Delhi High Court - Orders
Aditya Birla Finance Limited vs Presidium Educational And Charitable ... on 22 December, 2020
Author: Rekha Palli
Bench: Rekha Palli
Via video conferencing
$~22
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P.(I) (COMM.) 418/2019 & CCP(O) 41/2020, I.As. 337/2020,
9147/2020, 9148/2020, 9149/2020, 12524/2020
ADITYA BIRLA FINANCE LIMITED ..... Petitioner
Through Mr.Rajiv Nayar, Sr. Adv. with
Mr.Saurabh Seth, Mr.Manmeet Singh, Mr.Ayush
Sharma, Mr.Anugrah Robin Frey and Ms.Ria
Kohli, Advs.
versus
PRESIDIUM EDUCATIONAL AND CHARITABLE TRUST &
ORS. ..... Respondent
Through Mr.Rajshekar Rao with Mr.Jai
Mohan, Adv. for R-1 to 4 & 6 to 12.
Mr.P.S. Singal, Adv. for R-13 to 17.
Ms.Aditi Sharma for Mr.Neeraj Yadav, Advs for
R-20.
Mr.Akash Gupta, trustee of Contemnor No.1.
CORAM:
HON'BLE MS. JUSTICE REKHA PALLI
ORDER
% 22.12.2020
1. This is a petition under Section 9 of the Arbitration and Conciliation Act, 1996 seeking the following reliefs:-
"(a) Pass an order directing Respondents, jointly and or severally to furnish security for the outstanding dues under the Loan Agreement amounting to Rs. 98.26 Crores by way of deposit of monies or by way of a bank guarantee, for securing compliance of their obligations under the Loan Agreements and the respective Deeds of Guarantees;
(b) Pass an order directing Respondents, jointly and or severally to deposit an amount of Rs. 82.75 crores in the escrow accounts being the shortfall in the amount required to be deposited as per the Escrow Agreements;
(c)Pass an order that pending the furnishing of security prayer
(a) above, Respondent No.1 to 19 be restrained from selling, disposing, alienating or in any manner encumbering any of their immoveable or moveable assets, directly or indirectly;
(d) Direct the Respondents to disclose on oath, the list of moveable and immoveable assets owned by them, and disclose the ownership structure of the land and buildings of the schools owned by them;
(e) Direct Respondent Nos. 1 to 4 to provide details to the Petitioner of the number of students admitted in the schools under them, as well as the fee and other charges received by it and other entities in the Presidium Group from such students, for the financial years 2018-19 and 2019-2020;
(f) Direct the Respondents to provide details to the Petitioner of the fees, charges and other consideration received by it and the other Presidium Group entities from the third party schools operating under a franchise from the Presidium Group, for the financial years 2018-19 and 2019-2020
(g) Direct the appointment of a reputed charted accountants' firm to act as the receiver and undertake the activities/ exercise the powers as mentioned at Para 35 hereinabove;
(h) As an alternative to (g) above, direct the Respondents to ensure that (i) all revenues are only deposited in the escrow accounts set up under the escrow agreements; and (ii) utilize such revenues only for bonafide purposes strictly in accordance with the escrow agreement;
(i) restrain the Respondents from terminating the contracts entered into between Presidium Group entities and the Borrower Entities, as well as injunct the Respondents from interfering with the contracts entered into by third party franchise schools with the Borrower Entities;
(j) any money received by any of the Respondents 1 to 14 to be paid to the Petitioner and Respondent No. 20 on a pro-rata basis.
(k) Pass an ex-parte ad-interim order in terms of prayers (a) to
(j) above
2. Learned counsel for the petitioner submits that the respondents have an admitted liability of a sum of Rs.100 crores (approximately) towards the petitioner. The loan agreements forming the subject matter of the instant dispute require respondent nos.1 to 5 to deposit all income/cash flow generated by them from running their schools in the designated escrow accounts being maintained by the respondent no.20. However, since the respondents began defaulting on their contractual payments and siphoning off revenues generated from their schools, the petitioner was compelled to approach this Court by way of the instant petition. This Court, on 15.11.2019, restrained the respondents from alienating or creating any third party rights with respect to any of their assets, to the extent of the amounts due under the sanction agreements, except in the ordinary course of business. Notwithstanding this position, the petitioner seriously apprehends that the respondents have continued to contravene the terms of their agreement by failing to deposit the entire amounts received by them in the escrow accounts and, instead, seeking withdrawals therefrom for meeting wage-related, statutory and operational expenses of running their schools. He submits that that being said, despite being in receipt of the notice of contempt, none of the respondents have filed their responses thereto. In these circumstances, he prays for this Court to appoint a Receiver to monitor the escrow accounts being maintained by respondent no.20 and analyse all past, present and future deposit of amounts therein, to confirm whether respondent nos. 1 to 5 are adhering to the terms of the loan sanction. He also submits that he has no objection if the Receiver were to be entrusted with the power to determine the quantum of amounts which can be released to respondent nos.1 to 5 for the purpose of meeting the expenses of running their schools.
3. Learned counsel for the respondents submits that provided the Receiver is empowered to consider the respondents' request for release of the amounts they need to meet the daily expenses of running their schools, the respondents do not have any objection to this request.
4. Accordingly, with the consent of the parties, Justice Deepak Gupta, former Judge of the Hon'ble Supreme Court (+91 98165 33333) is appointed as Receiver to henceforth monitor the escrow accounts being maintained by the respondent no. 20 and the deposit of amounts therein as well as application thereof, which includes analysing all past instances of deposits as well and verifying whether the same adhered to the terms of the loan agreements. The learned Receiver shall inspect whether the amounts being collected by respondent nos.1 to 5 from their schools by way of fee and other charges are being, and have been, positively deposited in the escrow accounts. Further, all disbursements to be made from the escrow accounts shall be effected only pursuant to an authorisation therefor by the learned Receiver. It will be open for the learned Receiver to call for all books and records of respondent nos. 1 to 5, which he may need to discharge his duties under this appointment, and both sides shall render their full assistance to him on all these aspects. The learned Receiver shall be paid a sum of Rs.10 lakhs towards remuneration, which shall be released from the escrow accounts in question and may be increased if the need so arises.
5. However, keeping in view the respondents' urgent requirement for the amounts it would need to satisfy the salaries, wages of its employees, the statutory dues of its schools and the day to day expenses involved in running them, it will be open for them to approach the learned Receiver with all such requests. Needless to say, the learned Receiver shall examine all such requests expeditiously.
6. A copy of this order will be sent forthwith to the learned Receiver.
7. List on 26.03.2021.
REKHA PALLI, J DECEMBER 22, 2020 sr