRP Regulations.

The Report of the Insolvency Law Committee of March 2018 also clarifies that the objective of the IBC is to cater to the interests of the stakeholders [Please see the Summary Response to S. No. 23 @ Pages 85-86].

Thus, a proper interpretation of Section 33(3) would seek to balance the interests of such stakeholders in the proper implementation of a Resolution Plan, with the interest of the Resolution Applicant to not have to deal with vexatious proceedings initiated by mischievous third parties such as the Applicant, who are deriving their standing –several degrees removed – from their contractual relationship with other third parties who have never even held themselves out as stakeholders to the ESIL resolution proceedings. Such a party is ipso facto not a stakeholder in ESIL as a corporate debtor since it has no interest in the successful resolution of ESIL, but has, on its own pleadings and arguments sought to connect the outcome of this Application with the OSPIL resolution.

In the context of the present case, the ESIL Resolution Plan identifies the stakeholders [Application Vol. IV @ Pages 814-815] and it is clear that the Applicant (in its present capacity as OSPIL's financial creditor) is not a stakeholder.

Without prejudice, even if Section 33(3) is interpreted to mean that persons other than the stakeholders may apply thereunder, it can certainly not be a party as remotely placed as the Applicant. The Applicant's interpretation of this provision would lead to absurd consequences, as submitted above.

D. The Applicant's reliance on the judgment of S.K. Gupta v. K.P. Jain to suggest a wide interpretation of Section 33(3) is misplaced.

During rejoinder arguments, the Applicant contended that the expression used in Section 33(3) was of a wide import, and could not be restricted only to the stakeholders under Section 31(1). This argument was advanced on the basis of the judgment of the Hon'ble Supreme Court in SK Gupta v. KP Jain, (1979) 3 SCC 54 ("SK Gupta").

It is submitted that the Applicant's reliance on this judgment is entirely misplaced, for the following reasons:

a. The SK Gupta judgment interpreted Section 392 of the Companies Act, 1956, which permitted the Court to act suo motu to wind up a company or make modifications to a compromise/arrangement to make it workable. The Supreme Court held that if the Court could act on its own motion, the question of locus becomes irrelevant [Please see paras 7 (contention), 10, 13, 14, 16, 18]. This Adjudicating Authority has not been conferred with similar powers under Section 33(3) of the IBC.

b. In this context, paragraph 75 of the ESIL SC Judgment specifically holds that the power of a court under Section 392 is conspicuously absent when it comes to the Adjudicating Authority under the IBC and the two jurisdictions are vastly different.

(emphasis added)

It is well settled that the interpretation of a provision under the Companies Act cannot be imported into the construction of a different statute with a different object and in a different context, particularly when the provisions are not pari materia. Section 392 of the Companies Act, 1956 and Section 33(3) of the IBC neither use the same language, nor have they been enacted for the same purpose or for the same object and are therefore not pari materia. Please see:

a. Hotel & Restaurant Assn. v. Star India (P) Ltd., (2006) 13 SCC 753 - Paras 23(iv), 41-48; and

b. Shah and Co. v. State of Maharashtra, (1967) 3 SCR 466 - Paras 20-24.

The meanings of words and expressions used in an Act must take their colour from the context in which they appear [Pandit Ram Narain v. State of U.P., 1956 SCR 664 - Paras 9-10] and not with reference to another statute. The IBC is a composite code that marks a shift from the Companies Act.^{1313.Innoventive Industries Ltd. v. ICICI Bank, (2018) 1 SCC 407- paras 12, 54, 58, 60; Swiss Ribbons (P) Ltd. v. Union of India, (2019) 4 SCC 17, para 64. Also see the BLRC Report, pg. 13, pg. 26 (last 2 paras), pg. 30 (para 3 & 3); pg. 76 (para 5.1); pp. 138-141 (Chapter 7).} It has its own objectives, that promote resolution over liquidation and ensure finality of resolution. Section 33(3) has to be read in this context. The proper scope of Section 33(3) is as suggested by the UNCITRAL Legislative Guide (relied on to interpret the IBC), which categorically states that only stakeholders can be given the power to convert a resolution into liquidation.

E. The Applicant's reliance on the Loan Agreement and the Deed of Hypothecation to establish a purported 'interest' in the usage charges is misplaced.

The Applicant has sought to rely on Clause 7.2(vi) of the loan agreement dated March 28, 2015 [Application Vol. 1 @ Page 151] and the Deed of Hypothecation dated November 26, 2015 [Rejoinder to AMNS Reply @ Page 8] to contend that it has an independent right over the usage charges. However, even these are rights that are exercisable under the Applicant's independent contracts with OSPIL and are not rights that are directly linked to the corporate debtor. In any event, it is well settled that the IBC does not contemplate any recovery proceedings.

Furthermore, the Applicant's rights under the loan agreement and the Deed of Hypothecation stood extinguished on the approval of the OSPIL Resolution Plan on March 2, 2020. The OSPIL Resolution Plan supersedes any previous contractual arrangements between the Applicant and OSPIL, and binds the Applicant pursuant to Section 31 of the IBC.

Therefore, the Applicant's reliance on the Loan Agreements or the Deed of Hypothecation does not take its case any further, since the Applicant's locus standi is still predicated on its principal status as OSPIL's financial creditor. Assuming that the reliefs sought in the Application are granted and usage charges are paid to OSPIL, even then, there is no benefit to the Applicant, since its status as OSPIL's financial creditor has been extinguished by the OSPIL Resolution Plan. In any view of the matter therefore, the Applicant cannot claim to be prejudicially affected by the alleged non-payment of usage charges.

In any case, similar arguments have been rejected by courts, even in the context of Section 392 of the Companies Act, 1956, by intervenors, who have sought to exercise independent contractual rights in a compromise/ arrangement proceeding, relying on the SK Gupta judgment. The Hon'ble Calcutta High Court has, on at least two occasions dismissed such applications:

a. Prime Retail India (P) Ltd. v. Pawan Projects, (2012) SCC OnLine Cal 8147, Pages 2-3- the Applicants relied on the SK Gupta judgment to contend that they could challenge an application praying for recall of a sanctioned scheme. The court held that the Applicants were not "persons interested in the affairs of the company", since the interest had to be in the context of the scheme, and not an independent interest under a different agreement (much like the Applicant's interest under its loan agreements with OSPIL); and

b. Suvra Dey v. Pawan Kumar Churiwal, 2013 SCC OnLine Cal 12802- Pages 2-3.

The Application seeks payment of usage charges to OSPIL [Application Vol. I, Para 40(A-1) @ Pages 26-27]. It has been instituted by the Applicant, on OSPIL's behalf and for OSPIL's benefit, in its capacity as OSPIL's financial creditor. Since OSPIL was undergoing insolvency, the only person entitled to institute proceedings on OSPIL's behalf was the OSPIL RP. The OSPIL RP has not lodged any claim in the ESIL CIRP on OSPIL's behalf. The OSPIL RP has not even been made a party to these proceedings. For this reason alone, this Application deserves to be dismissed.

A. The ESIL resolution process concluded without a claim from OSPIL, which was at all material times under the control of the Applicant's group. Even after being placed into CIRP, OSPIL's RP has never made such a claim. Even today, OSPIL is not before this Adjudicating Authority. OSPIL has consciously abandoned and waived its right to claim usage charges.

The ESIL CIRP concluded without a claim from OSPIL, which was at all material times under the control of the Applicant's group. Importantly, OSPIL has never resiled from the Deed of Cancellation. OSPIL (which was under the control of the Applicant's group) has waived and abandoned its right to claim usage charges for two reasons:

a. It never filed a claim for usage charges during the ESIL CIRP, either as operational debt, or as CIRP Costs; and

b. It took a diametrically contrary plea in the OSPIL CIRP- that the Slurry Pipeline in fact belonged to ESIL (and consequently, usage charges were not payable by ESIL to OSPIL) [also admitted by the Applicant SREI Written Submissions, Para III(b) @ Page 12].

OSPIL's CIRP commenced on May 14, 2019. Prior to this, OSPIL was under the control of the Applicant's group and therefore the Applicant. 69.81% of OSPIL's shareholding was held by India Growth Organic Opportunity Fund ("IGOF"), a fund operated by SREI Multiple Asset Investment Trust ("SMAIT"). The Adjudicating Authority at Cuttack in its order dated November 29, 2019 in I.A. No. 85/CTB/2019, held that the Applicant and SMAIT were related parties [Application Vol. V @ Pages 884, 886].

The Adjudicating Authority at Cuttack found that the following entities comprise the "SREI Group":

a. The Applicant;

b. SREI Alternate Investment Manager Limited ("SAIML"), a wholly owned subsidiary and the fund management arm of the Applicant, also the investment manager of IGOF;

c. SMAIT, a registered trust under the Indian Trusts Act, 1882, one of the settlors of SMAIT; and

d. IGOF, a scheme of SMAIT.

Therefore, the wholly owned subsidiary of the Applicant was the creator, settlor, contributor and the investment manager of IGOF, the majority shareholder in OSPIL.

OSPIL has, till date not made any claim for usage charges:

a. (As alleged operational debt) prior to August 2, 2017: Prior to the ESIL CIRP commencement on August 2, 2017, OSPIL was under the control of the SREI Group, yet, it did not register itself as an operational creditor, claiming usage charges;

b. (As alleged CIRP Cost) between August 2, 2017 and March 8, 2019: The ESIL Resolution Plan was approved by this Adjudicating Authority on March 8, 2019. At this time, OSPIL was under the control of the SREI Group, yet OSPIL did not claim usage charges even as CIRP Cost;

c. (As alleged CIRP Cost) till May 14, 2019: OSPIL was under the control of the SREI group till May 14, 2019. Till this date, neither was any claim made, nor was any application filed before this Adjudicating Authority or the Hon'ble NCLAT in relation to usage charges; and

d. (As alleged CIRP Cost) even after May 14, 2019: Even the OSPIL RP did not approach either the Adjudicating Authority, the Hon'ble NCLAT or the Hon'ble Supreme Court, when the ESIL Resolution Plan was being approved, to raise the issue of non-payment of usage charges.

Far from raising a claim for usage charges (which is premised on the Deed of Cancellation being ineffective), in a bid to resist the commencement of the OSPIL CIRP, OSPIL has, through its director Mr. Subrata Ghosh, in its pleadings before NCLT Cuttack, claimed that the title to the Slurry Pipeline vested in ESIL [NCLT Cuttack's Order dated May 14, 2019 in Application Vol. V, Paras 3 and 4 @ Page 845]. If the Slurry Pipeline was never transferred to OSPIL, there arises no question of paying usage charges.

Mr. Subrata Ghosh has also been a director of other SREI entities, and as such, the averments in his affidavit are likely attributable to the Applicant.

Therefore, the SREI Group, which controlled OSPIL at all material times, has intentionally relinquished, abandoned and waived any right to claim usage charges [P. Dasa Muni Reddy v. P. Appa Rao, (1974) 2 SCC 725 at para. 13]. In any event, OSPIL, which is a party to the Deed of Cancellation and which has never questioned its validity has consciously chosen not to raise any claim for usage charges.

B. Only OSPIL can sue to claim monies due to it. The Applicant has no right to sue on OSPIL's behalf, in its capacity as OSPIL's financial creditor.

As a rule, only the management of OSPIL would be able to undertake an action for dues to OSPIL from any third party including ESIL. Reference may be had to the judgment of the Supreme Court in Chiranjit Lal Chowdhuri v. Union of India, 1950 SCR 869, at paragraph 46.

OSPIL has been fully capable of representing itself, either through its management (represented by the SREI Group) (until May 14, 2019, i.e. till insolvency admission) or through the OSPIL RP thereafter. Yet it chose not to lodge a claim for usage charges for the period either prior to, or during the CIRP. The management of OSPIL, at all material times, was controlled by the related party of SREI. In these circumstances, it is indeed curious that the Applicant has chosen to file this Application now, purportedly at the behest of OSPIL, after it has received payments in excess of INR 480 crores under both resolution processes of ESIL and OSPIL.

The Applicant is not entitled to agitate claims on behalf of OSPIL: a company sues for itself. The only exception in the common law is that accorded to derivative actions, where shareholders sue directors to protect the company's interests, which exception is not pertinent here. This Application does not even constitute a derivative action since:

a. A derivative action cannot be instituted by a third-party creditor of a company – this Application has been instituted by the Applicant in its capacity as OSPIL's financial creditor;

b. Such an action is usually against the management of the company – this action is not against OSPIL's management, which, in any event was under the control of the SREI group; and

c. The company is a necessary party to such an action – OSPIL has not been made party to this Application. The Application deserves to be dismissed on this ground alone.

Reference may be had to the following judgments:

a. BBN (UK) Ltd. v. Janardan Mohandas Rajan Pillai, 1993 SCC OnLine Bom 17, at paragraphs 15, 17 and 19; and

b. Starlight Real Estate (Ascot) Mauritius Limited & Anr. v. Jagrati Trade Services Private Limited & Ors., 2015 SCC OnLine Cal 6583, at paragraphs 13, 29-33.

Therefore, if even OSPIL's shareholders do not have the right to institute proceedings on its behalf, there is no question of the Applicant maintaining this application in its capacity as OSPIL's financial creditor (which status has, in any event, been extinguished now).

The Applicant has, in its rejoinder arguments, misconstrued and misrepresented this argument. The Applicant has proceeded on the basis that the Respondent has termed this action a 'derivative action' [SREI's Written Submissions, Para V(N)(i)(1) @ Page 39]. This is incorrect. The Respondent's argument is simply that only a company can represent itself except in the limited case of derivative actions (which the present Application is not). Though the Applicant has alleged that it is entitled to institute proceedings on OSPIL's behalf during OSPIL's insolvency [SREI's Written Submissions, Para N(i)(5) @ Page 39], it has made no reference to any provision of law that permits proceedings of such nature. It is well settled that during insolvency proceedings, only an RP can represent the corporate debtor. Merely stating that the Application has not been filed on OSPIL's behalf does not alter the fact that the prayer in the Application seeks payments to OSPIL. The right to receive usage charges, if at all, is a right that inures to only to OSPIL (now under the management of AMIPL) and not to the Applicant or any other erstwhile creditor/stakeholder of OSPIL. The proceeds if any shall be received by the new management of OSPIL and enure to its benefit – the creditors of OSPIL have collected resolution proceeds and hence all future recovery in any form will be to the account of new management of OSPIL.

The Applicant has also contended that Respondent No.1, i.e. AMIPL, is in management and control of OSPIL (thereby conceding that the OSPIL Resolution Plan has taken effect) and therefore, OSPIL could not have filed this Application [SREI's Written Submissions, Para V(N)(1)(4) @ Page 39]. The Applicant has made this statement, as though it explains OSPIL's silence since December 2016. In any event, this is not the basis on which the Applicant has claimed its locus standi in the Application, which was restricted to its status as OSPIL's financial creditor. The Applicant has sought to hedge its case in the written submissions (not even subsequent pleadings), which is impermissible. In any event, there is no answer whatsoever to why OSPIL has never come forward till date to claim monies that are purportedly owed to it.

There are three orders – of this Adjudicating Authority and the Adjudicating Authority at Cuttack – that have finally determined issues which are being raised in this Application. The Adjudicating Authority at Cuttack has also categorically refused to direct that usage charges are payable by ESIL to OSPIL. Therefore, the Applicant is barred, by the principles of res judicata/ issue estoppel from agitating these very issues in this Application.

A. Res judicata on the issue of jurisdiction: This Adjudicating Authority has held that it has no jurisdiction to determine issues concerning the title to the Slurry Pipeline in these proceedings.

The issue of title to the Slurry Pipeline was first raised before this Adjudicating Authority by the ESIL RP, in IA No. 419 of 2017, inter alia seeking a declaration that the title to the Slurry Pipeline vested in ESIL [Application Vol. II @ Page 420]. The ESIL RP contended that this Adjudicating Authority has the jurisdiction, under Section 60(5) of the IBC to adjudicate the dispute pertaining to the title of the Slurry Pipeline and grant consequential reliefs [Application Vol. II, Para 4 @ Page 428].

To resist this Application, the Applicant contended that this Adjudicating Authority does not have jurisdiction to determine the issue of title to the Slurry Pipeline [AMNS Reply, Para 4 @ Pages 85-88].

By an order dated February 7, 2018 in the ESIL RP's IA No. 419 of 2017, this Adjudicating Authority declined to exercise jurisdiction on the issue of ownership of the Slurry Pipeline (and consequently, it is submitted, all connected issues, including the payment of usage charges) [Application Vol. 3, Para 53 @ Page 469; Para 56 @ Page 470; Para 81 @ Page 480].

Though the Adjudicating Authority observed that for the purposes of preparing the Information Memorandum, the ESIL RP may assume that ESIL retained the right to use the Slurry Pipeline subject to the pending title proceedings, it expressly declined to adjudicate upon the title over the Slurry Pipeline itself in these proceedings. The Adjudicating Authority in fact acceded to the Applicant's arguments and declined to exercise its jurisdiction. This order operates as res judicata and issue estoppel against the Applicant, and bars it from filing this Application, raising the very same issues concerning the title to the Slurry Pipeline. This bar is specifically applicable to the Applicant, since it actively participated in the ESIL CIRP, being fully aware of the import of this Adjudicating Authority's order. Reference may be had to the judgment of the Hon'ble Supreme Court in YB Patil v. YL Patil, (1976) 4 SCC 66, at paragraph 4.

B. Res judicata on the issue of payment of usage charges: The Adjudicating Authority at Cuttack has expressly refused to grant the Applicant the very relief that it has claimed in this Application.

Having lost at the admission stage, the Applicant subsequently objected to the OSPIL Resolution Plan, on the ground that it did not provide for payment of usage charges from ESIL. In its application CA(IB) No. 194/CTB/2019 before the Adjudicating Authority at Cuttack, the Applicant had raised all the contentions that have been raised in this Application, to justify that usage charges were due and payable by ESIL to OSPIL.

The Applicant's objections were expressly rejected by the Adjudicating Authority at Cuttack. The Applicant is therefore barred in law from instituting a fresh proceeding to agitate the same cause of action. Reference may be had to the judgment of the Adjudicating Authority dated March 2, 2020 [Application Vol. V @ Page 1007; Paras 9(ii) and 9(iii) @ Page 1022; Para 9(vii) @ Page 1028; Para 9(x) @ Page 1030; Para 9(xi) @ Page 1031].

Reference may be had to the judgment of the Supreme Court in Hope Plantations Ltd. v. Taluk Land Board, (1999) 5 SCC 590, at paragraph 26.

It is not as though the Applicant was unaware even at a much earlier stage that usage charges were not demanded or considered payable. To begin with, OSPIL itself never filed a claim in the ESIL CIRP claiming usage charges. Be that as it may, the Applicant wrote several letters to the ESIL RP demanding usage charges. Reference may illustratively be had to the Applicant's:

a. objections to IA No. 419 of 2017 [AMNS Reply @ Page 68];

b. letter dated September 5, 2017 [Rejoinder to AMNS Reply @ Page 103];

c. letter dated December 18, 2017 [Rejoinder to AMNS Reply @ Page 107];

d. letter dated February 9, 2018 [Application Vol. V @ Page 893]; and

e. letter dated June 20, 2018 [Application Vol. V @ Page 895].

However, the Applicant was well aware of the ESIL RP's stand that usage charges were not payable to OSPIL. Reference may be had to the RP's IA No. 419 of 2017, claiming that ESIL retained title over the Slurry Pipeline [Application Vol. II @ Page 420] and the RP's letter dated December 26, 2017 [Rejoinder to AMIPL Reply @ Page 108].

Even the ESIL Resolution Plan, in clear terms states that the Slurry Pipeline is an asset of ESIL, subject to certain disputes. In fact, the Plan expressly states that it does not contemplate payment of lease rental costs for the Slurry Pipeline [Application Vol. IV @ Pages 708, 714 and 763].

Despite all this, the Applicant approved the ESIL Resolution Plan and took no steps to seek clarity from a court or tribunal on a contentious issue, where it had been made clear to it by the ESIL RP that he did not consider usage charges payable either as operational debt or as CIRP costs. Furthermore, the Applicant did not raise any objection when the plan was approved by the Adjudicating Authority on March 8, 2019 and finally by the Hon'ble Supreme Court on November 15, 2019 (ESIL SC Judgment). It could have filed applications seeking a direction at those stages that the usage charges should be paid as part of the CIRP. However, it maintained complete silence on this issue.

More importantly, the Applicant allowed the ESIL Resolution Plan to be implemented, and has received a payment of INR 159.4 crores thereunder. Having benefitted from the implementation of the ESIL Resolution Plan, the Applicant is now estopped from questioning the implementation at this stage, knowing fully well that the ESIL RP never contemplated paying usage charges to OSPIL (either as CIRP Cost or otherwise). If any charges are to be paid, SREI as a creditor of ESIL will be required to return the part of money which they have received as pro-rata share of working capital of ESIL (above a guaranteed amount).

The Applicant's silence in allowing the ESIL Resolution Plan to be implemented without any objection, is a form of estoppel by acquiescence, as explained by the House of Lords in Republic of India and Others v. India Steamship Company Ltd, [1997] UKHL 40, at page 8.

Reference may also be had to the following extract from Spencer and Bower: Reliance Based Estoppel, p. 61, Piers Feltham et.al., 5^th ed. 2017:

(emphasis added)

Reference may also be had to the following judgments:

a. Pravesh Kumar Sachdeva v. State of U.P., (2018) 10 SCC 628, at paragraphs 13 and 16, which holds that the failure to file objections amounts to waiver and estoppel through conduct;

b. Manak Lal v. Dr Prem Chand Singhvi, 1957 SCR 575, at paragraphs 8 and 9, which holds that a person who is aware of all material facts is deemed to have been conscious of his legal rights and his failure to take the objection at an earlier stage creates an effective bar of waiver against him; and

c. Sunderabai v. Devaji, AIR 1954 SC 82, at paragraphs 14, 18 and 19 holding that a person making another believe a thing to be true and act upon such belief, cannot deny the truth of that thing subsequently.

The Applicant is seeking to upset the ESIL Resolution Plan, after approving it and receiving significant funds thereunder (INR 159.4 crores), knowing fully well that AMIPL, after painstaking 800 plus number of days of the process and two rounds of litigations leading up to the Apex Court, has disbursed more than INR 42,000 crores under the ESIL Resolution Plan to give the creditors the largest recoveries under the IBC regime.

Having partaken in the benefits under the ESIL Resolution Plan, the Applicant cannot seek to upset the Plan, which did not contemplate payment of usage charges to OSPIL (as explained in detail in Part B below). Reference may be had to:

a. Bijan Kumar Barman v. Bhaskar Chandra Barman, 2000 SCC OnLine Cal 424, at paragraphs 17-21, which lays down the principle that a party taking the benefit of a transaction cannot challenge the transaction subsequently. He cannot approbate and reprobate; and

b. H.R. Basavaraj v. Canara Bank, (2010) 12 SCC 458, at paragraph 33, which holds that a person taking benefits under a contract elects to abide by it.

The Application is in the teeth of the ESIL SC Judgment, which expressly held that no fresh claims could be entertained against a successful Resolution Applicant, after the acceptance of a Resolution Plan and that the Resolution Applicant starts on a fresh slate [ESIL SC Judgment, Paras 86 and 88].

(emphasis added)

The Supreme Court has, in categorical terms held that all money claims should be made at the earliest possible opportunity. For a party like the Applicant, who had ample opportunities to agitate the issue of usage charges before this Adjudicating Authority, the ESIL SC Judgment acts as a clear bar against this Application.

In the same vein, the Supreme Court recently (on August 25, 2020) rejected a Review Petition filed by Dakshin Gujarat Vij Co. Ltd. ("DGVCL") (Review Petition (Civil) Diary No. 240/2020) against the ESIL SC Judgment, seeking payment of electricity dues during the CIRP Period. The Applicant has incorrectly contended that this DGVCL's claim did not pertain to the ESIL CIRP period [DGVCL Review Petition, Para (o) @ Page 207]. The Supreme Court rejected DGVCL's review petition on merits and upheld the ESIL SC Judgment that rejected DGVCL's claim for electricity dues as CIRP costs. The Hon'ble Supreme Court therefore reaffirmed that the quietus that was achieved through the ESIL SC Judgment could not be disturbed and the provisions of the ESIL Resolution Plan and the IBC would prevail.

The Supreme Court's efforts to avoid liquidating ESIL: The ESIL SC Judgment brought quietus to a long-drawn-out resolution process, that spanned over two years. In its earlier judgment of October 4, 2018 (ArcelorMittal India Private Limited v. Satish Kumar Gupta, (2019) 2 SCC 1) the Supreme Court had invoked its powers under Article 142 of the Constitution while assessing AMIPL's eligibility under Section 29A of the IBC and permitted it to participate as a Resolution Applicant. The intent of the Supreme Court was clearly to avoid pushing ESIL into liquidation. However, the Application seeks to do just that. Under the scheme of Section 33(3) of the IBC, the Adjudicating Authority lacks the jurisdiction to compel payment of usage charges to OSPIL. If SREI were to succeed in this Application, and the Respondents are directed to make payment of Usage Charges to OSPIL, then such payment would upset the viability of the resolution that AMIPL has proposed for erst. ESIL, which viability was approved by the COC and then by Hon'ble Supreme Court with a view to keep the corporate debtor alive. ESIL cannot be directed to be liquidated on account of such frivolous claims, an eventuality that the Supreme Court has sought to prevent twice over. While the claim of INR 1300 crores towards the purported RTU Charges is in itself frivolous, assuming without admitting that the said claim was payable, it is submitted that the ESIL Resolution Plan contemplated a one-time settlement of the resolution debt towards the Creditors uptill the Effective Date. Admittedly, the Resolution Applicant made the payment of the resolution amount (including the CIRP Cost date as well as the payout to the Applicant SREI), as informed to it by the ESIL RP. No further payments for a period prior to the Effective Date of ESIL Resolution Plan were envisaged and accordingly, could not be permitted in terms of Section 31(1) of the I&B Code.

The facts clearly reveal that the Application is brought mala fide under the guise of the Applicant, but in reality, by its related entities, which are attempting to derail the insolvency proceedings of OSPIL. The Applicant and SMAIT have throughout been acting in concert to oppose the OSPIL CIRP, at various stages.

At the admission stage, the Applicant attempted to intervene and oppose the commencement of the OSPIL CIRP. The Applicant's intervention application was rejected by the Adjudicating Authority at Cuttack on January 16, 2019. The Applicant's appeal (No. 126 of 2019) was also rejected by the Hon'ble NCLAT, by its order of February 11, 2019 [Annexure R-4 to AMNS Reply @ Page 153]. Nevertheless, the Applicant was permitted to file written submissions before the Adjudicating Authority at Cuttack.

The Adjudicating Authority expressly rejected the Applicant's opposition to OSPIL's insolvency commencement, in its order of admission dated May 14, 2019 pronounced by Hon'ble Adjudicating Authority, Cuttack[Application Vol. V @ Page 843]. The Adjudicating Authority held that the Applicant could not claim to be aggrieved by the OSPIL insolvency commencement, since it was a financial creditor and could, in any event, file its claims in the CIRP.

OSPIL itself, through a director Mr. Subrata Ghosh (presumably SMAIT's nominee), sought to resist the insolvency commencement, by contending that the title to the Slurry Pipeline vested in ESIL and not OSPIL. However, SMAIT was also unsuccessful in its endeavour.

SMAIT directly entered the arena thereafter, and appealed the admission order of May 14, 2019 in Appeal No. 666 of 2019. In its appeal, SMAIT, which has, at all times acted in concert with the Applicant, appears to have made a diametrically opposite contention to that of the Applicant in the Application [Please see the OSPIL RP's letter dated December 12, 2019, Application Vol. V @ Page 906]. The Hon'ble NCLAT dismissed SMAIT's appeal by an order dated September 25, 2019 [Annexure R-5 to the AMNS Reply @ Page 156].

Its related party SMAIT having faced rejection by the Hon'ble NCLAT, the Applicant once again stepped in, by attempting to force its way into the CoC of OSPIL. As stated above, by its order of November 29, 2019, the Adjudicating Authority at Cuttack refused the Applicant's plea to be on OSPIL's CoC in view of the fact that it was a related party of OSPIL [Application Vol. V @ Page 856].

SMAIT then began making overtures to the OSPIL RP. On November 30, 2019, SMAIT addressed a letter to the OSPIL RP purportedly in the garb of a settlement offer, in which it claimed that the Title Suit was "only a procedural matter" and that "the ownership dispute will be settled in favour of OSPIL." In this view, SMAIT contended that the claims of the stakeholders could easily be settled upon the decision in the Title Suit [Application Vol. V @ Page 901]. The Applicant also addressed a similar letter on December 6, 2019 [Application Vol. V @ Page 1003]. However, the OSPIL CoC rejected SMAIT's settlement offer, calling it 'speculative' [Application Vol. V @ Pages 906 and 1005].

Despite repeated attempts by the Applicant and SMAIT to scuttle the OSPIL CIRP, the OSPIL Resolution Plan came to be approved by the Adjudicating Authority on March 2, 2020 [Application Vol. V @ Page 1007]. Both the Applicant and SMAIT have challenged this order before the NCLAT, despite the Applicant accepting payments under the OSPIL Resolution Plan, supposedly 'under protest'. This Application was filed by the Applicant three days after the Adjudicating Authority at Cuttack approved the OSPIL Resolution Plan.

The Applicant's opposition to OSPIL's CIRP is therefore a recurring theme in all proceedings, and is inexplicable for a prudent and disinterested financial creditor. It is evident that the Applicant has filed this Application as a proxy for OSPIL's majority shareholder, whose only interest is to avoid the completion of OSPIL's CIRP at any cost.

It is evident from a plain reading of the Application that the Applicant is aggrieved by the OSPIL Resolution Plan, which allegedly does not provide for the payment of usage charges [Application Vol. 1, Para 30 @ Page 21; Para 36 @ Page 25; Para 39 @ Page 26].

The Applicant's challenge to the OSPIL Resolution Plan cannot be agitated before this Adjudicating Authority. The Applicant's recourse as OSPIL's financial creditor is only before the Adjudicating Authority at Cuttack, which is seized of the OSPIL CIRP. The OSPIL Resolution Plan has been approved by the Adjudicating Authority at Cuttack and payments thereunder have been disbursed to all of OSPIL's creditors, including the Applicant. The Applicant has agitated all the grounds that have been raised in this Application, in an appeal challenging the OSPIL Resolution Plan as well. Be that as it may, this Adjudicating Authority lacks the jurisdiction to decide issues that concern the Applicant's rights vis-à-vis the OSPIL Resolution Plan. In view of the submissions made hereinabove, it is submitted that the present Application is not maintainable and ought to be rejected on this ground alone.

PART B: CONTRAVENTION OF THE ESIL RESOLUTION PLAN AND PAYMENT OF USAGE CHARGES AS CIRP COSTS

The Applicant's entire case rests on AMIPL having contravened the ESIL Resolution Plan, by not paying usage charges to OSPIL, which, according to the Applicant is in the nature of "CIRP Costs". It is the Applicant's contention that the Respondents have violated Chapter X of the ESIL Resolution Plan [Application Vol. IV @ Page 820], whereby AMIPL "undertook to make payment of the unpaid Insolvency Resolution Process costs in priority to payments to the financial creditors of the Corporate Debtor". The Applicant has also alleged contravention of Chapter XI, which states that the Insolvency Resolution Process cost will be funded from internal accruals and cash flow in priority over other debts of ESIL and in case the internal accruals and cash flows were insufficient to meet such costs, it shall be met by AMIPL [Application Vol. 1, Para 24 @ Page 16; Application Vol. IV @ Page 825; Application Vol. 1, Para 37 @ Page 25].

It is an admitted position that the ESIL Resolution Plan does not expressly provide for the payment of usage charges. The Applicant has also conceded to this, during the course of the hearings. In the absence of such a clause, the Applicant has built its case on the following grounds:

a. That the ESIL CIRP proceeded on the basis that the title to the Slurry Pipeline vested in OSPIL and therefore, for the purposes of this insolvency resolution, usage charges were payable to OSPIL; and

b. That the ESIL Resolution Plan did not cap the CIRP Costs and therefore usage charges that were due during the CIRP period are payable as CIRP Costs.

The Applicant's contention that the ESIL CIRP proceeded on the basis that the title to the Slurry Pipeline vested in OSPIL, is entirely founded on an interpretation of the order of this Adjudicating Authority, dated February 7, 2018 [Application Vol. III, Paras 64, 72 and 81 @ Page 436] in LA No. 419 of 2017 filed by the ESIL RP on December 6, 2017 [Application Vol. II @ Page 420].

It is the Applicant's contention that since the potential Resolution Applicants were permitted to file Resolution Plans in view of ESIL's right to use the pipeline "under RTUA", any use of the Slurry Pipeline could only have been upon payment of usage charges to OSPIL.

To grant the reliefs sought in this Application, particularly the direction to ESIL to pay usage charges to OSPIL, this Adjudicating Authority would have to first arrive at the following findings: that (a) the Deed of Cancellation is invalid; (b) the title to the Slurry Pipeline vests in OSPIL; and (c) the RTU Agreement revives, thereby making ESIL liable for usage charges. It is submitted that these conclusions cannot be drawn on the basis of the February 7, 2018 order.

The Applicant's selective reliance on certain parts of the order, mischaracterizes the Adjudicating Authority's findings. There are two key aspects to this order, which were not brought to the attention of the Adjudicating Authority:

a. The Adjudicating Authority expressly declined to exercise jurisdiction under Section 60(5) of the IBC to determine the title of the Slurry Pipeline; and

b. The Adjudicating Authority's preliminary findings on the issue of title, were subject to the outcome of the Title Suit.

As stated above, this Adjudicating Authority expressly held that it lacked the jurisdiction to decide the issue of title to the Slurry Pipeline. Therefore, in as much as the very issue of jurisdiction of the Adjudicating Authority to determine title to the Slurry Pipeline was at issue between SREI and ESIL, and in as much as the Adjudicating Authority determined in terms that it does not have such jurisdiction, the issue is res judicata.

The Applicant's reliance on paragraphs 64 and 72 of the order to contend that the title to the Pipeline vests in OSPIL is misplaced, since the Adjudicating Authority specifically clarified that it does not have the jurisdiction to decide upon the title of the assets and its observations on the issue of title were only preliminary in nature and not conclusive or final..

The effect of the Adjudicating Authority's order was clearly that there was no adjudication on title.. The question then is whether the Adjudicating Authority has any power to determine this issue now. As stated above, as far as its jurisdiction is concerned, it does not, on an application of the principles of res judicata.

In so far as the Adjudicating Authority's statement in paragraph 81(4) of the order that "There is no hindrance for potential Resolution Applicant for filing Resolution Plans in view of right of Corporate Debtor to use pipeline under RTUA is concerned, this observation was not with respect to the present Resolution Plan, but a general observation concerning "potential Resolution Plans". It is an admitted position of the ESIL RP, that the Slurry Pipeline was appearing as an asset of ESIL, was in the possession of ESIL and was also being maintained by ESIL, accordingly this statement of the Adjudicating Authority has to be read in that context. Such being the case, this resolution process in fact proceeded on the basis that the title to the Slurry Pipeline belonged to ESIL (subject to certain disputes) and not OSPIL.

Moreover, this observation cannot be read, as the Applicant seeks to do, as a direction by the Adjudicating Authority that all potential Resolution Plans should proceed on the basis that the Slurry Pipeline belongs to OSPIL. It must be read in context of the pleadings: the ESIL RP had claimed that the lack of clarity as to whether the Slurry Pipeline is an asset of ESIL would hinder the resolution process. The observation in paragraph 81(4) of the order was in the nature of an assurance meant to allay the ESIL RP's apprehension that any ambiguity on the issue would hamper the effective resolution for ESIL, in as much as the Adjudicating Authority was suggesting that irrespective of who has title, ESIL will continue to have an unhindered right to use (i.e. access and possession) the Slurry Pipeline under the RTUA. This observation was limited to aiding the ESIL RP in preparing the Information Memorandum [Please see Application Vol. III, Para 53 @ Page 469 and Para 81 @ Page 481].

C. Without prejudice, the order has merged into the Adjudicating Authority's order of March 8, 2019 approving the ESIL Resolution Plan and finally into the Supreme Court's judgment of November 15, 2019. As such, the February 7, 2018 order has no efficacy and life.

Even if the Applicant's interpretation of the February 7, 2018 order is accepted, this order does not survive, and is subsumed by the Supreme Court's judgment. The February 7, 2018 order had a limited life and efficacy, which has been subsumed and discharged by subsequent orders of this Adjudicating Authority, the Hon'ble NCLAT and the Hon'ble Supreme Court.

The Applicant has also mischaracterized the status quo order of the Calcutta High Court, dated December 22, 2016 ("Status Quo Order") [Application Vol. II @ Page 388] to imply that the court granted a stay on the operation of the Deed of Cancellation. The Applicant has further relied on this flawed interpretation of the Status Quo Order to contend that "The Declaration Order, therefore, in Paragraph no. 81(2) clearly holds that the by virtue of the status quo order passed by Hon'ble High Court of Calcutta operates as a stay of unwinding of the BTA. The same is, therefore, clearly a stay of the Deed of Cancellation. The said order has never been challenged and has attained finality." [SREI's Written Submissions, Para I(1) @ Page 6].

The status quo was granted to preserve the status as on the date of the order. As on that date, the Deed of Cancellation was already executed and the pipeline vested in ESIL. The Applicant has grossly misread this order to imply that status quo ante was restored. This interpretation is untenable as the order clearly qualified the status quo by limiting it to status quo on the further alienation of the pipeline. On this issue, please see the Supreme Court's judgment in Bharat Coking Coal Ltd. v. State of Bihar, 1987 Supp SCC 394, at paragraph 5.

The Applicant filed a clarification application CAN No. 5599 of 2018 before the Calcutta High Court, seeking a clarification that the Status Quo Order dated December 22, 2016 did not stand in the way of OSPIL recovering usage charges from ESIL [Annexure R-3 to AMNS Reply @ Page 124-152]. However, the Calcutta High Court, by its order of February 11, 2020, declined to grant reliefs as sought in the Applicant's clarification application [Application Vol. V @ Page 897].

Therefore, there was no stay on the operation, let alone the execution of the Deed of Cancellation. Reading the Status Quo Order in the manner as canvassed by Applicant would amount to the Calcutta High Court having granted final relief in the Title Suit at the interim stage. Such an interpretation cannot be countenanced.

The Deed of Cancellation is an instrument in effect, and any determination of title will require it to be set aside, which can only be done by a civil court. Until then, it is valid and binding:

a. Gorakh Nath Dube v. Hari Narain Singh and Ors., AIR 1973 SC 2451- Paragraph 5;

b. Ramti Devi v. Union of India, (1995) 1 SCC 198- Paragraph 2; and

c. Ramachandran v. Baby, 2003 SCC OnLine Mad 248- Paragraphs 34-35.

Admittedly, no civil court of competent jurisdiction has set aside the Deed of Cancellation. Therefore, in whichever view of the matter, the reliefs sought in this Application cannot be granted.

During oral arguments, the Applicant, for the first time contended that the Deed of Cancellation is not effective, since (a) ESIL did not take over OSPIL's loans and (b) the purchase consideration of INR 2,457 was not returned to OSPIL [SREI's Written Submissions, Para 3 @ Page 1]. It is pertinent that this argument has not been raised, either in the Applicant's pleadings in these proceedings, or in any of the proceedings where the Applicant has agitated this issue. Most importantly, this issue was not even raised in the Title Suit, which was filed to challenge the Deed of Cancellation. The only ground raised by the Applicant in the Title Suit to challenge the Deed of Cancellation was that its consent was not obtained prior to the execution of the document. Furthermore, the ESIL SC Judgment has brought quietus to all claims, including any claims that OSPIL may have had in this regard.

The Applicant has alleged that it is an 'admitted position' that the Deed of Cancellation was not given effect to [SREI's Written Submissions, Para IV(1)(c) @ Page 15]. It is disingenuous to expound such a patently untrue position, since ESIL's stand throughout has been that the Slurry Pipeline is ESIL's asset and that ESIL has no obligation to pay usage charges in view of the Deed of Cancellation. Even the ESIL RP has consistently taken a stand that till the Deed of Cancellation is formally set aside, ESIL would not be liable to pay usage charges. This contention is explored in greater detail below.

The Applicant has contended that the information memorandum prepared by the ESIL RP, pursuant to this Adjudicating Authority's order of February 7, 2018 proceeded on the basis that the pipeline is OSPIL's asset. However, the Applicant has not shown even a single document, even from the Information Memorandum furnished by the ESIL RP that usage charges were payable by ESIL. On the contrary, record conclusively establishes that the ESIL CIRP proceeded on the basis that usage charges were not payable. Therefore, it cannot be held that the ESIL Resolution Plan contemplated payment of usage charges as CIRP costs.

During the course of arguments, the Applicant relied on correspondence exchanged between the Applicant, OSPIL, the ESIL RP and the OSPIL RP, wherein the Applicant and OSPIL demanded that usage charges be paid to OSPIL. The Applicant has relied on these letters to try and controvert the Respondents' arguments that OSPIL failed to claim usage charges prior to the approval of the ESIL Resolution Plan and can therefore not maintain a claim for the same now.

However, the correspondence on record, far from supporting the Applicant's contentions, establishes that the ESIL RP and the CoC always adopted the stand that usage charges were not payable, since there was no determination on the title to the Slurry Pipeline. Contrary to the Applicant's contentions, the documents on record show that the ESIL CIRP did not proceed on the basis that usage charges were payable. Not only were the Applicant and OSPIL aware of this, they did not take any action, during the pendency of the ESIL CIRP to obtain directions from either the Adjudicating Authority or any other court or tribunal on this issue. For these reasons, the Applicant is barred by the principles of waiver, estoppel and acquiescence from filing this Application.

The relevant documents, which establish that the ESIL CIRP (even to the Applicant's knowledge) always proceeded on the basis that usage charges were not payable are chronologically listed below:

a. The issue of annulment of the Pipeline Agreements was discussed at the meetings of the lenders of ESIL as also OSPIL, and the lenders directed ESIL and OSPIL to complete the annulment by June 30, 2016. Reference may be had to the minutes of the Joint Lenders Forum ("JLF") of ESIL dated April 28, 2016 [Application Vol. II at Page 323], minutes of the JLF of OSPIL dated April 28, 2016 [Application Vol. II at Page 333]; the minutes of the JLF of OSPIL dated June 16, 2016 [Application Vol. II at Page 335] and the minutes of the JLF of ESIL dated July 19, 2016 [Application Vol. II at Page 362].

b. Even before the commencement of the ESIL CIRP, the Applicant wrote to OSPIL on May 10, 2016 [Application Vol. II at Page 333] and May 31, 2016 [Application Vol. II @ Page 346] objecting to the prospective annulment of the Pipeline Agreements.

c. The Applicant wrote to the ESIL RP on September 5, 2017 [Rejoinder to AMNS Reply @ Page 103]. This letter shows that the Applicant was aware that the Cancellation Deed was implemented, since ESIL had given accounting effect to the annulment of the Pipeline Agreements in its books of accounts. The Applicant contended that the annulment was illegal and demanded payment of usage charges.

d. The ESIL RP filed IA No. 419 of 2017 on December 6, 2017, inter alia seeking a declaration that the Slurry Pipeline vested in ESIL [Application Vol. II @ Page 420].

e. The Applicant wrote to the ESIL RP on December 18, 2017, once again seeking payment of usage charges to OSPIL [Rejoinder to AMNS Reply @ Page 107].

f. The 5th meeting of the CoC was held on December 20, 2017 [Extracts @ Rejoinder to AMNS Reply @ Page M]. The minutes shows that the Applicant's objections on payment of usage charges were discussed by the CoC. However, there was no decision that ESIL would pay usage charges to OSPIL.

g. The ESIL RP responded to the Applicant on December 26, 2017 referring to the order of the Calcutta High Court dated December 22, 2016 and its application to NCLT Ahmedabad (IA No. 419 of 2017). The RP clarified that since the matters were sub judice, he could not offer comments on any aspect of the matter concerning payment of usage charges [Annexure H to Rejoinder to AMNS Reply @ Page 108].

h. The Applicant objected to IA No. 419 of 2017, (i) objecting to the Adjudicating Authority's jurisdiction to determine title; (ii) acknowledging that ESIL had given accounting effect to the annulment of the Pipeline Agreements; and (iii) stating that in so far as the issue of title is concerned, the Adjudicating Authority had to await resolution of the dispute by the Calcutta courts [Please see SREI's objections, Para (E) @ Page 86 of AMNS Reply].

j. The Applicant once again wrote to the ESIL RP on February 9, 2018, referring to the Adjudicating Authority’s order of February 7, 2018 and asking for the payment of usage charges to OSPIL [Application Vol. V @ Page 893].

k. OSPIL wrote to the ESIL RP on June 15, 2018 reiterating its request for usage charges [Rejoinder to AMIPL Reply @ Page 293].

l. The Applicant wrote to the ESIL RP on June 20, 2018, demanding usage charges [Application Vol. V @ Page 895].

m. The ESIL RP responded to OSPIL on July 13, 2018, stating that OSPIL failed to pay the purchase consideration for the Pipeline to ESIL and as a result, the Pipeline Agreements were cancelled by the Deed of Cancellation. The letter pointed out that the Adjudicating Authority’s order of February 7, 2018 was subject to the result of the Title Suit and since the matter is sub judice, the question of payment of usage charges does not arise. More importantly, OSPIL did not make any application to the Adjudicating Authority, seeking payment of usage charges. The ESIL RP asked OSPIL to produce the invoices raised by OSPIL after signing the Deed of Cancellation. The letter expressly states that no usage charges could be paid either before or during the CIRP [Compilation tendered by the RP @ Page 24].

n. The ESIL RP responded to the Applicant on July 17, 2018, stating that since the matter was sub judice before the Calcutta High Court, the question of paying usage charges does not arise. The letter also notes that the Applicant was a member of the CoC and was aware of all the discussions [Compilation tendered by the RP @ Page 39].

As a matter of fact, the ESIL Resolution Plan does proceed on the basis that the Slurry Pipeline is an asset of the Corporate Debtor, subject to certain disputes and that no lease rentals were payable [Application Vol. IV @ Pages 708, 714 and 763].

It is significant that this Resolution Plan, which proceeded on this basis, was approved by the Applicant itself without a murmur. In any event, the documents on record establish that even to the Applicant's knowledge, the ESIL CIRP proceeded on the basis that usage charges were not payable, till there was a final determination in the Title Suit.

The ESIL Resolution Plan: The Applicant has relied on the statement at page 740 of the ESIL Plan to contend that this indicates that OSPIL has title to the Pipeline [Application Vol. IV, @ Page 740; SREI's Written Submissions, Para I(r) @ Page 10]. It is submitted that the statement relied on is not a concession on title, but only recognition of facts on the ground: that a legal dispute existed regarding the Slurry Pipeline. This statement also shows that ESIL and OSPIL were separate entities with distinct debts and lenders. Since OSPIL was thereafter admitted to insolvency, the intent expressed in the above paragraph was followed through by resolving OSPIL's indebtedness through the only process available in law, i.e. CIRP under the IBC. AMIPL has in fact given effect to its statement of intent in the ESIL Resolution Plan, by resolving OSPIL's insolvency.

NCLT Cuttack's order of March 2, 2020: The Applicant has laid much emphasis on the statement in the above order that "We are of the view that this amount is receivables, subject to certain/ various eventuality". It is respectfully submitted that this statement has no meaning, since the Adjudicating Authority at Cuttack has not clarified what it meant by "certain/ various eventuality". Furthermore, the Applicant's application was rejected by the Adjudicating Authority. This statement is, at best, an obiter, and cannot be relied upon by the Applicant to contend that there is a categorical finding that usage charges are payable. During arguments, the Applicant's counsel expressly conceded that no meaning could be given to the statement [SREI's Written Submissions, Para V(F)(i)(6) @ Page 29]. Moreover, this Adjudicating Authority cannot sit in appeal over the order of the Adjudicating Authority at Cuttack, or interpret its order. In any case, the risks of eventualities were assumed by the Resolution Applicant, who has paid for it under both the plans. The Resolution Applicant undertook to make the payments irrespective of where the asset lies.

Affidavits filed by the CoC of OSPIL before NCLT Cuttack: The Respondent has also relied on an affidavit filed by the CoC of OSPIL before the Adjudicating Authority at Cuttack to contend that usage charges are a 'receivable' and that the Slurry Pipeline is OSPIL's asset [SREI's Written Submissions, Para V(F)(i)(5) @ Page 29]. This contention is entirely misplaced. The OSPIL CoC's 'belief' that usage charges were payable by ESIL to OSPIL is not a judicial determination that binds this Adjudicating Authority. Even if the CoC of OSPIL may have held this belief, it is a matter of fact that the CoC had approved the OSPIL Resolution Plan without providing for an inflow of usage charges from ESIL to OSPIL. The CoC rejected any proposal that accounted for usage charges as 'speculative', since there was no conclusive determination that usage charges were payable [This fact is noted in the very same paragraph of the CoC's affidavit that the Applicant has sought to place reliance on -CoC's Affidavit, Para 7 @ Page 167-168 of SREI's Rejoinder to AMIPL's Reply, as referred in SREI's Written Submissions, Para V(F)(i)(5) @ Page 29]. What binds this Adjudicating Authority is the rejection by the Adjudicating Authority at Cuttack of the Applicant's arguments premised on usage charges being payable to OSPIL and the approval of the OSPIL Resolution Plan that does not account for any usage charges.

Balance Sheet of ESIL for FY 2016-17: The Applicant has relied on the Balance Sheet of ESIL for FY 2016-17 to contend that the Deed of Cancellation has not been given effect to [SREI's Written Submissions, Para V(D)(i)(3) @ Page 27]. Far from supporting the Applicant's contention, this extract from the Balance Sheet relied up on by the Applicant reveals that any future course of action is dependent on a formal annulment of the sale [Annual Report for FY 2016-17 tendered by the RP, Note (1) @ internal page 33]. The same position is reflected in the other financial statements of ESIL as well. In any event of the matter, the balance sheets pertaining to a period prior to the Effective Date, when AMNSI was being controlled by the erstwhile promoter/management, cannot be relied upon.

Furthermore, this Adjudicating Authority has not been vested with the power/jurisdiction to get into the past accounts of the corporate debtor under Section 33(3) of the IBC. The Resolution Applicant cannot be held liable for past arrangements that are being reflected in the financial statements. The purpose of the IBC, as explained in paragraph 88 of the ESIL SC Judgment, is to allow the Resolution Applicant to start on a fresh slate.

CoC minutes: The Applicant has sought to rely on the minutes of the CoC meetings, when the CoC has not even been made a party to its Application, despite being aware that the present Respondent was not privy to such meetings. For the present Respondent the only binding document is the ESIL Resolution Plan, which the Applicant voted in favour of during the CIRP. Be that as it may, the extracts of the CoC minutes that the Applicant has relied on, far from supporting its case, evidence that the ESIL CIRP did proceed on the basis that usage charges were not payable to the Applicant. Further, as stated by the Resolution Professional (and also its advisor i.e. Alvarez & Marshal), all process costs had been paid and no process costs were pending. Basis the above, the working capital adjustments as required under the AMIPL plan were calculated and each of member of ESIL COC was paid their proportionate share of the working capital amounts, including SREI. Without prejudice, and without admitting anything in this behalf, assuming that any RTU charges are to be paid, then it is for the banks to pay such amounts as the beneficiaries of the working capital in ESIL process, including SREI.

The Applicant has contended that usage charges for the Slurry Pipeline fall within the definition of 'insolvency resolution process costs' under:

a. Section 5(13)(c) of the IBC i.e. "any costs incurred by the resolution professional in running the business of the corporate debtor as a going concern"; and/or

b. Section 5(13)(e) of the IBC, read with Regulation 31 (b) of the CIRP Regulations as "amounts due to a person whose rights are prejudicially affected on account of the moratorium imposed under Section 14(1)(d)".

A. Section 5(13)(c) does not apply, since the ESIL RP has not "incurred" the usage charges.

The Applicant claims that usage charges are in the nature of rental payments for the right to use the Slurry Pipeline. Usage charges do not fall within the ambit of Section 5(13)(c) as these charges were not incurred by the resolution professional in running the business of the corporate debtor as a going concern, for the following reasons:

a. The RP has clarified that during the CIRP and even prior to that, the Slurry Pipeline was operated and maintained by ESIL and not OSPIL. Therefore, OSPIL has not provided any services to ESIL to keep it running as a going concern; and

b. The RP also clarified that OSPIL did not produce any invoices, either for the period prior to or during the CIRP, despite being asked to do so in the RP's letter of July 13, 2018 [Compilation tendered by the RP @ Page 24].

Additionally, usage charges have neither been considered nor disclosed as CIRP Costs by the ESIL RP, in the manner required under the IBC:

a. Regulation 34A of the CIRP Regulations requires the RP to disclose item-wise CIRP costs in such manner as may be required by the Insolvency and Bankruptcy Board of India ("IBBI");

b. The IBBI, in exercise of its power under Regulation 34A, issued a circular dated June 12, 2018 titled 'Fee and other Expenses incurred for Corporate Insolvency Resolution Process' [tendered by the Applicant during arguments] ("Circular");

c. As per the Circular, the RP is required to maintain written contemporaneous records for incurring or agreeing to incur any fee or other expense during the CIRP [Please see Paras 4, 6(b), 6(d) and 7 of the Circular]. The Circular also provides a form to be submitted by the RP to the CoC for its approval, containing a description of item-wise costs incurred during the CIRP [Para 9 of the Circular, read with Annexure C];

d. The ESIL RP has confirmed that usage charges were neither identified, recorded or disclosed by him as CIRP Costs in the above manner. Therefore, usage charges does not constitute costs "incurred" by the ESIL RP under Section 5(13)(c) of the IBC; and

e. Alvarez & Marsal (as the consultancy firm to the Monitoring Committee of ESIL) has vide a letter dated December 13, 2019 certified that all CIRP costs have been paid by the Resolution Applicant as on the date of the letter [Annexure R-6 to AMNS Reply @ Page 161].

Section 5(13)(c) is, in any event not applicable, since the IBC has provided for a specific provision to deal with lease rentals of this nature:

f. Section 5(13)(e) is a residuary clause that covers any other costs, not already provided for under sub Sections (a) to (d). Regulation 31 of the CIRP Regulations details the kinds of costs that are covered within the fold of Section 5(13)(e);

g. Regulation 31(b) specifically provides for these kinds of lease rental charges that pertain to a property that is in the possession of the corporate debtor. It specifies the costs that are due to persons whose rights are prejudicially affected on account of a moratorium under Section 14(1)(d) and are unable to recover the property in the possession of the corporate debtor;

h. Reference may be had to the Statement of Best Practices Payment of Insolvency Resolution Process Costs, which clearly lays down the demarcation between operational costs under Section 5(13)(c) and rental payments under Regulation 31(b) [Please see Paras C(i)(a) and C(i)(e) @ Page 2]; and

In the present case, usage charges for the Slurry Pipeline are not payable as CIRP costs under Regulation 31(b) of the CIRP Regulations, since the requirements of the regulation are not fulfilled.

Section 14(1)(d) prohibits, during the period of moratorium, the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor. It is settled law that under Section 14(1)(d) the purpose of a moratorium is only to preserve the status quo. The purpose of the Section is to protect the corporate debtor from being dispossessed of such property. Reference may be made to the judgment of the Apex Court in Embassy Property Developments v. State of Karnataka, 2019 SCC OnLine SC 1542 at paragraph 46.

Under Regulation 31(b), a 'person' whose rights are prejudicially affected on account of the moratorium imposed under Section 14(1)(d) can only be the owner or lessor of a property which is occupied by, or in the possession of the corporate debtor. It is the Applicant's contention that 'OSPIL' is the owner of the Slurry Pipeline. Therefore, on its own averments, the Applicant is not entitled to make a claim under Regulation 31(b). For this reason, too, the Applicant is not a person whose rights are "prejudicially affected" under Section 33(3).

Without prejudice and in any event, the Applicant's rights have not been prejudicially affected 'by the order of the moratorium', for the following reasons:

a. The Applicant had already agitated its rights in the Title Suit, that was filed much prior to the commencement of the CIRP. This Adjudicating Authority has, in its order dated February 7, 2018 (in LA No. 419 of 2017), held that the moratorium in the ESIL CIRP did not affect the interim orders in the Title Suit. The Adjudicating Authority has held that the moratorium only applies to properties "of the Corporate Debtor" and since the very title of the pipeline is in dispute, the moratorium does not affect the Title Suit [Refer Application Vol. III, Paras 54, 55, 78, 79 and 81(5) @ Pages 469, 479 and 481]; and

b. The moratorium did not affect the Applicant's ability to agitate the Title Suit. During the moratorium, the Applicant filed a Clarification Application (CAN No. 5599 of 2018) before the Calcutta High Court, seeking clarification of the Status Quo Order dated December 22, 2016. Therefore, since the moratorium did not preclude the Applicant's right to recover the property, the Applicant cannot be said to be 'prejudicially affected on account of the moratorium imposed under Section 14(1)(d)'.

Without prejudice to the submission that the Applicant cannot file the present Application and that even otherwise the Applicant's rights are not prejudicially affected, it is submitted that even OSPIL cannot claim to be 'prejudicially affected on account of the moratorium' imposed under Section 14(1)(d) for the following reasons:

a. Usage charges have remained unpaid even prior to the order of moratorium (from January 2016). Therefore, OSPIL cannot be said to be prejudicially affected on account of the order of moratorium;

b. OSPIL has not even claimed the alleged usage charges for the period prior to the commencement of the CIRP. Therefore, it cannot be said that OSPIL's right has been prejudicially affected on account of the moratorium under Regulation 31(b). Please see the order of the NCLAT in the case of JAS Telecom v. Eolane Electronics, 2018 SCC OnLine NCLAT 641 at paragraphs 3, 5-7; and

c. Further, as stated above, this Adjudicating Authority, in its order dated February 7, 2018 held that the moratorium did not affect the Title Suit. Therefore, OSPIL's right to recover the property cannot be said to be 'prejudicially affected on account of the moratorium imposed under Section 14(1)(d)'.

In any case, in light of the Calcutta High Court order dated December 22, 2016 directing status quo with respect to the alienation/ transfer of the Slurry Pipeline, the recovery of the property from ESIL's possession would not have been possible even prior to the order of moratorium, whether it was at the instance of OSPIL or the Applicant. Therefore, it cannot be said that OSPIL's right to recover the property has been prejudicially affected on account of the moratorium.

AS REGARD TO THE JUDGMENT RELIED ON BEHALF OF THE RESPONDENTS FOR THE PURPOSE OF INTERPRETATION OF SECTION 33(3) OF THE CODE, THE APPLICANT HAS SUBMITTED AS UNDER:

AIR 1951 SC 41 - Chiranjit Lal Chowdhary v/s UOI & ors:

The said judgment has no application to the facts of the present case.

The issue therein arose with respect to enforcement of rights under Article 32 of the Constitution of India and Hon'ble Supreme Court in paragraph no. 44 (relied upon by Respondent No.1) took a view that only a person whose rights are infringed is entitled to maintain a petition under Article 32 of the Constitution of India.

However, in the facts of the present case, the Applicant is seeking relief under Section 33(3) of the Code since its 'own' interests are prejudicially affected due to non-payment of CIRP Cost by the Respondents. Such rights are available in law, as well as under the Loan Agreement and the Deed of Hypothecation.

AIR 1958 SC 341 - The Central Spinning and Weaving Mill Manufacturing Co., Ltd, the Empress Mills v/s The Municipal Committee, Wardha.

The said judgment has no application to the facts of the present case.

Hon'ble Supreme Court was dealing with the meaning of the phrase 'imported into or exported from', with respect to transit of goods through a municipal area and held that the words cannot be given its literal or natural meaning as it will lead to absurdity making them liable to tax each time they cross the municipal limits, even when they were not meant for sale within the municipal limits.

However, in the facts of the present case, the Applicant fulfils the criteria of the phrase 'any person whose interests are prejudicially affected'. In any case, the choice of words in Section 33(3) of the Code is a conscious departure from the language of Section 31(1) and would promote the intention of the legislature attaching primacy to fulfilling of obligations by a Resolution Applicant and would not lead to absurd results. Any other construction would amount to this Hon'ble Tribunal enacting law instead of interpreting it.

2004 (9) SCC 514 - A. P. Gas Corporation Ltd v/s A.P. State Regulation Commission & anr.

The said judgment has no application to the facts of the present case.

The said judgment was rendered at a time when a system of open access permitting sale of electricity by a generating company to any individual consumer was impermissible under the provisions of Electricity Supply Act, 1948. Since a generating company was only entitled to sell electricity to the electricity board, the term any person was given a restricted meaning, failing which it would have resulted into interpretation contrary to law. The Electricity Supply Act, 1948 has been since repealed and presently it is permissible for a generating company to enter into a contract of supply of electricity with person.

However, in the facts of the present case, the legislature has chosen Section 33(3) to have a wide import with a view to ensure that Resolution Applicants honour their commitments under a Resolution Plan. The language of the provision is plain and unambiguous and giving it a restrictive meaning would amount to doing violence to the same.

THE APPLICANT WITH REGARD TO OTHER CONTENTIONS RAISED BY RESPONDENTS HAS SUBMITTED AS UNDER:

THE APPLICANT HAS NO LOCUS ON ACCOUNT OF ESIL PLAN HAVING BEEN APPROVED AND IMPLEMENTED. THE PRESENT APPLICATION IS AN ATTEMPT TO REOPEN THE ESIL PLAN AND UNSCRAMBLE IT:

The above contention is incorrect which is evident from the following:

The Applicant has not filed the said Application to recover any debt of ESIL due to it. The approval or implementation of the ESIL Plan therefore has no bearing on the issue.

The ESIL Plan contained no cap on CIRP Cost. On the contrary, it undertook to pay all unpaid CIRP Cost. (Page Nos. 815 and 820 of Vol. IV - Petition)

CIRP of ESIL as well as the ESIL Plan proceeded on the footing that the Pipeline Asset is an asset of OSPIL. This is evident from the provisions of the Final Resolution Plan, Affidavit dated 10.01.2020 filed by OSPIL CoC before the Hon'ble NCLT Cuttack Bench and the Declaration Order. Similar submissions were made by the Respondent No.1 by way of Written Submissions filed before the Hon'ble Supreme Court during ESIL CIRP.

The binding nature of ESIL Plan also binds the Respondent No.1 and 3.

The reference to the term 'clean slate' in paragraph nos. 86 and 88 of Judgment dated 15.11.2019 is with respect to claims against the Corporate Debtor after all claims are obliterated under the Resolution Plan. They said observation cannot affect obligation to pay unpaid CIRP Cost, since the ESIL Plan is approved on the basis that the same will be paid by the Respondent No.1.

The present application merely seeks implementation of the ESIL Plan. Mere commercial implication on account of implementation cannot be termed as 'reopening' or 'unscrambling'. The contentions of the Respondent Nos.1 and 3 amount to a plea of frustration, which cannot be accepted merely because the said Respondents believe that this makes the bargain onerous. A promise undertaken under the ESIL Plan and accepted by Hon'ble Supreme Court cannot be given a cold shoulder by citing commercial inexpediency. On the contrary, paragraph no. 135 of the Hon'ble Supreme Court Judgment, inter alia, records satisfaction that the Final Resolution Plan complies with Section 30(2) of the Code. Such satisfaction is the basis for approval of the Final Resolution Plan. Thus, obliging payment of the CIRP Cost in a manner provided in the Final Resolution Plan read with Section 30(2) of the Code.

THE APPLICANT HAS LOST LOCUS SINCE OSPIL PLAN IS APPROVED AND IMPLEMENTED AND THE APPLICANT HAS BEEN PAID:

The above contention is false which is evident from the following:

The OSPIL Plan has been approved by Hon'ble NCLT Cuttack Bench with a clear finding that RTU Charges / CIRP Cost is a receivable.

Approval and payments under the OSPIL Plan are a subject matter of appeal which is pending. A statutory appeal is a vested right and is a continuation of original proceedings on all issues of facts and law. Therefore, it cannot be contended that the OSPIL Plan is irrevocably implemented.

In any case, any purported implementation of the OSPIL Plan is irrelevant since Hon'ble NCLAT in its Order dated 6.12.2019 and 19.12.2019 in in Company Appeal No. 1407 of 2019, filed by the Applicant directed that "... The Adjudicating Authority may pass appropriate order under Section 31 of the I&B Code uninfluenced by the order passed by this Appellate Tribunal, which may be subject to the decision of this Appeal." Any implementation of the OSPIL Plan by Respondent No.1 herein cannot take effect or prejudice the Applicant.

It has been argued that in absence of an order of stay, the OSPIL Plan would operate, divesting the locus of the Applicant. The locus of the Applicant will continue till the OSPIL Plan attains finality. In view of the pendency of statutory appeal and Orders dated 6.12.2019 and 19.12.2019 passed by the Hon'ble Appellate Authority in Company Appeal (AT) (Insolvency) No. 1407 of 2019, making approval of the OSPIL Plan subject to the pendency of the appeal, no finality can be attached. Further, mere implementation would not divest the Applicant of the locus, it admittedly has.

THIS HON'BLE TRIBUNAL CANNOT GO INTO THE ISSUE OF TITLE OF THE PIPELINE ASSET. SUCH A VIEW IS ALREADY TAKEN VIDE ORDER DATED 7.2.2018 PASSED BY THIS HON'BLE TRIBUNAL. ANY ORDER DIRECTING PAYMENT OF CIRP COST WOULD AMOUNT TO DECIDING THE TITLE OF THE PIPELINE ASSET.

The above contention is incorrect which is evident from the following:

The said Application is premised on the Order dated 7.02.2018 passed by this Hon'ble Tribunal in Declaration Application, under which, the Pipeline Asset came to be treated as the asset of OSPIL. The said Application does not seek adjudication of the title but seeks to proceed on the very premise on which the CIRP was ordered to proceed by this Hon'ble Tribunal.

CIRP Cost is a statutory obligation and merely depends on whether such cost is incurred during the CIRP of the Corporate Debtor and for keeping the Corporate Debtor as a going concern. Both these essential requirements are fulfilled in the facts of the present case.

The issue is title is mere mirage being created. The Respondent No.1, the Committee of Creditors of ESIL, the Resolution Professional of OSPIL and the Committee of Creditors of OSPIL have been ad idem that the Pipeline Asset is an asset of OSPIL. This is borne out of statements made on oath. On the contrary, denial of the prayer of CIRP Cost would amount to holding that the asset does not belong to OSPIL which is against the accepted position, on the basis of which both CIRP process have proceeded.

At no point of time did the Respondent No.2 or the Monitoring Committee of ESIL refuse payment of RTU Charges during CIRP of ESIL on the ground that it is an asset of ESIL. The only reason given was that the matter is 'sub judice'.

Order dated 7.2.2018 passed in IA 419 of 2017 by this Hon'ble Tribunal takes an unequivocal view that the Deed of Cancellation is ineffective and the ESIL CIRP is to proceed on the basis that a prospective Resolution Applicant will have 'the right to use' the Pipeline Asset.

THE PIPELINE ASSET IS AN ASSET OF ESIL. THE DEED OF CANCELLATION REMAIN UNAFFECTED BY ANY COURT ORDER AND IS EFFECTIVE:

The above contention is false to the knowledge of deponent which is evident from the following:

Findings of this Hon'ble Tribunal in Paragraph no. 72 read with 81 of Order dated 7.02.2018 (Page No. 476 - 47, 480 - 481 Vol. III -Petition)

Lack of consent by the lenders of ESIL and OSPIL had to unwinding of the BTA (Page No. 109 of Rejoinder to Reply filed by Respondent No.1 and Page No. 24 to 29 of the Note dated 22.09.2020 filed by the Respondent No.2).

Balance Sheet of ESIL for the year 2016-17 recording that the Deed of Cancellation is ineffective and has not been given effect to. (Internal page no. 33 of Annual Report of ESIL for FY 2016 - 17, produced by the Resolution Professional)

The CIRP of both ESIL and OSPIL have proceeded on the footing that the Pipeline Asset is an asset of OSPIL.

In any case, the Deed of Cancellation provides for all the debts of OSPIL lenders were to be taken over by ESIL and creation of charge on ESIL's assets. On the contrary, the debts of OSPIL lenders remained with OSPIL and the same came to be resolved by virtue of the Resolution Plan submitted by the Respondent No.1 for OSPIL. (See pg. 942 - 944 of Vol. V - Petition)

The Respondent No.1 has paid Rs. 2359 Crores for resolving the debts of OSPIL. If the sole asset of OSPIL, namely the Pipeline Asset, was not with it, there is no rationale for doling out such largesse and defles commercial logic.

THE TITLE SUIT NO. 177 OF 2016 IS PENDING AND THE TITLE TO THE PIPELINE ASSET WILL BE DETERMINED IN THE SAID SUIT.

The above contention is completely contrary to the stand taken by the Respondent No.1 before the Hon'ble Appellate Authority in Company Appeal No. 591 of 2020 and is to mislead this Hon'ble Tribunal, which will be evident from the following:

The said contention is contrary to the terms of the OSPIL plan, the Order dated 2.3.2020 and stand of Respondent No.1 on oath.

In its affidavit dated 28.07.2020 in Company Appeal (AT) (Insolvency) No. 591 of 2020 (filed by the Applicant challenging the Order dated 2.3.2020) the Respondent No.1 has made the following statements:

THE APPLICANT HAS WAIVED ITS RIGHTS BY NOT APPROACHING THE APPROPRIATE FORUM FOR PAYMENT OF RTU CHARGES AND HAS ACQUIESCED IN THEIR NON PAYMENT:

The said contention is wrong and a contention of desperation, for the following reasons:

There is no pleading regarding waiver or acquiescence in the Reply filed by the Respondents. The same is a question of fact and cannot be set up during arguments. [See 1979 (2) SCC 409 - M/s Motilal Padampat Sugar Mills Company Limited v/s State of Uttar Pradesh and Ors. (Paragraph no. 5) and Writ Appeal No. 344 of 1982 - L. Raghupathy v/s Additional Commissioners for Workmen's Compensation (Paragraph no. 6)]

Moreover, (a) the CIRP of ESIL and OSPIL proceeded on the footing that the Pipeline Asset is an asset of OSPIL, (b) by virtue of Order dated 7.2.2018, the Resolution Applicants of ESIL were aware that they only have a right to use the Pipeline Asset, (c) The CoC of ESIL was aware that RTU Charges are payable' Balance Sheet of ESIL for FY 2017-18 and FY 2018-19 clearly show that RTU Charges are payable (See Page No. 48 of the Note filed by the Respondent No.2), (d) The Respondent No.1 deleted the Key Assumptions of the Initial Plan which placed a cap on the CIRP Cost and undertook to pay all unpaid CIRP Cost. Therefore, as at 15.11.2019, there was no requirement for the Applicant to litigate for payment of CIRP Cost. The only reason assigned or given for not paying the RTU Charges was the status quo order of the Hon'ble High Court of Calcutta and the pendency of the matter. The Applicant, therefore, bonafide approached the Hon'ble High Court of Calcutta for appropriate clarification and awaited the outcome of the same. Even pending clarification application, the RTU Charges were demanded.

The clarification was given by the Hon'ble High Court of Calcutta vide Order dated 11.02.2020 (See Page No. 897 to 900 Vol. V - Petition), but immediately thereafter, OSPIL Plan was approved and where after the said Application was filed.

Waiver / abandonment of any claim has to be clear and specific. The Applicant has persistently been demanding RTU Charges and the live link between its first demand and the filing of the said Application has remained alive. The RTU Charges have also been demanded by OSPIL and OSPIL RP. The entitlement to the said RTU Charges is of OSPIL as well as of the Applicant. Both the Applicant and OSPIL have periodically demanded RTU Charges and kept the claim alive. Merely because an application was not filed before this Hon'ble Tribunal, the same cannot lead to an inference that the claim is abandoned / waived. It is ridiculous to even suggest waiver/ abandonment of claim. Such argument of desperation needs to be rejected.

Before such clarification, on 10.1.2020, the CoC of OSPIL had already filed an affidavit before Hon'ble NCLT Cuttack Bench that RTU Charges are receivable by OSPIL and that Pipeline is an asset of OSPIL (See Page Nos. 145 to 155 at page no.149 and Page Nos. 156 to 179 at page no. 167 of Rejoinder to Reply of Respondent No.1). The Respondent No.1 did not contradict such position

The OSPIL plan was approved with a clear finding that RTU Charges are 'receivables' (See Page No. 1028 Vol. V - Petition). It is only on account of refusal of Respondent No.1 to adhere to the ESIL Plan and approval of the ESIL Plan without a direction to pay, was the Applicant required to approach this Hon'ble Tribunal for appropriate directions.

Judgments cited by the Respondents:

AIR 1957 Supreme Court 425 - Manak Lal v/s Dr. Prem Chand

The said judgment has no application in facts of the present case.

In the said matter, Hon'ble Supreme Court was dealing with a situation where a party had failed to take a contention before the tribunal and raised such contention for the first time in an appeal before the High Court. In that context, Hon'ble Supreme Court held that the party has waived its right to take the contention.

However, in the facts of the present case, the Applicant has taken all contentions and has been consistently raising the issue of non-payment of RTU Charges. A bare perusal of the Timeline of Events, appended hereto, will show that the Applicant has approached this Hon'ble Tribunal at the first available opportunity. In any case, in light of the finding of the Hon'ble NCLT Cuttack Bench that RTU Charges are receivables, the question of waiver does not arise.

In any case, the Respondents are not entitled to set up a case of waiver having failed to plead waiver, which is essentially a question of fact. [See 1979 (2) SCC 409 - M/s Motilal Padampat Sugar Mills Company Limited v/s State of Uttar Pradesh and Ors. (Paragraph no. 5) and Writ Appeal No. 344 of 1982 - L. Raghupathy v/s Additional Commissioners for Workmen's Compensation (Paragraph no. 6)]

1974 (2) SCC 725 - P. Dasa Muni Reddy v/s P. Appa Rao

The said judgment has no application in facts of the present case.

The said judgment takes a view in paragraph no. 13 thereof that waiver is consensual in nature. Further, in paragraph no. 15 thereof, the Hon'ble Court held that the foundation of doctrine is with representation of existing facts and not a mere intention.

However, in the facts of the present case, the issue of waiver does not arise as the Applicant has not represented any facts before this Hon'ble Tribunal which it chose not to before any other forum. Further, the said judgment on facts came to the conclusion that a case of waiver is not made out (See paragraph no. 16 and 17 of the said judgment)

2010 (12) SCC 458 -H.R. Basavaraj and Another v/s Canara Bank and Ors.

The said judgment has no application in facts of the present case.

The Respondents have relied on paragraph no. 33 of the said judgment to point out that there are 3 kinds of waiver/ estoppel. None of the instances apply to the facts of the present case.

It is pertinent to mention that doctrine of election is applicable only when the remedies are inconsistent. However, in the facts of the present case, there was no inconsistency on part of the Applicant to approach Hon'ble NCLT Cuttack Bench for a direction to the OSPIL RP and in filing the said Application, more particularly in light of the stand on oath of CoC of OSPIL and the Respondent No.1 before Hon'ble NCLT Cuttack Bench, which took the view that RTU Charges are receivables for OSPIL.

2018 (10) SCC 628 - Pravesh Kumar Sachedava v/s State of UP and Ors.

The said judgment has no application in facts of the present case.

The said judgment pertains to an auction sale confirmed by the High Court to which the private Respondent before the Hon'ble Supreme Court was found not have raised the objections at relevant time but later sought to challenge the confirmation of sale. In this scenario, Hon'ble Supreme Court held that the private Respondent had a remedy available to them at the time of confirmation and failure to avail such remedy amounts to waiver/ estoppel.

However, in the facts of the present case, the Applicant had no remedy of seeking a direction for payment of RTU Charges. The Applicant believed that the Respondent No.1 would abide by the terms of the ESIL Plan and the directions of the Hon'ble Supreme Court. Before it could take any steps the OSPIL Plan was taken up for consideration and the Applicant has bona fide approached the Hon'ble NCLT Cuttack Bench, albeit for a direction to OSPIL RP. Though such direction was not granted, it was held that the RTU Charges are receivables. In the interregnum, Hon'ble High Court of Calcutta also clarified its interim Order. Accordingly, the Applicant has approached this Hon'ble Tribunal on the strength of the Approval Order and such action cannot be faulted on the ground of waiver or estoppel.

AIR 2001 Calcutta 98 – Bijan Kumar Barman – Bhaskar Chandra Barman

The said judgment has no application in facts of the present case.

In the said matter, Hon'ble High Court of Calcutta found that the plaintiff failed to bring to the notice of the court that the other successors of Dukhi Shyam, including the defendant no.1, ought to have been added as a party along with him in order to get benefit under a deed. This inaction on part of the plaintiff was found to be an act of acquiescence and estoppel on the ground that the plaintiff could not approbate and reprobate at the same time.

However, in the facts of the present case, it is a matter of record that the Applicant has not remained silent in respect of its rights and the said judgment has no application.

2019 SCC Online NCLAT 1038 - Bharat Petroresources Ltd. v/s Monnet Ispat & Energy Limited and Another.

The paragraph relied upon by the Respondents (paragraph no. 40 and 51) are submission advanced by the parties. In the entire judgment there is not finding with respect to waiver or estoppel.

The said contention is incorrect for the following reasons:

In IA 419 of 2017, the Respondent no.2 approached this Hon'ble Tribunal for a declaration that the title of the Pipeline Asset vests in ESIL. (See Page Nos. 420 to 435 at page no. 431 Vol. II - Petition)

The Applicant opposed the said application, contending that the title of the Pipeline Asset is with OSPIL and in any case, the Title Suit No. 177 of 2016 is pending and an Order of status quo as to alienation is passed by Hon'ble High Court of Calcutta. In this scenario, it was contended that this Hon'ble tribunal has no jurisdiction to decide title of the Pipeline Asset. (See Page Nos. 51 to 74 of Reply of the Respondent No.1)

The present application is not, by any stretch of imagination, require this Hon'ble tribunal to decide the title of the Pipeline Asset. It is restricted to 'contravention' of the ESIL Plan. If the contravention is found to exist, natural consequences will follow. The Respondents cannot contend that this Hon'ble Tribunal has no jurisdiction to decide whether the ESIL Plan is contravened.

Estoppel by conduct since the Applicant participated in the ESIL CIRP Process, accepted payments and cannot now challenge the same plan:

The said contention is incorrect for the following reasons:

The Applicant participated in ESIL CIRP Process as a financial creditor. The Applicant has been admittedly paid in terms of the ESIL Plan.

The Applicant has not and does not seek to question the ESIL Plan or its approval or any payment made to it as a financial creditor.

Merely participation in the ESIL CIRP process, does not and cannot preclude the Applicant from pointing out to this Hon'ble Tribunal that the ESIL Plan has been contravened by the Respondent Nos. 1 and 3, more so, when the Applicant's interests are prejudicially affect by such contravention. Such participation will have to be viewed with persistent demands made by the Applicant and its stand during the process.

Merely because the Applicant as a member of the Committee of Creditor of ESIL and OSPIL has been paid / dealt with under the relevant Resolution Plan, it cannot be a ground to preclude the Applicant from approaching this Hon'ble Tribunal under Section 33(3) of the Code for effective implementation of a Resolution Plan. Accepting such a contention would render both Section 33(3) of the Code and Regulation 39(9) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulation, 2016 nugatory. Both provisions envisage proceedings are a Resolution Plan is sanctioned and purportedly implemented. A claim of estoppel of such nature would amount to estoppel against law.

The above contention of the Respondent No.1 is completely misconceived and misdirected and same does not deserve to be accepted for the following reasons:

The Applicant's pleading before Hon'ble Adjudicating Authority at Cuttack in CP (IB) No. 352 of 2018 was to 'oppose admission' and not a claim for payment of RTU Charges. The opposition qua admission of insolvency was that if RTU charges are paid, OSPIL may not be insolvent. The question of res judicata would not arise. In any case, all parties before the Hon'ble Adjudicating Authority, Cuttack are not parties to this Application. (See Page Nos. 224 to 249 of Rejoinder to the Reply of the Respondent No.1)

The admission order dated 14.5.2019 in respect of OSPIL did not decide the said issue and therefore the question of res judicata cannot be applicable. (See Page Nos. 843 to 855 at page no.849 Vol. V - Petition)

At the time of hearing before Hon'ble Adjudicating Authority, Cuttack in respect of approval of the OSPIL Plan, the Applicant contented that in the absence of any proposal in the OSPIL plan for payment of RTU charges is an infirmity and the plan ought not be approved. It was not a demand for payment. The Applicant also contended that the approval of the plan be kept pending till the Title Suit is decided and/or direct the RP of OSPIL to take possession of the Pipeline Asset and take steps to recover outstanding usage charges. (See Page Nos.1022 to 1025 Vol. V - Petition)

The CoC of OSPIL and Resolution Professional of OSPIL in their respective affidavits asserted that the Pipeline Asset is an asset of OSPIL and RTU charges are payable. (See Page Nos. 123 - 144 at page 132 and 133; Page Nos. 145 to 155 at page 149; Page Nos. 156 - 179 at page 167 of Rejoinder to Reply filed by the Respondent No.1)

Accordingly, Hon'ble Adjudicating Authority vide Order dated 2.03.2020 approved the OSPIL plan observing that a sum amounting to Rs. 1300 crores i.e. the RTU charges are receivables for OSPIL from ESIL, subject to certain/ various eventualities, which could only mean directions by the appropriate forum i.e. this Hon'ble Tribunal to pay. (See Page No. 1028 of Vol. V - Petition) In any case, all parties before the Hon'ble Adjudicating Authority, Cuttack are not parties to this Application.

The Present Application is pursuant to the findings in Order dated 2.3.2020 for consequential orders and therefore not barred by Res Judicata.

Judgments relied upon by the Respondents:

2020 SCC Online NCLAT 592 – Committee of Creditors of Educom Solutions Limited v/s Ebix Singapore Pte. Limited

The said judgment has no application on the facts of the present case.

In the facts of the said case, Hon'ble Appellate Tribunal found that the grounds raised in a later application were already raised and rejected by the adjudicating authority in an earlier application. This was held to operate as res judicata.

However, in the facts of the present case, the issues raised before the Hon'ble NCLT Cuttack Bench were with respect to challenge to the OSPIL Plan and for directions to the OSPIL RP to take steps to recover RTU Charges. In the said Application, the issue is with respect to implementation of the ESIL Plan for failure to adhere to the terms of the plan. Both issues are materially different and the question of res judicata does not arise.

In any case, Hon'ble NCLT Cuttack Bench in the Approval Order has held that RTU Charges are receivable.

Further, the bar of res judicata applies only when the issue so decided in an earlier proceeding is by and between the same parties (See Section 11 of the Code of Civil Procedure, 1908). In the facts of the present case, such requirement is not fulfilled.

ESIL RESOLUTION PLAN SHOWS THE PIPELINE ASSET AS ASSET OF ESIL AND THEREFORE RTU CHARGES AS CIRP COST ARE NOT PAYABLE:

The above contention is false and is completely contrary to the record and Respondent No.1's own admission and does not deserve any credence for the following reasons:

The very fact that statements under Clause 5.8(g) (Page No. 557 Vol. III - Petition) were amended and replaced by the Respondent No.1 after the ESIL Resolution Plan was opened on or around 19.10.2018, shows that the Respondent No.1 was aware that the Pipeline Asset cannot be termed as an asset of ESIL.

The deletion of Clause 2a (at Page 664 of Vol III - Petition), reinforces such understanding of the Respondent No.1.

A wholly incorrect and misleading reference is made to the table under Clause 5.3.2 (Page 714 of Vol. IV - Petition) and the table under Clause 6.2.3 (Page 763 of Vol. IV - Petition) of ESIL Resolution Plan to contend that the Pipeline Asset is an asset of OSPIL. The said contention is fallacious for the following reasons:

- The nameplate capacity of the Pipeline Asset is 12 MTPA of which ESIL had a right to use 10 MTPA. By no stretch of imagination could the capacity magically increase to 20 MTPA. Thus, the reference at Page 714 appears to be to some other pipeline.

- Without prejudice to the above, Clause 6.2.5 of the RTU Agreement (Page no. 186 of Vol. I - Petition) required ESIL to bear the cost of operation and maintenance of the Pipeline Asset;

- By virtue of Order dated 7.2.2018 passed by this Hon'ble Tribunal, a prospective Resolution Applicant could give a plan considering the right to use the Pipeline Asset;

- Accordingly, under Clause 5.3.2 of the ESIL Resolution Plan (under the head of Reasonableness of Financial Projections at Page 699 Vol. IV - Petition), the following statement is made:

- This statement is in consonance with the understanding that the Pipeline Asset is available only operationally and not as ownership, in terms of the RTU Agreement. Accordingly, a further statement is made, which also in terms of the RTU Agreement (since maintenance was ESIL's responsibility) (See clause 6.2.5 at pg. 186 Vol. I – Petition).

- The reference at page no. 763 of Vol. IV – Petition is not to slurry pipeline at all, but only to Benefaction plants located at Kirandul and Dabuna, both of which have 8 MTPA capacity, which is proposed to be increased to 12 MTPA in so far as Dabuna plant is concerned, at the end of 6 years. The mentioning of the words slurry pipeline in column 2 of the table is inconsequential since the pipeline capacity of 12 MTPA is not factored at all. - In any case, any reference in the Final Resolution Plan, which is contrary to the Declaration Order is inconsequential for the purpose of the said Application.

RTU CHARGES DURING CIRP OF ESIL DO NOT CONSTITUTE CIRP COST SINCE THEY WERE NEITHER ASCERTAINED, NOR DETERMINED NOR APPROVED BY COC OF ESIL. THE ESIL PLAN DOES NOT PROVIDE FOR THEM:

The above contention is false and does not deserve to be considered for the following reasons:

Section 5(13) of the Code does not require any ascertainment or determination of cost by the RP but only requires 'incurring' of the cost.

Regulation 31 (b) and (e), both, do not require any ascertainment or determination of cost by the RP. Regulation 31(e), however, envisages approval of CoC. In the 17th meeting of the CoC, the Respondent No.2 made the following statement:

The Balance Sheet for FY 2018-19 of ESIL (during CIRP) under Note 52 to the Notes to Standalone Financial Statements for year ended 31st March 2018 clearly states that RTU Charges are shown as payable. (See Page Nos. 50 to 53 of Note filed by the Respondent No.2)

Even in the Annual report of ESIL for FY 2018-19 (Standalone Financial statement) of ESIL, RTU Charges are shown as contingent liability.

Therefore, the Respondent No.1 was always aware that these charges are payable as CIRP Cost.

The ESIL Resolution Plan under Chapter X and XI clearly provides for payment of unpaid CIRP Cost. Such statement is without any qualification as to ascertainment or determination. The Respondent No.1 is estopped from contending to the contrary. (Page No. 820 and 825 Vol. IV - Petition)

The letter dated 13.12.2019 issued by RP's advisors (Page No. 161 of Reply of Respondent No.3) is clearly a self-serving document, the reliance of Respondent No.1 over which is at its peril. No annexure to the said letter is produced, which appears to be an attempt to mislead this Hon'ble Tribunal. The said letter does not inspire confidence since it deliberately refers to only one part of the EIL Resolution Plan i.e. payment of CIRP cost out of internal accruals but to that part where Respondent No.1 has undertaken to pay any shortfall.

OSPIL was not mandated/ obligated to raise invoices under the terms of the RTU Agreement and RTU Addendum. The same, however, was only procedural in nature. Mere non-raising of the invoices by OSPIL cannot obliterate the liability of ESIL to make payment of the RTU Charges, which in fact, was absolute in nature. Therefore, absence of invoice cannot be seen as a ground for rejection of payment of the RTU Charges.

The Respondent No.1 has resorted to a piecemeal and warped reading of the IBBI Circular dated 12.6.2018 and Statement of Best Practices issued by SIPL, which is evident from the following:

- Clause 5 on page 1 refers to cost payable to RP and is not applicable; - Is so far as paragraph nos. 6(b), (c), (d) and (f) are concerned, the use of the Pipeline Asset is directly related for CIRP, is at arms' length basis and has been discussed in CoC meetings where it was decided that it is payable subject to orders of the Court. - The contention that use of ESIL's asset is incorrect. - In so far as, the Statement of Best practises issued by SIPL is concerned, the Applicant placed reliance on Clause C (i)(a) and (e). These pertain to Category 1 costs, which can be incurred without approval of CoC. No response is offered to the same. - The reliance placed on Clause E is misdirected since it pertains to Category 2 costs, which are not germane for the present proceedings.

RTU CHARGES AS CIRP COST ARE NOT PAYABLE UNLESS ASCERTAINED AND DETERMINED SINCE A SIMILAR CLAIM OF DAKSHIN GUJARAT VIJ COMPANY LIMITED (DGVCL) WAS ALSO REJECTED, EVEN AFTER IT APPLIED FOR REVIEW OF JUDGMENT DATED 15.11.2019 BEFORE HON'BLE SUPREME COURT OF INDIA.

The said contention is fallacious and misleading for the following reasons:

DGVCL is a distribution licensee within the meaning of the provisions of Electricity Act, 2003. It lodged a claim of Rs. 5882 Crores (approx.) for dues prior to the CIRP of ESIL before Respondent no.2, which was admitted and verified at Re. 1.

Electricity being an essential service within the meaning of Regulation 32 of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 continued to supply electricity from 2.8.17 to ESIL.

The Respondent No.2 apparently made payment of the consumption charges but did not make payment of the Cross Subsidy Surcharge (a surcharge on Extra High Tension / High Tension consumers to subsidise the electricity supplied to below poverty line (BPL) and agricultural consumers at lower charges). A claim for Cross Subsidy Surcharge of a sum of Rs. 606.49 Crores was made by DGVCL to RP, which was rejected. Accordingly, DGVCL filed IA No. 467 of 2018 in CP (IB) No. 40/NCLT/AHM/2017 before this Hon'ble Tribunal for recovery of Cross Subsidiary Charges. The same, however, did not constitute CIRP Cost within the meaning of Section 5(13) of the Code. It is pertinent to note that DGVCL was paid electricity charges for supply of electricity during the CIRP period of EISL, as the same squarely fell within the ambit of essential service and formed CIRP Cost.

The Hon'ble Appellate Authority vide Judgment dated 4.7.2019 directed that all claims of DGVCL should be considered and paid in the ratio decided in the said judgment. Hon'ble Supreme Court, however, allowed the appeals of CoC of ESIL and held that no such payment is mandated vide Judgment and Order dated 15.11.2019. As against this, DGVCL preferred Review Application seeking payment of its claim of Rs. 5882 Crores (approx.) as also Cross Subsidy Charges for the period August 2017 to October 2018, which was also dismissed.

It is pertinent to point out that Cross Subsidy charges are separate and distinct from consumption charges are separately indicated in a monthly invoice issued by a distribution licensee.

SREI MULTIPLE ALTERNATIVE INVESTMENT TRUST (SMAIT) THROUGH INDIA GROWTH OPPORTUNITIES FUND (IGOF) HOLD 69.8% EQUITY IN OSPIL WHILE ESIL HOLDS ONLY 30.2% EQUITY. SMAIT IS A SUBSIDIARY OF THE APPLICANT. THEREFORE, THE APPLICANT DESPITE HAVING MANAGEMENT AND CONTROL OF OSPIL FAILED TO CLAIM RTU CHARGES:

Till 26.2.2015, entire shareholding of OSPIL was held by Paradeep Steel Company Limited (See Page no. 199 of Rejoinder to Reply by Respondent No.1).

On 27.2.2015, ESIL became the 100% shareholder of OSPIL (See Page no. 199 of Rejoinder to Reply of Respondent No.1).

OSPIL was to avail finance for making payment purchase consideration for the Pipeline Asset, both by way of equity and debt. (See Page no. 217 of Vol. II - Petition) Consequently, OSPIL offered shares which would have been subscribed by SMAIT-IGOF as an investment. However, from the Annual report of ESIL for FY 2016-17 till 2018-19 (Standalone Financial statement) of ESIL, OSPIL is shown as an associate company within the meaning of Section 2(6) of Companies Act, 2013 i.e. a company over which ESIL has significant influence.

IGOF'S shareholding in OSPIL has not resulted in management and control of the Applicant. The Applicant or IGOF did not nominate any directors in OSPIL.

OSPIL has claimed RTU Charges from Respondent No.2 vide communications dated 16.12.2017 (See Page No. 33 of the Note filed by the Respondent No.2) and 15.06.2018 (See Page No. 293 -296 of Rejoinder to Reply of Respondent No.1). OSPIL in its affidavit in reply dated 17.01.2018 in IA 419 of 2017 has also claimed that RTU Charges to the tune of Rs. 750 Crores are payable by ESIL (See Page Nos. 75 - 106 at page no. 85 of the Reply filed by the Respondent No.1).

THE APPLICANT'S PRAYER FOR RECOVERY OF RTU CHARGES BY THE RESOLUTION PROFESSIONAL OF OSPIL IS ALREADY DECLINED BY THE HON'BLE ADJUDICATING AUTHORITY, CUTTACK.

The above contention is completely misdirected and misconceived for the following reasons:

The Application filed by the Applicant for rejection of the OSPIL Plan and/or directions to OSPIL RP for recovering RTU Charges was a challenge to the OSPIL Plan which failed to provide take into consideration the RTU Charges while proposing payments to financial creditors.

In response to the said Applications, the OSPIL CoC filed affidavits before Hon'ble NCLT Cuttack Bench concurring in principle with the stand of the Applicant that the Pipeline Asset is an asset of OSPIL and that RTU Charges are receivable by OSPIL.

However, the Respondent No.1 in its Affidavit dated 10.01.2020 stated that Hon'ble NCLT Cuttack Bench does not have jurisdiction to pass any directions with respect to recovery of RTU Charges payable by ESIL or under the Final Resolution Plan pertaining to ESIL.

Therefore, while Hon'ble NCLT Cuttack Bench in paragraph no. 9(vii) of the Approval Order found that the RTU Charges are a receivable for OSPIL, however, declined to exercise its jurisdiction for recovery thereof, since it would be a matter exclusively within the domain of this Hon'ble Tribunal. In the circumstances, the prayers of the Applicant seeking directions for recovery were before a court not having a jurisdiction to grant such prayer.

Therefore, the rejection of the Applicant's prayers by Hon'ble NCLT Cuttack Bench, cannot operate as a bar against the Applicant from approaching a court of competent jurisdiction, namely, this Hon'ble Tribunal for seeking reliefs, which this Hon'ble Tribunal is competent to grant.

THE PRESENT APPLICATION IS NOTHING BUT A DERIVATIVE ACTION BROUGHT BY A CREDITOR AND THE SAME IS NOT MAINTAINABLE SINCE ONLY A SHAREHOLDER CAN INITIATE DERIVATIVE ACTION. IN ANY CASE THE PRE-REQUISITES OF DERIVATIVE ACTION ARE NOT FULFILLED:

The above contention is completely misdirected and misconceived for the following reasons:

The present Application is filed by the Applicant in its individual capacity as a creditor of OSPIL. The same cannot be termed as a derivative action.

The approval of the OSPIL Plan has been challenged by the Applicant before the Hon'ble Appellate Authority in Company Appeal (AT) (Insolvency) No. 591 of 2020. Therefore, in law, the said Appeal is nothing but a continuity of the original proceedings i.e. C.P. (IB) No. 352/KB/2018 filed before the Hon'ble NCLT Cuttack Bench.

Therefore, while the Applicant is asserting that its interest is prejudiced by the contravention of the Plan, it is seeking a direction qua payment of CIRP Cost to the Resolution Professional of OSPIL considering that the OSPIL proceedings are still continuing.

In any case, the present Application is filed by the Applicant since by virtue of the approval of the OSPIL Plan, the Respondent No.1 is in control and management of OSPIL. Therefore, OSPIL cannot and will not come forward and initiate proceedings against the very person in whose control it is.

In such circumstances, whilst denying that the present Application is in the nature of derivative action, the same can be undertaken by a creditor during insolvency of OSPIL. Such action is necessary to prevent failure of justice.

Merely because the RTU Charges are payable by ESIL to OSPIL, any claim by the beneficiary of such payment does not make it a derivative action. The Applicant in its own individual capacity as a person interested in implementation of the Final Resolution Plan is entitled to approach this Hon'ble Tribunal. Law confers right upon the Applicant, independent of the acts and omissions of OSPIL. Any proceedings on the basis of such right cannot be construed as a derivative action. The action in not to enforce right of OSPIL but enforcement of consequent benefits, which will obviously accrue to the Applicant upon its implementation.

Judgments relied upon by the Respondent No.3

(86) Company Cases 371 - BBM (UK Limited) and Ors. v/s Janardan Mohandas Rajan Pillali and Ors. AND

AIR 2018 Calcutta 173 – Starlight Real Estate (Ascot) Mauritius Limited v/s Jagrati Trade Services Private Limited

The said judgments have no application on the facts of the present case.

The above judgments are an authority for the proposition that a derivative action is permissible only by a shareholder in a situation where a company or its management omits to take steps for its own benefit or for the benefit of a class of shareholders. Such action can be brought in the name of the company and by joining the company as a party.

However, the said Application, by no stretch of imagination, a derivative action. The Applicant has no asserted any right on behalf of OSPIL. On the contrary, the Applicant contents that its interests are prejudicially affected by the contravention of the ESIL Plan. Such interest is clearly recognized by virtue of the fact that the receivables for OSPIL are secured in favour of the Applicant under the Deed of Hypothecation and that the Applicant has an independent right under the Loan Agreement to call upon ESIL to make payment of the dues, which it was to pay to OSPIL. The said judgments are therefore only a façade and not germane to the present proceedings.

THE APPLICANT IS NOT A 'PARTY IN INTEREST' AS DEFINED IN THE UNCITRAL LEGISLATIVE GUIDE ON INSOLVENCY LAW:

Relying on the definition of the term 'party in interest' in the UNCITRAL Guide, it is contented that the Applicant's rights and interests are not affected by non-payment of RTU Charges and the Applicant's claim is a remote claim. It is also contended that the term 'any person' in Section 33(3) ought to be read in a restrictive manner in terms of the definition of the term 'party in interest'.

Such contention is misconceived for the following reasons:

The UNCITRAL Guide is nothing but a guide for different legislatures to enact law. In India the provisions of Code govern the field. When Section 33(3) is an unambiguous provision of wide import, there is no warrant or justification to construe it in a limited sense in terms of a legislative guide.

In any case, the Applicant is clearly a 'party in interest' in terms of Clause 12(dd) of the UNCITRAL Guide defines the term 'party in interest', which reads as under:

The Applicant's interests are clearly affected by 'particulars matters in the insolvency proceedings', namely non-payment of RTU Charges / CIRP Cost. Such interests cannot be termed as remote, more particularly when seen in light of the rights flowing out of the Deeds of Hypothecation and Clause 7.2(vi) of the Loan Agreement dated 28.3.2015, which gives the Applicant the right to independently proceed against ESIL / Respondent No.3 for repayment of its dues.

The Respondent No.3 has tendered judgments along with index. About 26 judgments are referred to. However, judgments at Serial Nos. 1, 2, 3, 7 and 8 of the said list are cited. The rest of the judgments are not cited and are therefore not dealt with. However, Serial No. 1, 5 and 6 were also cited by the Respondent No.1 and are separately dealt with hereinabove. The rest of the judgments do not deserve to be taken into consideration.

In the aforesaid facts and circumstances, it is respectfully submitted that this Hon'ble Tribunal be please to allow the said Application and direct the Respondents to pay a sum of Rs. 1589.51 Crores to the OSPIL RP. In case the Respondents fail to make such payment, this Hon'ble Tribunal be pleased to pass an order of liquidation of Respondent no.3.

This matter was reserved for order on 13.10.2020. However, subsequently, it was fixed for final arguments as some issues arose regarding certain additional judicial precedents being cited by the Respondent no.3 in its written submissions. Respondent no.3 clarified that such judicial precedents were not cited for any new grounds or pleas but related to contentions already made. The Applicant submitted its written arguments on such judicial decisions and the same are mentioned hereunder:

(a)1987 (3) SCC 279 – Utkal Contractors and Joinery Pvt Ltd v/s State of Orissa

The said judgment has been referred to contend that words used in a statute must be construed in the context of the statute and not literally. Therefore, the words 'any person' used in Section 33 (3) of the Insolvency and Bankruptcy Code, 2016 (the Code) must be used in a limited sense.

The said judgment has no application whatsoever for the following reasons:

(b)(1997) UKHL 40 - Republic of India and Ors. v/s India Steamship Company Limited and Spencer and Bower Reliance based Estoppel, Piers Feltham et. Al., 5^th ed. 2017

The said judgment and the commentary have been referred to contend that the Applicant is precluded by the principle of estoppel by acquiescence from maintaining the present Application.

The said judgment has no application whatsoever for the following reasons:

(Emphasis Supplied)

It is submitted that the Applicant has placed on record and produced numerous correspondences showing that the Applicant and/or Odisha Slurry Pipeline Infrastructure Limited (OSPIL) have taken steps to make their claim known to the Respondents on numerous occasions. The said judgment, therefore, assists the case of the Applicant.

The said judgments have been referred to contend that that the Applicant is barred by the principles of res judicata/ issue estoppel from the issues that have already been raised and decided against it.

The said judgment has no application whatsoever for the following reasons:

(e)2019 SCC Online SC 1542 - Embassy Property Developments Private Limited v/s State of Karnataka

The said judgment has been referred to contend that that this Hon'ble Tribunal cannot decide the title of the Pipeline Asset is it is not a civil court.

The said judgment has no application whatsoever for the following reasons:

The said judgment has been referred to contend that that the Order of status quo passed by Hon'ble High Court of Calcutta only puts the existing state of the Pipeline Asset as on the date of the said Order in status quo. When the said order was passed, the Deed of Cancellation had become effective.

The said judgment has no application whatsoever for the following reasons:

(g)2018 SCC Online NCLAT 641 – JAS Telecom Private Limited v/s Eolane Electronics Bangalore Private Limited

The said judgment has been referred to contend that that since RTU Charges were not being paid prior to the order of moratorium i.e. 2.08.2017 passed in CIRP of ESIL, such payment cannot be claimed to be prejudiced by the Order of moratorium.

The said judgment has no application whatsoever for the following reasons:

The said judgments have been referred to contend that the Order dated 2.3.2020 passed by the Hon'ble NCLT, Cuttack Bench is a judgment of a coordinate binding on this Hon'ble Tribunal and therefore the present Application does not deserve to be entertained.

The said judgments have no application whatsoever for the following reasons:

The said judgments have been referred to contend that the Deed of Cancellation dated 24.06.2016 has not been set aside pursuant to adjudication by a competent civil court and this Hon'ble Tribunal has no jurisdiction to opine on the validity of the said Cancellation Deed.

The said judgments have no application whatsoever for the following reasons:

We have considered the submissions made by all parties and material produced before us. We now proceed to decide the issue before us in the following manner:

This application has been filed under Section 33(3), 33(4) r.w Section 60(5)(c) of Insolvency and Bankruptcy Code, 2016 for implementation of the approved Resolution Plan which has been contravened by the Resolution Applicant and failing which, it is prayed that the order of liquidation is required to be passed. The Applicant has claimed that it has got locus to file this application for the reason that it would be a direct beneficiary if the usage charges of the slurry pipeline used for running the business of the Corporate Debtor during the Corporate Insolvency Resolution Process period of the Corporate Debtor are held as Insolvency Resolution Process Costs (hereinafter referred to as "IRP Costs") and therefore, payable to Orissa Slurry Pipeline Infrastructure Limited (OSPIL) to whom the Applicant had given loans. In this application, issues of locus-standi and maintainability of this application has been raised by the Respondents apart from challenging the claim of the Applicant on merits. Normally, the issue of maintainability is required to be decided first, however, in our considered view, if the locus-standi of the Applicant and maintainability of this application is confirmed then the issue of nature of usage charges as IRP Costs stands decided even without examining the factual aspects and merits of the claims made by all parties in that regard. Therefore, considering this aspect, we are of the view that in the present case, it is proper to first decide whether usage charges are IRP Costs and payable to OSPIL as per the relevant provisions of the Insolvency and Bankruptcy Code, 2016 (herein-after referred to as "CODE") and in IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (hereinafter called "CIRP Regulations"). If it is found so, then, whether these are payable by the Resolution Applicant as a part of its commitment being made in the Resolution Plan and failure on the part of the Resolution Applicant to do so gives cause of action to the Applicant under Section 33(3)/33(4) read with Section 60(5)(c) of the CODE. This issue has arisen primarily on account of deed of cancellation executed between OSPIL and the Corporate Debtor on 24.06.2016 as in the normal circumstances, in our view, there could not be any controversy as regard to nature of such usage charges as of the nature of IRP Costs because of use of subject slurry pipe line for running the business of the Corporate Debtor as a going concerned during CIRP period by the Resolution Professional of the Corporate Debtor, hence, the same being payable. Apart from challenging the issue on merit and maintainability of this application, various pleas have been taken as regard to scope of our jurisdiction under Section 33(3) and 33(4) r.w Section 60(5)(c) of the CODE viz.a.viz jurisdiction of Civil Court to decide the issue. In particular, it has been pleaded that determination of the controversy would amount to deciding the issue of ownership / title of such pipeline which could not be done as it falls squarely within the jurisdiction of a Civil Court. Interestingly, although such pleas have been taken on behalf of the Respondents but they themselves have relied on such deed of cancellation, other agreements/contracts, Resolution Plan of corporate debtor and OSPIL, orders of Adjudicating Authority both at Ahmedabad and Cuttack, minutes of CoC meetings, other documents, order of the Hon'ble High Court of Calcutta, order of the Hon'ble Supreme Court in the case of the Corporate Debtor dated 15.11.2019 in support of their claims in the pleadings as well as in the course of arguments made before us, and thus, in essence, Respondents are taking a contradictory / conflicting stand and desire that these documents should be read only to the extent these support their claims. In our view, this approach, in itself, is self-defeating. In this background, when we pose a question to ourselves as to whether a Civil Court is competent to decide the question as regard to the nature of IRP Costs; (ii) liability of Resolution Applicant to pay the same in terms of approved Resolution Plan; (iii) in case of failure to do so whether it amounts to non-implementation of the Resolution Plan, and (iv) consequently, order of liquidation of the corporate debtor under Section 33(4) of CODE is required to be passed. The instant, plain and an unambiguous answer is that the Civil Court is not capable to do so as it lacks jurisdiction which is vested in National Company Law Tribunal, being Adjudicating Authority under the provisions of the CODE. In this regard, we may also refer to the provisions of Section 9 of the Code of Civil Procedure, 1908 which provides that the Courts shall have jurisdiction to try all suits of a civil nature excepting suits of which their cognizance is either expressly or impliedly barred. There are specific provisions in the Code which bar the jurisdiction of a Civil Court (reference can be taken of Section 63, 64(2) and 231 of the CODE) in respect of matter covered under the CODE which the NCLT as Adjudicating Authority can entertain and disposed of under various specific provisions of the CODE r.w. Section 60 of the CODE which also provide residuary jurisdiction in sub-Section (5) thereof. Thus, when these provisions are read together with Section 9 of Code of Civil Procedure, 1908, there remains no doubt that the powers of NCLT, being the Adjudicating Authority, are extremely wide in respect of matters arising under this CODE. In this situation, we have to consider another aspect i.e. if these pleas of the Respondents are accepted then a situation would arise wherein a person cannot get relief at any level i.e. jurisdiction of the Civil Court does not exist and Adjudicating Authority also cannot decide the issue thereby rendering such person without any remedy. This cannot be the intention of the legislature nor can it be implied by any stretch of imagination. We are further of the view that once a matter becomes subject of any application / proceedings i.e. insolvency resolution or liquidation proceedings which either arises out of or is in relation thereto then the jurisdiction of this Authority even extends to decide that issue after considering the provisions of CODE as well as in accordance with any other applicable law for the time being in force subject only to one limitation that it cannot direct any other public authority / Government to act in a particular way under the provisions of a public law/statute. Here, we may also clarify that if such statute is subject to the provisions of CODE for any matter connected with the insolvency resolution or liquidation proceedings of the corporate debtor, then the specific provisions of CODE shall prevail over any provisions contrary to such specific provision contained in that statute in view of provisions of Section 238 of CODE. We also consider it pertinent to mention here that if any mechanism for any situation is provided in the CODE then also such mechanism will have to be applied i.e. in case of government dues of the nature of operational debts have to be given treatment in accordance with the provisions of the CODE. Having stated so, as regard to reliance placed by the Respondents on the decision of Hon'ble Supreme Court in the case of Embassy Property Developments Private Limited vs. State of Karnataka (here-in-after referred to as "Embassy Property") vide order dated 03.12.2019, we clarify that our findings / views given here are in consonance with the ratio of the said decision. We further hold that in the present case, the situation of giving direction to any public authority is not involved. We also consider pertinent to mention that after the said decision of the Hon'ble Supreme Court suitable changes have been made in the provisions of Section 14(1)(d) of the CODE with effect from 28.12.2019 so as to keep the value of the assets of the Corporate Debtor intact and for resolution of insolvency in a smooth manner. However, considering the emphasis given by the Respondents on this decision, we feel it necessary to take guidance from this decision in detail. There were two issues involved in that case. However, one of the issues is not relevant for disposal of this application, hence, not considered. The relevant question was whether High Court ought to interfere under Article 226/227 of the constitution with an order passed by NCLT under the CODE ignoring the availability of a statutory remedy of appeal to NCLAT and if so, under what circumstances; the Hon'ble Supreme Court after considering the scope of Article 226 of the constitution, jurisprudence on the subject held that 'so far as question of exercise of power conferred by the Article 226, despite the availability of a statutory remedy, is concerned Anisminic cannot be relied upon. The distinction between the lack of jurisdiction and the wrongful exercise of the available jurisdiction, should certainly be taken into account by High Courts, when Article 226 is sought to be invoked bypassing a statutory alternative remedy by a special statute (refer para 24).

Thereafter, the Hon'ble Supreme Court proceeded to examine whether decision of NCLT in respect of a matter covered by MMDR Act, 1957 amounted to a case of lack of jurisdiction on the part of NCLT or an instance of mere wrongful exercise of recognized jurisdiction on asking a wrong question or applying a wrong test or granting a wrong relief. After examining the provisions of MMDR Act, 1957, the Hon'ble Supreme Court held that action of the Government of Karnataka to refuse the benefit of deemed extension of lease was in public law domain, hence, correctness of the said decision could be called into question only in a Superior Court which is vested with the power of judicial review of administrative action. The Hon'ble Supreme Court held as under:

The Hon'ble Supreme Court, thereafter, examined various provisions of the CODE and in para 37 held as under:

Finally, in para 47 which is reproduced as under, the Hon'ble Supreme Court held as under:

From the perusal of the above findings, it is clear that the issue therein was entirely different from the issue before us as in this case, jurisdiction is not being exercised as Superior Court for the review of an administrative action of a public authority or Government. Further, in para 29 itself the Hon'ble Supreme Court has taken note of Section 9 of the Code of Civil Procedure, 1908 which limits the scope of jurisdiction of a civil court when it is either expressly or impliedly barred in a statute and such bar has specifically been provided in the CODE. Consequently, the question of jurisdiction of a Civil Court does not arise in such a case. The Hon'ble Supreme Court has also recognized that NCLT has requisite powers to deal with the matter which it is called upon to administrator under a particular statute. Interestingly, in para 18 of the said order, the Hon'ble Supreme Court has taken note of the decision of the Hon'ble Supreme Court in official Trustee, West Bengal vs. Sachindra Nath Chatterjee (1969) 3 SCR 92 wherein it was held that "before a court can be held to have jurisdiction to decide a particular matter it must not only have jurisdiction to try the suit brought, but must also have the authority to pass the orders sought for." As noted earlier, that only NCLT as Adjudicating Authority has jurisdiction to hear an application filed under Section 33(3) of the CODE and has also got the power to decide the questions at issue and grant the relief under Section 33(4) of the CODE. Further, in this process, NCLT has also got peripheral or ancillary jurisdiction under Section 60(5)(c) of the CODE to decide the issues which arise out of its substantive jurisdiction under Section 33(3) and 33(4) of the CODE. The observations of the Hon'ble Supreme Court as reproduced in para 37 here-in-above also support this view subject to only one limitation that NCLT lacks power to act as a Superior Court having the power of judicial review over administrative action.

Thus, in view of the above discussion, it is absolutely clear that the decision of Hon'ble Supreme Court in the case of Embassy Property (supra) does not operate against the jurisdiction of NCLT to decide such cases and on the contrary it supports our view that we have got ample jurisdiction to decide this issue. Further, in the background of the fact that even by own admission of Respondents that title suit stands abated in view of approved Resolution Plan of OSPIL, hence, examination of deed of cancellation, BTA, RTU and RTUA and findings thereon for decision of the issue before us if it results into the same conclusion which is in accord with the approved Resolution Plan of OSPIL, then there remains no validity of plea of lack of jurisdiction or wrong exercise of jurisdiction by this Adjudicating Authority in deciding this issue. Even otherwise, as the examination of such documents is not complex because the facts relating thereto are admitted and not disputed and only validity of such documents is only under challenge. Thus, for this reason also, this is not an issue now which falls into substantive power of any other forum even if it is held that this is a question of the nature of peripheral or ancillary jurisdiction of NCLT which is related to its substantive jurisdiction.

Having stated so, we may also note that the Hon'ble Supreme Court in the case of COC of Essar Steel India Limited vs. Satish Kumar Gupta & Ors (2019) SCC Online SC 1478 in para 50 held that Section 60(5)(c) is in the nature of residuary jurisdiction vested in the NCLT so that the NCLT may decide all questions of law or fact arising out of or in relation to insolvency resolution or liquidation under the code. It was also held that Section 60(5) spoke of its applicability over any other law for the time being in force which obviously could not include the provisions of the CODE itself. Hence, as regard to approval of a Resolution Plan provisions of Section 30(2) and Section 31 only were found applicable and in that regard provisions of Section 60(5) could not be invoked. The noticeable legal position is that the Hon'ble Supreme Court held that in exercise of such residual jurisdiction NCLT could decide all questions of law or facts arising out of or in relation to insolvency resolution or liquidation under the CODE. In our view, though the provisions of Section 60(5)(c) are of the residuary nature but the use of the words "any question of law or facts, arising out of or in relation to the insolvency resolution or liquidation proceedings" denote a substantive power and not an incidental power which is also supported by such observations of the Hon'ble Supreme Court. In the present case, we are not invoking this residual jurisdiction for deciding the substantive question for which specific provisions in the form of Section 33(3) and Section 33(4) already exist but such observations give additional authority/power to decide all connected issues therewith.

Having dealt with this aspect in the manner hereinbefore, we still consider it necessary to reproduce Section 60, Section 63, Section 64(2) and Section 231 of the CODE as under so that the issue of jurisdiction of Adjudicating Authority to the exclusion of Civil Court in regard to such matters may be established in a conclusive manner.

From the perusal of the above Sections, it is apparent that the legislature in a crystal clear manner has given jurisdiction to Adjudicating Authority to entertain and dispose of matters covered under Section 60(5) of the CODE and barred the jurisdiction of Civil Court, any other Tribunal or Authority to entertain such issue or to pass any order of injunction in regard thereto. Our view also finds support from the provisions of Section 14 of CODE which place moratorium on institution of suits or proceedings or continuation thereof in any manner during the Corporate Insolvency Resolution Process Period. At this stage, we need to consider a situation where a suit had already been instituted before moratorium under Section 14 comes into play and the matter of subject suit is also raised before Adjudicating Authority either directly or indirectly, then, what recourse is available to this Authority. In this regard, we are of the view that depending upon the stage of proceedings pending before this Authority, the decision would have to be made. The findings of the Hon'ble Supreme Court in para 84 of their order dated 04.10.2018 in the case of ArcelorMittal India Private Limited V/s. Satish Kumar Gupta & Others are relevant and therefore, reproduced as under for ready reference:

From the perusal of the above, it is clear that once an application filed under Section 7, 9 or 10 of CODE has been admitted then on an issue which is having relation to and/or inextricably linked with insolvency resolution, this Authority will have exclusive jurisdiction to decide that issue though it may be sub-judice before any other civil court. In the present case, such situation arose before this Authority in the Interlocutory Application No. 419 of 2017 filed by Resolution Professional of the Corporate Debtor wherein declaratory relief as regard to ownership of pipeline in favour of the Corporate Debtor was sought which was a subject matter of the pending Civil Suit arising out of deed of cancellation dated 24.06.2016. This Authority took a view that such declaratory relief could not be given in view of this Suit. We most humbly submit that on the date of such order, the decision of the Hon'ble Supreme Court in the case of ArcelorMittal (Supra) and in the case Embassy Property Developments were not available which could have bearing on this aspect. It is also pertinent to mention that there are certain other judicial decisions subsequent to the date of this order of the Tribunal wherein the scope of jurisdiction of Tribunal to the exclusion of Civil Court has been decided. Thus, findings of this decision are subject to the views of various judicial forums taken subsequently. Few decisions would be referred to in our order. Having said so, the decision of Adjudicating Authority in such IA on other issues has got bearing on our decision in the present application, and the same shall be considered in the later part of this order.

On the issue of exclusivity of jurisdiction even as regard to the dispute pertaining to ownership / title which were traditionally considered a domain of the Civil Court, we are of the view that assets of a Corporate Debtor are integral part of insolvency resolution and any uncertainty in this regard due to pendency of a suit may not bring in the desired results, hence, in our humble view, the jurisdiction for resolution of such disputes during CIRP period lies with Adjudicating Authority and a view taken by such Authority would be applicable in rem. This is not only so in view of specific provisions of Section 63, 64(2) and 231 of the CODE but also because of the legal position that once an issue forms part of Resolution Plan which is approved by Adjudicating Authority under Section 31(1) OF THE CODE then such issue attains finality as per the provisions made in that regard in such Resolution Plan and no civil court, then, can interfere therein and if such issue was sub-judice before a civil court then fate of such civil suit would depend on the terms of Resolution Plan which may also result into abatement of such suit thereafter. In other words, exclusivity of Jurisdiction of same Adjudicating Authority is extremely wide and it cannot be restricted stage wise i.e., up to the stage of approval of Resolution Plan Adjudicating Authority would have a limited jurisdiction and thereafter It's jurisdiction would be final on the very same issue. We also find that even Civil Courts were deciding such issues in accordance with the provisions of respective legislations and only the procedure as prescribed in Code of Civil Procedure, 1908 was followed for disposal of such matters and as compared to this, NCLT as such and as Adjudicating Authority is discharging the functions following the procedure as prescribed in the Companies Act, 2013 and provisions of CODE, wherever applicable. As per provisions of Section 424(2) of the Companies Act, 2013 has certain powers as are vested in a Civil Court under the Code of Civil Procedure, 1908 for the purpose of discharging its functions under Companies Act, 2013 or CODE. As per Section 424(1) of the Companies Act, 2013, for the purpose of disposal of any proceedings before it, NCLT is not bound by the procedure laid down in the Code of Civil Procedure, 1908 but it shall be guided by the principle of natural justice, provisions of the CODE / Companies Act, 2013 and in accordance with the Rules made thereunder. It is also provided that NCLT shall have power to regulate its own procedure. It is noteworthy that comprehensive NCLT Rules, 2016 have been framed which are in operation. It is also to be noted that as per provisions of Section 5(1) of the CODE for the purposes of insolvency resolution and liquidation of corporate person, Adjudicating Authority is NCLT, hence, provisions of Section 424 Companies Act, 2013 and NCLT Rules, 2016 are applicable. In addition to this, various rules / regulations have also been made under the CODE to enable the NCLT to discharge its functions as Adjudicating Authority. For ready reference, the provisions of Section 424 of the Companies Act, 2013 are reproduced as under:

Originally, Section 430 of the Companies Act, 2013 was not on statute until 2002. Based upon the recommendations of Eradi Committee report, Section 10GB which is analogous to Section 430 of the Companies Act, 2013 was incorporated simultaneously with the constitution of NCLT and NCLAT. Thus, creation of exclusive jurisdiction of NCLT and NCLAT is a conscious decision of the legislature and not a co-incidence. It is further to be noted that this is also an exercise to overcome delays and to bring in expertise in the disposal of such matters by a Bench consisting of both Judicial as well as Technical Members as domain expert. Having stated so, we are also conscious of the fact that such jurisdiction is to be confined to the matters which concern the company or its constituents having a bearing on the affairs / interests of the company. This is evident from the fact that there is a complete overhaul of the provisions of Section 397 / 398 of the Companies Act, 1956 in the new provisions which are contained in Section 241/242 of the Companies Act, 2013. Another instance is the incorporation of provisions of Section 244 of the Companies Act, 2013 which relate to class action suits which were earlier domain of Civil Court.

Provisions of Section 63, 64(2) and 231 of CODE also speak in the same manner, however, the notable difference is that these provisions are broader in scope as Section 430 of the Companies Act, 2013 bars the jurisdiction only of Civil Court whereas as per Section 64(2) of the CODE, apart from any Court, Tribunal or Authority is also prohibited to grant an injunction. Further, under Section 231 of the CODE, no Civil Court shall have jurisdiction in respect of any matter in which the Adjudicating Authority or the Board (IBBI) has jurisdiction. As per the scheme of CODE, IBBI also plays a vital role and by putting such restrictions on the Civil Court even on the jurisdiction of IBBI, the legislative intent is absolutely clear that all matters arising out of or in relation to insolvency resolution or liquidation proceedings should fall under the exclusive jurisdiction of institutions created under CODE. It is also to be noted that apart from any Court, no other authority can grant an injunction against the order passed by Adjudicating Authority or IBBI.

In addition to this, Section 238 of CODE gives overriding effect to the provisions of CODE over inconsistent provisions of any other law for the time being in force and any instrument having effect by virtue of such law. As regard to the scope of jurisdiction of NCLT, we may also refer to provisions of Section 52(6) of the CODE whereby the Adjudicating Authority is empowered to pass such order as may be necessary to permit a secured creditor to realise security interest in accordance with law for the time being in force. Such law(s), in our view, could be Transfer of Property Act, 1882; Sales of Goods Act, 1930; Specific Relief Act, 1963, Indian Contract Act, 1872 etc. as amended from time to time. Thus, this provision also reflects the approach of legislature to make NCLT as Adjudicating Authority as a single window clearance solution provider. Apart from this, we also need to take into cognizance the fact that the CODE is enacted to consolidate and amend the laws relating to reorganization and insolvency resolution in a time bound manner, hence, unless Adjudicating Authority is made a sole authority / institution, such objective cannot be achieved and for this reason also, we are of the view that NCLT is entitled to decide the issues under the CODE in accordance with the provisions of any law for the time being in force subject to one limitation that such issues either arise out of or must be in relation to insolvency resolution or liquidation proceedings. We are further of the view that such scheme has been formulated with a view to bring in a culture whereby object of ease of doing business is also achieved.

In view of the above discussion, we are of the view that NCLT as Adjudicating Authority has got widest possible power to decide the various issues which arise out of or are in relation to insolvency resolution or liquidation proceedings under the provisions of CODE which include the resolution of dispute of civil nature. For this view, we further draw support from the decision of the Hon'ble Delhi High Court in the case of Liberty House Group Pte. Ltd. Vs. State Bank of India & Ors order dated 22.02.2019 wherein a plea was taken that issue relating to restraining encashment of bank guarantees given by the prospective Resolution Applicant in the course of Corporate Insolvency Resolution Process was a dispute of civil nature, hence, it fell within the jurisdiction of the Hon'ble High Court and exclusion of jurisdiction of Civil Court was not to be readily inferred. The Hon'ble Delhi High Court after considering the elaborate submissions made by both the sides, held that this Court as the Civil Court of original jurisdiction to not to have jurisdiction to entertain the dispute subject matter of the present suits and the appeals were rejected. We most humbly submit that we cannot do better except reproducing the findings / reasoning of the Hon'ble High Court here-under:

M. Now if this Court were to have jurisdiction and to hold, either that the terms of the Process Memorandum or of the BBG were not binding on the plaintiff and/or that the plaintiff is not in default thereof, the same would clearly amount to rendering findings inconsistent with the NCLT.

N. Section 231 of the Code, also provides that "... no injunction shall be granted by any court...in respect of any action taken or to be taken in pursuance of any order passed by such Adjudicating Authority ... under this Code". The injunction sought by the plaintiff in these suits is clearly in respect of action to be taken by NCLT under the jurisdiction vested in it under Section 60(5)(C) supra and barred by this part of Section 231 of the Code.

O. The disputes raised by a Resolution Applicant, prior to the approval of its Resolution Plan by the NCLT, can be in many forms. The said disputes can also take the form of the readiness and willingness of the RP and compliance of other terms and conditions of the Process Memorandum and/or the Resolution Plans. If it were to be held that NCLT does not have jurisdiction over the Resolution Applicant till approves the Resolution Plan, as is contended by the senior counsel for the plaintiff, the jurisdiction with respect to all such disputes would be in the Civil Court and the exercise of jurisdiction by the Civil Court over such disputes will undoubtedly interfere with the CIR Process and amount to indirectly injunctioning action by NCLT.

P. Reference in this regard can also be made to Rule 11 of National Company Law Tribunal Rules, 2016 providing that nothing confined therein shall be deemed to limit or otherwise affect the inherent powers of the Tribunal to make such order as may be necessary for meetings the ends of justice or to prevent abuse of process of the Tribunal. NCLT thus has inherent powers to pass orders in relation to the insolvency resolution, as may be necessary from time to time, even in the absence of any specific power. The contention of the senior counsel for the plaintiff that in all those matters for which there is no specific provision to approach NCLT, Civil Court can be approached on the ground of law not permitting a person to be without remedy, cannot be accepted. Such a construction would result in abuse of process of NCLT, to whose supervision the insolvency resolution has been entrusted.

Supreme Court recently in Swiss Ribbons Pvt. Ltd. Vs. Union of India 2019 SCC OnLine SC 73, while dealing with the challenge to the constitutional validity of various provisions of the Code, has reiterated

every legislation, particularly in economic matters, is essentially empiric and it is based on experimentation or what one may call trial and error method and therefore it cannot provide for all possible situations or anticipate all possible abuses; there may be crudities and inequities in complicated experimental economic legislation but on that account alone it cannot be struck down as invalid;

timely resolution of a corporate debtor who is in the red, by an effective legal framework, would go a long way to support the development of credit markets;

vide Section 60 of the Code, the CoC does not have the last word on the subject of withdrawal; if the CoC arbitrarily rejects a just settlement and/or withdrawal claim, the NCLT, and thereafter, the NCLAT can always set aside such decision under Section 60 of the Code;

the RP has no adjudicatory powers; the RP cannot act in a number of matters without the approval of the CoC and which in turn decides by two-thirds majority; the RP is really a facilitator of the resolution process, whose administrative functions are overseen by the CoC and by the Adjudicating Authority;

The reasons given me above are not controverted by the aforesaid judgment; rather it supports my reasons. The judgment also expressly negates the argument of the senior counsel for the plaintiff, of jurisdiction of NCLT being limited and the Code not providing for NCLT to be approached in such matters.

Thus I hold this Court as the Civil Court of Original Jurisdiction to be not having jurisdiction to entertain the dispute subject matter of the present suits. Resultantly, the plaints in the suits are liable to be rejected.

Thus, on the basis of above discussion, the scope of powers of NCLT as Adjudicating Authority under the CODE to the exclusion of civil court is fairly clear.

Having said so and discussed the provisions of Companies Act, 2013 in brief also, we find that the Respondent no 3 has relied on the decision of the Hon'ble Supreme Court in the case of Aruna Oswal vs Pankaj Oswal order dated 6th July, 2020 for the proposition that Title issue was of the nature of civil suit and thus, the same could be decided by the Civil Court only. In this case the issue of maintainability of petition of the application filed under Section 241 and 242 of the Companies Act, 2013 was involved as in that case Respondent claimed holding of the requisite number of shares based upon his rights in the property/shares of deceased father which were held by his mother as a nominee and a civil suit was already pending before Hon'ble High Court. NCLT and NCLAT held that such petition was maintainable. This was challenged before Hon'ble Supreme Court. The Hon'ble Supreme Court noted that prima facie there did not appear to be a case of oppression and mismanagement and petition should not have been entertained by NCLT because of pending civil suit and considering the minuscule shareholding of 0.03% that too acquired after filing of civil suit. The relevant findings are reproduced as under:

From the perusal of above findings it is evident that petition under Section 241 and 242 Companies Act, 2013 was filed essentially to get legitimacy to claim partial ownership of shares which were held by her mother as a consequence of her nomination being made by her deceased husband or in other words adjudication of ownership of shares was sought under Section 241 and 242 of the Companies Act, 2013 in spite of pending civil suit and that too without making out a case of oppression and mismanagement. Whereas in the present case civil suit has already abated and thus, Applicant has no protection of such suit in respect of matter raised herein. Further, the Applicant is neither seeking maintainability of this application as an owner of such pipeline nor seeking the ownership of such pipeline either directly or indirectly, hence, on the face of it ratio of this decision is not applicable. As far as other aspects of jurisdiction of NCLT/Adjudicating Authority are concerned, we have already mentioned that both under Companies Act, 2013 or CODE, the issues must be connected with affairs of the company or should be in relation to or arise out of insolvency resolution or liquidation proceedings respectively and if that situation exists then civil court will not have jurisdiction in view of specific provisions barring the jurisdiction of the civil court and specific provisions of these statutes giving exclusive jurisdiction NCLT/Adjudicating Authority. Thus, if in the case of Aruna Oswal application under Section 59 of the Companies Act, 2013 r.w Section 72 of the Companies Act, 2013 would have been filed by Pankaj Oswal then perhaps the view / decision of the Hon'ble Supreme Court as regard to issue of jurisdiction to decide the same dispute would have been somewhat different as in that eventuality the NCLT would have jurisdiction to decide the issue of rectification of register of members and, thus, provisions of Section 430 of the Companies Act, 2013 would have come into play.

Apart from this decision, there are other judicial decisions on the scope of Section 430 of the Companies Act, 2013 which is a reflection of Section 63, 64(2) & 231 of the CODE in a consolidated manner wherein a view has been taken that in such situations NCLT has got the requisite jurisdiction. Two such decisions are as under:

The relevant findings of the Hon'ble Supreme Court in the case at (i) above are reproduced as under:

The relevant findings of the Hon'ble Delhi High Court in the case at (ii) above are reproduced as under:

It is also to be noted that the Hon'ble Delhi High Court has taken into consideration the decision of the Hon'ble Supreme Court in the case of Aruna Oswal (Supra).

We also consider it pertinent to mention that in case of Delhi District Cricket Association, the Hon'ble High Court has also taken note of the decision of the Division Bench of the Delhi High Court in the case of Jay Kumar Arya wherein the decision of the constitution Bench of the Hon'ble Supreme Court in Dhulabhai Vs. State of M.P. AIR 1969 SC 78 was considered in the background of the plea that the principle of exclusion of jurisdiction was to be strictly construed. The relevant findings of the decision in the case of Jay Kumar Arya (Supra) were and for the sake of ready reference, we also reproduce the same as under:

(Emphasis supplied)"

Thus, if the aforesaid guidelines given by the constitution Bench of the Hon'ble Supreme Court are applied to determine the scope of jurisdiction of Adjudicating Authority under the provisions of CODE, then it becomes absolutely clear that the jurisdiction of Adjudicating Authority to decide the dispute of the civil nature which are material and pertinent for the insolvency resolution of a Corporate Debtor is not limited by any factor as canvassed by the Respondents as there are express provisions in the CODE which give power to Adjudicating Authority to decide such issues and there are express provisions which bar the jurisdiction of Civil Court. Remedies by way of appeal to NCLAT and Supreme Court are also provided against the order of Adjudicating Authority. Further, as per provisions of Section 424 of the Companies Act, 2013, the powers of Civil Court have also been bestowed upon NCLT being Adjudicating Authority and procedural rules on the lines of the provisions of Code of Civil Procedure, 1908 have also been framed to conduct the proceedings. Power under Section 425 of the Companies Act, 2013 has also been given to punish for contempt. Apart from this, decision of the Hon'ble Supreme Court in the case of Shashi Prakash Khemka (supra) also supports our view as regard to this aspect. We also reiterate that Section 14 of the CODE results into moratorium on all civil proceedings against the Corporate Debtor admitted into CIRP as per the provisions of the CODE and such provision of moratorium does not exist under Companies Act, 2013, hence, implications on account of exercise of powers by NCLT as Adjudicating Authority are more under the provisions of the CODE as compared to Companies Act, 2013.

Meaning, nature of Insolvency Resolution Process costs, legal framework related thereto and determination of the issue that usage charges for the use of the slurry pipeline during CIRP period are IRP Costs have been included in the Resolution Plan.

Now, having established that we have got the jurisdiction to decide this issue, we move forward to look into the legal frame work relating to nature, scope and treatment of IRP Costs under relevant provisions of CODE and CIRP Regulations. This journey starts with the consideration of provisions of Section 5(13) of the CODE which is the most relevant. The same is reproduced as under:

From the perusal of the above Section, it is apparent that five aspects / events are involved. For the moment, we confine ourselves to Clause (c) and Clause (e) though Clause (a) is also of relevance. Clause (c) is concerned with the expenses being incurred by Resolution Professional in running the business of the Corporate Debtor as a going concern. In the present case, it is not in dispute that the Corporate Debtor is a going concern as on insolvency commencement date and also during CIRP period. Thus, as per the various provisions of the CODE and CIRP Regulations, the Interim Resolution Professional as well as Resolution Professional was obliged to keep the Corporate Debtor as a going concern to the extent possible. It is also not in dispute that use of subject pipeline is critical and necessary to carry on the manufacturing activities and business operations of the Corporate Debtor. It is also not in dispute that this slurry pipeline has, in fact, been used in the business operations of the Corporate Debtor prior to insolvency commencement date as well as during CIRP period. Accordingly, we are of the view that there is no need to further deliberate on the concept as to what constitutes going concern and use of this pipeline to keep the Corporate Debtor as a going concern during CIRP period. We are further of the view that if there would not have been alleged dispute as regard to title / ownership of this pipeline, it would not have required any effort to hold that usage charges payable / paid for the use of such pipeline in running of the business of the Corporate Debtor as a going concern during Corporate Insolvency Resolution Process period would be IRP Costs in spite of the fact that there have been raised various contentions as regard to nature of IRP Costs.

Although, we have expressed our opinion as regard to usage charges being of the nature of IRP Costs still we consider it necessary to deal with some of these contentions canvased before us. The Applicant has relied on the Circular No. IBBI/IP/013/2018 dated 12th June, 2018 along with statement of best practices dealing with payment of Corporate Insolvency Resolution Process costs and has argued that such costs fell under category 1 of part C of such statement; hence, no approval of CoC was required. As against this, it has been contended on behalf of the Resolution Professional that approval of CoC was required under Section 28(1)(f) of the CODE as it was a case of transaction with the related party and no such approval had been taken by the Resolution Professional, and therefore, the conclusion which could be drawn that no such charges were payable. In this regard, we are of the view that at the first stage Interim Resolution Professional is appointed as on the insolvency commencement date whose term continues till the appointment of Resolution Professional under Section 22 of the CODE. The management of the affairs of the Corporate Debtor were then vested in the Interim Resolution Professional as per Section 17(1)(a) of the CODE. As per Section 17(2)(b), Interim Resolution Professional has to take such actions in the manner and subject to such restrictions as may be specified by the IBBI. The Interim Resolution Professional, as per Section 20(1) mandated to manage the operations of the Corporate Debtor as a going concern. The Interim Resolution Professional is also required to constitute a Committee of Creditors (here-in-after referred to as "CoC") as per the provision of Section 18(1)(c) of the CODE. Such committee is constituted after collation of all claims received against the Corporate Debtor and determination of the financial position of the Corporate Debtor. As per Regulation 40A of CIRP Regulations, report certifying constitution of CoC in terms of Regulation 17(1) of CIRP Regulations is to be furnished to the Adjudicating Authority on 23rd day from the date of insolvency commencement date and appointment of Interim Resolution Professional. Thus, during this period, Interim Resolution Professional while incurring the IRP Costs has to take guidance from the impugned circular issued by IBBI as by that time there is no CoC and therefore, even though the transaction may be with the related party, the same has to be executed / continued to manage the operations of the Corporate Debtor as a going concern. Since, there is no CoC at that point of time, no such approval can be obtained by IRP and, therefore, it cannot be said that without such approval, no IRP Costs could incurred by the IRP to keep the Corporate Debtor as a going concern. It is also noteworthy that no provision for ratification of such action post constitution of CoC exists, thus, the action of Interim Resolution Professional, in this regard, becomes final. Further, as per provisions of Section 20(2)(b), the Interim Resolution Professional is entitled to enter into contracts on behalf of the Corporate Debtor or to amend or modify the contracts or transactions which were entered into before the commencement of Corporate Insolvency Resolution Process. For such actions also, there cannot be any prior approval of CoC as the same does not exist at this stage. Further, no post CoC ratification is envisaged. However, after the constitution of CoC, it cannot be disputed that for every transaction with a related party prior approval of CoC is required i.e. whether such transaction is of the nature of IRP Costs or not. In this regard, when we look at the provisions of Section 28(1) of the CODE, it is observed that the Resolution Professional cannot take the actions specified therein without prior approval of CoC and nature of such actions, leads to an inference that such transactions / actions have to be fresh one or have new impact on the affairs of the Corporate Debtor because a prior approval in case of a continuing transaction cannot be a possibility. This view is also supported by the provisions of Section 17, 18 and 20 of the CODE as in that situation; approval of CoC cannot be obtained in spite of the fact that such transaction / action may fall in the category of transaction as specified in Section 28(1) of the CODE. In the present case, it is an admitted fact that BTA, RTU, RTUA were executed before the commencement of Insolvency Resolution Process of the Corporate Debtor and subject pipeline being used through-out, hence, there was no necessity to take approval of CoC in spite of it being a transaction with related party. We are further of the view that the use of the words "undertake" in Section 28(1) (f) also denotes that the transaction should be new one or there should be a material change in an ongoing transaction which would warrant such prior approval. Having said so, in the present case, Resolution Professional formed an opinion that issue of payment of usage charges was sub-judice and subject to outcome of the suit filed with Civil Court, Sealdah and any positive or negative decision suo-moto would prejudice the outcome of such civil suit. At this stage, we need not to go into the correctness of this view. Thus, in our considered view, absence of such approval from the CoC by the Resolution Professional does not lead to a conclusion that no usage charges were payable. This is also for the reason that in most of the meetings of CoC, the issues of liability to pay usage charges, lenders loan liability, interest payment on outstanding debt were raised by the members of CoC during the entire process. In this regard, reference to minutes of 5th, 7th, 17th, 18th and 20th meeting of CoC can be made. It is also pertinent to mention that in 18th meeting, Resolution Professional / legal advisors had also suggested that these issues were to be discussed by CoC with the Resolution Applicant at the appropriate time. In 20th meeting of CoC wherein Resolution Applicant also participated and in which Resolution Plan was considered, discussions on these issues also happened and taken note of. Even in the Resolution Plan of ESIL, issues relating to slurry pipeline have been mentioned. It would not be out of place to mention that such charges have been shown as a contingent liability in the financial statements of the Corporate Debtor which include the CIRP period during which such pipeline was used for the business operations of the Corporate Debtor. Even, some of the lenders of Corporate Debtor as well as OSPIL are common and in the capacity of lenders of OSPIL, it is an admitted position of such lenders that such usage charges were payable by the Corporate Debtor. In the information memorandum also various issues relating to OSPIL contract have been mentioned. Further, there is no whisper of any of the documents produced before us to show that an explicit decision had been taken by Resolution Professional or CoC that usage charges were not payable. These facts clearly establish that there was a tacit approval of CoC as regard to incurrence of usage charges by Resolution Professional to keep the Corporate Debtor as a going concern. Having said so, assuming there is a lapse on the part of Resolution Professional to take prior approval of CoC, in our view, such lapse cannot prejudice adversely the right of third parties and cannot lead to a conclusion that issue of payment of such usage charges was not considered in formulating the information memorandum and Resolution Plan when information relating to all issues connected with slurry pipeline formed part of VDR mechanism( Information Memorandum) from time to time and which was accessed by Resolution Applicant (s) and other stake-holders. Accordingly, such contention raised on behalf of the Resolution Professional is rejected.

Our attention was also drawn to Regulations 31 to 34A of CIRP Regulations and also to circular issued by IBBI on 12th June, 2018 to contend as regard to role and responsibilities of Resolution Professional and also the requirement of CoC approval for incurring such expenses. Regulations 31 to 34A are reproduced as under:

As regard to approval of CoC, reliance was placed on Clause 31(e) as reproduced herein before. We are of the view that Clause 31 arise out of Section 5(13) (e) of the CODE and here we are concerned with Section 5(13) (c) of the CODE, hence, at the very outset, such plea is devoid of merits and, thus, rejected. In this regard, we are further of the view that when a specific provision exists for a particular situation then such provision prevails over the general provision and therefore, for this reason also, this plea of the Respondents is rejected. We are further of the view that IRP Costs comprise of two categories of expenses. One category is related to running of the Corporate Debtor as a going concern and second category is related to the costs incurred during Insolvency Resolution Process whether Corporate Debtor is a going concern or not. For example, interim finance may be required to meet the IRP Costs to smoothly carry on CIRP. Similarly, fee of the Resolution Professional is to be paid. The legislature has also provided a residuary clause in the form of Section 5(13) (e) to cover the situations which may be specified by IBBI. The aforesaid regulations fall in that category. Thus, considering this scheme of the CODE, we again reiterate that full freedom has been given to Resolution Professional to run the Corporate Debtor as a going concern and the only requirement is that a Resolution Professional has to submit information to IBBI periodically or on the happening of certain events and non-compliance, if any, of such requirements, in our view, will neither prejudice the rights of third parties nor it can be interpreted in a way that such IRP Costs were not payable.

The Applicant also took a plea as regard to payment of usage charges by relying on the provisions of Regulation 31(b) of the CIRP Regulations. The Applicant has contended that due to moratorium being in place, civil suit about ownership of slurry pipeline remained pending and such pipeline remained in the possession of the Corporate Debtor who used the same for its operations as well and therefore, usage charges were payable in accordance with the provisions of Right to Use Agreement. In this regard, it has been contended on behalf of the Respondents that rights of the Orissa Slurry Pipeline Infrastructure Limited (hereinafter referred to as "OSPIL") were not prejudiced because of moratorium as contended by the Applicant but such right in fact did not exist in view of deed of cancellation dated 24th June, 2016 which was signed much before insolvency commencement of the Corporate Debtor, hence, reliance on the provisions of Regulation 31(b) of CIRP Regulations was misplaced. We are of the view that plea of the Applicant has force that as Civil Suit could not be disposed-off because of moratorium and therefore, slurry pipeline remained in the possession of the Corporate Debtor for its use and which in fact has been used during CIRP period. Here, it is relevance to take note of provisions of Section 14(2A) which have been brought on statute w.e.f. 28.12.2019 supply of goods or services to keep the Corporate Debtor as a going concern cannot be suspended or terminated or interrupted during moratorium period (which coincides with CIRP period) except where such debtor has not paid dues arising from such supplies. Thus, this provision provides relief to third parties as they can now take back their assets, in case, usage charges are not paid during moratorium period. Therefore, for this reason also usage charges are IRP Costs and, thus, payable.

Apart from above two contentions, several other pleas were raised on the basis of impugned Circular dated 12.06.2018 issued by IBBI which, in our opinion, are not of much relevance for deciding the issue, hence, not discussed in detail. Having said so, we are further of the view that non-compliance of any regulation or action of Resolution Professional in a particular manner on the basis of its view that matter was sub-judice cannot, in any way help the cause of Respondents because it is a self-serving exercise. Further, for violation of any provision of the code or regulations or non-compliance thereof including code of conduct, there is a separate mechanism in the code which falls within the domain of IBBI, hence, for this reason also we do not find any necessity to deal with such contentions further.

Thus, in view of above discussion, we hold that as far as the nature of usage charges is concerned, the same can safely be categorized as of the nature of IRP Costs.

Next question which arises for our consideration is as to how IRP Costs are to be dealt with as per various provisions of CODE and CIRP Regulations. In this regard, notable provision is Section 30(2) (a) which prescribes that Resolution Plan must provide for the payment of IRP Costs in a manner specified by the Board (IBBI) in priority to the payment of other debts of the Corporate Debtor. From the perusal of this provision, it emerges that a Resolution Plan which does not provide so cannot be approved. It is also evident that IRP Costs are to be paid in priority to the payment of other debts of the Corporate Debtor. Another requirement is that the payment of IRP Costs is to be in accordance with the manner specified by IBBI. At this stage, we recall that Section 5(13) (a) treats the amount of any interim finance and costs in raising such finance as IRP Costs. The term "interim finance" as per Section 5(15) of CODE means any financial debt raised by the Resolution Professional during the Insolvency Resolution Process Period and such other debt as may be notified. From this definition, it is apparent that although the amount of interim finance is a financial debt still it is to be treated differently as compared to other financial debts owed by the Corporate Debtor. As per Section 28(1)(a) of the CODE, Resolution Professional needs prior approval to raise any interim finance. Thus, as compared to incurrence of expenses by Resolution Professional to run the corporate debtor as a going concern for which no approval of CoC is required in the normal circumstances unless it falls within the ambit of Section 28(1)(b), approval of CoC in regard to raising of interim finance is a prerequisite. This also goes to show that Resolution Professional has been given a free hand subject to guidelines given by IBBI which are generally restricted to costs other than costs which are incurred for running the Corporate Debtor as a going concern. Now, coming to the other element of Section 30(2) (a) i.e. in the manner specified by IBBI, we need to look at Regulation 38 of CIRP Regulations which is reproduced as under in the chronological order of amendments being made therein.

Regulation 38 originally stood as under:

With effect from 05.10.2017 by Notification No IBBI/2017-18/GN/REG018, clause (1A) was introduced and w.e.f. 07-11-2017 by third amendment, clause (3) was inserted. Accordingly, revised Regulation 38 stood as under:

On 03.07.2018 by Notification No. IBBI/2018-19/GN/REG031, 38(1)(a) as well as Clause 3 was amended. Amended Regulation 38 stood as under:

With effect from 05-10-2018, Regulation 38(1) was again amended. Amended Regulation 38 reads as under:

Other clauses not reproduced being not relevant

Simultaneously, clause 39(1)(b) was deleted which prior to such deletion stood as under:

Clause (1B) was introduced w.e.f. 24.01.2019 and after that the regulation 38 reads as under:

Thereafter, again clause 1 has been changed on 28.11.2019 and amended Regulation 38, as a whole, reads as under:

From perusal of the said regulation, it appears that originally Resolution Plan was to specify the source of funds that would be used to pay IRP Costs and it was also provided that such resolution costs were to be paid in priority to any other creditor. There was an amendment in Regulation 38(1)(a) whereby Resolution Plan had to contain and disclose the source of the funds to pay IRP Costs to the extent unpaid in priority to the any other creditor. This change implies when the Corporate Debtor was a going concern and if it could meet the IRP Costs out of the profits / income earned due to running of business as a going concern or if not a going concern but IRP Costs could be met from other sources during CIRP Regulations period, then, Resolution Applicant was not required to pay entire IRP Costs. The Resolution Applicant, in this situation, was required only to meet the unpaid IRP Costs in priority to any other creditor. However, disclosure of specific sources to meet total amount of IRP Costs in the Resolution Plan still remained mandatory meaning thereby that entire IRP Costs were to be disclosed indirectly.

Simultaneously, there also existed Regulation 39(1)(b) in CIRP Regulations which provided that the prospective Resolution Applicant will give an undertaking to provide additional funds to the extent required for the purposes of Regulation 38(1) of CIRP Regulations. Thereafter, with effect from 05.10.2018, as evident from the provision reproduced here-in-before, there is no requirement as regard to disclosure of the source of funds to pay IRP Costs including payment of unpaid IRP Costs in priority over any other creditor. In our view, in spite of such amendment in the Regulation -38 of CIRP Regulations, requirement of provision of IRP Costs in the Resolution Plan and priority of payment of IRP Costs over other creditors still remain because of the provisions of Section 30(2) (a) of CODE. In our view, though IBBI in its wisdom has done away the requirement of the disclosure of source of funds to be provided by Resolution Applicant in payment of total IRP Costs in the Resolution Plan and priority thereof over any other creditor, non-disclosure of such information is not in consonance with the provision of Section 30(2)(a) of CODE as IBBI is obliged to provide manner of payment of IRP Costs as per this Section. At this stage, we also consider it pertinent to mention that as per Section 240 of the CODE, IBBI is obliged to make regulations consistent with the CODE and rules made there-under to carry out the provisions of the CODE, hence, for this reason also doing away of the requirement of such disclosure in the Resolution Plan needs reconsideration. It is also pertinent to mention that provisions of Section 30(2) of the CODE are of paramount importance as far as approval of Resolution Plan is concerned because non-compliance of this Section results into rejection of Resolution Plan and ultimately to the corporate death. In the facts of the present case, we are of the view that if the requirement to disclose sources of total IRP Costs would have remained, the controversy before us perhaps would not have arisen or could have been resolved in a summary manner which now will have to be considered on the basis of contents of the Resolution Plan and other material produced and lengthy arguments made before us. Be that as it may, in the case before us, though the final Resolution Plan has not provided any cap / outer limits of IRP Costs, the Resolution Plan consists of manner of payment of unpaid IRP Costs and provides that the same shall be taken care of by Resolution Applicant. Similar provision was also part of the Resolution Plan submitted by the Resolution Applicant on 02.04.2018 which was not considered for approval by the Adjudicating Authority as issues regarding eligibility of the Resolution Applicant arose in terms of provisions of Section 29A of the CODE. The matter reached up to the level of Hon'ble Supreme Court who directed the Resolution Applicant to comply with the provisions of Section 29A within a specified period and then resubmit the Resolution Plan. The Resolution Plan was resubmitted by that time the mandatory requirement to show the amount of IRP Costs as per Regulation 38(1) of CIRP Regulations had been deleted. In our view, if such requirements in Regulation-38(1) would have remained, the Resolution Plan submitted on 23.10.2018 would have been modified to meet such requirements or else it could be rejected as violative of provisions of Section 30(2)(e) of the CODE.

There may also be a situation where no resolution happens i.e. no Resolution Applicant comes for insolvency resolution of the Corporate Debtor or no Resolution Plan is approved by CoC / Adjudicating Authority and in that situation, liquidation of the Corporate Debtor is the only option. As per Section 53(1)(a) of CODE, the IRP Costs and liquidation costs are to be paid in full. Thus, in both situations i.e. in the course of insolvency resolution or liquidation, IRP Costs are to be paid in full and in priority to other debts of the Corporate Debtor.

Now, the question arises whether unpaid claims of creditor in regard to expenses incurred by the Corporate Debtor which are of the nature of the IRP Costs could be classified as of the nature of operational creditor, financial creditor or other creditors. In this regard, prima-facie we are of the view that since IRP Costs relate to the period beginning from insolvency commencement date till approval of Resolution Plan by the Adjudicating Authority and financial debt / operational debt / other debts are prior to the date of commencement of insolvency, hence, such costs are of distinct nature. In this regard, we are further of the view that claims by Financial Creditors, Operational Creditors, other creditors, workman and employees etc. are to be made in specific forms provided in CIRP Regulations which also indicate the same position i.e., only claims due on the insolvency commencement date could be categorized as creditors. Further, no form / requirements have been prescribed in the CODE / CIRP Regulations to lodge a claim as regard to IRP Costs. We are also of the view that distinct nature of IRP Costs from other debts is also noticeable from the language deployed in Section 30(2) (a) itself as primacy to IRP Costs has been given over other debts of the Corporate Debtor. We are further of the view that primacy of IRP Costs over other debts of the Corporate Debtor is also for the reason that the Corporate Debtor cannot be run as a going concern during CIRP period if no such primacy is given because the suppliers / providers of goods / services would not be willing to remain associated with such kind of a business entity without being assured of payment to them for the goods /services provided to such corporate debtor. It is also so for the reason that if no such primacy is given, the maximization of value of assets of Corporate Debtor cannot be achieved as valuation as a going concern would certainly be more than the valuation which can be achieved in the course of liquidation. Accordingly, the legislature has accorded highest priority to payment of such costs both in the course of insolvency resolution or liquidation. In this view of the matter, we hold that approval of the Resolution Plan under Section 31(1) cannot be interpreted in a manner which defeats this basic and cardinal requirement of maximization of value of the Corporate Debtor and balancing of the interests of all stake-holders which include employees, creditors, government and society at large. Accordingly, we conclude that IRP Costs are different from creditors / guarantors of the Corporate Debtor and these have to be given priority over such category of persons. Consequently, in our humble view, findings of the Hon'ble Supreme Court in para 86 and 88 of the order in the case of corporate debtor dated 15-11-19 do not apply to IRP Costs as such findings are in the context of claims of creditors and guarantors especially when no issue as regard to payment of IRP Costs was being considered by Hon'ble Supreme Court.

In view of above discussion, it can be safely concluded that NCLT as Adjudicating Authority is having requisite jurisdiction to decide the issue of usage charges being IRP Costs and liability of Resolution Applicant to pay the same after considering all documents produced before us as material on record as it is in relation to insolvency resolution which may also result into a situation of deciding the issue of ownership of such pipeline if such issue would have not already been closed by the approved Resolution Plan of OSPIL which is binding on various stakeholders under Section 31(1) of the CODE. We, however, make it clear in no uncertain terms that we have discussed the issue of jurisdiction in detail only for the purpose to bring certainty to this issue as a whole and our such exercise or findings related thereto should not be considered as an exercise by us to decide the issue of ownership/title of the subject pipe line as the main issue for the purpose of resolution of the controversy before us. We also make it clear that all the documents/contentions are being considered with the perspective of or confined to the resolution of the controversy of contravention and/or non-implementation of an approved plan on account of non-payment of usage charges, being IRP Costs.

Now, we would look into the other material facts of the case. The whole controversy has arisen due to deed of cancellation executed between the Corporate Debtor and OSPIL on 24.06.2016 whereby business transfer agreement dated 27.02.2015 (hereinafter referred to as BTA), right to use agreement dated 30.03.2015 (hereinafter referred to as RTU), and amendment to RTU dated 31.08.2015 (hereinafter referred to as RTUA) were cancelled with effect from 30.06.2016. For looking into the validity and consequences of such deed of cancellation, in our view, the nature and purpose of BTA, RTU & RTUA is required to be seen.

Now, we shall look at the major provisions of RTU.

From the perusal of this, it is apparent that the RTU is valid for 20 years from the date of its commencement and can be terminated prior to expiry of such term only in accordance with the provisions contained in RTU.

From the perusal of the above clause, it is noted that the Corporate Debtor is liable to pay usage charges for allocated capacity in all conditions during the Term.

From the perusal of the Clause-2.3.1, it is established beyond doubt that equipment i.e. subject pipeline along with other attached assets thereto is to remain the property of OSPIL at all times. The use of the words, "at all times" instead of "during the term" leads to this conclusion. This also goes to show that RTU is valid for the specified term subject to the provisions of renewal / early termination as contained in RTU and is independent of BTA. Further, Clause-2.3.3 (though it has been mentioned as 2.3.1 due to typographical mistake) provides that in spite of termination of RTU for whatever cause, Corporate Debtor shall not have any right over the equipment. It is further provided that on termination of the RTU, the equipment is to be given back to the OSPIL. Thus, if the equipment is not given back to the OSPIL then the logical inference is that RTU remains in operation and is valid up-to the specified term. If that be the case, then payment of usage charges for the use of equipment in accordance with the terms and conditions of RTU is the natural consequence.

From the perusal of the above, it can be easily concluded that payment of usage charges for the use of equipment i.e. pipeline by the Corporate Debtor remains an admitted liability because of such use. Clause 4.3.4 also gives a right to OSPIL to adjust / set of the amounts owed by OSPIL to ESIL from the amount due by ESIL to the OSPIL meaning thereby that outstanding usage charges can be adjusted by OSPIL against the unpaid purchase consideration.

From the perusal of the Clause-10.1.4, it is evident that RTU creates certain binding obligations on the Corporate Debtor which also indicate that as on the date of signing of RTU, no situation which could result into early termination of RTU due to insolvency or other financial stress of Corporate Debtor.

From the perusal of the Clause-13.1 above, it is absolutely clear that term of RTU is non-cancellable by either party except as expressly provided in RTU. It is further noted that the Term of RTU is subject to the provisions of only RTU.

Clause 14 reads as under:

From the perusal of the Clause 14.1.1, it is apparent that the intention of the party is that RTU would remain valid till the completion of Term. As per Clause-14.1.2 has got a right to terminate RTU in the event defaulting party fails to cure / provide remedy for an event of default during the cure period as per Clause-12.3 of RTU. Clause-14.1.3 is important as it provides that RTU cannot be terminated by either party in any case whatsoever except as expressly provided herein. It is worth noting that the reasons for execution of deed of cancellation do not fall under any express provision of RTU in regard to termination of RTU nor the procedure as prescribed in RTU for early termination has been followed. Hence, in our view, cancellation of RTU through such deed is not valid and, therefore, RTU survives even after cancellation of BTA if it is assumed that BTA was validly cancelled.

From the perusal of the above clause, it is apparent that OSPIL has got unfettered rights as regard to the ownership of slurry pipeline in all situations including upon termination of RTU.

Now, we shall look into the provisions of RTUA. RTUA was executed on 31.08.2015 whereby an amendment was carried out in terms of Clause-20.6 of RTU as regard to quantum of monthly usages charges to be paid by Corporate Debtor to OSPIL. It has been provided that monthly usage charges payable by the Corporate Debtor would be in direct proportion to the percentage of purchase consideration paid by OSPIL at the end of respective month. Thus, it links the quantum of monthly usage charges payable to the extent of purchase consideration paid by OSPIL. Apart from this, there is no amendment either to BTA or RTU. Thus, this amendment, effectively results into a situation where, if for any reason, total purchase consideration is not paid then also BTA remains valid and operative by reducing the quantum of monthly usage charges. Further, as per Clause-4.3.4 of RTU, OSPIL also has right to set-off any amounts which OSPIL owed to Corporate Debtor from any cause whatsoever against any amount due by Corporate Debtor to OSPIL under RTU. Hence, if the monthly usage charges were not paid by the Corporate Debtor, then OSPIL could adjust / set-off such charges against the purchase consideration payable by OSPIL to the Corporate Debtor but which was not paid. Thus, in essence, RTUA amends both BTA and RTU and works out a mechanism whereby in future this arrangement remains workable and valid for the Term as provided in RTU.

This arrangement continued for few months without any hindrance. In January 2016, some directions / guidelines from RBI came and because of that this arrangement was considered as an instance of restructuring of loans given to Corporate Debtor and consequently re-classification of category of such loans. This prompted the secured lenders to revisit the whole transaction. After deliberations, it was decided to reverse the transaction. Consequently, deed of cancellation was signed on 24.06.2016. Relevant clauses of such deed of cancellation are reproduced hereunder:

First issue which arise for our consideration is whether deed of cancellation is valid and legally binding. In this regard, we recall that BTA consist several conditions precedent. One of the conditions was that prior consent of all the secured lenders of ESIL had to be obtained to execute BTA which in fact had been obtained. This fact is also supported by the recitals of deed of cancellation which mention that the BTA was executed with the consent of its lenders. Such consent was provided as per Schedule-7 of BTA. It is crucial to note that Lenders are common and, as stated earlier, normally hiving off in such a manner cannot be allowed at the first place itself, and, therefore, consent of all lenders was mandatory for execution of BTA as well as for execution of deed of cancellation. In this situation, a question arises as to how such BTA can be cancelled without the consent of all such lenders. It is not in dispute that all lenders have not given consent for cancellation of BTA. It is also not in dispute that one of the lenders after giving consent withdrew the same later on. Thus, on this ground itself, the deed of cancellation stands null and void.

Another legal competence which is required to execute deed of cancellation is the special resolution of shareholders of OSPIL as per the provisions of Section 180 of the Companies Act, 2013 which has not been obtained. It is also noteworthy that it is a transaction between related / associated parties and deed of cancellation vide Clause-8 thereof also provides for obtaining of such approvals. Apart from this, as per the minutes of the meetings of the lenders held in April, 2016, May, 2016 & June, 2016, approval of competent authorities of lender was also to be obtained. No such approvals have been brought on record. From the recitals of deed of cancellation, it is noted that the only reason for executing such deed of cancellation was due to the clarification issued by RBI on 13.01.2016 in view of Corporate Debtor's account being a sub-standard asset, lenders could not consider fresh sanctions and disbursement thereby OSPIL could not pay balance purchase consideration. In our view, on the face of it, this reason does not justify the cancellation as by RTUA, an amendment had already been carried out in RTU as regard to monthly usage charges being paid in proportion to the purchase consideration actually paid by OSPIL, hence, there was not requirement to pay the balance purchase consideration. Having said so, in our view, some of the lenders have insisted on this to avoid RBI action for financing the corporate debtor in sum and substance in this manner and that is why such consent was subject to the condition of transfer of lenders' liabilities to corporate debtor. Moving forward, we look into other aspects. In the recitals, it is also mentioned that lenders had an option to exercise "put option" on ESIL in the event of default. It is also mentioned that the lenders of OSPIL in their meeting on 16.06.2016 decided to exercise such option which is incorrect in fact as no such decision was taken. This observation is based upon the material produced before us. Thus, this reason is a mistake of fact and, therefore, deed of cancellation is not an enforceable agreement as per Section 20 of Indian Contract Act, 1872. It is also pertinent to mention that there were no other reasons to execute the deed of cancellation as evident from the recitals in 4th para at page 6 of such deed which mentions that "AND WHEREAS pursuant to the above, the parties have now mutually decided to unwind / cancel the BTA and cancel subsisting rights and obligation under BTA, RTU and also RTUA with effect from the effective date". In Clause-2, the same statement has been made. Therefore, any statements made by the Respondents, in this regard, being contrary to the actual facts, are rejected. Thus, for the above reasons, we hold that deed of cancellation was always null and void and, consequently, BTA, RTU and RTUA remained effective.

Having held so but for the sake of certainty and finality of the issue before us, we further consider it necessary to see whether such deed of cancellation has actually been acted upon by ESIL i.e. Corporate Debtor if we assume that such deed of cancellation was not null and void ab-initio. It is not in dispute that in this deed of cancellation, the consideration is mutual covenants and promises contained therein, and other good and valuable consideration, the receipt and adequacy of which has been mutually acknowledged and the parties have expressed their intent to be legally bound. This provision makes it obligatory on the part of the Corporate Debtor to take the liabilities of the lenders of OSPIL to itself when it transfers back pipeline to itself. Admittedly, this has not been done which is evident from the financial statements of the Corporate Debtor of the relevant period, statement made by RP of the Corporate Debtor in the information memorandum, and by the respective parties in the course of proceedings before this Adjudicating Authority in LA 419 of 2017. Further, in the Resolution Plan of OSPIL, the Resolution Applicant has made payment to the lenders of the OSPIL of the amount of outstanding loans which were part of the deed of cancellation. Further, no material has been brought on record to show that obligations as regard to creation of first pari passu charge on the Corporate Debtor's fixed assets and second pari passu charge on the current assets in favour of OSPIL's lenders and SREI Infrastructure Finance Limited as investor was also discharged. Thus, considering these facts, the only conclusion which can be arrived at is that deed of cancellation has not been acted upon by the Corporate Debtor and consequently, Corporate Debtor is obliged to pay the usage charges for the period of CIRP during which period subject pipeline was used for running the business of the Corporate Debtor as a going concern.

Admittedly, the Corporate Debtor came into CIRP vide order of this Authority dated 02.08.2017. Thereafter, RP took control of the affairs of the Corporate Debtor. An application in IA 419 of 2017 was filed before this Authority seeking various directions. This application was disposed-off by this Authority vide its order dated 07.02.2018. The relevant facts, contentions and findings of this Authority are reproduced hereunder:

From the perusal of findings given in para 64 as re-produced herein before, it is noted that this Authority gave finding that the pipeline was not the property of the Corporate Debtor after rejecting it's claim that a registered conveyance deed had not been executed for transfer of ownership as the same was necessary only OSPIL considered such pipe line as an immovable property and not otherwise. In para-72, this Authority after taking note of the disclosures made in the annual report of the Corporate Debtor for the year 2016-2017 noted that there was no approval from all the lenders of the rewinding of BTA. IT was also observed that Applicant herein had also not given its approval. Finally, it was also observed that, therefore, the pipeline remained the property of the OSPIL. Further, in para-81(3), this Authority clarified that findings given in these paras were for the purpose of Corporate Insolvency Resolution Process and to clarify the resolution professional and Resolution Applicant. It was also observed that these findings were subject to the result of Civil Suit for the reason that this Authority took a view that it was not having an authority / power to grant declaratory reliefs to the Applicant. However, as far as Corporate Insolvency Resolution Process of the Corporate Debtor is concerned, the findings are absolute and final. This position is further supported by the fact that in para 81(4), it was clarified that there was no hindrance for potential Resolution Applicant for filing Resolution Plans in view of the right of Corporate Debtor to use pipeline under RTUA (which includes both RTU and RTUA as in that IA right to use agreement was referred as RTUA). In this regard, we further take note of the fact that though the findings in para 64 and 72 were considered subject to the result of Civil Suit in para 81(3) of the order but the findings given in para 81(4) have not been so subjected meaning thereby that RTUA was held to be a valid and operating agreement in spite of such civil suit. In our considered view, as this Authority give unconditional findings as regard to the right of Corporate Debtor to use pipeline under RTUA, the consequential liability to pay usage charges is embedded therein as at no point of time or in no situation the free use of the pipeline by the Corporate Debtor has been intended or established. We further note that this order has been accepted by the Corporate Debtor and RP of the Corporate Debtor has proceeded with the CIRP in terms of directions given in this order. We also note that information memorandum has been prepared accordingly.

In the earlier part of our order, we observed that the deed of cancellation was null and void ab- initio and for that we had taken note of the fact that consent of all the lenders was not obtained. This fact gets further established from the extract of annual report of the OSPIL as reproduced in para 33 of the said order. There appears to be a typographical mistake as far as financial year is concerned which cannot be 31.03.2013 as the OSPIL was itself incorporated in the year 2014. We have also observed earlier that the deed of cancellation was not acted upon. This fact is also established from the said note as it is stated therein that the purchase consideration paid by the OSPIL to the Corporate Debtor was shown as a liability of ESIL towards OSPIL which was to be repaid upon annulment of sale. Thus, it becomes clear that liabilities of lenders of OSPIL which were to be taken by the Corporate Debtor were not taken which was so required in terms of the provisions of deed of cancellation. In para 72, note from the annual report of the Corporate Debtor for the year 2016-2017 has been reproduced. Such annual report has been finalized after the Corporate Debtor had been admitted in to CIRP. These observations, in the annual report, therefore, reflect the view of resolution professional whereby it has been accepted that reversal of BTA was not effective. IT has also been mentioned that claims submitted by lenders of OSPIL in requisite forms were neither classified as admitted or rejected or under verification in view of interim injunction granted by the Hon'ble Kolkata High Court. This note also re-affirms our view that the deed of cancellation was not acted upon. It is also noted that not only the lenders to OSPIL but lenders of the Corporate Debtor had not granted approval for rewinding and transfer of business undertaking.

Now, if we look at the Resolution Plans submitted by the Resolution Applicant on 02.04.2018 and 19.10.2018 which was revised and the revised plan was submitted on 22.10.2018. It is noted that certain disclosures / provisions have been made by the Resolution Applicant as regard to contract with OSPIL and slurry pipeline in such Resolution Plan. The relevant portions of these Resolution Plans are reproduced as under:

Relevant extracts from the Resolution Plan submitted by Resolution Applicant on 02.04.2018.

Relevant extracts from the Resolution Plan submitted by the Resolution Applicant on 22.10.2018.

From the perusal of the relevant extracts of both the Resolution Plans, it is observed that in the first plan, a declaratory relief as regard to ownership of Corporate Debtor of the said pipeline was sought. The same relief was sought in the Resolution Plan submitted on 19.10.2018. However, this was revised due to objection taken by the Applicant and in the revised Clause, such declaratory relief was deleted and in Clause-5.8.2.a specific provision has been made as regard to OSPIL contract and a commitment has been made by the Resolution Applicant to resolve the same were working with the lenders of OSPIL. From the perusal of the final Resolution Plan, it is noted that Clause-5.3.2, as regard to slurry pipeline a specific observation has been made that certain disputes in relation thereto were sub-judice. This qualification indicates that the Resolution Applicant has itself acknowledged the fact of title dispute as well as of issue of payment of usage charges of said pipeline during Corporate Insolvency Resolution Process period because the Resolution Applicant was aware of all the disputes and only because of that the words "certain disputes" have been used instead of title dispute which could have been used if the Resolution Applicant was of the view that only title dispute was in question and no usage charges were payable. This is also so because the Resolution Applicant has submitted the Resolution Plan based upon the information memorandum prepared by Resolution Professional and information contained in VDR wherein all disclosures as regard to these two issues were made from time to time. It is also pertinent to mention that in the Resolution Plan dated 02.04.2018, no such disclosure / qualification was attached to slurry pipeline which also goes to show that in the final Resolution Plan, the Resolution Applicant took into consideration both the aspects i.e. ownership issue and usage charges payable for the CIRP period. Having stated so, we move to Clause-5.8.2 which relates to asset specific risk and anticipated remedies. As per Clause-5.8.2.a, the Resolution Applicant has recognized the importance of OSPIL contract and has also undertaken to acquire the outstanding debt of OSPIL and simultaneously has made a commitment to ensure that unhindered usage of this asset was available for the business of the Corporate Debtor. This commitment again shows that the usage charges liability for CIRP Period has been taken into consideration.

Having stated so, now we move to mandatory contents of Resolution Plan which provides for disclosure of obligations undertaken by the Resolution Applicant in regard to payment of IRP Costs in priority to the repayment of other debts and source of the same. This takes us to step 5 of implementation plan which specifically mentions about payment of unpaid Insolvency Resolution Process cost. Schedule-XI provides source of funds to meet out IRP Costs. From the perusal of the same, it is evident that the Resolution Applicant has committed itself to meet such costs on its own if the internal accruals were insufficient. As stated earlier, no upper limit or / ceiling has been prescribed in this regard nor any bifurcation has been given, hence, declarations made by the Resolution Applicant in Clause-5.3.2 and 5.8.2.a become crucial and relevant and when read in the light of those declarations, even at the cost of repetition, we may not hesitate to hold that usage charges are payable for the CIRP period. Further, interestingly in the Resolution Plan of OSPIL submitted by the same Resolution Applicant ceiling / cap of IRP Costs has been fixed wherein no such issue was involved. This fact also supports our view. Apart from this, we also consider it pertinent to take note of part XIII relating to other terms of Resolution Plan which contain disclosures / assertions made by the Resolution Applicant as regard to extinguishment of claims. As per Clause-C thereof, it is noted that all contingent liabilities of the Corporate Debtor up-to the plan approval date arising out of any proceedings to which the Corporate Debtor was a party reduced /capped at the amounts that would be realizable by the claimant, if the contingent liability had fructified at any time prior to the plan approval date. Most importantly, this term is subject to "unless otherwise stated in the Resolution Plan" which leads to a definite conclusion that even if such usage charges were treated by the Corporate Debtor as a contingent liability in its books of account then also liability to pay such charges would survive in view of a specific assertions made by the Resolution Applicant as regard to slurry pipeline in the Resolution Plan as pointed out hereinbefore. Accordingly, Resolution Applicant is barred from taking a plea that such usage charges being shown as a contingent liability stood capped / reduced or extinguished. We are further of the view that for this reason, Clause-9 of relief and concessions would also not be applicable. Clause-9 would also not be applicable for the reason that IRP Costs necessarily form part of Resolution Plan in terms of provisions of Section 30(2)(a) of the CODE and therefore, any violation thereof after the approval of the Resolution Plan have its own consequences as per the provisions of CODE.

Now, we move to look into the provisions of Resolution Plan of OSPIL which was submitted on 06.12.2019 after the submission of the Resolution Plan of the Corporate Debtor and its approval by the Hon'ble Supreme Court on 15.11.2019. The relevant provisions of OSPIL Resolution Plan as reproduced as under:

From the perusal of the above assertions made in OSPIL Resolution Plan, conclusive fact which emerges is that the slurry pipeline is the only asset of OSPIL and OSPIL has no other business and operations. The Resolution Applicant has acknowledged this fact. The Resolution Applicant has also acknowledged that such pipeline was being operated and maintained by the Corporate Debtor (ESIL). In the introduction and background of Resolution Plan it has been stated that such plan shall not be construed in any manner as any admission of tile over the slurry pipeline or prejudice the claims of any person over the title of the slurry pipeline and/or the legality and enforceability of identified contracts and Resolution Applicant shall honour its obligations in the Resolution Plan irrespective of the Title proceedings but in Para 3(vi) at page 51 of Resolution Plan that such Title proceedings shall stand withdrawn. Provisions have also been made regarding extinguishment of the rights of Financial Creditor including security interest. Obligations have also been cast upon the interested stakeholders to pursue the withdrawal of Title proceedings. It has also been provided that the rights of stakeholders to pursue the title proceedings shall automatically abate and discharged and the title proceedings would become infructuous. Thus, there is apparent contradiction in the stand of Resolution Applicant and, in spite of such position, the net result is that ownership of OSPIL over the said pipeline has been accepted and established by the Resolution Applicant itself in the said Resolution Plan. It is further pertinent to mention that Adjudicating Authority at Cuttack has also accepted this position in its order of approval of Resolution Plan of OSPIL. In fact, the Adjudicating Authority in para-9(xi) of the said order has held that because of approval of this Resolution Plan title suit filed before Civil Court stands abated as a natural consequence of such approval. This position is to be read with the commitments made by the Resolution Applicant to repay the loan of lenders of OSPIL which were given by them to pay the purchase consideration to the Corporate Debtor. The Resolution Applicant has paid such liability which existed at the time of execution of deed of cancellation as on 24.06.2016. Thus, if this factual position is considered then the obvious conclusion or natural consequence which can be arrived is that the ownership / title of OSPIL over the said pipeline go back to the date of deed of cancellation and, therefore, the liability to pay the usage charges for the use of such pipeline accrues from that date.

Thus, if both the resolutions plans are read together, we reach to a conclusion that both resolutions plan have been submitted on the premise that slurry pipeline was the asset of OSPIL although title proceedings were pending. Further, with approval of the Resolution Plan of OSPIL, such title proceedings have abated and become infructuous. It has been so observed in the order of the Adjudicating Authority of Cuttack while approving the Resolution Plan. In this background, we are of the view that deed of cancellation becomes null and void from the very beginning and consequently, BTA / RTU / RTUA remain valid and effect to RTU and RTUA is to be given for the entire period including CIRP period of the Corporate Debtor. However, for our purposes, the CIRP period is only relevant as the claim for payment of usage charges being of the nature of IRP Costs has been made. The CIRP period is to be ascertained as per the provisions of the CODE and in that exercise we shall involve ourselves in the later part of this order.

Finally, as regard to the issue of payment of IRP Costs, in our considered view, following observations of the Adjudicating Authority at Cuttack in order dated 02.03.2020, while approving the Resolution Plan of OSPIL, are also relevant:

From the perusal of the above, it is clear that the Adjudicating Authority has given a finding that usage charges to the tune of Rs.1300 crore were receivable subject to certain / various eventualities. This has been so observed by the Adjudicating Authority after taking note of the contentions made by the Applicant therein who has filed the present application before us that the Resolution Applicant had not kept its commitment made in the Resolution Plan of the Corporate Debtor. Thus, this finding when read with the relevant clauses of Resolution Plan of the Corporate Debtor enables us to hold that such usage charges, being IRP Costs were part of the Resolution Plan of the Corporate Debtor and the Resolution Applicant has failed to make the payment thereof in priority to other debts of the Corporate Debtor. As far as the observation by the Adjudicating Authority of certain / various eventualities attached to receipt of such charges is concerned, none of the parties before us could throw light on what could be such eventualities, hence, we are left with no option but to put in some efforts as regard to this as such findings of the Adjudicating Authority have relevance to the issue before us. Firstly, we find that an appeal had been filed by the Applicant herein before Hon'ble NCLAT vide Company Appeal (AT)(Insolvency) No.1407 of 2019 against the Resolution professional of OSPIL and CoC through IDBI Bank was also made a Respondent. The Hon'ble NCLAT vide its order dated 06.12.2019 observed as under "in the meantime, if any plan is approved, it shall be subject to the decision of this Appellate Tribunal". The proceedings continued and the Hon'ble NCLAT again vide its order dated 19.12.2019 reiterated that the Adjudicating Authority may pass appropriate order under Section 31 of I & B CODE uninfluenced by the order passed by this Appellate Tribunal which may be subject to the decision of the Appeal. Both these orders were available with the Adjudicating Authority at the time of passing of the order of approval of Resolution Plan of OSPIL. Secondly, though the Resolution Applicant was one and the same for both entities but the Adjudicating Authority at Cuttack had no jurisdiction to direct the Resolution Applicant to implement the Resolution Plan of the Corporate Debtor (ESIL) and only an aggrieved party could enforce such commitment as per the provisions of the CODE, hence, this is also an eventuality in the background of correspondences / communications of Resolution professional of OSPIL and CoC of OSPIL produced and contentions made in the course of various proceedings before such authority regarding steps being taken by Resolution Professional of OSPIL for recovery of usage charges from the Corporate Debtor. Even, finality of pendency of civil suit though it stands abated after the approval of the Resolution Plan of OSPIL, can also be considered as an eventuality. Having deliberated on this aspect, we deem it fit to mention that approved Resolution Plan of OSPIL is ultimately subject to the finding that this amount is receivable by OSPIL, hence, liability of Corporate Debtor to pay usage charges legally exists and remain valid even according to this order.

One issue which remains to be dealt with is whether it is an instance of hydra head popping up after the approval of Resolution Plan. Our answer, in this regard, is a capital NO which is based on sequence of events, various proceedings/ actions taking place during the course of CIRP of the Corporate Debtor and commitments made by the Resolution Applicant itself in the Resolution Plan of the Corporate Debtor whereby issues relating to the slurry pipeline have been taken note of and assurance has been given by the Resolution Applicant to successfully resolve the same with the lenders of OSPIL by way of inter alia acquisition of outstanding debt of OSPIL and to ensure that unhindered usage of this asset is available for the business of the Corporate Debtor. The awareness of the Resolution Applicant as regard to liability of usage charges being IRP Costs and its intention to pay the same gets established from the use of the word inter alia. The dictionary meaning of which is 'among other things' and use of it as prefix to the acquisition of outstanding debt of OSPIL leaves no room for any doubt that whatever amount was due to OSPIL would be paid and in addition to that OSPIL's outstanding debt would be acquired. At this stage, it may not out of place to mention that apart from these two issues, no other monetary/ financial issues relating to slurry pipeline were pending, hence, no other view is possible. Further, this was also required to comply with the provisions of Section 30(2) (a) of the CODE. Hon'ble Supreme Court in para 135 of the said order observed that Resolution Plan as approved by CoC followed the mandate of Section 30(2) of the CODE, which means that IRP Costs were also taken into consideration, hence, any contrary claim by the Respondents would lead to other serious consequences for the Resolution Applicant. At this stage, it is also relevant to mention that it is a settled proposition in law that the documents do not lie but the people can. In our view, after getting the Resolution Plan approved from the Adjudicating Authority and finally by the Hon'ble Supreme Court, the Resolution Applicant is trying to expand the size of clean slate for its benefit and unjustly enriching itself in this way. We are further of the view that dismissal of review petition filed by Dakshin Gujarat Viz Company by the Hon'ble Supreme Court also does not have any bearing on present application as that company was an operational creditor and claim pertained to pre-CIRP period and amount claimed was also not of the nature of IRP Costs whereas in the present case the issue involved is regarding payment of usage charges for the use of slurry pipeline during CIRP period, being IRP Costs, which are of altogether different nature and given different treatment under the provisions of CODE. Thus, in view of this factual/legal position, all contentions made by the Respondents based upon the observations of Hon'ble Supreme Court in para 86 and 88 of the order in the case of Corporate Debtor are rejected.

Thus, based upon above discussion and considering the issue from all corners starting from the stage of execution of BTA till approval of both Resolution Plans, we hold that usage charges for the use of slurry pipeline during the CIRP period are IRP Costs and these have been so considered in the Resolution Plan of the Corporate Debtor by the Resolution Applicant. We may further add that if the aspects relating to the impact of deed of cancellation as dealt by us are ignored i.e. validity or otherwise of the deed of cancellation is not considered or our jurisdiction to decide the same is not found then also the conclusion would remain the same on the basis of stand taken by Resolution Applicant, being the same for both Corporate Debtor and OSPIL and members of CoC of both entities and other documentary evidences brought on record.

NOW WE SHALL TAKE UP THE ISSUE OF LOCUS OF THE APPLICANT AND MAINTAINABILITY OF THE APPLICATION.

Admittedly, application has been filed under Section 33(3) r.w Section 33(4) and 60(5)(c) of the CODE. The Applicant is a Financial Creditor of the OSPIL who had advanced money to OSPIL to make payment of purchase consideration of the pipeline transferred to it by the Corporate Debtor. The Applicant had secured its interest through hypothecation of receivables of OSPIL which included such usage charges. The Applicant also had right to independently claim such charges as per Clause-7.2(vi) of the loan agreement. According to the Applicant, if such usage charges are paid then it would be a direct beneficiary and because of non-payment of such usage charges being CIRP Cost, the situation of contravention of approved Resolution Plan has arisen and consequently, the Applicant is a person whose interests are prejudicially affected by such contravention. Before we look into the legal provisions, we may point out those rights of the Applicant as per the provisions of loan agreement with OSPIL and deed of hypothecation over such usage charges are not in dispute. The controversy surrounds as to how the scope of provisions of Section 33(3) should be decided i.e. whether it should be construed in a restricted sense or be given a literal interpretation having regard to the objects of the CODE or liberal interpretation. For this purpose, firstly, we need to consider provisions of Section 33(3) & 33(4) of the CODE as such:

The salient features of Section 33(3) & 33(4) can be narrated as under:

The controversy which requires our determination centres on whether the Applicant can be said to be a person whose interests are prejudicially affected by such contravention. As far as aspect of contravention of the approved Resolution Plan is concerned we have already adjudicated thereupon in the earlier part of our order, hence, the remaining question is whether Applicant can be considered as a person whose interests have been prejudicially affected because of such contravention or in other words whether Applicant can be called an aggrieved person. From the bare reading of the wordings used in Section 33(3) it appears so but having regard to the consequences which follow from such determination, we need to consider implications for Resolution Applicant in case of failure to implement the approved Resolution Plan as without such implications a Resolution Applicant can escape easily by not doing the implementation of the approved Resolution Plan as envisaged on one hand and putting the Corporate Debtor on death bed on the other hand. This is also necessary from the perspective of the objects and purposes of the CODE which requires balancing of interests of all stake-holders which in our opinion would also serve the purpose of the CODE of promoting entrepreneurship and availability of credit. Thus, in our opinion, the interpretation of these words requires alignment of literal interpretation with the object and scheme of the CODE. Before we start this process, in support of our such view, we consider it appropriate to reproduce the findings of the Hon'ble Supreme Court in the order in the case of ArcelorMittal India Private Limited Vs. Satishkumar Gupta and Others (2019) 2 SCC as under:

Thus, the alignment of the text and context with the overall object of a statute is a pre-requisite to find out the solution of a problem which is being raised. In this exercise, in the context of the issue before us, the role and responsibilities of Resolution Applicant as per the provisions of the CODE and Regulations made there-under need to be understood.

The Resolution Applicant is most important participant in the insolvency resolution of a Corporate Debtor who submits Resolution Plan to the Resolution professional in pursuance to invitation made under Section 25(2)(h) of the CODE which substituted the original clause with effect from 23.11.2017 whereby requirement of understanding of complexity and scale of the operation of the business of the Corporate Debtor and other conditions as may be thought fit by CoC for the purpose of submission of Resolution Plan were introduced so that only such persons could submit Resolution Plan(s) which understood the business of the Corporate Debtor and had the requisite resources. Thus, this was the attempt to ensure that only such Resolution Plan(s) be approved which could be implemented. Apart from this, a proviso to Section 31(1) was also introduced with effect from 06.06.2018 requiring Adjudicating Authority to satisfy itself before approving a Resolution Plan that such Resolution Plan had provisions for its effective implementation and this obligation was made in addition to an already existing obligation on the part of Resolution professional / CoC under Section 30(2)(d) to see that Resolution Plan had provisions for the implementation and supervision thereof. Further, such Resolution Plan is based upon the information memorandum prepared by the Resolution professional for formulating a Resolution Plan as per the provisions of Section 29(1) of the CODE. The Resolution professional also gives access to the Resolution Applicant of all relevant information when Resolution Applicant gives an undertaking in terms of provisions of Section 29(2) of the CODE. Thus, at any later stage, the Resolution Applicant cannot say that it was not given the requisite information / details which were necessary to submit the Resolution Plan. However, in case, some substantial factual mistake and or absence of vital information in information memorandum is found then Resolution Applicant can certainly seek the relief as may be necessary in such cases. It is needless to mention that such Resolution Plan should comply with the requirement of Section 30(2) of CODE r.w. Regulations 36A, 36B, 37 and 38 of CIRP Regulations. Thus, the CODE and CIRP Regulations have been framed in a manner so that probability of non-implementation of an approved plan ceases to exist to the extent possible. Once such Resolution Plan is approved under Section 31(1) of the CODE by the Adjudicating Authority, the Resolution Applicant is under an obligation to implement the same and it is the expectation of both CoC as well as Adjudicating Authority who have to ensure that the Resolution Plan has provisions for its effective implementation. This is an idealistic condition and generally this happens but there have been instances where after the approval of Resolution Plan by the Adjudicating Authority, such Resolution Plan was not implemented which led to liquidation or re-initiation of CIRP. The provisions were found insufficient or absent as regard to fixing of the accountability of such errant Resolution Applicants. Consequently, there have been amendments in the CIRP Regulations. Once such change has been made with the introduction of regulation 36B(4A) with effect from 24.01.2019 which stipulates that Resolution Applicant shall provide a performance security which shall stand forfeited if the Resolution Applicant fails to implement or contributes to the failure of implementation of that plan in accordance with the terms of the plan and its implementation schedule. Such performance security would of such value, duration and nature as approved by the CoC having regard to the nature of Resolution Plan and the business of the Corporate Debtor. It is also to be noted that amount payable to the creditors under the Resolution Plan may also be a factor to determine the nature and value of the performance security. Further, with effect from same date, Regulation 38(1B) was also brought on statute which required the details of the Resolution Applicant or any of its related parties who failed to implement or contributed to the failure of implementation of any other Resolution Plan approved by the Adjudicating Authority at any time in the past. Here, we take a pause and just wonder if the Resolution Professional or CoC of OSPIL would have raised this issue during the course of the approval of the Resolution Plan of OSPIL which was admittedly submitted after the approval of Resolution Plan of the Corporate Debtor even by the Hon'ble Supreme Court then the Resolution Plan of OSPIL submitted by the Resolution Applicant could have been rejected particularly when both Resolution Professional and CoC of OSPIL held the view that the usage charges for use of slurry pipeline during the course of CIRP period of the Corporate Debtor were payable. Be that as it may, it is one of the reasons that the Applicant filed impugned application before us immediately after the approval of Resolution Plan of the OSPIL by the Adjudicating Authority wherein its applications on the same issue had been filed and were disposed-off by the Adjudicating Authority acknowledging the fact that such usage charges were receivable as noted herein before. Coming back to the core issue as regard to role and responsibilities of Resolution Applicant, it is evident from the above discussion that the real role of a Resolution Applicant starts only after the approval of Resolution Plan by the Adjudicating Authority and, in case, some contravention happens by the Resolution Applicant then apart from the consequences for the Resolution Applicant which are of great magnitude, the consequences for the Corporate Debtor, other stake-holders including CoC and Creditors are far more serious as the whole CIRP becomes a nullity. Further, such event may have adverse impacts on other connected persons and also result into economic adversities for the society as a whole. Hence, the interpretation of such Section should be made so that Resolution Applicant does not contravene the provisions of an approved Resolution Plan. Simultaneously, this exercise should not result into derailment of the whole process in a casual manner. The task of interpretation, thus, becomes critical. Above all, the facts and circumstances of a particular case would also play an important role in this exercise. In this situation, we consider it appropriate to take guidance from judicial precedents as regard to aspect that who can be an aggrieved person. Although few judicial precedents have been cited both by Applicant and Respondents but in our view appropriate guidance can be taken from the decision of the Hon'ble Supreme Court in the case of Jasbhai Motibhai Desai vs. Roshan Kumar, Haji Bashir Ahmed and Ors (1976 AIR 578) as in common parlance an aggrieved person is a wider in scope and it also undertakes within its ambit a person whose interests are or have been prejudicially affected in a sense that he has been deprived of something which was otherwise legally due to him. The relevant findings of the Hon'ble Supreme Court are as under:

From the perusal of the above guidelines, it is observed that a person can be held as a person whose interests have been prejudicially affected from an action/omission of other party in a situation when such person is having sufficient interests or peculiar interests of his own in the subject matter so that such person is not altogether a stranger. Now, we have to apply this legal position to the facts of the case. Admittedly, the Applicant has given loans to OSPIL which have been transferred to the Corporate Debtor by OSPIL as purchase consideration for the said pipeline. The funds have remained with the Corporate Debtor in spite of alleged deed of cancellation. The use of pipeline during the course of CIRP period by the Corporate Debtor is also not in dispute. It is also not in dispute that OSPIL has hypothecated such charges to the Applicant by deed of hypothecation. Thus, any payment of IRP Costs to the OSPIL is going to directly benefit the Applicant. This benefit completes the link between any person and his interests in the payment of IRP Costs and therefore, non-payment of such IRP Costs prejudicially affects his interests. On the basis of these facts when such legal position is applied, the Applicant is found eligible to file the application as the Applicant's own interests are involved and as per the tests/guidelines given by the Hon'ble Supreme Court, the Applicant is not a stranger.

Having found so, now, we take note of the amendment in CIRP Regulations whereby Regulation 39(9) was brought into effect from the same date i.e. 24.01.2019 which also support our above view in regard to the interpretation of the provisions of Section 33(3) of the CODE. This regulation 39(9) is reproduced as under:

Thus, as evident, a new provision has been brought to deal with the situation arising out of non-implementation of an approved Resolution Plan. This provision entitles an aggrieved creditor by non-implementation of an approved Resolution Plan to approach Adjudicating Authority for directions. Now, we find that there exist two provisions which deal with the situation arising out of non-implementation of a Resolution Plan approved under Section 31 of the CODE. However, the language of both the provisions i.e. Section 33(3) & Regulation 39(9) is different. Hence, the analysis of both these provisions is required to understand their scope and purpose having regard to the object and scheme of the CODE. First, noticeable difference is that this regulation is applicable to a CREDITOR ONLY whereas provisions of Section 33(3) are applicable to ANY PERSON whose interests are prejudicially affected by such contravention, hence, apparently the provisions of Section 33(3) are wider in scope and take into its ambit a person who may not be a creditor of the Corporate Debtor but a creditor, on the other hand, may fall into the category of such any person as creditors have not been excluded by a corresponding amendment to Section 33(3) of the CODE. Thus, both provisions co-exist and apply to different category of aggrieved persons. As far as scope of powers of Adjudicating Authority under both the provisions is concerned, under Section 33(3) the Adjudicating Authority has implied power to issue directions to the Resolution Applicant to correct the mistake and in case of failure, to rectify the contravention which is found to exist, the Adjudicating Authority has necessarily to pass an order of liquidation under Section 33(3) of the CODE. Whereas, in regulation 39(9), no such condition exists as it only says that Adjudicating Authority may issue directions. Now, next question which arises is that if such directions are not complied then what? Whether Adjudicating Authority can pass an order of liquidation in that situation? In our view, this can be done because, as stated earlier, the creditor can also approach under Section 33(3), hence, in our view, a creditor has been given an option either to approach Adjudicating Authority under Section 33(3) or regulation 39(9). In case, a creditor firstly approaches Adjudicating Authority under regulation 39(9) and if it does not bear the fruits as desired, the ultimate recourse to Section 33(3) can be made. There can also be other solution for such creditors under Section 74(3) of the CODE for appropriate punishment as prescribed therein for contravention of the Resolution Plan by the Resolution Applicant who is a Corporate Debtor and approved Resolution Plan is also binding on such Resolution Applicant under Section 31(1) of the CODE. However, such action would not benefit such creditor in any way as the creditor is more interested in the implementation of the approved Resolution Plan. Thus, commercially speaking provision of punishment under Section 74(3) would not yield the desired results. In our view, in case of an application filed under Section 33(3) of the CODE, provisions of Section 74(3) of the CODE can also be applied but order of liquidation is necessary unless the word "shall" used in Section 33(4) of the CODE is interpreted as "may". Now, the question with which we confront ourselves is that why in case of a person who is not a creditor, strict provisions of Section 33(3) r.w. 33(4) are applicable? The answer to this question is very simple as insolvency resolution of a Corporate Debtor is to benefit to all who are associated / concerned with the Corporate Debtor either directly or indirectly and if such insolvency resolution fails then such persons may themselves go into insolvency which would be more drastic and have effects on multiple parties and therefore, a Resolution Applicant should not be allowed to take undue advantage in any manner of any person and as a punishment for such behaviour, the liquidation is bound to happen though the same may cause unintended consequences. As seen earlier, several provisions have been made so that Resolution Applicant does not adopt methods to unjustly enrich it or to back out after getting the Resolution Plan approved but the same in our view are not sufficient, hence, a deterrent like liquidation is necessary.

We are further of the view that the legislature has itself provided the answer to this question by linking any person with the prejudicial impact on the interests of such person due to such contravention. In other words, every Tom, Dick and Harry cannot come and file an application under Section 33(3) of the CODE and it is equally true that such person cannot be restricted to the class of a person whose interests are prejudicially affected directly as contended by the Respondents because that would amount to doing injury to the words employed by the legislature and it would also amount to adding a condition which does not exists in fact. Our view is well supported by the fact that class of direct persons who are essentially creditors has been provided relief mechanism in the case of non-implementation of an approved Resolution Plan separately in regulation 39(9) of CIRP Regulations.

Now, we shall deal with the legal contentions raised by the Respondents in this behalf. It has been claimed that this phrase refers to only those persons who are recognized as stake-holders in a Corporate Debtor in terms of provisions of Section 31(1) of the CODE and on whom a Resolution Plan approved by the Adjudicating Authority is binding. In this regard, reliance has also been placed on the provisions of Section 53 of the CODE and regulation 38 of CIRP Regulations. In our view, such arguments do not address this issue at all as question before us is the contravention of the approved Resolution Plan by the Resolution Applicant and not by such persons as are mentioned in Section 31(1) of the CODE. Section 53 deals with the distribution priority of the proceeds received from the Resolution Applicant between different classes of persons. In fact, Section 53(1)(a) gives top most priority to the payment of IRP Costs and liquidation costs in full which is also so as per the approved Resolution Plan but that has not been fulfilled. Further, Section 31(1) takes note of compliance to provisions of Section 30(2)(a) of the CODE, hence, once a Resolution Plan is approved on that premise then subsequently it cannot be pleaded that provisions of Section 31(1) would prevail irrespective of non-implementation of the provisions made in the Resolution Plan in respect of IRP Costs as mentioned in Section 30(2)(a) of the CODE. We are further of the view that provisions of Section 31(1) and 33(3) operate in altogether different fields and in fact provisions of Section 33(3) come into play only after provisions of Section 31(1) have been given effect to. Further, the language deployed in both these Sections is entirely different. It may not be out of place to mention here that Section 31(1) is binding on the persons who are directly connected with the insolvency resolution of the Corporate Debtor and / or are involved in the Resolution Plan. Thus, the plan is binding on the OSPIL to the extent of its rights as Operational Creditor of the Corporate Debtor and no more. Simultaneously, it is also binding on the Resolution Applicant as a substituted Corporate Debtor to pay the IRP Costs. Thus, in our view, both these Sections are to be interpreted independently as having no co-relation between the objects thereof. In this view of the matter, we do not consider it necessary to deal with the decision of the Hon'ble Supreme Court in the case of S.K. Gupta relied on by the Applicant and distinguished by Respondent no.3. However, we consider it necessary to point that while interpreting the provisions of Section 33(3) hereinbefore we have already cited the decision of the Hon'ble Supreme Court in the case of ArcelorMittal (supra) and Jasbhai Motibhai Desai (Supra) wherefrom we have taken suitable guidance, hence, for this reason also, there no need to go anywhere else. We also consider it pertinent to mention exercise under Section is not being done to reopen or review the approved Resolution Plan of the Corporate Debtor in any manner as it is confined to so the contravention of approved plan which is evident from the fact that we have looked at only what has been provided therein as regard to IRP Costs and OSPIL Contract and is there any contravention thereof. If pleas of the Respondents that this amounts to reopening or review of the approved Resolution Plan and which cannot be done then the provisions of Section 33(3) of the CODE would become redundant, hence, rejected.

Reliance has also been placed on the UNCITRAL GUIDELINES in support of the argument that the Applicant could not be considered as a person whose interests have been prejudicially affected on the basis of the definition of the term "party in interest" given in such guideline and it has been claimed that it could be only OSPIL. Our attention was drawn to few paragraphs of such guidelines which have been mentioned in the written submissions as reproduced in earlier part of the order. It has also been argued that such guidelines are a source for interpretation of statutory provisions of the CODE and have also been referred to by the Hon'ble Supreme Court in various decisions. In this regard, we may mention that we are not in dispute with the Respondents as such guidelines can certainly be referred to for the purpose of interpretation of a particular Section if the situation so warrants. However, in our view, generally such help is taken when the provisions are ambiguous or otherwise not clear or the issue to be determined is complex. In our view, such situation does not exist in the present case still we would be looking into such contention. Having said so, the emphasis has been given on the words "party in interest." From the perusal of this definition, it is apparent that even in this definition "any other person so affected" has been included in addition to parties whose rights, obligations or interests are affected by insolvency proceedings or by particular matters in the insolvency proceedings though there is a qualification thereafter that persons with remote or diffuse interest affected by insolvency proceedings would not be considered to be a party in interest. Who can be a party in interest is, thus, connected with insolvency proceedings. Therefore, the meaning of the insolvency proceedings as defined in the said guidelines becomes relevant. The term "insolvency proceedings" in the said guidelines has been defined as "collective proceedings, subject to court supervision, either for reorganization or liquidation." Thus, the definition of this term i.e. party in interest has been given with reference to the insolvency proceedings which is of the nature of either CIRP or liquidation proceedings under the CODE and is neither related to determination of eligibility of a particular person to file application under the provisions of the CODE for contravention of approved Resolution Plan nor it is connected with that who can decide that there is a contravention of an approved Resolution Plan. Further, paragraphs 72 & 75 also deal with the same process and in the context of the CODE, this jurisdiction falls within realm of the commercial wisdom of the Committee of Creditors that too mainly comprises of Financial Creditors and in case of other countries, there may be other constituents of a Corporate Debtor who can decide either course of action. If we read para 72 in this context, the guidelines mentioned therein have been incorporated in Section 33(1) and 33(2) of the CODE and in para 74 situation arising out of action taken in these Sections have been narrated. Para 24 is a generic guideline and prescribes for various circumstances which a specific law may provide for different situation, hence, this has also no relevance to the fact situation before us. In this background, we are of the view that though there may be a logic for narrowing the eligibility of persons who can decide whether a Corporate Debtor be put into insolvency resolution and continue in that manner or if the circumstances warrant then such proceedings be stopped and liquidation process should begin as such decision should be taken by persons who have large stakes as lenders and likely to be most impacted but, in our view, having regard to the object and provisions of the CODE and to avoid a situation of a secondary insolvency due to such non-implementation such a restricted view is neither required nor justified. The reliance has also been placed on certain observations made in the report of the Insolvency Law Committee March, 2018 in Serial No.23 of the Annexure-II. In our view, the issue which was being considered was whether NCLT had jurisdiction to look into the larger interest of the majority shareholders or the creditors, the government revenue and workman and in that background, the response was given by stating that there were adequate provisions to take care of interest of all stake-holders. Thus, the context of the issue as well as the response is not even remotely connected with the issue before us. Rather emphasis on the fact that NCLT could approve the Resolution Plan only if it was satisfied that requirements stated in Section 30(2) had been met in the Resolution Plan approved by CoC goes against the Respondents in so far it relates to payment of IRP Costs which are mandatory as per provisions 30(2)(a) of the CODE. Thus, the contentions made by the Respondent no.3 are relevant for a different context and have got no bearing on the interpretation of Section 33(3) of the CODE, hence, rejected.

It has also been argued that even OSPIL was not recognized a Financial or Operational Creditor by ESIL, hence, how the Applicant could be considered as a person whose interests were prejudicially affected. In the present case, the issue is connected with the payment of IRP Costs which are of distinct from financial debt or operational debt as discussed earlier; hence, this plea is not relevant here and so it cannot be applied. We are afraid that this argument is devoid of any merits also for the reason that it is not a pre-condition either explicitly or impliedly in the provisions of Section 33(3) of the CODE that such person's interests must be connected with a financial or Operational Creditor of a Corporate Debtor as only requirement is that interests of such person should have been prejudicially affected from such contravention and such affected person can be connected with the person who could fall in the category of other stakeholder of the Corporate Debtor. Having said so, we are conscious of the fact that such person cannot be a stranger altogether and there must be some connectivity and it is not so in the case before us that Applicant is a stranger altogether as it has got rights to realise its loan along with interest given to OSPIL or directly from ESIL in terms of provisions of loan agreement and deed of hypothecation and because of such rights only the application has been filed. It has also been pleaded that the Applicant is not a Financial Creditor of OSPIL and its status as OSPIL's Financial Creditor got extinguished after the approval of Resolution Plan of OSPIL and acceptance of the payment by the Applicant (though under protest) as a Financial Creditor of OSPIL in terms of provisions of Resolution Plan of OSPIL. In this regard, it has also been pleaded that even in the written submissions the Applicant itself had stated that it had locus till the OSPIL plan attains finality and for this purpose, plea of appeal filed by the Applicant before Hon'ble NCLAT being pending has been taken but there is no stay on such approved plan, hence, the same has become final and consequently even by its own admission the locus of the Applicant has been lost. In regard to these pleas, we state that the Resolution Plan of OSPIL as approved by the Adjudicating Authority is subject to the observations / findings given by the Adjudicating Authority in its order wherein, as stated earlier, it has been observed that the usage charges were income receivable of OSPIL. We are further of the view that such approved plan is admittedly subject to the final outcome of appellate proceedings which are pending before Hon'ble NCLAT in addition to the relevant findings of the Adjudicating Authority, hence, it cannot be said that it has attained finality nor Applicant has lost locus merely because there is no stay on the implementation of such Resolution Plan. We are further of the view that when the application was filed, payment to Applicant of its outstanding amount as a lender of OSPIL had not been made and for this reason also, the locus remains. Further, the payment has been made by the Resolution Applicant in a mode different from the mode agreed and prescribed in Resolution Plan and such payment has been accepted under protest and for this reason also, the locus remains.

It has also been pleaded that OSPIL never raised a claim as an Operational Creditor during the Insolvency Resolution Process of the Corporate Debtor nor before initiation of CIRP. OSPIL has also not come on its own under Section 33(3) of the CODE. Thus, according to the Respondents, the OSPIL has consciously abandoned and waived its right to claim usage charges. In this regard, at the outset, we may point out that as per settled proposition of law a party can waive only such rights which affect such party only and it cannot waive a right wherein interest of third parties are involved. We have already held that the Applicant has a legally valid and enforceable right by way of deed of hypothecation and loan agreement between the Applicant and OSPIL, hence, OSPIL cannot waive or abandon right to receive such usage charges. Apart from this legal position, the fact remains that the Resolution Professional as well as CoC of OSPIL have not given up this right at any stage as evident from the submissions made during the course of hearing of appeal no. IA 419 of 2017 before NCLT, Ahmedabad Bench, or other proceedings before NCLT, Cuttack Bench, hence, any omission to raise the invoices cannot lead to conclusion of waiving of right to receive such usage charges. In this regard, letters have been written by Resolution Professional of OSPIL to the Resolution Professional of Corporate Debtor (ESIL) from time to time and even after the approval of the plan by Hon'ble Supreme Court also. We may again reiterate that as per the provisions of RTU, no invoices were to be raised as Corporate Debtor was liable to pay the charges on take or pay basis for the allocated capacity as per the payment mechanism prescribed therein, hence, the point that no claim was being made in pre-CIRP Regulations period has no bearing. In this regard, we may point that in the reply of Resolution Professional of Corporate Debtor it has been mentioned that after December, 2016 no invoices were raised whereas the deed of cancellation was effective from 30.06.2016. This fact not only controverts the claims of the Respondents but also shows that deed of cancellation was not given effect from the date mentioned in such deed. Further, we cannot forget the fact that OSPIL was under the management of the Corporate Debtor either directly or indirectly, being a related or associated party of the Corporate Debtor. Further, if the invoices were raised then that action would have made deed of cancellation a nullity, hence, to avoid such situation invoices were not being raised, and therefore, this cannot be taken as a waiver its rights to claim such usage charges. We are further of the view that Resolution Professional of the Corporate Debtor though sought directions from the NCLT, Ahmedabad as regard to ownership of the Corporate Debtor over such pipeline which was rejected outline but for the purpose of insolvency resolution RTU was found to be valid, hence, in spite of using the pipeline for the business of the Corporate Debtor, there appears no justification for not taking clarification on the liability of the Corporate Debtor to pay the same from NCLT, Ahmedabad which would have closed the issue at that very stage. In our view, for this situation, more than OSPIL, Resolution Professional of Corporate Debtor and member of CoC of the Corporate Debtor need to explain that as to why in spite of recognizing this issue through-out the CIRP period and disclosing this issue in information memorandum and also discussing it with the Resolution Applicant, this issue was not closed at the earliest point of time so as to avoid the happening of current situation. Another issue which baffles us is that as to why other lenders of the OSPIL have not come forward as they also stand to gain. One of the reasons for not doing so could be that they lack the rights which the Applicant has got by virtue of relevant provisions of deed of hypothecation and loan agreement. The other reasons could be that they have taken a conscious call to not to proceed further and bear the loss and the only reason for that could be that they are large institutions and / or public financial institutions who can get budgetary support; hence, their survival and growth may not be impacted as compared to the Applicant who is a private institution and whose failure can certainly impact its investors and depositors if it goes into Insolvency because of non-payment of such dues particularly when as against its claim of more than rupees 500 Crores it has received rupees 321 crores only. Thus, we are of the view that such stand of these lenders cannot provide a shelter to the Respondents against the Applicant nor it can make the Applicant's action malafide. It may not be out of place to mention that if such usage charges were paid in time then perhaps OSPIL would not have gone into CIRP as such charges could have been used to service the outstanding loans as well as repay such loans as per schedule agreed upon between the parties particularly when except for the fact that a civil suit was pending which could be impacted if such action was taken by the concerned parties as it apparent from the facts found herein before that deed of cancellation was null and void since beginning nor it was acted upon. Now, the situation is hanging in balance and creating unnecessary litigation. Apart from this, we have also looked into the material to find out as to whether Applicant has waived such right but found nothing which could suggest so.

A plea for dismissal of this application on the ground of lack of legal competence on the part of the Applicant as not being a shareholder of OSPIL has been taken as such action, in view of the Respondents, is of the category of a derivative action. We are not impressed with this argument for the simple reason that this action has been initiated by the Applicant for its own benefit which would accrue to it directly in proportion to its interests amongst other lenders whereas in the case of a derivative action nothing of this sort could happen as the benefit would have accrued to the company. In this view of the matter, we do not consider it necessary to deal with other contentions raised by the Respondent as regard to the nature and procedure applicable to derivative actions. Further, as regard to the plea of the Respondents that the related entity controlled by the Applicant was a major shareholder in OSPIL, hence, that entity could take appropriate actions in that capacity but which were not taken, hence, for this reason also the application was not maintainable. In this regard, we are of the view that Applicant and such related party are separate legal entities and the Applicant has filed this application by exercising its independent right as a lender of OSPIL and being a direct beneficiary if such application is accepted.

It has also been pleaded that proceeds of such payment shall belong to OSPIL which is under the new management; hence, the Applicant cannot gain anything even if this application is allowed. We are of the view that such plea does not strengthen the case of the Respondents as that situation will have to be dealt with as per the agreement between the respective parties and, therefore, this cannot be a ground to reject this application.

It has also been pleaded that Applicant is barred by the principle of res-judicata / issue estoppel as this issue has already been raised and decided against the Applicant. We have gone through all the relevant material and proceedings before NCLT, Ahmedabad as well as NCLT, Cuttack and do not find any order wherein this issue has been decided against the Applicant or OSPIL. In the appeal, in IA No.419 filed on 2019 filed by the Resolution Professional of the Corporate Debtor, this issue was not raised by the Applicant nor has any specific finding been given by NCLT, Ahmedabad. On the contrary, even at the cost of repetition, we state that NCLT, Ahmedabad in its order dated 07.02.2018 in fact recognized the existence and validity of RTU for the purposes of insolvency resolution of the Corporate Debtor which has been accepted by Resolution Professional and CoC of Corporate Debtor. NCLT, Cuttack in its order dated 14-052019 while disposing-off application filed under Section 7 against OSPIL also held that this was not a relevant consideration for the disposal of that application, hence, did not adjudicate the same. Thereafter, NCLT, Cuttack in the order dated 02.03.2020 while approving the Resolution Plan held that such charges were income receivable. The Respondents have also placed reliance on the decision of Hon'ble Calcutta High Court dated 10.02.2020 whereby the Hon'ble High Court held that there was no requirement of any clarification in respect of its order dated 22.12.2016 whereby status-quo as regard to ownership of pipeline was ordered and any alienation thereof had been barred. The Hon'ble High Court did not go into the merits of the case at all which was pending before the Civil Judge at Sealdah wherein all the issues arising out of or as a consequence of deed of cancellation had to be determined. Thus, in none of the proceedings, this issue has been decided earlier. Further, the parties are not same; hence, for this reason also, res-judicata is not applicable. On the contrary in both the Resolution Plans, the Resolution Applicant has recognized these issues as discussed in the earlier part of our order; therefore, this factual position actually operates against the Resolution Applicant by its own conduct and thus, resolution has no right to take a contrary stand now.

A plea of estoppel by acquiescence has also been raised against the Applicant for the reason that Applicant gave its consent to the Resolution Plan of ESIL. This plea is also of no benefit to the cause of the Respondents as the Resolution Applicant in the Resolution Plan of the Corporate Debtor specifically represented that the Resolution Applicant would work with the lenders of the OSPIL to successfully resolve the issues relating to OSPIL contract and on that basis, such consent has been given although in view of percentage of voting rights of the Applicant in the CoC of Corporate Debtor his dissent would not have made any difference. In our view, this gesture shows the bonafides of the intent of the Applicant in the background of the fact that Resolution Plan submitted by the Resolution Applicant on 19-10-2018 was modified after the representation made by the Applicant as regard to manner of presentation of the issue relating to slurry pipeline and reliefs sought in relation thereto by the Resolution Applicant and revised Resolution Plan was submitted on 22-10-2018. In fact, it is an instance of application of principle of promissory estoppel against the Resolution Applicant. In this factual background, we do not consider it necessary to go into the judicial precedents cited by the Respondents and duly answered by the Applicant on this issue.

It has been pleaded that the Applicant allowed the Resolution Plan of ESIL to be implemented without any objection, hence, for this reason, application filed by him was not maintainable. It is also pleaded that the Applicant accepted the payment made to it as a lender of ESIL and for this reason also, the action of the Applicant was not valid on the principle that one person cannot approbate and reprobate at the same time. In this regard, we are of the view that the Applicant has accepted the Resolution Plan of the Corporate Debtor (ESIL) on the basis of the representation of the Resolution Applicant and, therefore, a legitimate expectation arises that Resolution Applicant would fulfil its commitment. It has also written communications to the Resolution Professional of the OSPIL as well as to the Corporate Debtor for payment of usage charges from time to time and even after approval of the Resolution Plan. The applications with NCLT Cuttack were also filed wherein some relief was granted. If the plea of the Respondents is accepted then it would mean that since beginning one should take a legal recourse to prove its dissent or non-acceptance which is neither a practical approach in terms of commercial practices nor a requirement of any law. The Applicant has done what a commercially prudent person would do in such circumstances. We are of the firm view, in such circumstances where stakes are so high, difference between commercial prudence and acquiescence must be judicially noted particularly when the issues are being considered under an economic legislation like CODE which is a complete code in itself for the matters for the disposal of the matters falling thereunder unless the conduct of such person amounts to abuse of process of law or the issue have been settled in unambiguous manner by some judicial forum. In the present, we also gave thought to this aspect but after considering the complete facts of the case found that only fault of the Applicant were that it financed the transaction in the ordinary course of its business and, thus, got entangled in this web due to unforeseen circumstances and somewhat due to self-serving approach of parties involved in this transaction since beginning at the cost of others. Ultimately, the Applicant, left with no other option, has filed this application as a person whose interests have been prejudicially affected from such contravention in an independent capacity than that of a Financial Creditor. Thus, this is not a case of abuse of process of law. Further, this issue has not attained finality against the Applicant in any judicial proceedings so far.

Hence, for these reasons, we hold that there is no merit in such pleas raised by the Respondents. Accordingly, we hold that the Applicant has got a valid locus-standi to file this application and this application is maintainable also.

Now, the question of determination of CIRP period needs to be addressed. The Applicant has claimed that CIRP period would begin with the date of admission of the Corporate Debtor into Insolvency Resolution Process and on the date when the Resolution Plan was finally approved by the Hon'ble Supreme Court i.e. from 02.08.2017 till 15.11.2019. In our view, this claim requires our consideration in accordance with the provisions of the CODE. As per Section 5(14) of the CODE Insolvency Resolution Process period means the period of one hundred and eighty days beginning from the insolvency commencement date and ending on one hundred and eightieth day therefrom. Such period can be extended as per provisions of Section 12 of the CODE and if it is so extended then the entire period up to the date of expiry of such extended period would be construed as Corporate Insolvency Resolution Process period. Thereafter, Section 23(1) of the CODE (as it existed at the relevant point of time) comes into play which requires the resolution professional to manage the operations of the Corporate Debtor after the expiry of Corporate Insolvency Resolution Process Period until an order is passed by the Adjudicating Authority under Section 31 of the CODE in regard to the Resolution Plan submitted for its approval under Section 30(6) of the CODE. Thus, having regard to these provisions, we hold that Corporate Insolvency Resolution Process period in the case before us would start from 02.08.2017 and on the date of approval of the Resolution Plan by this Adjudicating Authority. We are further of the view that for the period thereafter liability and payment of such usage charges is to be governed by the relevant provisions of such Resolution Plan.

Before giving final conclusion, we state that we have taken into consideration every contention raised by all the parties and judicial precedents cited by them in arriving at our decision, though, these may not have been explicitly mentioned herein for the sake of brevity. We also state that the Applicant has effectively countered the pleas raised by Respondents and we, in substance, agree therewith. Having said so, however, we consider it pertinent to mention that the decision of the Hon'ble NCLAT in the case of Bharat Petro Resources Ltd. Vs. Monnet Ispat and Energy Ltd. and Another (2019 SCC Online NCLAT 1038) is not applicable because in that case IFCI was categorised as unsecured Financial Creditor as a consequence of order of the Adjudicating Authority which was not objected/appealed/disputed by IFCI and on this basis the Hon'ble NCLAT rejected the appeal filed by IFCI. Further, in that case, the benefits were accepted by IFCI without any protest or reservation of rights. Both these situations are not present in the present case as the Resolution Plan has been accepted and consented by the Applicant based upon the specific representation made by the Resolution Applicant as regard to payment of unpaid IRP Costs and a particular reference of OSPIL contract has been given. Further, there is no unchallenged order of Adjudicating Authority which is against the Applicant or wherein this issue has been decided. The Applicant has pleaded that no finding was given by Hon'ble NCLAT which is not correct as in para 52 the Hon'ble NCLAT has given the above findings, hence, to this extent, the plea of the Applicant is not correct.

The usage charges for the use of subject slurry pipeline for running the Corporate Debtor as going concern during CIRP period (as determined by us) of the Corporate Debtor are IRP Costs.

Such IRP Costs have been duly considered and provided by the Resolution Applicant in the Resolution Plan submitted by the Resolution Applicant and approved by the Adjudicating Authority.

The Resolution Applicant (Corporate Debtor) has contravened the provisions of such approved Resolution Plan by not making payment of such IRP Costs.

The Resolution Applicant (Corporate Debtor) is directed to make the payment of such IRP Costs to OSPIL by 15.12.2020.

In case, our direction at serial no 4 above is not complied with then the Applicant is directed to intimate us regarding the same so that we can pass an appropriate order under Section 33(4) of the CODE.

Before parting, we cannot refrain ourselves from submitting, with due regards and in a most humble manner, that the tone and tenor of the arguments was that a decision of allowing this application should not be taken under any circumstances and for that purpose it was repeatedly argued that if it is so taken then that would amount to serious violation of the decision of the Hon'ble Supreme Court. Even, reference of exercise of jurisdiction by Hon'ble Supreme Court under article 142 of the Constitution of India was also given. We make it clear that our decision is solely based on the facts of the case and applicable legal position thereto and is not influenced by such approach in any manner. Further, we most humbly submit that no institution or person can have courage and dare to disobey the directions of the Hon'ble Supreme Court. So is the case with us. In this situation, we most cautiously went through the judgment and to the best of our ability, no-where we could find that the issue raised in application was considered either explicitly or impliedly. Rather, Hon'ble Supreme Court has stated that Resolution Plan complied with the requirements of Section 30(2) of the CODE which means that the Resolution Applicant is liable to pay IRP Costs for which it has committed itself in such Resolution Plan as seen hereinbefore. In fact, in the written submissions of the Respondents it has been mentioned that the Applicant did not challenge the approved Resolution Plan of the Corporate Debtor earlier and allowed it to be implemented which itself gives answer to such attempt being made by them. In fact, if such arguments are accepted then there cannot be a situation of application of provisions of Section 33(3) of the CODE and also of regulation 39(9) of CIRP Regulations. In our most humble view, therefore, these provisions need to be taken out of the statute. However, on the contrary, the legislature has brought in other provisions as well whereby financial and commercial obligations are being imposed on the Resolution Applicants to deter them from indulging into an action of non-implementation of an approved Resolution Plan. In the Resolution Plan, disclosure about such event, if any, in past has also been made mandatory so that CoC is takes cognizance of this fact while considering the Resolution Plan submitted by such Resolution Applicants. Before parting, we may also add that it was also projected that this case is one of the largest insolvency resolution in the country, we are conscious of this fact but that by itself cannot preclude a quasi-judicial institution to act within the four corners of governing statute if some aggrieved person approaches. Here, it may not be out of place to mention that no business man comes for a charity and if the replacement cost of plant of this magnitude, factors of acquisition of going concern giving immediate returns on the investment without any gestation period and time value of money of the amount invested is considered then such acquisition is appears to be an extremely good bargain, hence, considering this, leave apart our legal findings, we hope that this issue would be resolved amicably.

IA No. 245 of 2020 stands allowed and disposed of in terms indicated above.

IA No. 284 of 2020, IA No. 285 of 2020, IA No. 348 of 2020 and IA No. 349 of 2020 are connected with the main petition in IA No. 245 of 2020. These IAs stand considered and disposed of as a consequence of disposal of main IA No. 245 of 2020.