NCLT New Delhi (07.03.2023) In Mr. Anuj Jain Interim RP Jaypee Infratech Ltd. Vs. Suraksha Realty Ltd. [IA. No. 2836/PB/2021, IA. No. 3457/PB/2021 IA. NO. 3306/PB/2021, and IA. No. 2521/PB/2022 in Company Petition No. (IB)-77(ALD)/2017] while approving the Resolution Plan considered reliefs & concessions in detailed order;
Blogger’s Comments; Detailed order on reliefs and concessions will be a valuable guide for Resolution Applicants for framing Resolution Plans in other similar real estate companies.
Excerpts of the order;
X. RELEIFS AND CONCESSIONS
# 131. The Successful Resolution Applicant (SRA)/Suraksha, has sought for 38 “Reliefs and Concessions”, as detailed in Annexure II, from Pages 132 to 138 of the Resolution Plan. It is, however, important to note that the SRA/Suraksha has undertaken in clause 12 of the Resolution Plan that it will implement the plan even if no relief or concession is granted to it. The said Clause 12 of the Resolution plan is reproduced below, for the sake of
immediate reference: . . . . . . . .
# 132. Nevertheless, we would like to examine each of the reliefs and concessions asked for. The first relief and concession sought in the Annexure- II of the Resolution Plan are:
“1. All the existing legal proceedings relating to Income Tax shall stand irrevocably and unconditionally abated, settled and all liability/ obligations of the Corporate Debtor vis-a-vis the Income Tax authority in relation to such matters shall stand extinguished in perpetuity.”
Through this relief, the SRA is seeking irrevocable and unconditional abatement/settlement in perpetuity of all Income Tax proceedings of the Corporate Debtor. Thus, the relief sought being abatement/settlement of all legal proceedings relating to Income Tax in perpetuity, we are not inclined to grant such a blanket relief. In our view, it is the duty of the SRA to seek termination of such litigations, pending before the relevant Authorities, in accordance with the law. It would not be apt for this Adjudicating Authority to interfere with the jurisdiction of various legal forums on a blanket basis and therefore, the relief is declined.
# 133. The next Relief and Concession sought by the SRA is at Serial No.2 of Annexure-II, which is reproduced below:
“2. The approval of this Plan by the Adjudicating Authority shall be deemed to have waived all the procedural requirements in terms of Section 66, Section 42, Section 62, Section 71 of the CA, 2013 and relevant rules made thereunder, in relation to reduction of share capital of the Corporate Debtor, issuance of shares by Expressway SPV, Land Bank SPV, conversion of Admitted Financial Debt due to the Institutional Financial Creditors to equity, subscription of debentures by the Corporate Debtor or transfer of shares of the Land Bank SPV from the Corporate Debtor to Institutional Financial Creditors.”
In our view, if Resolution Plan proposes a reduction of share capital or further allotment of shares, there is no need to follow any separate procedure, as the approval of the Resolution Plan under the IBC 2016 is a single window clearance. Hence, we are inclined to grant this relief.
# 134. The next relief and concession sought by the SRA is at Serial No.3 of Annexure-II, which reads thus:
“3. All relevant Governmental Authorities to grant relief/waiver from payment of stamp duty, to the extent permissible under the Applicable Law, for the successful implementation of the Plan inter alia including for the increase in authorized share capital, issuance/transfer of shares or debentures (optionally convertible debentures/non-convertible debentures), transfer of Expressway asset and land bank asset (including leasehold rights in underlying land) to Expressway SPV and Land Bank SPV respectively, pursuant to business transfer, etc.”
Since waiver of Stamp Duty is not a liability of the Corporate Debtor of the pre-CIRP period and will cause a loss of revenue to the Public Exchequer, we are not inclined to grant this relief and concession.
# 135. The next relief and concession asked by the SRA is mentioned in Serial No.4 of Annexure II, which reads as under:
“4. All Governmental Authorities (including the Income Tax authority) to waive the non-compliances of the Corporate Debtor or further claims of the Governmental Authorities on the Corporate Debtor arising out of or in relation to the past claims or non-compliances, prior to the Approval Date.”
Since the relief sought is with respect to non-compliance of the CD or further claims of the Governmental Authorities (including the Income Tax authority) on the Corporate Debtor, which has neither been crystalized nor an opportunity of hearing to the relevant Governmental Authorities including the Income Tax Department was available, we are not inclined to grant such a blanket relief in rem.
# 136. The next relief and concession sought by the SRA is listed in Serial No.5 of Annexure-II, which is reproduced below:
“5. All Governmental Authorities (including the Income Tax authority, Service Tax department and VAT department) to provide relief to the Corporate Debtor from all past litigations pending at different levels and provide waiver from tax dues including interest and penalty on such litigations as on the Approval Date.”
Through, this relief, the SRA is seeking blanket termination of litigations pending before all Governmental Authorities. In our view, it is the duty of the SRA to seek termination of those litigations, pending before the relevant Governmental Authorities, in accordance with the law. It would not be apt for this Adjudicating Authority to interfere with the jurisdiction of Governmental Authorities on a blanket basis and therefore, the relief is declined. However, the SRA would be at liberty to proceed in accordance with law.
# 137. The next relief and concession sought by the SRA listed at Serial No.6 of Annexure II, which reads thus:
“6. The lenders (including Institutional Financial Creditors) to the Corporate Debtor shall regularize all the loan accounts of the Corporate Debtor and shall ensure that the asset classification of such loan accounts is "standard" in their books with effect from the Approval Date.”
None of the Financial Creditors of the Corporate Debtor have objected to this relief at any stage. Further, in our view, the Financial Creditors having been treated as per their entitlement in the Resolution Plan, the relief sought will not cause any prejudice to the Financial Creditors. Hence, we are agreeable to granting this relief.
# 138. The next relief and concession sought is mentioned in Serial No.7 of Annexure II, which reads as under:
“7. All creditors (including the Institutional Financial Creditors, FD Holders, Home Buyers Refund Seekers and the Operational Creditors) of the Corporate Debtor to withdraw all legal proceedings commenced against the Corporate Debtor in relation to Claims including proceedings under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and Recovery of Debt and Bankruptcy Act, 1993 and seek quashing of criminal proceedings including proceedings under Section 138 of the Negotiable Instruments Act, 1881, within a period of 90 (ninety) days of the Approval Date.”
Through, this relief and concession, the SRA is trying to seek blanket withdrawal of all legal proceedings initiated before various other forums. In our view, it is the duty of the SRA to seek termination of the legal proceedings, pending before various forums, in accordance with the law. It would neither be apt for this Adjudicating Authority to interfere with the jurisdiction of other forums nor to direct any third party to withdraw the legal proceedings and therefore, this blanket relief is declined. However, the SRA would be at liberty to proceed in accordance with law.
# 139. The next relief and concession listed at Serial No.8 of Annexure II is as follows:
“8. Except those agreements/letter of allotments, where the sub-lease deeds had been executed between the Corporate Debtor and the third parties, in relation to all the agreements/letter of allotments, entered into between the Corporate Debtor and the third parties in relation to the transfer of the leasehold rights over the land situated in Agra and Tappal, the Resolution Applicant reserves the right to terminate/cancel the same with concurrence of such third parties and with simultaneous repayment of the actual amount already paid by such third parties without any interest or further liabilities on the Corporate Debtor or the Resolution Applicant, Pursuant to such termination/cancellation, such land parcels and rights attached thereto shall be fully vested in the Corporate Debtor.”
Through this relief, the SRA is seeking blanket termination/cancellation of agreements/letters of allotments executed between the Corporate Debtor and third parties. In the absence of specific details of such agreements/letters of allotments being available before us and without affording an opportunity of hearing to the third parties, we are not inclined to interfere in the dealings of Corporate Debtor with third parties and therefore, this blanket relief is declined. However, the SRA would be at liberty to proceed in accordance with law.
# 140. The next relief and concession sought by the SRA is mentioned in Serial No.9 of Annexure II, which is reproduced below:
“9. The relevant Governmental Authorities shall not initiate any investigations, actions or proceedings against the Corporate Debtor or the Resolution Applicants or the new management (upon acquisition of the Corporate Debtor) including the board of directors, in relation to any noncompliance with Applicable Laws by the Corporate Debtor pertaining to any period up to Approval Date. Neither shall the Resolution Applicants nor the Corporate Debtor nor their respective directors, officers, and employees to be appointed after the Approval Date be liable for any violations, liabilities, penalties or fines with respect to or pursuant to the Corporate Debtor not having in place the requisite licenses and approvals required to undertake its business as per Applicable Laws and the Resolution Applicant seeks a time period of 12 months from the Approval Date, to ensure renewal of such consents/licenses and approvals. Licenses and approvals held by the Corporate Debtor which expired prior to the Approval Date or which will expire within a period of 3 months thereafter shall be renewed/extended by the relevant Governmental Authorities and the Corporate Debtor shall be permitted to continue its business and assets in manner operated prior to submission of this Plan. Resolution Applicant seeks a time period of 12 months from the Approval Date, to ensure compliances.”
There is no provision under any law (except as specified in Section 32A of IBC, 2016) by which blanket immunity against investigations, actions, or proceedings, in relation to any non-compliance with Applicable Laws or from taking requisite approvals and licenses for 12 months can be granted to the Corporate Debtor or the Resolution Applicants or the new management (upon acquisition of the Corporate Debtor) including the board of directors. Hence, we are not inclined to grant this relief. However, the SRA would be at liberty to proceed in accordance with law.
141. The next relief and concession sought by SRA is listed in Serial No.10 of Annexure II, which reads thus:
“10. In relation to any alleged transfer of any economic interest or other beneficial interest by the Corporate Debtor to JAL in the past pertaining to the land parcels for the real estate development, where the title and ownership is still lying with the Corporate Debtor, the Resolution Applicant shall have a right to proceed in accordance with Applicable Law including to terminate/cancel such arrangement without any liability (monetary or otherwise) on the Corporate Debtor or the Resolution Applicant.”
During the course of the hearing, JAL has raised objections to this clause. It is argued by the JAL that this clause pertains to 302 acres of land for which, the entire consideration was paid by JIL to JAL as far back as between 2006 to 2009. Accordingly, physical possession of the land was also handed over by JIL to JAL. A number of housing projects, registered under the RERA, have been launched by JAL on the said land, the development/construction of which is still in progress. Further, the 302 acres of land have not been shown as an asset of the corporate debtor/JIL in its Annual Financial Statements since 2009, whereas this land has been shown as an asset of JAL in its Annual Financial Statements since 2009. The termination of the agreements between JIL and JAL of the 302 acres of land would create an unprecedented crisis for 4,000 homebuyers of flats/plots, who may lose the money which they have already paid to JAL. Further, JAL has already incurred expenditure on construction and the undelivered flats are at various stages of construction. Per contra, SRA has contended that there were many transactions and wrongdoings in the working of the Corporate Debtor under the garb of incorporating JIL as an SPV. In the event, any such transaction is found, where JAL is enjoying the land parcels, where ownership is with the JIL, JIL shall be entitled to terminate such contracts. This relief does not prejudice the legal right of any party and Resolution Applicant has the right to proceed only in accordance with prevailing laws.
We have heard both parties. It is argued by the JAL that Clause 10 pertains to 302 acres of land for which, the entire consideration was paid by JIL between 2006 to 2009 and physical possession of the land was also handed over to JAL. What transpired during the hearing is that the JIL and JAL have yet to execute registration of the said land. As we have noted earlier a letter dated 4th Oct 2022 has been sent by IRP to JAL authorities requesting them to take necessary action for the transfer of land which is duly mentioned i our order dated 3rd Oct 2022. In our considered view, once the sub-lease deed is executed by JAL, the legal title of the 302 acres of land shall stand transferred in favour of JAL and the issue raised by JAL will become redundant. However, till then, prejudice may be caused to the Homebuyers of JAL, if this relief is granted. Hence, we are not inclined to grant this relief. However, in case either of the parties does not take steps for registration of the aforesaid 302 acres of land, they shall be at liberty to approach the court of appropriate jurisdiction for requisite relief.
# 142. The next relief and concession sought by the SRA is listed in Serial No.11 of Annexure-II, which is reproduced below:
“11. The Resolution Applicants assume that, in compliance of his duties under Regulation 35A of the CIRP Regulations, the Interim Resolution Professional had determined whether the Corporate Debtor has been subjected to any transactions covered under sections 43, 45, 50 or 66 of the Code or not and applied to the Adjudicating Authority for seeking appropriate relief. Accordingly, though the Resolution Applicants reserve their right to institute any investigation pertaining to any transaction(s) carried out by the ex-management of the Corporate Debtor or to file appropriate applications before the court/tribunal of competent jurisdiction, the Resolution Applicants and its officers, directors, employees and the new management of the Corporate Debtor, shall never be liable/responsible for any such transactions carried out by the exmanagement of the Corporate Debtor.”
The aforesaid relief sought is vague in nature. There is no provision in the law requiring permission of this Adjudicating Authority to file an application against ex-management. The SRA is free to initiate action which is permissible under the law. However, the same shall not be treated as if the same is done with the permission of this Adjudicating Authority. In view of the above, the relief at Serial 11 is not granted.
# 143. The next relief and concession sought by the SRA is mentioned in Serial No.12 of Annexure II, which reads as under:
“12. With respect to any alleged transfer of land parcels by the Corporate Debtor to third parties without any proper agreement/sub-lease deeds and where the consideration amount has not been paid to the Corporate Debtor inter alia including the land parcels, the Resolution Applicant reserves a right to cancel such instruments/agreements/term sheets and upon cancellation the title in such land parcels. will continue to be legally vested in the Corporate Debtor without any liability/obligation to the counter-party, provided that such counter-party may take necessary steps as per Applicable Laws.”
Through this relief, the SRA is seeking blanket permission to cancel such instruments/agreements/term sheets entered into by the Corporate Debtor for the transfer of land parcels to third parties. In our view, depending upon the specific facts of each case/transaction, the Resolution Applicant is free to take action as deemed fit and permissible under the law. However, such acts should not be deemed to have been initiated on the pretext, as if the same is permitted by this Adjudicating Authority. In view of the above, we are not inclined to grant this relief. However, the SRA would be at liberty to
proceed in accordance with the law.
# 144. The reliefs and concession sought by the SRA at Serial No.13 of Annexure II read thus:
“13. For the purpose of consolidation of the books of Corporate Debtor with Resolution Applicant, the Approval date shall be treated as the first day of the quarter immediately succeeding the quarter in which the Resolution Applicants acquire 100% shareholding of the Corporate Debtor.”
The implications of the relief sought being not explained to our satisfaction, we are not inclined to grant this relief.
# 145. The next relief and concession sought by the SRA at Serial No.14 of Annexure II, is reproduced below:
“14. The claims of all Home Buyers (including claims filed before RERA), Financial Creditors, Operational Creditors and Landowners (farmers) against the Corporate Debtor at all platforms including judicial, quasijudicial and regulatory shall stand withdrawn on the NCLT Approval Date.”
Through this relief, the SRA is seeking blanket withdrawal of the claims of all Home Buyers (including those filed before RERA), Financial Creditors, Operational Creditors, and Landowners (farmers) against the Corporate Debtor at all platforms including judicial, quasi-judicial, and regulatory platforms. In our view, it would not be apt for this Adjudicating Authority to permit blanket withdrawal of claims of different stakeholders including Home Buyers and Farmers pending before other forums. It is the duty of the SRA to apprise the court of appropriate jurisdiction. Accordingly, we are not inclined to grant this relief. However, the SRA would be at liberty to proceed in accordance with law.
# 146. The next relief and concession sought by SRA at Serial No.15 of Annexure II reads as under:
“15. All the concerned authorities including the Central Government and the Reserve Bank of India to accord the necessary permissions or approvals under the Banking Regulation Act 1949 (to the extent permissible under the Applicable Law) to the Institutional Financial Creditor(s) (if required) in relation to the transfer of shareholding of the Expressway SPV and the Land Bank SPV to the Institutional Financial Creditors.”
In our considered view, this Adjudicating Authority cannot interfere with the working of Central Government and RBI, for providing necessary approvals. It is the duty of the SRA to take necessary approvals from the competent authority. Accordingly, we are not inclined to grant this relief. However, the SRA would be at liberty to proceed in accordance with law.
# 147. The next relief and concession as sought at Serial No.16 of Annexure II reads thus:
“16. Entities including Serious Fraud Investigation Office, Income Tax Department will not stop the segregation of accounts, records, SAP, employees of Corporate Debtor and JAL and further, JAL will not hold back any document, hardware which is jointly held by the Corporate Debtor and JAL.”
During the course of the hearing, JAL objected to this relief. In our view, under the garb of seeking this relief and concession, the SRA cannot ask for any direction with respect to the manner in which an investigating agency should act and as a matter of general principle, we would not like to interfere with the working of Investigating Agencies. However, it goes without saying as and when the need arises, both JIL and JAL will extend necessary cooperation to the Investigation Agencies. In view of the above, the relief sought is declined.
# 148. The next relief and concession sought at Serial No.17 of Annexure II is as under:
“17. The various deposits under protest made with various authorities shall be unconditionally made available as assets of the Corporate Debtor immediately upon approval of this Resolution Plan as the underlying claims are being settled in terms of this Resolution Plan.”
In our view, such a relief and concession cannot be sought under a Resolution plan. The SRA may take appropriate steps in accordance with law to recover any such deposit made under protest. Accordingly, we are not inclined to grant this relief.
# 149. The next relief and concession sought by the SRA at Serial No.18 of Annexure II, is reproduced below:
“18. The Resolution Applicants be permitted to claim set-off of the entire Minimum Alternate Tax (MAT) credit as available to the Corporate Debtor, against the normal income-tax as would be payable by the Corporate Debtor post the Approval Date i.e., no normal taxation should be applicable until the MAT credit is adjusted/utilized in full.”
JAL had objected to such relief and concession. It has stated that the relief regarding MAT credit if granted, would violate the provisions of the IBC as well as that of the Income Tax Act. As per Section 115 JAA (3A) of the Income Tax Act, carry forward of a tax credit is not allowed beyond the fifteenth assessment year succeeding the assessment year in which tax credit becomes allowable. However, through approval of its Resolution Plan, Suraksha is attempting to bypass the relevant provisions of the Income Tax Act as it seeks to avail the benefit of MAT credit for an indefinite period i.e., till the MAT credit is utilized in full. While agreeing with the submissions of JAL, the relief sought to be violative of the Income Tax Act, we decline this relief.
# 150. The next relief and concession sought by the SRA at Serial No.19 of Annexure II reads as under:
“19. All the losses already lapsed/not lapsed as on the Approval Date should be allowed to be carried forward for a period till the same are utilised/ set-off fully by the Corporate Debtor.”
The JAL has objected to this relief and concession. Through this relief, the SRA seeks blanket permission to carry forward all losses already lapsed or not lapsed, as on the date of approval of the Suraksha Plan, for a period till the same is utilized or set off in full by the JIL. As per Section 72(3) of the ncome Tax Act, no loss can be carried forward for more than eight assessment years immediately succeeding the assessment year for which the loss was first computed. However, under the garb of the approval of the Plan, Suraksha is attempting to bypass the future application of relevant provisions of the Income Tax Act contrary to the express provisions of the law. In our view, this issue will have to be dealt with under the purview of the IT Act. Therefore, such a blanket relief and concession sought by the SRA, against the provisions of the Income Tax Act, cannot be granted. Accordingly, the same is declined.
# 151. The next relief and concession sought by the SRA at Serial No.20 of Annexure II, which reads as given below:
“20. The transfer of land to lenders and to Land Bank SPV as part of Resolution Plan in terms of the Resolution Plan may involve capital gains/business income to the Corporate Debtor. Such a gain or income shall be treated as capital reserve for the purposes of Corporate Debtor.”
JAL has objected to this Clause and has stated that the land in the case of JIL forms part of its assets as stock in trade. Accordingly, JIL has been accounting for the proceeds from sub-lease of land as business income and surplus from said sub-lease of such land as business profit, which is taxable as business income under Section 28 (i) of the Income Tax Act. However, through approval of the Resolution Plan, Suraksha is seeking to avoid the relevant provisions of the Income Tax Act and to escape taxation under the Income Tax Act by treating income as a capital reserve. Any capital gain is a subject matter of the extant tax laws. Whether the capital gain tax will be applicable or not on a particular transfer of land is to be determined within the framework of the Income Tax Act and Rules there under by the Competent Authority/Income Tax Department. Hence, we cannot interfere with the jurisdiction of the Central Government/Income Tax Department. Accordingly, the relief as sought is not granted.
# 152. The next relief and concession sought by the SRA at Serial No.21 of Annexure II reads as under:
“21. All Governmental Authorities including the Income Tax authority, Service Tax department and VAT department, Labour Cess department (BOCW), to provide relief to the Corporate Debtor from all past litigations pending at different levels and provide waiver from tax & cess dues including interest and penalty on such litigations as on the Insolvency Commencement Date.”
Since, the aforesaid relief and concession is in the nature of a blanket relief, we are not inclined to grant the same.
# 153. The next relief and concession sought by the SRA at Serial No.22 of Annexure II, is reproduced below:
“22. The penalty levied/leviable and procedural requirements for delisting of shares, by the Stock Exchanges and SEBI, relating to reduction of Share Capital Delisting/ any Other reasons etc., (if any) to be waived off.”
In our view, the penalty levied/leviable and procedural requirements for delisting of shares, by the Stock Exchanges and SEBI, relating to the reduction of Share Capital Delisting/any Other reasons, etc., (if any) shall be subject to the relevant provisions of law. In view of the above, the relief sought is not granted.
# 154. The next relief and concession sought by SRA at Serial No.23 of Annexure II, reads thus:
“23. All software/licences including SAP and hardware belonging to JAL or any other party which were being used by the Corporate Debtor shall stand transferred to the Corporate Debtor.”
Since the relief sought is of a blanket nature with respect to the properties, which do not belong to Corporate Debtor/JIL and those may have been subject to certain/particular contractual arrangements, therefore, we are not inclined to grant this relief. Hence, the relief sought is declined.
# 155. The next relief and concession sought by the SRA at Serial No.24 of Annexure II reads as under:
“24. Issuance of necessary directions for the segregation of data of Corporate Debtor and JAL any other associate company of the Corporate Debtor will be allowed.”
It is stated by JIL that there are several documents, information, and data stored in records of JAL i.e., Architectural drawings and Auto CAD designs, which are critical for effective implementation of the Resolution Plan. In view of the above, the relief sought is granted.
# 156. The next relief and concession sought at Serial No. 25 of Annexure II is reproduced below:
“25. Issuance of necessary direction to the concerned government uthority for waiver of the stamp duty, registration charges, filing fees and other moneys payable to the government, if applicable and in relation to this Resolution Plan and its implementation including but not limited to reduction of share capital of the Corporate Debtor, issuance of Equity Shares and documentation in relation thereto, to the extent permissible under Applicable Laws.”
Since the relief sought is a waiver of the stamp duty, registration charges, filing fees, and other amounts of money payable to the government, which will cause a significant loss of revenue to the public exchequer, we are not inclined to grant this relief and concession. Accordingly, the relief is declined.
# 157. The next relief and concession sought by the SRA is at Serial No.26 of Annexure II, which reads as under:
“26. Issuance of necessary directions to SEBI, relevant stock exchanges and MCA for expediting the delisting of shares and to take necessary actions in a time bound manner as applicable under the prevailing laws in order to implement the Resolution Plan.”
As the relief sought is to facilitate implementation of the Resolution Plan, the same is granted.
# 158. The next relief and concession sought by the SRA is at Serial No.27 of Annexure II reads thus:
“27. Issuance of necessary directions to relevant RERA Authority(ies) to expeditiously make the appropriate changes in its records qua Projects, in accordance with the Resolution Plan.”
Since the relief sought will expedite the implementation of the Resolution Plan, the same is granted.
# 159. The next relief and concession sought by the SRA is at Serial No.28 of Annexure II is reproduced below:
“28. Issuance of necessary directions to the lenders of the Homebuyers, waive the past defaults of the homebuyers/Corporate Debtor in relation to projects, disburse the outstanding sanctioned facility as per the project completion milestones in line with the terms of sanction, immediately upon approval of the Resolution Plan by the Adjudicating Authority, as it is critical for the construction/completion of the projects.”
Through this relief, the SRA is seeking blanket direction to the Lenders of the Home Buyers to waive the past default of the Home Buyers/CD in relation to projects, which in our view, is unreasonable to the Lenders who may have entered tripartite agreements with the parties and beyond our Jurisdiction. Hence, the relief sought, being devoid of merit, is declined.
# 160. The next relief and concession sought at Serial No.29 of Annexure II reads as given below:
“29. The Hon’ble Adjudicating Authority be pleased to issue necessary directions to the local district administration of the respective states where the assets of the Corporate Debtor are situated to give assistance to the Resolution Applicant (s) for the implementation of the Resolution Plan, as and when required by the Resolution Applicants and for completing the Construction of Projects for Home Buyers.”
Since the relief sought will expediate implementation of the Resolution Plan, the relief is granted.
# 161. The next relief and concession sought is at Serial No. 30 of the Annexure II, which reads as under:
“30. To direct the concerned Registrar of Companies to expeditiously associate, as per Applicable Laws, the Directors Identification Numbers (DIN) of the Directors who would be taking charge collectively as Board of Directors of the Corporate Debtor, pursuant to the approval of the Resolution Plan.”
The aforesaid relief is granted.
# 162. The next relief and concession sought at Serial No. 31 of Annexure II reads thus:
“31. Issuance of necessary directions to Central Board of Direct Taxes for exemption /grant of relief to the Corporate Debtor from the provisions of Sections 41(1), 45, 72 (3), 43-B, 56, 79, 80 read with 139, 115JB and 269-SS, 269-T and 281, provisions of Chapter XVII of the Income Tax Act effective from the date of approval of the Resolution Plan or on account of implementation of the Resolution Plan.”
The reliefs and concessions sought are contrary to the provisions of the Income Tax Act, of 1961, therefore, we are not inclined to grant such relief. Accordingly, the relief is declined.
# 163. The next relief and concession sought at Serial No. 32 of Annexure II is reproduced below:
“32. Issuance of necessary directions to Central Board of Indirect Taxes and Custom to waive any requirement of approval for transfer of assets or business undertaking in term of the Resolution Plan.”
The reliefs and concessions sought are required to be considered under the provisions of the Income Tax Act, of 1961, therefore, we are not inclined to grant such relief. Accordingly, the relief sought is declined.
# 164. The next relief and concession sought at Serial No.33 of Annexure II reads as under:
“33. Issuance of suitable directions to the Ministry of Corporate Affairs, to waive the requirements under Section 140 of the Companies Act, 2013 in respect of the removal of the existing auditors of the Corporate Debtor. Issue directions to JAL to the effect that during the Transition Period, JAL, if so required by the Resolution Applicants, shall provide all facilitation to the Resolution Applicants /Corporate Debtor, with regard to maintenance and handing over the assets of the Corporate Debtor, for effective implementation of the Resolution Plan.”
Since the relief sought will expedite the implementation of the Resolution Plan, the relief is granted.
# 165. The next relief and concession sought at Serial No.34 of Annexure II is reproduced below:
“34. Issue directions such that the Corporate Debtor receives the amounts due to it, with respect to and in interest of the Home buyers of the Corporate Debtor, including outstanding construction advance received from the Corporate Debtor, outstanding maintenance deposit received from the Corporate Debtor and outstanding maintenance deposits of the Home Buyers of the Corporate Debtor, and other outstanding advances related to Home Buyers of the Corporate Debtor, immediately upon completion of the reconciliation between the Corporate Debtor and JAL, as the same shall be utilised for completion of the construction for Home Buyers of the Corporate Debtor, in line with the following directions of the Jaypee Kengsinton Judgement.”
The relief and concession sought at serial no. 34, relates to the outcome of the reconciliation process taking place between JAL and IRP of JIL as per the direction of Hon’ble Apex Court. Since the matter is a subject of separate Adjudication, we are not inclined to grant any such relief. Accordingly, the relief is declined. However, it goes without saying that if any amount is found receivable by the JIL, it will be subject to the orders of this Adjudicating Authority passed in the Reconciliation proceedings.
# 166. The next relief and concession sought at Serial No.35 of Annexure II reads as under:
“35. Issue directions to JAL to make immediate payment of the outstanding amounts of Rs. 71 crore, as per the audited balance sheet of the Corporate Debtor dated March 31, 2021, payable by JAL to the Corporate Debtor, with respect to outstanding consideration for lands of the Corporate Debtor sub-leased to the lenders of JAL, as these funds also can be utilised for expediting the construction for Homebuyers. It is clarified that this relief is not linked to reconciliation directed by Hon’ble Supreme Court in Jaypee Kensignton Judgement and is sought independently, in the interest of justice.”
This relief sought herein is a subject matter of the reconciliation process taking place between JAL and IRP of JIL as per the direction of the Hon’ble Apex Court. Since the matter is a subject of separate Adjudication, we are not inclined to grant any such relief. Accordingly, the relief is declined.
# 167. The next relief and concession sought at Serial No.36 of Annexure II reads thus:
“36. Issue such directions that the infrastructure of the Corporate Debtor (common between Home Buyers of the Corporate Debtor and home buyers of JAL) under the control and management of JAL, shall be made available/continue to be available to the Home Buyers of the Corporate Debtor, without any further payment.”
The relief sought relates to the continued availability and utilisation of infrastructure of the Corporate Debtor/JIL (common between Home Buyers of the Corporate Debtor and home buyers of JAL) under the control and management of JAL without further payment. Whereas, it is important to have continuous availability and access to the common infrastructure for the Home Buyers and employees of JIL and JAL, however, it needs to be done on a reciprocal basis and sharing of future costs including maintenance thereof. Accordingly, we consider it appropriate to grant this relief to JIL/Corporate Debtor on a mutual/reciprocal basis and sharing of costs incurred subsequent to approval of the Resolution Plan.
#168. The next relief and concession sought at Serial No.37 of Annexure II is reproduced below:
“37. Issue necessary directions to YEIDA to complete the following pending transactions expeditiously, as per the provisions of the Concession Agreement:
a) transfer/sub-lease the balance land of approx. 79 acres in favour of the Corporate Debtor or grant compensation, as applicable, as per the provisions of the Concession Agreement.
b) NBCC, had in its earlier plan sought a relief for extinguishment of liability of the Corporate Debtor towards Noida- Greater Noida expressway in terms of the Concession Agreement. Such relief was rejected by the Adjudicating Authority and accordingly the Corporate Debtor shall provide for debt in its books for value of construction cost (Capital Costs) of the same and pay the same to YEIDA as per the terms of the Concession Agreement and in lieu, as per the terms of the Concession Agreement, YEIDA shall hand over the possession of the Noida-Greater Noida Expressway and land required for construction of toll plaza thereon and Corporate Debtor shall exercise its rights to collect the toll on the Noida- Greater Noida Expressway in terms of the Concession Agreement.
c) Any further extension of the Concession Period by 15 years, if eligible, as per the Concession Agreement, and that may be granted by YEIDA, shall be available to the Corporate Debtor and the Expressway SPV, as the case may be.
d) the deposits already made by the Corporate Debtor of around Rs. 35 crore, shall be remitted back by the YEIDA to Corporate Debtor within 30 days of NCLT Approval Date.
e) Revision of Toll as per Applicable Laws, for which request of IRP is pending.
f) Payment of appropriate compensation of all the delays as per the Concession Agreement regarding the above clauses from a) to e), in line with the Concession Agreement
g) Issuance of approvals/building completion certificate, in compliance with Applicable Laws, in the interest of more than 20,000 home buyers that are stuck since 8-10 years, as needed in order to effectively implement the Resolution Plan, which is one of the key requirements of the Code, in order to make Resolution Plan succeed.”
YEIDA has strongly objected to the grant of such reliefs and concessions on the ground that such reliefs would result in tinkering with the Concession Agreement and the same cannot be done without taking the express consent of YEIDA. We agree with the submissions made by YEIDA. Accordingly, reliefs and concessions sought at 37(a) to 37(g) are declined.
# 169. The next relief and concession sought at Serial No.38 of the Annexure II reads thus:
“38. Issuance of necessary directions to the effect that the transaction pertaining to mortgage of 100 acres land of the Corporate Debtor situated at Tappal for securing the credit facility availed by JAL from its lenders can be agitated under the provisions of the Code before this Adjudicating Authority.”
It is stated by the SRA that as per the information available to them, there was no consideration for creating a mortgage of 100 acres of land, which is n asset of the Corporate Debtor (out of total of 858 acres of the land mortgaged by the Corporate Debtor), in favour of the lenders for the loans given to JAL. Therefore, a mortgage over such 100 acres of land parcel is also invalid and requires to be reversed. The JAL had argued that whereas, 757 acres of land were transferred back to JIL/Corporate Debtor, the remaining 100 acres of land was found beyond the look-back period. In our view, the relief sought by the SRA has been the subject matter of litigation in the past and is not in the nature of relief and concession for implementation of the Resolution Plan. Hence, the relief sought is declined.
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