National Company Law Appellate Tribunal
State Bank Of India vs Khagaria Purnea Highway Projects ... on 4 July, 2023
Author: Ashok Bhushan
Bench: Ashok Bhushan
NATIONAL COMPANY LAW APPELLATE TRIBUNAL
PRINCIPAL BENCH, NEW DELHI
Company Appeal (AT) (Insolvency) No. 1137-1138 of 2022
(Arising out of Order dated 08th June, 2022 and 31st August, 2022 passed
by National Company Law Tribunal, Special Bench, New Delhi in I.A. No.
2691 of 2022 in CP(IB) No. 731(PB)/2018)
IN THE MATTER OF:
STATE BANK OF INDIA,
09TH Floor, Jawahar Vyapar Bhawan I,
Tolstoy Marg, Janpath,
...Appellant
New Delhi - 110001
Versus
1. KHAGARIA PURNEA HIGHWAY PRIVATE
LIMITED,
Punj Llyod House,
17-18, Nehru Place, New Delhi 110019
2. PUNJ LLOYD INFRASTRUCTURE LIMITED,
Punj Llyod House,
17-18, Nehru Place, New Delhi 110019
3. MR ASHWINI MEHRA, LIQUIDATOR OF
PUNJ LLOYD LIMITED,
Correspondence Address:
Punj Lloyd Limited
C/O Mr. Surendra Raj Gang,
GT Restructuring Services LLP
L-41, Connaught Circus, New Delhi - 110001
Registered Address of RP with IBBI:
A-1601, Salarpuria Magnificia, 15th Floor,
Old Madras Road, Bengaluru - 560016
4. NATIONAL HIGHWAYS AUTHORITY OF
INDIA,
Ministry of Road Transport and Highways,
G-5 & 6, Sector 10, Dwarka, New Delhi
110075
2
Email:- [email protected] ...Respondents
Appellant: Mr. Abhinav Vasisht, Sr. Advocate with Mr. Prateek
Kumar, Ms. Vaishnavi Chillakuru, Ms. Moha Paranjee,
Ms. Akshita Sachdeva, Advocates
Respondent: Mr. Sunil Fernandes, Mr. Raghav Chadha, Ms. Diksha
Dadu, Advocates.
Ms. Gunjan Sinha Jain and Mr. Kosh Gupta, Advocates
of NHAI.
JUDGEMENT
ASHOK BHUSHAN, J:
1. These Appeals challenges two orders passed by National Company Law Tribunal, Special Bench, New Delhi (hereinafter referred to as "The Adjudicating Authority") in I.A. No. 2691 of 2022 in CP(IB) No. 731(PB)/2018. By order dated 08th June, 2022, the Adjudicating Authority after hearing the Learned Counsel for the Applicants as well as Learned Counsel for the Respondents held I.A. No. 2691 of 2022 maintainable under Section 60(5)(c) of Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as "The Code"). By subsequent order dated 31st August, 2022, the Adjudicating Authority directed that the copy of the Application may be given to Learned Sr. Counsel for the State Bank of India and the matter was adjourned to 20th September, 2022. The Appellant State Bank of India aggrieved by both the orders, has filed these Appeals.
2. Brief facts of the case leading to filing I.A. No. 2691 of 2022 needs to be noted:-
i. The Khagaria Purnea Highway Project Limited entered into Concession Agreement dated 08th April, 2011 with National Highways Authority of India for construction, operation and maintenance of Company Appeal (AT) Insolvency No. 1137-1138 of 2022 3 Khagaria Purnea Section of NH-31 in the State of Bihar. Respondent No. 1 hereinafter referred to as "Khagaria" entered into Facility Agreement with the Appellant-State Bank of India for an amount of Rs. 586 Crores. As contemplated under the Facility Agreement, the Appellant, Respondent No. 2-Punj Lloyd Infrastructure Limited and Respondent No. 3-Punj Lloyd Limited (Corporate Debtor) entered into two sponsor support Agreements dated 30th September, 2011. By an order dated 08th March, 2019, on an application filed under Section 7 by the ICICI Bank, Corporate Insolvency Resolution Process commenced against Punj Llyod Limited (Corporate Debtor). On 14th September, 2020, the Appellant issued a notice of event of default to Respondent No.1 and the Corporate Debtor informing them inter alia the admission of the Corporate Debtor in CIRP constituted an event of default under the Facility Agreement which entitled the lenders to take necessary action against the Respondent No. 1. ii. The State Bank of India further issued a notice dated 08th March, 2022 to Respondent No. 1-Khagaria and the Corporate Debtor under Clause 3.2.1 of the Substitution Agreement notifying Respondent No. 1 of its intention to exercise its rights under the Substitution Agreement by substituting Respondent No. 1 as a concessionaire under the Concession Agreement with a nominated Company.
iii. The notice dated 08th March, 2022 was replied by the Corporate Debtor vide its Letter dated 30th March, 2022 requesting the State Company Appeal (AT) Insolvency No. 1137-1138 of 2022 4 Bank of India on the grounds mentioned in the letter not to substitute the concessionaire with any nominated company. iv. Another letter dated 08th April, 2022 was issued to Respondent No. 1-Khagaria rejoining Letter dated 30th March, 2022. On 10th May, 2022, the State Bank of India wrote to the NHAI seeking approval for exclusion of the substitution of current concessionaire with nominated company. Copy of the letter was also sent to Respondent No. 1-Khagaria. The Respondent No. 3- Resolution Professional of the Corporate Debtor had also sent a letter dated 13th April, 2022 requesting the Appellant not to substitute Respondent No. 1 as a concessionaire in Concession Agreement. On 25th May, 2022, the Corporate Debtor through Resolution Professional filed an I.A. seeking to quash and set aside the letters issued by State Bank of India. On 27th May, 2022, the Adjudicating Authority ordered Liquidation of the Corporate Debtor as a going concern. I.A. No. 2691 of 2022 filed by Resolution Professional of the Corporate Debtor following prayers were made:
"(a) Quash and set aside the letters dated 08.03.2022 and 08.04.2022 10.05.2022 issued by Respondent No. 1 to the Applicant;
(b) Quash and set aside the letter dated 10.05.2022 issued by Respondent No. 1 to the office of Respondent No. 2;
(c) Direct the Respondent No. 1 & 2 to not to take any steps towards substitution of any new concessionaire till the pendency of the present Application;
Company Appeal (AT) Insolvency No. 1137-1138 of 2022 5
(d) Direct the Respondent No. 1 & 2 to maintain status quo with respect to any steps taken for substitution of the new concessionaire and not to take any further steps for attaining finality in this regard;
(e) Pass such further and other direction as this Hon'ble Tribunal may deem fit and expedient."
v. I.A. No. 2691 of 2022 came for consideration before the Adjudicating Authority on 08th June, 2022. The Application was filed by following three applicants viz. (i) Khagaria Purnea Highway Project- Applicant No. 1, (ii) Punj Lloyd Infrastructure Limited-Applicant No. 2 and Punj Llyod Limited through Ashwani Mehra, Liquidator-Applicant No. 3. The Application was opposed by Learned Sr. Counsel for the State Bank of India. It was contended before the Adjudicating Authority on behalf of Learned Counsel appearing for the State Bank of India that Application is not maintainable under Section 60(5)(c) of the Code. It was contended that Applicants have no locus to file the Application. The Adjudicating Authority after hearing the parties on the said application held the Application maintainable under Section 60(5)(c) of the Code. Subsequently, on 31st August, 2022, the Adjudicating Authority directed the copy to be given to Learned Counsel for the State Bank of India. The Appellant aggrieved by both the orders dated 08th June, 2022 and 31st August, 2022 has come up in these Appeals.
Company Appeal (AT) Insolvency No. 1137-1138 of 2022 6
3. We have Heard Mr. Abhinav Vasisht, Learned Sr. Counsel appearing for the Bank, Mr. Sunil Fernandes has appeared for Respondent Nos. 1 to 3 and Ms. Gunjan Sinha Jain, Advocate has appeared for NHAI.
4. Learned Sr. Counsel for the Appellant submits that Khagaria Respondent No. 1 is a step down subsidiary of the Corporate Debtor hence its asset can not form part of the liquidation estate of the Corporate Debtor in terms of Explanation (d) to sub-section 4 of Section 36 of the Code. It is submitted that the Liquidator does not have locus to file an application which is not maintainable. It is submitted that the Adjudicating Authority has no jurisdiction to decide dispute unrelated to the Corporate Debtor. The State Bank of India is exercising its rights of substituting the Respondent No. 1 with nominated company as per the facility agreement and the substitution agreement. It is submitted that the contractual dispute between the State Bank of India and the Respondent No.1 can not be made subject matter of application under Section 60(5) of the Code. Continuation of Khagaria as a concessionaire is not imperative for the survival of the Corporate Debtor.
5. Learned Counsel appearing for Respondent Nos. 1 to 3 opposing the submissions of Learned Sr. Counsel for the Appellant contends that issue before the Adjudicating Authority in I.A. No. 2691/2022 is not about the inclusion of the assets of the Corporate Debtor or its subsidiary. It is submitted that the action which is sought to be initiated by State Bank of India in its notice dated 08th March, 2022 and subsequent notices were founded on the initiation of Insolvency Resolution Process against the Company Appeal (AT) Insolvency No. 1137-1138 of 2022 7 Corporate Debtor hence the Application I.A. No. 2691 of 2022 is fully maintainable under Section 60(5)(c) of the Code. It is submitted that any question of law or facts arising out of or in relation to the Insolvency Resolution or Liquidation proceedings of the Corporate Debtor can be very well made subject matter of an Application under Section 60(5)(c) of the Code. It is submitted that there is no financial debt on the Respondent quo the loan account of the Appellant Bank. Installments are paid on time before and during the pendency of the present dispute. The Khagaria is not an NPA of the Appellant-Bank. CIRP of the Corporate Debtor is a sole ground to seek substitution of the Khagaria. It is submitted that Application is fully maintainable before the Adjudicating Authority and need to be heard on merits. It is submitted that since the only question in this Appeal is regarding maintainability of the Application, no submission are being advanced on the merits of the I.A. No. 2691 of 2022.
6. We have considered the submissions of Learned Counsel for the parties and have perused the record.
7. The only question which has arisen for consideration in the present Appeal is as to whether I.A. No. 2691 of 2022 filed by Respondent Nos. 1 to 3 before the Adjudicating Authority in CP(IB) No. 731-PB/2018 is maintainable under Section 60(5) of the Code?
8. The filing of the Application I.A. No. 2691 of 2022 was founded on the notice dated 08th March, 2022 issued by the State Bank of India to the Khagaria-Respondent No. 1. Notice dated 08th March, 2022 was addressed to both Khagaria and Punj Llyod House (Corporate Debtor). It is useful to Company Appeal (AT) Insolvency No. 1137-1138 of 2022 8 notice the letter dated 08th March, 2022 issued by the State Bank of India which is to the following effect:
"Ref No.: SBI/OBND/AMT-II/2021-22/KPHPL/402 Date: 08/03/2022 Khagaria Purnea Highway Project Limited 78, Institutional Area, Sector 32, Gurugram - 122001, Haryana, India And Punj Llyod House 17-18, Nehru Place, New Delhi, 110019, India ("Concessionaire"/"Company"/"Borrower") Attn: Mr. S K Goyal/Mr. Gaurav Kapoor, Mr. Rahul Maheswari Dear Sir Ref: Facility Agreement dated 30 September, 2011 executed inter alia by the Senior Lenders (list attached as Annexure I), Concessionaire (as the borrower), State Bank of India as the lenders' agent & issuing bank, and SBICAP Trustee Company Limited as the security trustee for senior debt amounting to INR 586,00,00,000/- (Indian Rupees Five Hundred and Eighty Six Crores Only) ("Senior Debt Facility") and Facility Agreement dated 30 September, 2011 executed inter alia by the Sub-Debt Lender (list attached as Annexure I), Concessionaire (as the borrower), State Bank of India as the lender's agent & issuing bank, and SBICAP Trustee Company Company Appeal (AT) Insolvency No. 1137-1138 of 2022 9 Limited as the security trustee for sub debt amounting to INR 30,00,00,000 (Indian Rupees Thirty Crores Only) ("Sub Debt Facility) towards part funding of the project cost for two laning of Khagria - Purnea section of NH-31 FROM Km 270.00 to Km 410.00 in the state of Bihar on BOT (Annuity) under NHDP III ("Project") pursuant to the concession agreement dated April 08, 2011 executed between the National Highway Authority of Indai ("NHAI"/ "Authority") and the Concessionaire ("Concession Agreement"). (Both the facility agreements mentioned above with respect to Senior Debt Facility and Sub-Debt Facility are collectively referred to as the "Facility Agreements") Sub: Notice of Financial Default under the Concession Agreement issued in terms of Clause 3.2.1 of the substitution agreement dated 12 December 2011 executed between NHAI, Concessionaire and State Bank of India ("Lenders Representative") ("Substitution Agreement").
Dear Sir(s) This is to bring to your notice that in terms of the Facility Agreement, Punj Llyod Limited ("PLL') has been acting as a sponsor ("Sponsor") (and therefore obligor, as per the definition of "Obligor"
under the facility agreements) and two sponsor support agreements were executed inter alia by PLL on 30 September 2011, each in relation to the Senior Debt Facility and the Sub-Debt Facility. Company Appeal (AT) Insolvency No. 1137-1138 of 2022 10 PLL has been admitted into insolvency resolution process pursuant to the order of the Hon'ble National Company Law Tribunal (NCLT) dated 08 March 2019 and we further understand that the PLL is admitted into insolvency and the liquidation application before NCLT has already been filed.
Clause 28 of the Facility Agreements prescribes certain specified events, which are termed as "Event of Default" under the Facility Agreements and one of the specified Event of Default being Clause 28.10 (b) provides as follows:
"28.10(b) If an involuntary proceeding against an obligor has been commenced under any applicable bankruptcy, insolvency, winding up or other similar law now or hereafter in effect, or in any case, proceeding or other action for the appointment of a trustee, receiver, liquidator, assignee (or similar official) for any part of its assets and/or property, or for the winding up or liquidator of its affairs, or other action has been presented to a court or other Government Authority."
The term 'Obligor' is defined in the Facility Agreements to mean and inter alia include the Borrower, the Sponsor and the Pledger(s) and the term 'Sponsor' is defined in the Facility Agreements to mean Punj Lloyd Limited and Punj Lloyd Infrastructure Limited.
Since PLL has been admitted into insolvency and more than two years has been passed since then Company Appeal (AT) Insolvency No. 1137-1138 of 2022 11 and the liquidation application with respect to PLL before NCLT has already been filed. Therefore, in our considered view, the Event of Default had occurred and is subsisting under the Facility Agreements and accordingly, we had declared the occurrence of an event of Default under Facility Agreements pursuance to the notice of event of default dated 14 September 2020 in respect of the Senior Debt Facility and Sub Debt Facility.
It may also be noted that the Facility Agreements and the Substitution Agreement, the Senior Lenders now propose to exercise their right of substitution and substitute the Concessionaire with a Nominated Company (as defined under the Substitution Agreement) in accordance with the provisions of the Concession Agreement and the Substitution Agreement.
The exercise by the Lenders of their right to substitute as aforementioned is without prejudice to any other rights and remedies to them under the Facility Agreements (and other financing agreements) and the Substitution Agreement. A copy of this notice of Financial Default is being forwarded to NHAI in accordance with Clause 3.2.1 of the Substitution Agreement.
For and on behalf of the Senior Lenders Yours sincerely, Signed and delivered by State Bank of India Company Appeal (AT) Insolvency No. 1137-1138 of 2022 12 (Acting as Lenders' Representative on behalf of the lenders of Senior Debt Facility) By :Mr. Amit Ranjan Title :Assistant General Manager & RM - AMT-2"
9. The notice is founded on the ground that Insolvency Resolution Process pursuant to the Order of Adjudicating Authority dated 08th March, 2019 has commenced against the Punj Lloyd Limited (Corporate Debtor).
Clause 28.10(b) has been relied for stating that event of default has occurred. On the event of default, it was proposed to exercise the right of substitution of the concessionaire i.e. Respondent No. 1 with the nominated company. The notice was replied both by Respondent No. 1 and Corporate Debtor and thereafter another notice was issued on 08th April, 2022 and 10th May, 2022 leading to filing of the Application I.A. No. 2691 of 2022 by the Applicants. As noted above, the Application was filed by three applicants that is Respondent Nos. 1 to 3 in the Present Appeal. The contention which has been advanced by Learned Sr. Counsel for the Appellant is that Application was not maintainable under Section 60(5)(c), the Khagaria being step down subsidiary of the corporate debtor and Khagaria's assets can not form the liquidation estate of the Corporate Debtor. The Appellant was exercising its right under the facility agreement and the substitution agreement quo the Respondent No. 1-Khagaria which can not be made subject matter of dispute before the Adjudicating Authority under Section 60(5)(c) of the Code. Section 60(5) of the Code provides as follows:
Company Appeal (AT) Insolvency No. 1137-1138 of 2022 13 "(5) Notwithstanding anything to the contrary contained in any other law for the time being in force, the National Company Law Tribunal shall have jurisdiction to entertain or dispose of--
(a).......
(c) any question or priorities or any question of law or facts, arising out of or in relation to the insolvency resolution or liquidation proceedings of the corporate debtor or corporate person under this Code."
10. Section 60(5) began with non-obstante clause. Sub-Section 5(c) which is relied provides "any question or priorities or any question of law of facts, arising out of or in relation to the Insolvency Resolution or Liquidation Proceedings of the Corporate Debtor" the key words under Section 60(5)(c) are "ARISING OUT OF OR IN RELATION TO THE INSOLVENCY RESOLUTION OR LIQUIDATION PROCEEDINGs OF THE CORPORATE DEBTOR." What is the meaning of expression "arising out of or in relation to" has to be examined to find out as to whether Application I.A. No. 2691 of 2022 is maintainable or not.
11. Elaborating the submission, Learned Counsel for the Appellant has relied on Section 36(4) (d) of the Code. Section 36(4)(d) is as follows:
"36. Liquidation Estate.
4. The following shall not be included in the liquidation estate assets and shall not be used for recovery in the liquidation:-
.....
Company Appeal (AT) Insolvency No. 1137-1138 of 2022 14
(d) assets of any Indian or foreign subsidiary of the corporate debtor; or"
12. Section 36 deals with the Liquidation Estate and the above provision is clear that liquidation estate of the Corporate Debtor shall not include assets of any Indian or Foreign Subsidiary. There can be no dispute that assets of Respondent No. 1 i.e. subsidiary of Corporate Debtor can not be included in the Liquidation Estate of the Corporate Debtor. The present is a case where the issue is not regarding assets of the Respondent No. 1 being included or not included in the Liquidation Estate of the Corporate Debtor, question which has arisen is regarding maintainability of Application I.A. No. 2691 of 2022.
13. The Hon'ble Supreme Court had occasion to consider Section 60(5)(c) in Gujarat Urja Vikas Nigam Limited Vs. Amit Gupta, 2021 7 SCC 209. In the above case, power purchase agreement was entered between the Corporate Debtor and GUVNL. GUVNL issued notices alleging that event of default has occurred, Corporate Debtor was called upon to remedy his default failing which the power purchase agreement was to be terminated. The Corporate Debtor filed an Application under Section 60(5) with regard to notice issued by GUVNL where an Interim Order was passed on 31st May, 2019 restraining the Appellant from terminating PPA till the next date of hearing. The Adjudicating Authority allowed the Application setting aside the notice issued by the GUVNL. Appeal was dismissed by the Appellate Tribunal against which the GUVNL filed an Appeal. In reference to the above case, the Hon'ble Supreme Court has occasion to consider the expression "arising out of or in relation to". The Hon'ble Supreme Court noticed earlier Company Appeal (AT) Insolvency No. 1137-1138 of 2022 15 judgments of the Supreme Court where expression "arising out of or related to" were explained. It was noted that word 'arising out of and relating to' have been given expansive interpretation by the Supreme Court. Hon'ble Supreme Court however observed that it is necessary to bear in mind the context in which the phrases have been used. In paragraph 53 of the Judgment, following was observed:
"53. While the phrases ―arising out of" and "relating to" have been given an expansive interpretation in the above cases, words can have different meanings depending on the subject or context. Words are after all, a vehicle for communicating ideas, thoughts and concepts. A one-size-fits-all analogy may not always hold good when we construe similar words in entirely distinct settings. Justice G.P. Singh in his authoritative commentary on the interpretation of statutes, Principles of Statutory Interpretation, has noted that the same words used in different sections of the same statute or used at different places in the same clause or section can have different meanings. Therefore, it is necessary to bear in mind the context in which the phrases have been used. Justice G.P. Singh has stated in his commentary that: ― "When the question arises as to the meaning of a certain provision in a statute, it is not only legitimate but proper to read that provision in its context. The context here means, the statute as a whole, the previous state of the law, other statutes in pari materia, the general scope of the statute and the mischief that it was intended to remedy."
Company Appeal (AT) Insolvency No. 1137-1138 of 2022 16
14. It was held by Hon'ble Supreme Court that NCLT has jurisdiction to adjudicate dispute which arises only from or which relates to the Insolvency of the Corporate Debtor. In paragraph 69 of the Judgment, following has been laid down:
"69. The institutional framework under the IBC contemplated the establishment of a single forum to deal with matters of insolvency, which were distributed earlier across multiple fora. In the absence of a court exercising exclusive jurisdiction over matters relating to insolvency, the corporate debtor would have to file and/or defend multiple proceedings in different fora. These proceedings may cause undue delay in the insolvency resolution process due to multiple proceedings in trial courts and courts of appeal. A delay in completion of the insolvency proceedings would diminish the value of the debtor's assets and hamper the prospects of a successful reorganization or liquidation. For the success of an insolvency regime, it is necessary that insolvency proceedings are dealt with in a timely, effective and efficient manner. Pursuing this theme in Innoventive (supra) this court observed that:
"13. One of the important objectives of the Code is to bring the insolvency law in India under a single unified umbrella with the object of speeding up of the insolvency process".
The principle was reiterated in Arcelor Mittal (supra) where this court held that:
"84. .....The non-obstante Clause in Section 60(5) is designed for a different purpose: to ensure that the NCLT alone has jurisdiction when it comes to Company Appeal (AT) Insolvency No. 1137-1138 of 2022 17 applications and proceedings by or against a corporate debtor covered by the Code, making it clear that no other forum has jurisdiction to entertain or dispose of such applications or proceedings".
Therefore, considering the text of Section 60(5)(c) and the interpretation of similar provisions in other insolvency related statutes, NCLT has jurisdiction to adjudicate disputes, which arise solely from or which relate to the insolvency of the Corporate Debtor. However, in doing do, we issue a note of caution to the NCLT and NCLAT to ensure that they do not usurp the legitimate jurisdiction of other courts, tribunals and fora when the dispute is one which does not arise solely from or relate to the insolvency of the Corporate Debtor. The nexus with the insolvency of the Corporate Debtor must exist."
15. Before the Hon'ble Supreme Court in GUVNL, Submission was also made on behalf of Appellant relying on Section 25(2)(b) and 18(1)(f). The said arguments were noted in paragraph 72 and 73 which are to the following effect:
"72. Ms Ramachandran and Mr Diwan have contended that CA 1956, PIA and BRA do not contain any provisions equivalent to Sections 25(2)(b) and 18(f)(vi) of the IBC which empower the RP to exercise rights for the benefit of the Corporate Debtor in certain adjudicatory proceedings. They submit that Section 60(5)(c) of the IBC must be read in consonance with Sections 25(2)(b) and 18(f)(iv), which would be rendered nugatory if NCLT becomes the exclusive forum for the enforcement of all the Corporate Debtor's rights. Section 25(2)(b) of the IBC provides: ― Company Appeal (AT) Insolvency No. 1137-1138 of 2022 18 "Section 25 - Duties of resolution professional.-
(1)........
(2) For the purposes of sub-section (1), the resolution professional shall undertake the following actions, namely:-
....
(b) represent and act on behalf of the corporate debtor with third parties, exercise rights for the benefit of the corporate debtor in judicial, quasi-
judicial or arbitration proceedings;"
Section 18(1)(f)(vi) provides: ― "Section 18 - Duties of interim resolution professional .-The interim resolution professional shall perform the following duties, namely:-
......
(f) take control and custody of any asset over which the corporate debtor has ownership rights as recorded in the balance sheet of the corporate debtor, or with information utility or the depository of securities or any other registry that records the ownership of assets including--
.......
(vi) assets subject to the determination of ownership by a court or authority;"
73. We are inclined to agree with the submission made by Mr Singh that merely because a duty has been imposed on the IRP or the RP, it does not mean that the jurisdiction of the NCLT is circumscribed under section Company Appeal (AT) Insolvency No. 1137-1138 of 2022 19 60(5)(c) of the IBC. In Embassy Property (supra), it was argued that the term "property" under Section 3(27) of the IBC includes a mining lease granted by government and the lRP is duty bound under Section 20(1) of the IBC to preserve the value of the property of the Corporate Debtor. Hence, the submission was that the RP can invoke the jurisdiction of the NCLT to adjudicate upon a dispute relating to non-extension of the lease. However, Justice V. Ramasubramanian, speaking for this Court, observed that:― "39. ......the said argument cannot be sustained for the simple reason that the duties of a resolution professional are entirely different from the jurisdiction and powers of NCLT."
16. The submission of Learned Counsel for the Appellant is founded on Section 36(4)(d) as noted above in present case whereby the Application I.A. No. 2691 of 2022 was not with respect to assets of the subsidiary which admittedly cannot be part of Liquidation Estate of the Corporate Debtor. The State Bank of India initiated action against the Respondent No. 1 on strength of Insolvency Process of the Corporate Debtor which is clearly mentioned in the notice dated 08th March, 2022 as extracted above. The notice thus stemmed from initiation of Insolvency Process against the Corporate Debtor. The application filed by Applicants I.A. No. 2691 of 2022 thus can very well be said to be arising out of or in relation to Insolvency Resolution Process or Liquidation Proceeding of the Corporate Debtor.
17. We thus are of the view that the Adjudicating Authority did not commit any error in holding that Application is maintainable under Section Company Appeal (AT) Insolvency No. 1137-1138 of 2022 20 60(5)(c) of the Code. We however make it clear that we have not entered into the merits of the Application I.A. No. 2691 of 2022 nor considered the respective arguments of Learned Counsel for the parties in the above regard. It is the Adjudicating Authority who is to examine the merits of the Application I.A. No. 2691 of 2022 without being influenced by any observations made in this order after hearing both the parties.
18. We thus do not find any error in both the Orders of the Adjudicating Authority dated 08th June, 2022 and 31st August, 2022, which does not warrant any interference in these Appeals.
Subject to observations as made above, both the Appeals are dismissed.
[Justice Ashok Bhushan] Chairperson [Barun Mitra] Member (Technical) New Delhi 04th July, 2023 Basant B. Company Appeal (AT) Insolvency No. 1137-1138 of 2022