Delhi High Court - Orders
3I India Infrastructure Investments ... vs Kmc Infratechlimited & Ors on 26 February, 2021
Author: Sanjeev Narula
Bench: Sanjeev Narula
$~24
*IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P.(I) (COMM.) 44/2020
3I INDIA INFRASTRUCTURE
INVESTMENTS LIMITED .....Petitioner
Through: Mr. Arvind Nigam, Sr. Adv. with Ms.
Tine Abraham, Mr. AkshayPuri and
Ms. Doel Bose Advs.
versus
KMC INFRATECHLIMITED & ORS. ..... Respondents
Through: Ms. Kiran Suri, Sr. Adv. with Mr.
Suryadeep Singh, Ms. Radha R.
Tarkar and Mr. Aaron Shaw, Advs for
1, 2 and 4 to 7.
Mr. Anuj Berry, Mr. Sourabh Rath, Mr.
Shikhar Mehra, Mr. Shiv Johar, Mr.
Deepto Roy and Ms. Shubham Sharma,
Advs. for R-8.
CORAM:
HON'BLE MR. JUSTICE SANJEEV NARULA
ORDER
% 26.02.2021
[VIA VIDEO CONFERENCING]
I.A. No. 3071/2021 (for deletion of Respondent No.8)
1. It is stated in this application that the parties have arrived at an arrangement,under which Respondent No. 8 has issued an irrevocable power of attorney in favour of an authorised representative of Respondents 1, 2 and 4-7 (Respondent No. 3 has merged with Respondent No. 1) [hereinafter collectively referred to as 'KMC Respondents'] to take all legal actions on behalf of Respondent No. 8 before any Court / tribunal in relation to an Signature Not Verified Digitally Signed O.M.P.(I) (COMM.) 44/2020 Page 1 of 6 By:SAPNA SETHI Signing Date:05.03.2021 16:18 arbitralaward of INR 1,173 crores in dispute between Respondent No. 8 and NHAI (hereinafter referred to as 'AT-3 Award').It is further stated that it has been agreed that the sums received by KMC Respondents in relation to the AT-3 Award pursuant to the power of attorney shall be deposited in an escrow account with Kotak Mahindra Bank Limited (having account number 4811965268) or such other escrow account jointly nominated by the Petitioner and any of the KMC Respondents; and the Petitioner shall take steps for deletion of Respondent No. 8 from the memo of parties of the present proceedings.
2. In terms of the above understanding, by way of the present application, applicant seeks deletion of RespondentNo.8 from the array of parties. Amended memo of parties, is annexed with the application as document No.
3. The application is allowed and the amended memo of parties is taken on record.
I.A. 3086/2021 (joint application filed by Petitioner and RespondentsNo. 1, 2 and 4-7)
4. This is a joint application on behalf of KMCRespondents as well as the Petitioner [collectively referred to as 'Applicants']seeking modification of the order dated 20th March, 2020 and 15th January, 2021.
5. On 20th March, 2020 this Court had recorded the following undertakingof RespondentNo. 1 to 7:
"4. At this stage learned Senior counsel for the RespondentNo. 1 to 7 submits that, though the amount of Rs.306,20,00,000/- is presently not payable to the Petitioner, if the amount under the award is received by Respondent no.8 and then passed on RespondentNo. 1 to 7, the said Respondents without prejudice to their rights and contentions, will till the next date withhold a sum of Rs.306,20,00,000/-. In view of the aforesaid stand taken by the parties, the present application will be Signature Not Verified Digitally Signed O.M.P.(I) (COMM.) 44/2020 Page 2 of 6 By:SAPNA SETHI Signing Date:05.03.2021 16:18 taken up for consideration along with the main matter on the next day."
6. The above undertaking of RespondentNo. 1 to 7 was extended vide order dated 15th January, 2021 and is continuing.
7. During the pendency of the present proceedings,settlement discussions were initiated inan attempt to resolve the dispute between the Applicants. On 15February, 2021, theApplicants entered into an agreement which,inter alia,sets out the parties' respective rights and obligations for sale of thePetitioner's 9,006,991 fully paid up equity shares in Respondent No. 1, constituting 48.1% of its issued, subscribed and paid-upequity share capital.
8. In terms of the understanding arrived at between the parties, the present application has been filed to record undertakings on part of KMC Respondents.
9. In view of above, in the present application, the KMC Respondentsgivethe following unconditional undertaking:
(a) RespondentNo. 1, 2 or 4 (KMC Group Purchaser) and their affiliates shall purchase the 3i Shares on payment of the Purchase Consideration (INR 270 crores) to the Petitioner. The Purchase Consideration would be paid to the Petitioner (without any deductions or withholdings on account of taxes or otherwise) in a maximum of four tranches, which are as follows:
S. No. Amount (INR)
1. 5 crores
2. 20 crores
3. 80 crores
4. 165 crores
(b) The Purchase Consideration will be paid within a maximum of 12 months from the date of execution of the Agreement, i.e., 15 February 2021 (Execution Date). Further, the first two tranches of the Purchase Consideration [Tranche 1 Purchase Consideration (INR 5 crores) and Tranche 2 Purchase Consideration (INR 20 crores)] shall be paid within the time lines specified in the Agreement and latest by the date on which 6 Signature Not Verified Digitally Signed O.M.P.(I) (COMM.) 44/2020 Page 3 of 6 By:SAPNA SETHI Signing Date:05.03.2021 16:18 months from the Execution Date expire.
(c) In the case that the Purchase Consideration is not paid within 6 months from the date of execution of the Agreement, i.e., 15 February 2021 (Execution Date), the KMC Respondents are liable to pay 10% interest per annum on the balance amounts payable as set out in Tranche 2 Purchase Consideration (INR 20 crores), Tranche 3 Purchase Consideration (INR 80 crores) and Tranche 4 Purchase Consideration (INR 165 crores) till the date of remittance.
(d) Additionally:
i. the KMC Respondents shall procure an irrevocable power of attorney from Respondent No.8 in favour of one of the entities in the KMC Group (KMC Power of Attorney Holder) to take all legal actions on behalf of Respondent No. 8 before any court/ tribunal in relation to an arbitral award (INR 1,173 crores) and any interest thereon in dispute between Respondent No.8 and NHAI (AT-3 Award);
ii. Within 12 months from the Execution Date, the KMC Group Power of Attorney Holder shall endeavour to reach a settlement with NHAI in relation to the AT -3 Award. The settlement amount in relation to the AT-3 Award shall be more than the sum of the amounts set out in clause 2.5(a) of the Agreement.
iii. The use of proceeds from the settlement with NHAI as well as any other sums receivable by RespondentNo. 1, 2 and 4, their subsidiaries, holding companies and affiliates (including any cash proceeds, monetizations, sale proceeds, refinancing or any other amounts that may be received in relation to any of the road BOT projects of the KMC Respondents) shall be used in accordance with the priority of payments provided in clause 4 of the Agreement.
iv. INR 55 crores to be received from Respondent No. 8, its holding companies, subsidiaries and/or affiliates by KMC Respondents and their affiliates, under any agreement or arrangement, shall be deposited immediately upon receipt by KMC Respondents, into an account nominated by the Petitioner as per the directions of the Petitioner. This amount will be appropriated first towards the agreed payment ofINR Signature Not Verified Digitally Signed O.M.P.(I) (COMM.) 44/2020 Page 4 of 6 By:SAPNA SETHI Signing Date:05.03.2021 16:18 25 crores by the end of 6 months from the Execution Date.
(e) The sale of 3i Shares in the manner set out above shall not be contingent on (i) any action required under the Agreement; and/or (ii) fulfilment of any condition, taking of any action or execution of any document by any third party.
10. Moreover, the Petitioner undertakes that it will: - (a) accord its approval for refinancing of thedebts ofThrissur Expressway Limited (an affiliate of Respondent Nos.1, 2 and 4), on terms agreed to between the Petitioner and RespondentNos. 1 and 2; and (b) take steps to delete Respondent No. 8 from thepresent proceedings. Also, the Applicants unconditionally agree that the pending arbitration proceedings initiated between the parties shall continue.
11. As already noted above, pursuant to the above application filed by the Petitioner[I.A. No. 3071/2021],RespondentNo. 8has been deleted from the array of parties. Further, it is submitted by the Petitioner's counsel that the Petitioner has accorded its approval for refinancing of the debts of Thrissur Expressway Limited and thus, the Petitioner has fulfilled its undertakings as stated in paragraph 10 above.
12. Accordingly, the orders dated 20th March 2020 and 15th January 2021 are modified and the parties now shall be bound by the undertakings recorded hereinabove. It is made clear that in case of any default in the undertaking given to this Court as recorded above, parties shall be free to take recourse to appropriate remedies as are available under law. The application is disposed of in the above terms.
O.M.P.(I) (COMM.) 44/2020
13. The Court is informed that the Arbitral Tribunal has been constituted Signature Not Verified Digitally Signed O.M.P.(I) (COMM.) 44/2020 Page 5 of 6 By:SAPNA SETHI Signing Date:05.03.2021 16:18 and the arbitration proceedings have commenced. Now that the Arbitral Tribunal is seized of the matter, if at all, any further directions are required by any of the parties, it would be best if it were to approach the Arbitral Tribunal for that purpose.Accordingly, the present petition is disposed of with the direction that the parties shall remain bound by the modified undertakings recorded in this order unless modified/varied/recalled by the Arbitral Tribunal.Needless to say, nothing stated by this Court hereinabove will come in the way of the final adjudication of the disputes pending between the parties.
14. The petition and the pending applications are disposed of.
15. The date already fixed i.e.10th March, 2021 stands cancelled. ss SANJEEV NARULA, J FEBRUARY 26, 2021 ms Signature Not Verified Digitally Signed O.M.P.(I) (COMM.) 44/2020 Page 6 of 6 By:SAPNA SETHI Signing Date:05.03.2021 16:18