The State Of Madhya Pradesh & Ors. vs Sasan Power Limited

"(i)

That, this Hon'ble Court may kindly be pleased to allow the instant petition and set aside the order impugned order dated 10.07.2014 (Annexure-P/1).

"Several Instruments used in single transaction of sale, mortgage or settlement. -

(1)

Where, in the case of any sale, mortgage or settlement, several instruments are employed for completing the transaction, the principal instrument only shall be chargeable with the duty prescribed in Schedule I-A, for the conveyance, mortgage or settlement, and each of the other instruments shall be chargeable with a duty of six rupees instead of the duty (if any) prescribed for it in that Schedule.

(2)

The parties may determine for themselves which of the instruments so employed shall, for the purposes of sub-section (1), be deemed to be the principal instrument:

Provided that the duty chargeable on the instrument so determined shall be the highest duty which would be chargeable in respect of any of the said instruments employed.

(3)

Notwithstanding anything contained in sub-sections ( 1) and (2), in the case of any issue, sale or transfer of securities, the instrument on which stamp-duty is chargeable under Section 9-A shall be the principal instrument for the purpose of this section and no stamp-duty shall be charged on any other instruments relating to any such transaction."

Description of the Instrument Proper Stamp Duty

(1)

(2)

43.

Mortgage deed, not being an agreement relating to the deposit of title deeds, Pawn, Pledge or Hypothecation (No.7), Bottomry bond No.55), or a Security bond (No.56) The same duty as a

(a)

When possession of the property or any conveyance (No.25) part of the property comprised in such deed is for the amount secured given by mortgage or agreed to be given. by such deed. The same duty as a

(b)

When possession is not given or agreed to Bond (No.14) for the be given as aforesaid. amount secured by such deed

Explanation - I. A mortgagor who gives to the mortgagee a power of attorney to collect rents of a lease of the property mortgaged or part thereof, is deemed to give possession within the meaning of this article.

Explanation - II. For mortgage, for creating development of or construction on land under the Madhya Pradesh Nagar Palika (Registration of Colonizer, Terms and Conditions) Rules, 1998 and the Madhya Pradesh Gram Panchayat (Registration of Colonizer, Terms and Conditions) Rules, 1999, the development expenses approved by the competent officer and set forth in the document, shall be the amount secured. Five Hundred Rupees

(c)

When a collateral or auxiliary or (earlier Two Hundred additional or substituted security, or by way and Fifty Rupees)* of further assurance for the above mentioned purpose, where the principal or primary security is duly stamped.

"58. “Mortgage”, “mortgagor”, “mortgagee”, “mortgage-money” and “mortgage-deed” defined. —

(a)

A mortgage is the transfer of an interest in specific immoveable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability. The transferor is called a mortgagor, the transferee a mortgagee; the principal money and interest of which payment is secured for the time being arc called the mortgage-money, and the instrument (if any) by which the transfer is effected is called a mortgage -deed."

A. At the request of the Borrower, the Existing Lenders under the Rupee & LC Facility Agreement and the Foreign Currency Facility Agreement have agreed to provide /provided to the Borrower and the Borrower has availed/agreed to avail the Facilities from such Existing Lenders for meeting part of the cost of the Project on and subject to the terms and conditions contained in the Rupee & LC Facility Agreement, the Foreign Currency Facility Agreement and the Common Terms Agreement.

B. For the purposes of availing foreign currency loans and replacing certain of the undrawn commitments or the unfunded LC obligations, as the case may be, under the existing Facilities, the Borrower executed inter alia the following facility agreements: (i) the US Ex-Im Facility Agreement dated September 30, 2011, among the Export-Import Bank of the United States ("US Ex-Im", and which terms shall include transferees, novatees and assigns of its loans and/or commitments), the Borrower and Deutsche Bank Trust Company Americas as the US Ex-Im Facility Agent (the "US Ex-Im Facility Agreement", which expression shall include all amendments thereto from time to time); and (ii) the Commercial Facility Agreement dated September 30, 2011 among Mizuho Corporate Bank, Ltd., DBS Bank Ltd. and Standard Chartered Bank (together the "Commercial Lenders", and which terms shall include transferees, novatees and assigns of their respective loans and/or commitments), the Borrower and Standard Chartered Bank as the Commercial Facility Agent (the "Commercial Facility Agreement", which expression shall include all amendments thereto from time to time and together with the US Ex-Im Facility Agreement, the "Additional USD Facility Agreements" and each individually, a "Additional USD Facility Agreement"). The aforesaid lenders have also agreed to a schedule of certain common terms applicable to all of them (the "Common Term Schedule") and such Common Terms Schedule is attached as a schedule to each Facility Agreement. Standard Chartered Bank, DBS Bank Ltd. and US Ex-Im are hereinafter collectively referred to as "Additional USD Lenders" and individually as the "Additional USD. Lender" and the facilities provided by such Additional USD Lenders in terms of their respective Additional USD Facility Agreements shall be referred to as the "Additional USD Facilities".

C. The Borrower, in accordance with and subject to the terms of Section 3.3 of the Common Terms Agreement has availed financial assistances in the form of external commercial borrowings from US Ex-Im, Standard Chartered Bank, and DBS Bank Ltd. and as one of the security for such facilities availed/being availed by the Borrower, the Borrower created, in accordance with the terms of the Amended and Restated Indenture of Mortgage dated December 21, 2012 ("Restated Indenture of Mortgage") a mortgage over its immoveable properties specified in such Restated Indenture of Mortgage. For this purpose, and inter alia to get the benefit of security interests over certain immoveable properties and the shares of the Borrower, US Ex-Im, the US Ex-Im Facility Agent, Standard Chartered Bank, DBS Bank Ltd. and the Commercial Facility Agent inter alia acceded to the Existing Security Trustee Agreement by executing a Deed of Accession to the Security Trustee Agreement dated September 18, 2012 (the "First Deed of Accession").

D. In accordance with an approval granted by the Lenders and the Additional USD Lenders under their respective facility agreements, the Borrower will avail/has availed hedging facilities from State Bank of India, Axis Bank Limited, Standard Chartered Bank and DBS Bank Ltd. ("Hedge Counterparties") and as one of the security (securing an amount/exposure not exceeding Rs. 1100,00,00,000 (Rupees Eleven Hundred crores only)) for such facilities being availed by the Borrower, the Borrower created, in accordance with the terms of the Second Amended and Restated Indenture of Mortgage dated [June 2, 2014, Sr. No 685] ("Second Restated Indenture of Mortgage") a mortgage over its immoveable properties specified in such Second Restated Indenture of Mortgage. For this purpose, and inter alia to get the benefit of security interests over certain immoveable properties [and the shares] of the Borrower, the Hedge Counterparties inter alia acceded or will accede to the Existing Security Trustee Agreement by executing a Deed of Accession to the Security Trustee Agreement (the "Second Deed of Accession").

E. The Borrower has now agreed to create mortgage over the Mortgaged Properties (as defined hereinafter) for the benefit of the Scheduled Secured Parties. It has been agreed that the Security Trustee will hold the Mortgage Properties for the benefit of the Scheduled Secured Parties (including the Hedge Counterparties) on a pari passu basis provided however that the aggregate outstanding amounts and/or exposure of the Hedge Counterparties for which the security shall be created for the benefit of the Hedge Counterparties shall not exceed Rs. 1100 (one thousand one hundred only) crores and the other Scheduled Secured Parties shall share the security over the Mortgaged Properties with the Hedge Counterparties only to such extent. Inter se the Hedge Counterparties, the security shall be shared proportionately to the extent of the outstanding exposure of each Hedge Counterparty.

F. The Borrower has executed the Existing Mortgage Documents (as defined hereinafter) creating security over various properties described in such Existing Mortgage Documents in favour of the Security Trustee and the security over the mortgaged Properties is in addition to security created under such Existing Mortgage Documents." (emphasis added)

Construction-

The principles of construction set forth in Section 1.2 of the Common Terms Agreement shall apply to this Indenture as if expressly set out in full herein with each reference to ‘this Schedule’ being deemed to be a reference to this Indenture. This Indenture shall be a “Security Document” under the Common Terms Agreement and the Common Terms Schedule.

Security Previously Created - The Security Interest created pursuant to the Existing Mortgage Documents for the benefit of the relevant Secured Parties shall continue with full force and effect and nothing contained in this Agreement shall have the effect of releasing the Security Interest created pursuant to the Existing Mortgage Documents. (emphasis added)

Definitions-

“Common Terms Agreement” or the “CTA” shall mean the agreement titled as the ‘Common Terms Agreement’ dated April 21, 2009 and entered into among the Borrower, the Existing Lenders, State Bank of India (as the Facility Agent for the Existing Lenders) and providing certain terms which are common to, inter alia, the Facilities being availed of by the Borrower in relation to the Project, together with all schedules and exhibits attached théreto and shall include all amendments thereto.

“Existing Mortgage Documents” shall mean:

(a)

the Original Indenture to Mortgage;

(b)

the Original Supplemental Indenture of Mortgage;

(c)

the Second Supplemental Indenture of Mortgage;

(d)

the Third Supplemental Indenture of Mortgage;

(e)

the Fourth Supplemental indenture of Mortgage;

(f)

the Restated Indenture of Mortgage; and

(g)

the Second Restated Indenture of Mortgage.

“Original Indenture to Mortgage” shall mean the indenture(s) or agreement(s) executed on 12 August 2009 by the Borrower in favour of the Security Trustee as amended pursuant to the Modification Agreement to the Indenture of Mortgage dated April 20, 2010 through which the benefit of the Security created under the indenture dated 12 August 2009 was extended to Union Bank of India.

“Original Supplemental Indenture of Mortgage ” shall mean the supplemental indenture(s) or agreement(s) executed on 22 June 2010 by the Borrower in favour of the Security Trustee.

“Second Supplemental Indenture of Mortgage” shall mean the supplemental indenture(s) or agreement(s) executed on 03 August 2011 by the Borrower in favour of the Security Trustee.

“Third Supplemental Indenture of Mortgage” shall mean the supplemental indenture(s) or agreement(s) executed on 24 December 2011 by the Borrower in favour of the Security Trustee.

“Fourth Supplemental Indenture of Mortgage” shall mean the supplemental indenture(s) or agreement(s) executed on 14 September 2012 by the Borrower in favour of the Security Trustee.

“Secured Parties” shall mean the Lenders, the Facility Agents, the Security Trustee, and the Hedge Counterparties (only to the extent of the aggregate outstanding amounts/exposure being secured not exceeding Rs. 1100 crores) and any receiver appointed over any property subject to the Security, and "Secured Party" shall mean any of them.

“Mortgaged Properties” shall have the same meaning as ascribed to such term in Section 5.1 hereof. (emphasis added)

"For the consideration mentioned hereinabove and as continuing security for the payment and discharge of the Outstandings, the Borrower, doth hereby grant, assign, convey, assure, charge and transfer unto the Security Trustee for the benefit of the Scheduled Secured Parties by way of continuing security all the premises more particularly described in Schedule II and depicted in sketch being Annexure 1- 9 hereunder written together with all buildings, erections and constructions of every description which are standing erected or attached or shall at any time hereafter during the continuance of the security hereby constituted be erected and standing or attached to the aforesaid lands and premises or any part thereof and all rights to use common -areas and facilities and incidentals attached thereto, and all plant and machinery, fixtures and fittings therein, all liberties, privileges, easements and appurtenances whatsoever to the aforesaid premises or to any part thereof whether presently in existence or in the future belonging to or in anywise appertaining or usually held, occupied, enjoyed therewith or reputed to belong or be appurtenant thereto and all the estate, right, title, interest, property, claim and demand whatsoever of the Borrower unto and upon the same (the “Mortgaged Properties”) TO HAVE AND TO HOLD all and singular the Mortgaged Properties unto and to the use of the Security Trustee for the benefit of the Scheduled Secured Parties absolutely UPON TRUST and subject to the powers and provisions contained in this Indenture and the other Financing Documents." (emphasis added)

Continuing Security, etc.-

(a)

Pari Passu Ranking among Scheduled Secured Parties- The beneficial interest in the Security Interest created on the Mortgaged ‘Properties in favour of the Security Trustee hereunder for the benefit of the Scheduled Secured Parties shall rank pari passu inter se between the Scheduled Secured Parties provided however that the aggregate outstanding amounts and/or exposure of the Hedge Counterparties for which the security shall be created for the benefit of the Hedge Counterparties shall not exceed Rs. 1100 (one thousand one hundred only) crores, and the other Scheduled Secured Parties shall share the security over the Mortgaged Properties with the Hedge Counterparties only to such extent. Inter se the Hedge Counterparties, the security shall be shared proportionately to the extent of the outstanding exposure of each Hedge Counterparty.

(b)

Continuing Security- The security created by or pursuant to these presents is a continuing security and shall remain in full force and effect, notwithstanding any intermediate payment or settlement of account or other matter or thing whatsoever and in particular the intermediate satisfaction by the Borrower of the whole or any part of the Outstandings in accordance with the Financing Documents and is in addition and without prejudice to, and shall neither be merged in, nor in any way exclude or prejudice, any other security, guarantee, lien, indemnity or right of recourse or other right whatsoever (or the invalidity thereof) or remedy which the Security Trustee may now or hereafter hold or have (or would apart from this Security hold or have) as regards the Borrower or any other Person in respect of the Outstandings or any part thereof. The Security Interest created hereunder may be enforced against the Borrower without first having recourse to any other rights of the Security Trustee or the other Secured Parties including pursuant to the Security Interests created under the Existing Mortgage Documents. (emphasis added)

8. Further Acquisition, Easements and Possession-

A. Further Acquisition-

(a)

The Borrower hereby covenants with the Security Trustee that the Borrower shall, until the Final Settlement Date, promptly upon acquisition of any other immovable property whether by way of ownership, lease or otherwise, in relation to the Project, inform the Security Trustee and shall promptly as required under Clause 8.8 of the Common Terms Schedule, but in no event later than the timelines provided for in Section 8.2 of the Common Terms Schedule, upon such acquisition of additional immovable property grant, convey, transfer, assign, secure and charge, in the form and manner acceptable to the Security Trustee, such additional property unto the Security Trustee, at the cost of the Borrower, to and for the benefit of the Secured Parties. (emphasis added)