National Company Law Appellate Tribunal
Ca Rajeev Bansal vs Soma-Indus Varanasi Aurangabad ... on 10 January, 2024
Author: Ashok Bhushan
Bench: Ashok Bhushan
NATIONAL COMPANY LAW APPELLATE TRIBUNAL,
PRINCIPAL BENCH, NEW DELHI
Company Appeal (AT) (Insolvency) No. 1695 of 2023
[Arising out of Order dated 09/10/2023 passed by the Adjudicating
Authority (National Company Law Tribunal, Chandigarh Bench,
Chandigarh) in I.A No. 1626 of 2022 in CP(IB) No. 97/Chd/Hry/2018]
IN THE MATTER OF:
C A Rajeev Bansal,
Liquidator of Isolux Corsan India Engineering &
Construction Prviate Limited,
Regn. No. IBBI/IPA-001/IP-P00226/2017-
18/104252163A
Reg. Address: 2163A, Shri Nagar Colony,
Jagadhri, Yamunanagar, Haryana
Mob:- 9315373372
...Appellant
Email: [email protected]
Versus
Soma-Indus Varanasi Aurangabad Tollway Pvt. Ltd.
(Erstwhile Soma Isolux Varanasi Aurangabad Tollway
Pvt. Ltd.)
5th Floor, Block-2, Vatika Business Park, Sector-49,
Sohna Road, Gurugram, Haryana - 134109
E-mail: [email protected] ...Respondent
Present:
For Appellant: Mr. Abhinav Mishra, Nivedita Chauhan, Komal
Singh, Jagriti Dosi, Advocates
For Respondents: Mr. Gauhar Mirza, Ms. Hiral Gupta, Ms. Sukanya
Singh, Advocates
JUDGMENT
ASHOK BHUSHAN, J.
1. This Appeal has been filed by the Liquidator of Corporate Debtor challenging the Order dated 09th October, 2023 passed by National Cont'd.../ -2- Company Law Tribunal, Chandigarh Bench, Chandigarh (hereinafter referred to as 'The Adjudicating Authority") in I.A. No. 1626 of 2022 filed by the Liquidator under Section 66 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as 'The Code').
2. Brief facts of the case giving rise to this Appeal are:-
i. National Highway Authority entered into a Concession Agreement with Soma Isolux Varanasi Aurangabad Tollway Pvt. Ltd. (hereinafter referred to as "Concessionaire') to construct, operate and maintain the project. Engineering procurement and construction contract dated 21st January, 2011 was entered between Soma Isolux Varanasi Aurangabad Tollway Pvt. Ltd. (Concessionaire) and the Isolux Corsan India Engineering and Construction Pvt. Ltd. (hereinafter referred to as "Corporate Debtor'). Corporate Debtor was to design and execute the work from Km 871 to 978 Six Lane Varanasi-Aurangabad Section of NH-2. ii. There were certain issues between the Corporate Debtor and the Concessionaire. On 14th June, 2017, Concessionaire terminated the agreement with the Corporate Debtor and invoked Bank Guarantees.
iii. Corporate Insolvency Resolution Process was initiated against the Corporate Debtor at the instance of Oriental Bank of Commerce vide order dated 11.10.2018. The Appellant was appointed Liquidator in the Liquidation Proceedings of the Corporate Debtor vide Order dated 06.02.2020.
Company Appeal (AT) (Insolvency) No. 1695 of 2023 -3- iv. Forensic Audit Report was conducted in the Liquidation Proceedings of the Corporate Debtor. Liquidator on 07.09.2021 gave a notice of claim for additional cost on account of changes in the scope of work, price variation and prolongation of working due to the delay caused along with the supporting document on behalf of the Corporate Debtor to the tune of INR 570.14 Crores to the Concessionaire.
v. I.A. No. 609 of 2021 was filed by the Liquidator on 05.10.2021 under Section 60(5) read with Section 33(5), 35(1)(k) seeking approval of the Adjudicating Authority to initiate arbitration proceedings against the Respondent with regard to NH-2 Project. vi. There were certain conciliation meetings between the Liquidator and the Concessionaire during the period. In I.A. No. 609 of 2021 the Respondent No. 1 the Concessionaire was also impleaded as one of the Respondent for which I.A. No. 96 of 2022 was filed which was allowed by the Adjudicating Authority. On 3rd November, 2022 Liquidator filed I.A. No. 1626 of 2022 under Section 66 read with section 67 of the Code relying on the transaction audit report in which application the Respondent No. 1 herein was Respondent No.
8. On 3rd July, 2023 I.A. No. 609 of 2021 was allowed and disposed of granting leave to the Liquidator to initiate proceedings under arbitration. On 09.10.2023, I.A. No. 1626/2022 was listed on which date, the Adjudicating Authority passed an order directing that Respondent No. 1 herein (Respondent No. 8 in the Application) to be deleted from the array of the party. The Adjudicating Company Appeal (AT) (Insolvency) No. 1695 of 2023 -4- Authority observed in the Order that in I.A. No. 609 of 2021 Liquidator has already prayed for initiation of arbitration in which Respondent No.1 was a party. The Adjudicating Authority observed that Liquidator cannot be allowed to take two opposite pleas simultaneously hence the Adjudicating Authority directed deletion of Respondent No. 8 to the I.A. No. 1626 of 2022 from the array of the party.
vii. Liquidator aggrieved by the Order dated 09.10.2023 passed in I.A. No. 1626 of 2022 has come up in this Appeal.
3. Learned Counsel for the Liquidator submits that the invocation of bank guarantee by Concessionaire after termination of the agreement was wrongful and fraudulent hence the Liquidator has rightly impleaded the Concessionaire as Respondent No. 8 in the Application and the Adjudicating Authority committed error in deleting the Respondent No. 8 from Section 66 Application.
4. Learned Counsel appearing for Respondent No. 1 opposing the submissions of Appellant submits that Liquidator himself has filed I.A. No. 609 of 2021 seeking leave of the Adjudicating Authority to proceed in arbitration against the Respondent No. 1 Concessionaire which leave has been granted on 3rd July, 2023, there is no occasion to proceed against the Respondent No. 8 in Application under Section 66 because allegation are only with regard to invocation of bank guarantee which is also subject matter of the arbitration claim as submitted by the Liquidator. It is submitted that the Adjudicating has rightly taken the view that Liquidator cannot be allowed to pursue two proceedings simultaneously. It is further Company Appeal (AT) (Insolvency) No. 1695 of 2023 -5- submitted that Liquidator has not even filed any arbitration proceeding even though leave was granted on 3rd July, 2023.
5. We have considered the submissions of Learned Counsel for the parties and have perused the record.
6. I.A. No. 609 of 2021 was filed by the Liquidator where following prayers have been made:
"A. to authorize the Liquidator/Applicant to institute Arbitration to ensure recovery for the beneficial liquidation of the Corporate Debtor.
B. Pass any other such order(s), which this Hon'ble Tribunal deems fit in the interest of justice, equity and good conscience."
7. In the Application I.A. No. 609 of 2021, the Liquidator has pleaded all necessary facts regarding concession agreement, the project agreement between the Concessionaire, termination of the Agreement, details of the claims which Liquidator may have against the concessionaire mentioned in detailed in different heads in paragraph 4.18 of the Application. In paragraph 4.8(i), compensation with regard to wrongful invocation of bank guarantee was also included. Paragraph 4.8(i) is as follows:
"(i) COMPENSATION FOR ILLEGAL TERMINATION OF THE EPC CONTRACT, SETTLEMENT AGREEMENT & FIRST AMENDMENT AGREEMENT & WRONGFUL INVOCATION OF BANK GUARANTEES The claim pertains to the Compensation for illegal termination of the EPC Contract, Settlement Agreement & First Amendment Agreement & Wrongful Invocation of Bank Guarantees under which the Corporate Debtor has substantiated in detail the Company Appeal (AT) (Insolvency) No. 1695 of 2023 -6- unilateral/wrongful/concocted/malfide and illegal termination of a series of contractual relations between the Corporate Debtor and the Concessionaire and the wrongful/uncalled for/malafide and unwarranted invocation of the Bank Guarantees and the compensation arising in favour of the Corporate Debtor directly from the Concessionaire to the tune of INR 89,10,96,000/- (Indian Rupees Eighty Nine Crore Ten Lakh Ninety Six Thousand Only)"
8. Learned Counsel for the Appellant has submitted that Section 66 Application has been filed against the Respondent No. 1 where Appellant is alleging wrongful and fraudulent invocation of guarantee by the Concessionaire hence the Adjudicating Authority ought not to have deleted Respondent No. 1 from the Section 66 Application. I.A. No. 609 of 2021 was filed by the Liquidator where details of all claims including invocation of bank guarantee was included in the Application. The claims which have been mentioned in the Application against the Concessionaire are to the tune of Rs. 570.14 Crores. The Adjudicating Authority have already granted leave to the Liquidator to proceed in arbitration against the Concessionaire where claim on basis of wrongful invocation of guarantee is also included, we are of the view that the Adjudicating Authority did not commit any error in directing deletion of name of Respondent No. 1 in application under Section 66 of the Code. We however observe that after a decision by the Arbitrator in the arbitration proceeding to be filed by the Liquidator in event facts and findings come in the proceeding which may oblige the Liquidator to file an application under Section 66 against the Concessionaire, the liberty is granted to the Company Appeal (AT) (Insolvency) No. 1695 of 2023 -7- Appellant and the deletion of name by the order impugned shall not come into way in filing a fresh application under Section 66 of the Code, if any such circumstance arises. We thus are not inclined to interfere in the order impugned passed by the Adjudicating Authority in I.A. No. 1626 of 2022 deleting Respondent No. 1 (Respondent No. 8 in the Application). The Appeal is dismissed subject to liberty as granted above.
[Justice Ashok Bhushan] Chairperson [Barun Mitra] Member (Technical) [Arun Baroka] Member (Technical) NEW DELHI 10th January, 2024 Basant Company Appeal (AT) (Insolvency) No. 1695 of 2023