NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Company Appeal (AT) No. 346 of 2018 & I.A. No.1139 of 2019
IN THE MATTER OF:
Union of India ...Appellant
Vs.
Infrastructure Leasing & Financial Services Ltd. & Ors. ....Respondents
Present: Mr. Kapil Sibal, Senior Advocate, Mr. Abhinav Vashisht,
Senior Advocate, Ms. Arun Kathapalia, Senior Advocate, Mr. Manmeet Singh, Mr. Anukrit Gupta, Mr. Abhinandan Banerjee and Ms. Ria Kohli, Advocates for Intervenors.
Mr. Krishnendu Datta, Ms. Madhusneta, Ms. Kanika
Tandon and Ms. Shivangi Khurana, Advocates for NHAI – Applicant.
Mr. Gopal Jain, Senior Advocate, Mr. Ramesh Babu, Ms.
Manish Singh and Ms. Swati Setia, Advocates for Reserve
Bank of India.
Mr. Gopal Jain, Sr. Advocate with Mr. Ashish Mukhi, Ms.
Madhurima Sarangi, Mr. Kamlendra P. Singh, Advocates
for UTI AMC, UTI RSL, UTI MF, HDFC PF, Kotak PF, SBI
PF, LIC PF.
Mr. Arun Kathpalia, Senior Advocate with Mr. Sidharth Sethi and Ms. Tanya Tiwari, Advocates for PTC India Financial Services – Intervenor.
Mr. Ajay Bhargava, Ms. Vanita Bhargava, Mr. Aseem
Chaturvedi, Ms. Wamika Trehan, Advocates for Mashreq Bank, Aditya Birla Finance Ltd., Apollo Munich, West Coast Paper Mills Ltd., HUL Union Fund, MC Rubel India
Ltd.
Mr. R.B. Trivedi, Advocate for BOI (Respondent No.15)
Mr. Singh, for Citizen Credit Co-operative Bank.
2
Mr. Ashish Prasad and Sanyam Saxena, for Appolo Tyres; Hindalco Employees Provident Fund; Hindalco
Employee Fund-II; Naysara Energies Employee Fund and ICBC.
Mr. Atul Shanker Mathur, Ms. Priya Singh and Ms. Sweta, Advocates for Mother Dairy Fruit & Vegetable Pvt.
Ltd.
Mr. Atul Shanker Mathur, Ms. Priya Singh and Ms.
Sweta, Advocates for NDDB PF Trust
Mr. Atul Shanker Mathur, Ms. Priya Singh and Ms. Sweta, Advocates for BHEL PF Trust.
Mr. Abhinav Goyal and Mr. Pallav Mongia, Advocates for Yokogawa India Ltd. Employees Provident Fund and BALCO Employees Provident Fund, Intervenors.
Mr. Rohit Gandhi, Mr. Bindu, Mr. Aprajita Swarup and
Mr. Dhruv, Advocates for ITGI Employee Provident Fund Trust – for Appellant.
Mr. Bindu, Mr. Rohit Sondhi, Mr. Aprajita Swarup and Mr. Dhruv, Advocates for IFFCO-Tokio General Insurance
Co. Ltd. – Appellant.
Mr. Nishant Menon, Mrs. Kavita Sarin, Mr. Shafiq
Ahmed, Advocates for Intervener in IA 1251 & 1257 Ravi Kirishan Chandre for Applicant.
Mr. Piyush Bansal and Mr. Gurcharan Singh Advocate
for Interpleaders (1) HPGCPL – Employees Pension Fund
Trust (2) HVPNL – Employees Pension Fund Trust (3)
UBHVNL – Employees Pension Fund Trust (4) HVPNL –
Employees Provident Fund Trust and (5) UBHVNL –
Employees Provident Fund Trust.
Mr. Gucharan Singh, Advocate for Interpleader (1) Dalal
& Broacha Stock Broking Pvt. Ltd. and Mudra
Communication Pvt. Ltd. – Employees Pension Fund
Trust.
Dr. Abhishek Manu Singhvi, Senior Advocate with Mr.
Diwakar Maheshwari, Mr. Avishkar Singhvi, Mr. Shreyas
Edupuganti and Mr. Ashwij Ramaiah, Advocates for
Indus Ind Bank, Respondent 16.
3
Mr. Kailash Vasdev, Senior Advocate with Mr. Diwakar
Maheshwari and Mr. Shreyas Edupuganti, Advocates for
Asian Paints Factory PF Trust, Asian Paints Office PF
Trust, Asian paints Gratuity Trust and Asian Paints SAF
Trust, Intervenors.
Mr. Diwakar Maheshwari and Mr. Shreyas Edupuganti,
Advocates for Himami Ltd. Staff Provident Institution,
Bajaj Finance Ltd., CESC Limited Provident Fund and
CESC Ltd. - Intervenors.
Ms. Priyambada Mishra and Ms. Shweta Duggal,
Advocates for Food Corporation of India.
Ms. P.S. Chandralekha and Mr. P.I. Jose, Advocates for
Bassein Catholic Cooperative Bank, I.A. No.422/2019.
Mr. Ashish Rana and Mr. Anurag Kr. Singh, Advocates
for Intervenor (Exim Bank).
Mr. Krishna Dev J. and Mr. Rana Sandeep Advocates for
Ray Constructions, Intervenor.
Mr. Arun Kathpalia, Senior Advocate with Mr. Sidharth
Sethi and Ms. Tanya Tiwari, Advocates for (PFS).
Mr. Dheeraj Nair and Mr. Kumar Kislay, Advocates for
Intervenor – EDC, Kotak Trust Invesco Trust.
Ms. Priyanka, Advocate for Adizath Industries (QC).
Mr. Arun Mani, Ms. Anannya Ghosh, Mr. Abhinav
Raghuvanshi and Ms. Gaurika Mohan, Advocates for
Intervenors.
Ms. Mallika Prabhakar for Sanjay Bajaj for Karnataka
Bank (Intervenor).
Ms. Mallika Prabhakar for Sanjay Bajaj for Punjab &
Sind Bank (Intervenor).
Mr. Vardhman Kaushik and Mr. Sangkrito Chauhan,
Advocates for Intervenor, Tata Motors Fin. Ltd.
4
Mr. Avijit Dikshit, Advocate for Powergrid EPF Trust, Powergrid EGF Trust, Powergrid Employees Defined
Contribution Superannuation Benefit (Pension) Scheme. Ms. Monika Benjamin, Advocate for Boxco Far East Pvt.
Ltd.
Mr. Himanshu Gupta, Advocate for DIAL Employees PF
Trust.
Mr. Shashwat Bhardwaj, Advocate on behalf of Ms. Anjali
Sharma, Advocate for Applicants – SAIL; Indian Iron &
Steel Co. Ltd. Provident Fund; Board of Trustees,
Hindustan Steel PF; Hindustan Steel Bhilai Project PF;
Hindustan Steel Ltd., Central Purchase Organisation
Calcutta PF; Durgapur Steel Plant PF Trust; SAI RMD
Establishment and Administrative Offices Employees PF;
SAIL Alloy Steel Plants PF Trust; Bokaro Steel Employee
PF; and Hindustan Steel Ltd. Contributory PF, Rourkela.
Mr. Vikas Kumar, Mr. Manish Paliwal, Mr. Ashutosh K.
Sharma, Advocates (Corporate Legal Partners) for BEL.
IPS Oberoi Aditi Sharma, Advocate for Mazagon Dock
Limited Operatives, Rashtriya Chemicals & Fertilizers
Ltd. and India Factoring Financial Solutions.
Mr. Arjun Harkauli, Mr. Anshuman Gargesh and Ms.
Arunima Bishnoi, Advocates for Crompton Greaves PF
No.1 (Intervenor).
Mr. L.K. Bhushan and Ms. Aditi Awasty, M/s Dua Associates, Advocates for Mccann Ericksion (Intervenor).
Mr. Chitranshul Sinha, Advocate for Deutsche Bank.
Mr. Gollamudi Sri Harsha Datta and Ashish Virmani Advocates for EGIS.
Mr. Anupam Kumar, Advocate for The Press Trust of India.
Mr. Parth Chopra, Advocate for Respondent Nos.4, 5, 6, 7 and 8.
5
Mr. Amit Agrawal, Ms. Aanchal Tikmani and Mr. Sahil Raveen, Advocates for Army Group Insurance Fund
(Intervenor) Diary No.11382/19.
Mr. Manih Dogra, Ms. Sonali Jaitely Bakshi and Mr.
Sharad Sharma, Advocates for Shapoorji Pallonji Pvt. Ltd. (Intervenor).
Mr. Sumit Arora Advocate for Navodyay Vidalyay Samiti (Intervenor)
Mr. Abhirup Dasgupta, Mr. Ishaan Duggal, Advocates for DHFL Prameria Ltd. (Intervenor)
Mr. Abhirup Dasgupta, Mr. Ishaan Duggal, Advocates Provident Fund (Intervenor).
Mr. Mohammad and Mr. Brijesh Ujjainnwal, Advocates for Infosys Ltd. Employee Provident Fund Trust.
Mr. Vishnu Sharma, Mr. Sourav Roy and Mr. Ashutosh Kumar, Advocates for Noida Authority (Impleadment party).
Mr. T. Sunder Ramanathan and Ms. Prerana De,
Advocates for HPCL Pension Fund Trust & BPCL Pension Fund Trust.
Mr. Amit S. Chadha, Senior Advocate with Mr. Shivek Trehana, Mr. Mehul M. Gupta and Mr. Pranay Mohan Govil, Advocates for Maharashtra Metro Rail Corporation
I.A. No.2077 and 2076.
Mr. Sanjeev Singh and Mr. Prashant Tripathi, Advocates for Aditya Birla Finance Ltd.
Mr. Gaurav Kejriwal and Mr. Sujit Keshri, Advocates for Bharatiya Reserve Bank Note Mudran Pvt. Ltd.
Mr. Vikram Hegde, Advocate for IREDA
Mr. R. Sudhinder, Ms. Nimita Kaul and Ms. Amrita Sarkar for Superannuation Fund of Housing Development, Finance Corporation Ltd., Housing
Development Finance Corporation Ltd., Provident Fund, Gratuity Fund of Housing Development Finance
Corporation Ltd., Gruh Finance Ltd., Employees Gratuity Trust Fund, Gruh Finance Ltd., Officer’s superannuation Fund, Gruh Finance Ltd. Employee’s Provident Fund
Trust.
6
Mr. Rahul Kripalani, Advocate for Countdown Financial
Services Ltd.
Mr. Sunil Fernandes, Mr. Karan Nagrath, Mr. Siddharth
Sharma, Ms. Anju Thomas and Mr. Darpan Sachdeva, Advocates.
Mr. Sidhanatha Barua, Advocate
Mr. T.P. Sindhu and Mr. Lakshman.RS and Mr. Mukund P.Unny, Advocates
Mr. Abhishek Gupta, Mr. Harshil Gupta, Advocates for
NALCO Employees Provident Fund Trust.
Mr. Anil Kher, Sr. Advocate with Ms. Disha Bajaj,
Advocate for Everest
Mr. Satendra K. Rai, Advocate
Mr. Sanjay Kapur, Ms. Meghna Karnwal, Mr. Bharath
Ganga Dharan and Mr. Kauser Husain, Advocates for SBI.
Mr. Atul Nigam, Mr. Nishant Nigam and Mr. Anubhav Tyagi, Advocates for Arvind Ltd.
Mr. Manoj, Advocate for FCI
Mr. Avneesh Garg and Mr. M.T. Reddy, Advocates for Hindustan Aeronatics Ltd.
Mr. Rudreshwar Singh and Mr. Gautam Singh, Advocates for First Rand Bank
Mr. Rudreshwar Singh and Mr. Gautam Singh,
Advocates for Punj Lyodd Ltd.
Mr. Rudreshwar Singh and Mr. Gautam Singh,
Advocates for Punj Loyodd Employees Provides Ltd.
Mr. Gautam Singh, Advocate for Arun Enterprises
Ms. Priya Sharma, Advocate for Vijya Bank
Mr. Gautam Singh and Ms. Priyanka Das, Advocates for Assam Tea Employees
7
Mr. Parag Maini, Mr. Abhimanyu Chopra, Mr. Raghav
Chadha and Mr. Parth Chopra, Advocates for South Indian Bank
Mr. Saransh Jain and Mr. Madhavam Sharma, Advocates for Jupiter Capital
Ms. Sriparna Dutta, Advocate for Titan Industries
Mr. R.B. Trivedi, Advocate for BOI
Mr. Yojit Mehra and Mr. Ajitesh Soni, Advocates for Maihar Cement, 63 Moons and SBI.
Mr. Krishna Dev J. and Mr. Rana Sandeep, Advocates for Ray Construction.
Mr. Rajgopal and Mr. Jasdeep S. Dhillon, Advocates for Skylark Infra and Sammon Infra
Mr. Anshuman Gupta, Mr. Syed Asalam Abib and Mr. Prateek Khaitan, Advocates for Jammu & Kashmir
Bank.
Mr. Abhirup Das Gupta and Mr. Ishaan Duggal, Advocates for DHFL Pramerica and Tata Power Consolidated PF.
Mr. Alok Dhir, Mr. Kunal Godhwari and Ms. Varsha Banerjee, Advocates for Punjab National Bank.
Ms. Jayashree S. Dasgupta and Ms. Saloni Chowdhri,
Advocates for Wavell Investment Pvt. Ltd.
Mr. Mohit Singh, Advocate for ICICI Bank
Mr. Rajiv Dutta, Sr. Advocate and Ms. Kanika Singhal,
Advocates for Axis Bank
Ms. Garima Jain and Mr. Balaji Srinivasan, Advocates for SIDCO Employees PF Trust.
Ms. Samridhi Hota, Advocate for J.K Paper Employees PF and J.K. Ltd. officers superannuation scheme, PF of
Tinplate Company of India Ltd., Tinplate Company Executive Staff, Superannuation Fund Limited Gratuity Fund., Tata Teleservices Ltd. Provident Fund Trust., Tata
Steel Limited Gratuity Fund, Provident Fund of TSL, Tata
8
Steel Limited Employees Pension Scheme, Tata Elxci India Employees Provident Find, Mutual Fund AMC.
Ms. Anushka Sharda Ms. Diviaana harg Advocate for Zyan Industries Ltd. and PPL Employees Provident Fund
Trust.
Mr. Ramji Srinivasan, Senior Advocate with Ms. Gauri Rasgotra, Mr. L. Vishwanathan, Mr. Raunak Dhillon, Mr. Vikash Kumar Jha, Mr. Karan Khanna, Mr. Aditya
Sikka, Ms. Ananya Dhar Chodhury and Mr. Hariharan for Cyril Amarchand Mangaldas.
Mr. Sanjay Shorey, Director, Legal Prosecution MCA
Mr. Sanjay Bhatt, Advocate for IDBI Trusteeship Mr. Brijesh Kumar Tamber, Mr. Vinay Singh Bist, Mr.
Pawan Kumar and Ms. Deepika Singh, Advocates for Allahabad Bank and Indian Bank
Mr. Ankit Vijaywargiya and Mr. Shrey Patnaik, Advocates for IRCON Medical Trust and IRCON ERF Trust.
Mr. Aditya Verma and Mr. Shrey Patnaik, Advocates for
Coastal Marine Construction & Engineering Ltd. Mr. Muthuvel Palani M., Advocate for Loyal Textile Mills
Ltd., Employees Provident Fund and Valli Cotton Traders Ltd., Employees Gratuity Fund.
Mr. Anand Shankar Jha, Mr. Arpit Gupta and Md. Ali, Advocates for Mahindra and Mahindra Ltd., Mahindra
and Mahindra Staff Provident Fund and MCC India Employees Provident Fund Trust.
Mr. Kamal Kant Jha, Mr. Prabhakar Thakur and Ms. Kriti Kumari, Advocates
Ms. Anushree Kapadia and Ms. Kavita Bhardwaj, Advocates
Mr. Anil Kaushik, Mr. Abhishek Mishra and Mr. Akash Bhardwaj, Advocates for EIL
Mr. Ankur S. Kulkarni and Ms. Richa Bhardwaj,
Advocates for Sun Iron Steel & Co.
Mr. Abhishek Anand, Mr. Anant A. Pavgi and Ms.
Chetna Singh, Advocates
9
Mr. Tushar Tyagi, Advocate for Shree Gautam
Construction Pvt. Ltd. Mr. Rajnish Sinha and Ms. Shreya Kohli, Advocates for
ENSO Infrastructure Pvt. Ltd.
Mr. Rajiv S. Roy, Mr. Avrojyoti Chatterjee, Mr. Abhijit Roy
and Ms. Jayasree Saha, Advocates for Canara Bank &
UCO Bank.
Mr. Ashish Rana and Mr. Anurag Kr. Singh, Advocates for Exim Bank
Mr. Kailash Pandey and Mr. Ranjeet Singh, Advocates for
Garhwal Mandal Awas Vikas Parishad Ms. Aishwarya Ramakrishnan, Advocates for Philips
Electronics India Ltd. Management Staff Provident Fund Trust.
Mr. Amit Tyagi and Mr. Haridutt Kr. Mishra, Advocates for TLG India Pvt. Ltd. Employees Provident Fund and
Sapient Consulting Employees Provident Fund Trust.
Mr. Debarshi Bhuyan, Advocate for Godrej Consumer
Products Ltd. Provident Fund
Ms. Richa Sandilya, Advocate for Indian Overseas Bank Ms. Risha Mittal, Mr. Karan Mehra and Ms. Simran
Mehrotra, Advocates for SAS Employees Provident Fund Trust.
Mr. B. Banerjee, Advocate
Mr. Arun Kathpalia, Sr. Advocate with Mr. Pramaya Goyal, Mr. Dharav Shah and Mr. Chiranjivi Sharma, Advocates for HDFC Mutual Fund.
With
Company Appeal (AT) No. 347 of 2018 IN THE MATTER OF:
Infrastructure Leasing and
Financial Services Ltd. ...Appellant
Vs.
10
Union of India & Ors. ...Respondents
Present: Mr. Ramji Srinivasan, Senior Advocate with Ms. Gauri
Rasgotra, Mr. L. Vishwanathan, Mr. Raunak Dhillon, Mr. Vikash Kumar Jha, Mr. Karan Khanna, Mr. Aditya
Sikka, Ms. Ananya Dhar Chodhury and Mr. Hariharan for Cyril Amarchand Mangaldas.
Mr. Krishnendu Datta, Ms. Madhusneta, Ms. Kanika Tandon and Ms. Shivangi Khurana, Advocates for NHAI –
Applicant. Mr. Abhishek Kumar and Ms. Arvshi Gupta, Advocates
for R-14 (PFC) and PFC EPF, PFC EGF and PFC SMF.
Mr. Gopal Jain, Senior Advocate, Mr. Ramesh Babu, Ms.
Manish Singh and Ms. Swati Setia, Advocates for Reserve
Bank of India.
Mr. Gopal Jain, Sr. Advocate with Mr. Ashish Mukhi, Ms.
Madhurima Sarangi, Mr. Kamlendra P. Singh, Advocates
for UTI AMC, UTI RSL, UTI MF, HDFC PF, Kotak PF, SBI
PF, LIC PF.
Mr. Gopal Jain, Sr. Advocate with Mr. Ashish Mukhi, and
Mr. Kamlendra Singh, Advocates UTI Mutual Fund.
Mr. Ashish Mukhi, and Mr. Kamlendra Singh, Advocates
for Hindustan Zinc Ltd.
Mr. Debal K. Banerjee, Sr. Advocate with Mr. Pankaj
Vivek, Advocate for Respondent No.13 – Bank of Baroda.
Mr. Arun Kathpalia, Senior Advocate with Mr. Sidharth
Sethi and Ms. Tanya Tiwari, Advocates for PTC India Financial Services – Intervenor.
Mr. Ajay Bhargava, Ms. Vanita Bhargava, Mr. Aseem Chaturvedi, Ms. Wamika Trehan, Advocates for Mashreq
Bank, Aditya Birla Finance Ltd., Apollo Munich, West Coast Paper Mills Ltd., HUL Union Fund, MC Rubel India Ltd.
Mr. Atul Shanker Mathur, Ms. Priya Singh and Ms.
Sweta, Advocates for Mother Dairy Fruit & Vegetable Pvt.
Ltd.
11
Mr. Atul Shanker Mathur, Ms. Priya Singh and Ms.
Sweta, Advocates for NDDB PF Trust Mr. Atul Shanker Mathur, Ms. Priya Singh and Ms.
Sweta, Advocates for BHEL PF Trust.
Mr. Piyush Bansal and Mr. Gurcharan Singh Advocate
for Interpleaders (1) HPGCPL – Employees Pension Fund
Trust (2) HVPNL – Employees Pension Fund Trust (3)
UBHVNL – Employees Pension Fund Trust (4) HVPNL –
Employees Provident Fund Trust and (5) UBHVNL –
Employees Provident Fund Trust.
Mr. Gucharan Singh, Advocate for Interpleader (1) Dalal
& Broacha Stock Broking Pvt. Ltd. and Mudra
Communication Pvt. Ltd. – Employees Pension Fund
Trust.
Mr. Krishna Dev J. and Mr. Rana Sandeep Advocates for
Ray Constructions, Intervenor.
Mr. Arun Kathpalia, Senior Advocate with Mr. Sidharth
Sethi and Ms. Tanya Tiwari, Advocates for (PFS).
Mr. Dheeraj Nair and Mr. Kumar Kislay, Advocates for
Intervenor – EDC, Kotak Trust Invesco Trust.
Mr. Aakash Sirohi and Mr. Indralal, Advocates for M/s
Shakti Traders (Diary No.9649/19)
Ms. Mallika Prabhakar for Sanjay Bajaj for Karnataka
Bank (Intervenor).
Ms. Mallika Prabhakar for Sanjay Bajaj for Punjab & Sind Bank (Intervenor).
Mr. Adarsh Tripathi and Mr. Anish Gupta, Advocates for
NTPC Limited Employees Provident Fund Trust.
Mr. Vikas Kumar, Mr. Manish Paliwal, Mr. Ashutosh K.
Sharma, Advocates (Corporate Legal Partners) for BEL.
Mr. Gollamudi Sri Harsha Datta and Ashish Virmani, Advocates for EGIS.
12
Mr. Amit Agrawal, Ms. Aanchal Tikmani and Mr. Sahil
Raveen, Advocates for Army Group Insurance Fund (Intervenor) Diary No.11382/19.
Mr. Manih Dogra, Ms. Sonali Jaitely Bakshi and Mr. Sharad Sharma, Advocates for Shapoorji Pallonji Pvt.
Ltd. (Intervenor). Mr. Vishnu Sharma, Mr. Sourav Roy and Mr. Ashutosh
Kumar, Advocates for Noida Authority (Impleadment party)
Mr. Abhijeet Sinha and Mr. Arijit Mazumdar and Mr. Shambo Nandy, Advocates for SREI Infrastructures
Finance Ltd.
Mr. R. Sudhinder, Ms. Nimita Kaul and Ms. Amrita
Sarkar for Superannuation Fund of Housing Development, Finance Corporation Ltd., Housing
Development Finance Corporation Ltd., Provident Fund, Gratuity Fund of Housing Development Finance Corporation Ltd., Gruh Finance Ltd., Employees Gratuity
Trust Fund, Gruh Finance Ltd., Officer’s superannuation Fund, Gruh Finance Ltd. Employee’s Provident Fund
Trust.
Mr. Sunil Fernandes, Mr. Karan Nagrath, Mr. Siddharth Sharma, Ms. Anju Thomas and Mr. Darpan Sachdeva, Advocates.
Mr. Sidhanatha Barua, Advocate
Mr. T.P. Sindhu and Mr. Lakshman.RS and Mr. Mukund P.Unny, Advocates
Mr. Sanjay Kapur, Ms. Meghna Karnwal, Mr. Bharath
Ganga Dharan and Mr. Kauser Husain, Advocates for SBI.
Mr. R.B. Trivedi, Advocate for BOI Mr. Yojit Mehra and Mr. Ajitesh Soni, Advocates for
Maihar Cement, 63 Moons and SBI.
Mr. Krishna Dev J. and Mr. Rana Sandeep, Advocates for Ray Construction.
13
Mr. Rajgopal and Mr. Jasdeep S. Dhillon, Advocates for Skylark Infra and Sammon Infra
Mr. Anshuman Gupta, Mr. Syed Asalam Abib and Mr. Prateek Khaitan, Advocates for Jammu & Kashmir
Bank.
Mr. Abhirup Das Gupta and Mr. Ishaan Duggal, Advocates for DHFL Pramerica and Tata Power Consolidated PF.
Mr. Amish Tandon, Mr. Sameer Abhyankar, Mr. Ayush
Beotra and Ms. Priyanka Arora, Advocates. Mr. Alok Dhir, Mr. Kunal Godhwari and Ms. Varsha
Banerjee, Advocates for Punjab National Bank. Ms. Jayashree S. Dasgupta and Ms. Saloni Chowdhri,
Advocates for Wavell Investment Pvt. Ltd.
Ms. Anushka Sharta Ms. Diviaana Garg, Advocate for Zyan Industries Ltd. and PPL Employees Provident Fund Trust.
Mr. Sanjay Shorey, Director, Legal Prosecution MCA for
R-1. Mr. Anuj Aggarwal, Advocate for Kudremuka Iron Ore
Company
Mr. Ankit Vijaywargiya and Mr. Shrey Patnaik, Advocates for IRCON Medical Trust and IRCON ERF Trust.
Mr. Aditya Verma and Mr. Shrey Patnaik, Advocates for Coastal Marine Construction & Engineering Ltd.
Mr. Anil Kaushik, Mr. Abhishek Mishra and Mr. Akash
Bhardwaj, Advocates for EIL Mr. Abhishek Anand, Mr. Anant A. Pavgi and Ms.
Chetna Singh, Advocates Mr. Tushar Tyagi, Advocate for Shree Gautam
Construction Pvt. Ltd.
Mr. Rajiv S. Roy, Mr. Avrojyoti Chatterjee, Mr. Abhijit Roy
and Ms. Jayasree Saha, Advocates for Canara Bank &
UCO Bank
14
Mr. Amit Tyagi and Mr. Haridutt Kr. Mishra, Advocates for TLG India Pvt. Ltd. Employees Provident Fund and
Sapient Consulting Employees Provident Fund Trust. Mr. Arun Kathpalia, Sr. Advocate with Mr. Pramaya
Goyal, Mr. Dharav Shah and Mr. Chiranjivi Sharma, Advocates for HDFC Mutual Fund.
With
Company Appeal (AT) No. 422 of 2018
IN THE MATTER OF:
S. Rengarajan ....Appellant
Vs. Union of India, Ministry of Corporate Affairs. ….Respondent
Present: Ms. Mallika Prabhakar for Sanjay Bajaj for Karnataka Bank (Intervenor).
Ms. Mallika Prabhakar for Sanjay Bajaj for Punjab &
Sind Bank (Intervenor).
Mr. Gopal Jain, Senior Advocate, Mr. Ramesh Babu, Ms.
Manish Singh and Ms. Swati Setia for Reserve Bank of India.
Mr. Arun Kathpalia, Senior Advocate with Mr. Sidharth Sethi and Ms. Tanya Tiwari, Advocates for PTC India
Financial Services – Intervenor. Mr. Gollamudi Sri Harsha Datta and Ashish Virmani,
Advocates for EGIS.
Mr. Amit Agrawal, Ms. Aanchal Tikmani and Mr. Sahil
Raveen, Advocates for Army Group Insurance Fund (Intervenor) Diary No.11382/19.
Mr. Manih Dogra, Ms. Sonali Jaitely Bakshi and Mr. Sharad Sharma, Advocates for Shapoorji Pallonji Pvt.
Ltd. (Intervenor).
Ms. Anushka Sharta Ms. Diviaana harg Advocate for Zyan Industries Ltd. and PPL Employees Provident Fund Trust.
15
Mr. Ankit Vijaywargiya and Mr. Shrey Patnaik, Advocates
for IRCON Medical Trust and IRCON ERF Trust.
Mr. Aditya Verma and Mr. Shrey Patnaik, Advocates for
Coastal Marine Construction & Engineering Ltd.
Mr. Arun Kathpalia, Sr. Advocate with Mr. Pramaya Goyal, Mr. Dharav Shah and Mr. Chiranjivi Sharma, Advocates for HDFC Mutual Fund.
With Company Appeal (AT) No. 24 of 2019
IN THE MATTER OF:
Arun Kumar Saha ...Appellant
Vs.
Union of India, Ministry of Corporate Affairs ...Respondent
Present: Ms. Mallika Prabhakar for Sanjay Bajaj for Karnataka
Bank (Intervenor).
Ms. Mallika Prabhakar for Sanjay Bajaj for Punjab & Sind Bank (Intervenor).
Mr. Arun Kathpalia, Senior Advocate with Mr. Sidharth Sethi and Ms. Tanya Tiwari, Advocates for PTC India Financial Services – Intervenor.
Mr. Gollamudi Sri Harsha Datta and Ashish Virmani, Advocates for EGIS.
Mr. Amit Agrawal, Ms. Aanchal Tikmani and Mr. Sahil Raveen, Advocates for Army Group Insurance Fund
(Intervenor) Diary No.11382/19.
Mr. Manih Dogra, Ms. Sonali Jaitely Bakshi and Mr. Sharad Sharma, Advocates for Shapoorji Pallonji Pvt.
Ltd. (Intervenor).
16
Ms. Anushka Sharta Ms. Diviaana harg Advocate for Zyan Industries Ltd. and PPL Employees Provident Fund
Trust.
Mr. Aditya Verma and Mr. Shrey Patnaik, Advocates for Coastal Marine Construction & Engineering Ltd.
Mr. Ankit Vijaywargiya and Mr. Shrey Patnaik, Advocates for IRCON Medical Trust and IRCON ERF Trust.
Mr. Arun Kathpalia, Sr. Advocate with Mr. Pramaya
Goyal, Mr. Dharav Shah and Mr. Chiranjivi Sharma, Advocates for HDFC Mutual Fund.
O R D E R
SUDHANSU JYOTI MUKHOPADHAYA, J.
The ‘Union of India’ has filed an application under Sections 241 and
242 of the Companies Act, 2013, in public interest, alleging ‘oppression and
mismanagement’ of ‘Infrastructure Leasing and Financial Services Limited’
(“IL&FS” for short) and its Group Companies. In the said case, the National
Company Law Tribunal (“Tribunal” for short) passed an interim order by
changing the management of ‘IL&FS’, but rejected the application filed by
the ‘Union of India’ praying therein to pass order of ‘Moratorium’.
2. The order of rejection dated 12th October, 2018, rejecting the prayer
for ‘Moratorium’ has been challenged in the appeals preferred by the ‘Union
of India’ and ‘IL&FS’.
3. On 15th October, 2018, this Appellate Tribunal framed the following
questions of law and passed interim order:
17
“3. The questions arise for consideration in these
appeals are:
(i) Whether the Tribunal can pass
appropriate order under Section 241 read with
Section 242 of the Companies Act, 2013 for
resolution of the problems faced by the
Company in a time-bound manner for
maximisation of value of assets of the
Company, to promote entrepreneurship,
availability of credit and balance the interests
of all the stakeholders, and in case of failure
of resolution pass appropriate order of
liquidation; and
(ii) Whether the Tribunal in exercise of
powers conferred Under Section 242 (1) (b)
read with Section 242 (2)(m) and Section
242(4) of the Companies Act, 2013 read with
Rule 11 of the National Company Law
Tribunal Rules, 2016, can pass appropriate
interim order similar to order under Section 14
of the Insolvency and Bankruptcy Code, 2016.
4. According to Mr. Tushar Mehta, Learned
Solicitor General for the Appellant- ‘Union of India’
and Mr. Ramji Srinivasan, Learned Senior Counsel for
the ‘IL&FS’, the Tribunal has much wider power
under Sections 241 and 242 of the Companies Act,
2013 than the powers vested under provisions of
Insolvency and Bankruptcy Code, 2016.
5. Taking into consideration the nature of the
case, we are of the view that five largest creditors
should be also impleaded as party Respondents to
these appeals in the representative capacity of the
18
Creditors. Learned counsel for the Appellant(s) will
make necessary correction in the cause title and other
pages of the appeals in course of the day. Defects, if
pointed out by office, may be removed before the next
date.
6. Issue notice on Respondents, including newly
impleaded Respondents by speed post. Requisite
along with process fee, if not filed, be filed in course
of the day. If the Appellant(s) provides the e-mail
address of Respondents, let notice be also issued
through e-mail. Dasti service is permitted particularly
in the newly impleaded Respondents.
Post these appeals ‘for admission’ on 13th
November, 2018 on the top of the list.
Taking into consideration the nature of the
case, larger public interest and economy of the nation
and interest of the Company and 348 group
companies, there shall be stay of
(i) The institution or continuation of suits or
any other proceedings by any party or
person or Bank or Company, etc. against
‘IL&FS’ and its 348 group companies in any
Court of Law/Tribunal/Arbitration Panel or
Arbitration Authority; and
(ii) Any action by any party or person or Bank
or Company, etc. to foreclose, recover or
enforce any security interest created over
the assets of ‘IL&FS’ and its 348 group
companies including any action under the
Securitization and Reconstruction of
Financial Assets and Enforcement of
Security Interest Act, 2002;
19
(iii) The acceleration, premature withdrawal or
other withdrawal, invocation of any term
loan, corporate loan, bridge loan,
commercial paper, debentures, fixed
deposits, guarantees, letter of support,
commitment or comfort and other financial
facilities or obligations vailed by ‘IL&FS’
and its 348 group companies whether in
respect of the principal or interest or hedge
liability or any other amount contained
therein.
(iv) Suspension of temporarily the acceleration
of any term loan, corporate loan, bridge
loan, commercial paper, debentures, fixed
deposits and any other financial facility by
the ‘IL&FS’ and its 348 group companies by
any party or person or Bank or Company,
etc. as of the date of first default.
(v) Any and all banks, financial institutions
from exercising the right to set off or lien
against any amounts lying with any
creditor against any dues whether principal
or interest or otherwise against the balance
lying in any bank accounts and deposits,
whether current or savings or otherwise of
the ‘IL&FS’ and its 348 group companies.
The interim order will continue until further
orders and not be applicable to any petition under
Article 226 of the Constitution of India before any
Hon’ble High Court or under any jurisdiction of the
Hon’ble Supreme Court.”
20
4. These appeals were subsequently admitted and from time to time
orders have been passed by this Appellate Tribunal. Out of 348 Group
Companies of ‘IL&FS’, 178 ‘Offshore Group Companies’ have been released.
As regards ‘Green Entities’, the order of ‘Moratorium’ has been lifted. There
are about 13 ‘Amber Entities’ whose matters are pending consideration.
5. When it was brought to the notice of this Appellate Tribunal that a
number of Banks were declaring the loan accounts of ‘IL&FS Group
Companies’ as ‘Non-Performing Assets’ (“NPA” for short) in view of the
interim order as noted above, on 25th February, 2019, this Appellate
Tribunal passed an order restraining the Banks from declaring the loan
accounts as ‘NPA’.
6. The ‘Reserve Bank of India’, the regulatory body of the Banks have
filed Interlocutory Application for vacating the interim order dated 25th
February, 2019.
7. Mr. Gopal Jain, learned Senior Counsel appearing on behalf of the
‘Reserve Bank of India’ made following submissions:
7.1. ‘NPA’ affect the financial health of Banks and Financial
Institutions, which is ultimately against the public interest.
Identifying ‘NPAs’ and treating them properly in the books of
accounts of the lender banks is necessary to show a clear and true
financial position of the lender Banks. It is also necessary to identify
‘NPAs’ and to make provisions for non-recovery or under recovery so
that the Banks will not face a situation of sudden dip in their
financial strength. Thus, the appropriate classification of assets in
21
the books of the lenders is necessary to present a true and correct
picture of the financial health of the Banks.
7.2. The Committee on the Financial System (under the
Chairmanship of Shri M. Narashimham) in its Report published in
November 1991, had observed that, a proper system of income
recognition and provisioning is fundamental to the preservation of
the strength and stability of the banking system. A proper asset
classification will, however, have to precede this exercise. The
Committee also observed that a policy of income recognition should
be objective and based on record of recovery rather than on any
subjective considerations. The Committee, therefore, opined that for
the purposes of provisioning, Banks and financial institutions should
classify their assets into the following broad groups i.e. ‘Standard’,
‘Sub-standard’, ‘Doubtful’; and ‘Loss’. The Committee also observed
that the Reserve Bank of India should prescribe clear and objective
definitions for these four categories to ensure a uniform, consistent
and logical basis for classification of assets. On the basis of the
recommendation of Narashimham Committee, the ‘Reserve Bank of
India’ issued ‘Prudential Norms on Income Recognition, Asset
Classification and Provisioning’ pertaining to Advances.
7.3. The ‘Reserve Bank's Prudential Norms on Income Recognition,
Asset Classification and Provisioning’ pertaining to Advances are
primarily based on international standards and was first issued on
27th April, 1992 Prudential Norms clearly set out the parameters for
22
classification of Loan Accounts as ‘NPA’. Classifying a loan account
as ‘NPA’ is actually an indicator to the lenders to follow the
guidelines with regard to income recognition and provisioning.
7.4. The latest Master Circular on ‘Prudential Norms on Income
Recognition, Asset Classification and provisioning pertaining to
Advances’ was issued on 1st July, 2015.
7.5. The provisioning on ‘NPAs’ has to be made on the basis of the
period for which the asset has remained non-performing or the
availability of security and the realizable value thereof or both. A
ninety days’ delinquency is uniformly applicable to all loans and
advances, as is done internationally, as it is essential to identify
impairment in order to provide for it. Any deferment in asset
classification and provisioning as against the ‘Reserve Bank of India’
norms will lead to non-recognition of stress in the books of the
lenders which will distort the financial statements published by
them, The financial stress must be recognized and acted upon by the
lenders, irrespective of borrower specific issues.
7.6. Identifying and classifying a defaulted loan account in the
Books of the Bank as ‘NPA’ is only a process of treating the account
as such and following the guidelines in making provisions etc. in the
books of the lender Bank. It doesn't mean that there will be an
immediate recovery process. Even after classifying a loan account as
‘NPA’, all options of re-scheduling or Resolution Process are open and
there is no impediment to any Resolution Process. The ‘Reserve Bank
23
of India’ has not barred banks from sanctioning need based
additional finance to borrowers whose accounts are classified as
‘NPA’. On the contrary, the Reserve Bank's extant guidelines envisage
a situation where banks may need to sanction additional finance to
borrowers under stress to revive / rehabilitate the borrower and to
preserve the economic value of the asset.
8. Learned counsel for the ‘Reserve Bank of India’ produced ‘Master
Circular- Prudential Norms on Income Recognition, Asset Classification and
Provisioning’ pertaining to advances as circulated on 1st July, 2015. The
‘NPA’ has been defined therein at Clause 2.1, which reads as follows:
“2.1 Non performing Assets
2.1.1 An asset, including a leased asset,
becomes non performing when it ceases to
generate income for the bank.
2.1.2 A non performing asset (NPA) is a loan or
an advance where;
i. interest and/ or instalment of
principal remain overdue for a period
of more than 90 days in respect of a
term loan,
ii. the account remains 'out of order' as
indicated at paragraph 2.2 below, in
respect of an Overdraft/Cash Credit
(OD/CC),
iii. the bill remains overdue for a period
of more than 90 days in the case of
bills purchased and discounted,
24
iv. the instalment of principal or interest
thereon remains overdue for two crop
seasons for short duration crops,
v. the instalment of principal or interest
thereon remains overdue for one crop
season for long duration crops,
vi. the amount of liquidity facility
remains outstanding for more than
90 days, in respect of a securitisation
transaction undertaken in terms of
guidelines on securitisation dated
February 1, 2006.
vii. in respect of derivative transactions,
the overdue receivables representing
positive mark-to-market value of a
derivative contract, if these remain
unpaid for a period of 90 days from
the specified due date for payment.”
9. Clause 4.2.4 also deals with classification of an asset as ‘NPA’ with
regard to ‘Accounts with temporary deficiencies’, is as follows:
“4.2.4 Accounts with temporary deficiencies
The classification of an asset as NPA should be based
on the record of recovery. Bank should not classify an
advance account as NPA merely due to the existence of
some deficiencies which are temporary in nature such
as non-availability of adequate drawing power based
on the latest available stock statement, balance
outstanding exceeding the limit temporarily, non-
submission of stock statements and non-renewal of the
limits on the due date, etc. In the matter of
classification of accounts with such deficiencies banks
may follow the following guidelines:
25
i) Banks should ensure that drawings in the
working capital accounts are covered by the
adequacy of current assets, since current assets
are first appropriated in times of distress.
Drawing power is required to be arrived at based
on the stock statement which is current. However,
considering the difficulties of large borrowers,
stock statements relied upon by the banks for
determining drawing power should not be older
than three months. The outstanding in the
account based on drawing power calculated from
stock statements older than three months, would
be deemed as irregular.
A working capital borrowal account will become
NPA if such irregular drawings are permitted in
the account for a continuous period of 90 days
even though the unit may be working or the
borrower's financial position is satisfactory.
ii) Regular and ad hoc credit limits need to be
reviewed/ regularised not later than three
months from the due date/date of ad hoc
sanction. In case of constraints such as non-
availability of financial statements and other data
from the borrowers, the branch should furnish
evidence to show that renewal/ review of credit
limits is already on and would be completed soon.
In any case, delay beyond six months is not
considered desirable as a general discipline.
Hence, an account where the regular/ ad hoc
credit limits have not been reviewed/ renewed
within 180 days from the due date/ date of ad
hoc sanction will be treated as NPA.”
26
10. From the aforesaid provisions, we find that ‘NPA’ is a loan or an
advance where interest and/or instalment of principal remain overdue for a
period of more than 90 days in respect of a term loan; or where the account
remains ‘out of order’ in respect of an Overdraft/ Cash Credit (OD/ CC) etc.
11. Thus, we find that ‘NPA’ relates to loan or an advance given by the
Banks and not the Company (‘Corporate Debtor’). It is an asset i.e. loan or
advance which becomes non-performing when it ceases to generate income
for the Bank.
12. During the ‘Resolution Process’, the Company (‘Corporate Debtor’) is
required to continue as a going concern. An idea was given that if the asset
of the ‘Corporate Debtor’ is declared as ‘NPA’ then it will be contrary to the
provisions of the ‘Insolvency Resolution’ as per which the ‘Corporate Debtor’
should continue as a going concern. However, we find that ‘NPA’ relates to
an asset i.e. loan or advance which becomes non-performing when it ceases
to generate income for the Bank. Thus, it relates to the Banks and we are
satisfied that declaration of ‘NPA’ by the Bank in no manner will affect the
Company (‘Corporate Debtor’) to continue as a going concern.
13. In view of the aforesaid position of law, we modify the order dated
25th February, 2019 and allow the Banks to classify loan accounts of any of
the Group Companies of ‘IL&FS’ as ‘NPA’ without debiting any amount from
the account of the ‘Amber Entities’ and ‘Red Entities’, if defaulted to pay
after order of ‘Moratorium’ was passed on 15th October, 2018.
27
14. The classification of an account as ‘NPA’ should not result in
withdrawal of support to viable borrowal accounts, though it will be open to
the Banks to classify any loan accounts as ‘NPA’ for the purpose of
differential treatment in the books of accounts of the Banks.
I.A. No. 1139 of 2019 filed by the ‘Reserve Bank of India’ stands
disposed of with aforesaid observations and directions.
[Justice S.J. Mukhopadhaya]
Chairperson
[Justice Bansi Lal Bhat] Member (Judicial)
NEW DELHI 2nd May, 2019
AR