Yamuna Expressway Industrial Development Authority vs Monitoring Committee of Jaypee Infratech Ltd. Through Anuj Jain, Secretary & Ors.
Company Appeal (AT) (Insolvency) No.493 of 2023 & I.A. No. 3017, 3703 of 2023 & 2535, 2548, 2660, 2669 of 2024
Facts:
1. Yamuna Expressway Industrial Development Authority (“Appellant”) was set up for the development of certain areas in the State into industrial and urban township and for matters connected therewith. In exercise of its function under the 1976 Act, the Taj
Expressway Industrial Development Authority (“Authority) entered into a Concession Agreement executed on 07.02.2003 between Authority and Jaiprakash Associates Limited for construction of six-lane 160 km long super expressway, connecting NOIDA and Agra along with service roads and allied facilities.
2. In return, it was granted the rights to collect toll on the Yamuna Expressway for 36 years and to commercially exploit the land for development, i.e., 6,177 acres of land abutting the Yamuna Expressway. The land, which was leased to the Concessionaire had been acquired by the YEIDA between year 2007-2011. Various litigations were filed in relation to acquisition of land and State Government vide Government Order dated 29.08.2014 issued a policy, providing for payment of additional compensation as ‘no litigation incentive’ to farmers who withdrew their challenge to the acquisitions. The YEIDA accepted the UP Government Order and resolved to implement it through its Resolution dated 15.09.2014.
3. An Application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the “Code”) was filed by IDBI Bank against the Corporate Debtor which was admitted vide order dated 07.08.2017. Various cases was filed in relation to exclusion of time period and plans wherein on 06.11.2019, the Hon’ble Supreme Court in the appeal filed by JAL, directed the completion of CIRP within 90 days. It was further directed that only revised Plans of Suraksha and NBCC should be invited and considered by the CoC.
4. Revised Resolution Plans were submitted and NBCC Resolution Plan was approved by 97.36% vote share of the CoC. An Application was filed by the IRP on 19.12.2019 before the NCLT Allahabad Bench, seeking approval of the Plan. On 23.01.2020, YEIDA filed an Application before the Adjudicating Authority, challenging the treatment of its claim and raising objections against the First Plan. On 03.03.2020, the First Plan was approved by the Adjudicating Authority with certain modifications. The approval of Plan order was challenged by the NBCC by way of an Appeal before the NCLAT. On 22.04.2020, NCLAT refused to grant stay on the approval order.
5. The Resolution Plan of Suraksha was approved by CoC in June 2021 with 98.66% votes. The IRP filed an IA No.2836 of 2021 before the Adjudicating Authority seeking approval of Suraksha Resolution Plan. YEIDA filed an IA No.3306 of 2021 objecting to Suraksha Resolution Plan on various grounds. The Adjudicating Authority heard the learned Counsel for the YEIDA, IRP, SRA, CoC, JAL, Homebuyers and others and by judgment dated 07.03.2023, approved the Suraksha Resolution Plan. The objections filed by the YEIDA were dismissed.
6. YEIDA aggrieved by rejection of its objection raised to the Resolution Plan has come up in this Appeal challenging the order dated 07.03.2023.
Issue: Whether the appeal can be admitted ?
Argument:
Appellant:
1. Counsel submitted that Resolution Plan submitted by NBCC, which has extinguished the claim of the Appellant towards additional compensation and other claims had been disapproved by the Hon’ble Supreme Court in the case of Jaypee Kensington Boulevard Apartment Welfare Assocaition & Ors. vs. NBCC (India) Ltd.
2. Counsel submitted that the claim of the Appellant regarding additional compensation and EDC have been not dealt with in accordance with law. The Resolution Plan having earmarked only Rs.10 lakhs, each for the aforesaid claim. The learned ASG submits that the YEIDA is a Secured Creditor of the Corporate Debtor by Section 13 and 13A of the 1976 Act.
3. Counsel for the Appellant submits that Appellant in this Appeal is only concerned with regard to treatment of its claim in the Plan and the Appeal has been filed only qua the treatment of the Appellant towards its claim. Shri Venkataraman further submits that additional compensation payable to the farmers against the acquisition of land is their constitutional right guaranteed under Article 300A of the Constitution of India and the said right, cannot be taken away by any means.
Respondent:
1. Counsel appearing for SRA stated that without prejudice to its rights, the SRA is offering to pay an amount of Rs.1216 crores towards additional compensation, which according to SRA is 100% payment towards the additional compensation claimed by the Appellant.
2. Counsel submitted that the Appellant has claimed additional farmers’ compensation to the extend of Rs.1689 crores, in which claim, the additional farmers’ compensation of Rs.330 crores pertaining to land parcel of 1537 acres already subleased by the Corporate Debtor to third parties before CIRP commencement date, cannot be included.
3. Counsel submitted that amount of additional farmers’ compensation of Rs.143 crores pertaining to land in Noida where projects of Homebuyers are situated also need to be deducted, since additional farmers’ compensation regarding the said land has already been paid by Noida Authority. The Appellant cannot seek reimbursement on behalf of Noida Authority. It was submitted that claims towards EDC of land parcel located at Tappal and Agra cannot be included in the EDC claims. It is submitted that EDC claim is not a secured claim and the liquidation value of the Appellant being Nil, as per the provisions of Section 30, sub-section (2), the Appellant is not entitled to any payment for EDC claim.
Decision: NCLAT upheld the Resolution Plan.
Rationale:
1. NCLAT noted that Claim of Rs.1,689 Crores was not admitted and in the column of amount as verified word ‘NA’ was mentioned. EDC claim was admitted for Rs.409.6 Crores. One other claim was admitted by the IRP was claim towards pending work i.e. Rs.51.4 Crores.
2. It held that appellant’s claim filed in the CIRP of the corporate debtor for additional farmers’ compensation of Rs.1,689 Crores deserves consideration. The appellant has been agitating their rights by filing objections to the resolution plan and with regard to resolution plan of Suraksha, IA No.3306 of 2021 was filed, as noted above, where claim for additional compensation of Rs.1,689 Crores towards farmers’ compensation was agitated.
3. It held that claim submitted by YEIDA in CIRP of the corporate debtor of Rs.1,689 crores needed to be considered in the CIRP and IRP clearly erred in disregarding the claim on the ground of pending litigation. It further held that the amount of additional compensation towards 64.7% as allowed by the order issued by the State of Uttar Pradesh and have been affirmed by the Hon’ble Supreme Court in case of Shakuntla (supra), clearly makes the concessionaire i.e. corporate debtor liable to make the payment of additional cost and additional compensation cost which is required to be paid by concessionaire to the appellant and the appellant is a secured creditor.
4. It held that YEIDA is secured creditor, the treatment of YEIDA in the resolution plan and in the order of the Adjudicating Authority is unsustainable.” and entire claim of Rs.1,689 Crores submitted by YEIDA towards the additional farmers’ compensation need consideration and amount of Rs.330 Crores pertaining to land parcels already sub-leased by the corporate debtor to third party and an amount of Rs.143 crores pertaining to land arranged from Noida need no deduction. Thus, appellant’s claim of Rs.1689 crores towards additional farmers’ compensation need consideration.
5. It held that Resolution Plan in the present case, does not contemplate transfer of land to SRA and Assenting Financial Creditors. Information Memorandum clearly contemplate that Corporate Debtor has only lease hold rights in the land. It held that no clause of Concession Agreement is being tinkered with by the Resolution Applicant, so as to require consent of YEIDA. The Resolution Plan deals with the claim of Creditors as per CIRP Regulations and Resolution Plan only deals with lease hold rights, which Corporate Debtor has in the land in question.
Order:
