Union Bank of India vs Resolution Applicant of M/s. Bheema Cements Limited Consortium of Fortuna Engi tech and Structurals (India) Pvt. Ltd., and its two promoters 1. T Raja Kishore 2. Prasanna Sai Raghuveer Kandula, And Murgud Vincom Private Limited & Ors.

[Per: Shreesha Merla, Member (Technical)]

Company Appeal (AT) (CH) (INS) No. 84 / 2023 is preferred by Union Bank of India, challenging the Impugned Order dated 04.01.2023 in IA / 1538 / 2022 in CP(IB)/97/7/HDB/2018, by which Order, the Adjudicating Authority while allowing the Application, preferred by the Successful Resolution Applicant (`SRA’), seeking extension of time for implementation of the Plan, has granted an extension of time by 8 months, effective from the date of expiry of 6 months time granted earlier vide Order in IA No. 634 / 2022 dated 10.10.2022. Company Appeal (AT) (CH) (INS) No. 391 / 2023 is preferred by the Resolution Applicant / Appellant, seeking relaxation of timelines of a period more than 8 months to implement the Resolution Plan, keeping in view that there was no Restoration of Power Supply to the Corporate Debtor till the intervention of the Hon’ble Apex Court in Civil Appeal No. 4587 / 2022.

It is submitted by the Learned Senior Counsel for the Appellant Mr. PH. Arvindh Pandian that the Adjudicating Authority has rightly observed in Para 26 of the Impugned Order dated 04.01.2023 that there is no change in the situation regarding the Restoration of Power Supply to the Corporate Debtor from the previous Order dated 10.10.2022, till date, as admittedly Southern Power Distribution Company of Telangana Limited (SPDCTL) had not restored the power connection to the Corporate Debtor.

It is strenuously argued by the Learned Senior Counsel for the Appellant that an additional 18 months time is required to implement the Resolution Plan and seeks a direction to exclude the period of lis pendens i.e. till disposal of Civil Appeal No. 4587 / 2022 which was pending adjudication before the Hon’ble Apex Court, and therefore, seeks modification of the Impugned Order dated 04.01.2023.

Heard both Parties at length. During the pendency of the Appeal, the Resolution Applicant / Appellant in Company Appeal (AT) (CH) (INS) No. 391 / 2023, filed an Affidavit dated 18.01.2024 with a Proposal, which is reproduced as hereunder:

On a pointed query from the Bench to Mr. Varun Srinivasan, Learned Counsel appearing for Union Bank of India / Appellant in Comp. App (AT) (CH) (INS) No. 84 / 2023, whether this Proposal was acceptable, the Learned Counsel on instructions, submitted that as all the amount due to the Bank was resolved to be paid in full on or before 31.03.2024, the said Proposal was acceptable to the Appellant herein / the Union Bank of India. Having regard to the consent given by the Appellant / Union Bank of India, both these Appeals are being disposed of with the following directions:

Though, M/s. JM Financials did not file any Appeal here, an opportunity was given to the Learned Counsel to take instructions regarding this Proposal. The Learned Counsel submitted, under instructions, that they are agreeable to the last three Tranches, but seek that the Appellant / Resolution Applicant pay the 1/4^th of the amount due to them, within 4 weeks from today. Keeping in view the factual matrix of the attendant case on hand and the fact that the power supply was restored to the Corporate Debtor Company only with the intervention of the Hon’ble Apex Court in Civil Appeal No. 4587 / 2022 in the year 2023 and the consent given by the Appellant / Union Bank of India to the Proposal given by the Successful Resolution Applicant vide Affidavit dated 18.01.2024 and having regard to the scope and objective of Insolvency and Bankruptcy Code, 2016, to avoid Companies going into Liquidation, as Liquidation of the Corporate Debtor should be a matter of last resort; that the IBC recognizes a wider public interest in resolving corporate insolvencies and its object is not the mere recovery of monies due and outstanding; that the Successful Resolution Applicant has indicated its bona fide, at least prima facie at the present stage, to complete the implementation of the `Resolution Plan’; and therefore, this `Tribunal’ is of the considered view that powers under Rule 11, can be exercised in the facts of this matter and the aforenoted Proposal given by the Successful Resolution Applicant, be accepted.

Both these Appeals are disposed of with the aforenoted directions. Needless to add, in case of any Breach of any of the Payment Terms or Undertaking given in the Affidavit or even if one Tranche of Payment is violated, the `Appeal’, preferred by the Successful Resolution Applicant is deemed to be dismissed and the `Appeal’, preferred by the Union Bank of India is deemed to be allowed and the Union Bank of India / JM Financials, may approach the Adjudicating Authority, seeking `Order of Liquidation’. No order as to costs. The connected pending Interlocutory Applications are closed.