(2023) ibclaw.in 1062 NCLT
IN THE NATIONAL COMPANY LAW TRIBUNAL
Mumbai Bench
ICICI Prudential Asset Management Company Ltd.
v.
Nandi Vardhan Infrastructure Ltd.
Company Petition – CP(IB) 276 MB 2023
Decided on 19-Dec-23
Coram: Shri Kuldip Kumar Kareer (Judicial Member) and Shri Anil Raj Chellan (Technical Member)
Add. Info:
Corporate Debtor: Nandi Vardhan Infrastructure Ltd.
For Appellant(s): Adv. Rohan Rajadhyakhsha a/w Pushkar Deo
For Respondent(s): Adv. Rohit Gupta a/w Prashansa Agarwal
Brief about the decision:
Facts of the case
- Sunshine Housing and Infrastructure Pvt. Ltd. (SHIPL) defaulted in meeting its payment obligations as it failed to make payment of the Interest which was due and payable to ICICI Prudential Real Estate AIF I (AIF 1) on 31.12.2017.
- On 21.12.2018, AIF I filed an insolvency application against SHIPL which was admitted on 08.05.2019 by NCLT.
- The Resolution Plan submitted by Nandi Vardhan Infrastructure Ltd. (Successful Resolution Applicant) was approved by Tribunal by way of order dated 11.02.2022.
- In terms of Clause 3.6.1 of the Resolution Plan, the Corporate Debtor was required to pay AIF I, a sum of INR 5 Crores in partial discharge of the financial debt owed to the AIF I within six months from the Plan Approval Date.
- The Corporate Debtor failed to abide by the payment obligation under the Resolution Plan.
- This Company petition is filed by ICICI Prudential Real Estate AIF I under Section 7 of IBC seeking to initiate CIRP against Nandi Vardhan Infrastructure Ltd. (Corporate Debtor in the capacity of Successful Resolution Applicant) alleging that the Corporate debtor committed default in making payment to the Petitioner.
Issue
Whether any undertaking/promise/proposal made by a Successful Resolution Applicant in a Resolution Plan to pay certain money to the stakeholders/creditors of the Corporate Debtor in CIRP can be equated with a Financial Debt?
Decision the Adjudicating Authority
- Such a promise or undertaking made by a Resolution Applicant, if not fulfilled, cannot be treated as a default of a financial debt nor the so called obligation to pay such sums to the Financial Creditors of the Corporate Debtor in CIRP by such an Applicant can be treated as a financial debt covered under the four corners of the definition provided u/s 5(8) of the Code, 2016. In our considered view, in such an eventuality when the SRA is not able to implement the plan, some consequences are bound to follow. The performance guarantee furnished by such SRA can be forfeited and the SRA can also be prosecuted u/s 74 of the Code, 2016 but since the liability of the SRA either to pay the creditor or to infuse money in the Corporate Debtor in CIRP for its revival cannot be equated with a financial debt, proceedings u/s 7 of the Code, 2016 cannot be initiated.(p24)
- During the course of arguments the Counsel for the Petitioner has tried to draw a parallel that a guarantee furnished by a Corporate Guarantor in favour of a Corporate Debtor, being the principal borrower is also financial debt and in the similar fashion, the SRA has also sort of furnished a guarantee to implement the plan and pay the creditors which is akin to Corporate Guarantee and, therefore, the Corporate Debtor is liable to be treated as a Financial Debtor.(p26)
- We have thoughtfully considered the aforesaid contentions raised by the Counsel for the Petitioner but in our considered view, it would be quite far fetched to equate the obligation of the Successful Resolution Applicant to implement the plan with incurring a financial debt qua the Financial Creditors or Members of the Committee of Creditors of the Corporate Debtor in CIRP. We have also gone through the case law cited by the Counsel for the Petitioner but we are afraid to say that on the basis of the law laid down in the cited cases relied upon by the Counsel for the Petitioner it cannot be held that the debt invoked by the Petitioner in filing the instant Petition u/s 7 of the Code, 2016 is a financial debt in terms of section 5(8) of the Code, 2016. The obligations of a successful Resolution Applicant cannot be equated to a Corporate Guarantee.(p27)
- As a result of above discussion, it is held that the Petitioner has failed to make out a case of existence of a financial debt and its default committed by the Corporate Debtor. Accordingly, the Petition i.e. CP(IB) 276(MB)2023 fails and is hereby dismissed with no order as to cost.(p28)
Judgment/Order:
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