Insolvency and Bankruptcy Code, 2016 – NCLAT permitted the Successful Resolution Applicant (SRA) to adjust the last tranche of Rs 150 crores by adjusting the Performance Bank Guarantee (PBG) of Rs 150 crores – Correctness: Held: The occasion for an extension of time to the SRA for the deposit of Rs 350 crores arose as a consequence of the affidavit which was filed by SBI before the NCLAT – SBI’s affidavit envisaged that the lenders would not contest the issues pertaining to the grant or exclusion of time; or extension in terms of the orders passed by the NCLT on 13.01.2023 and 26.05.2023; and compliance of the conditions precedent by the SRA – However, SBI’s offer was subject to the fulfillment of three conditions that the SRA must infuse Rs. 350 Crores by 31.08.2023, adhering to the resolution plan terms, and meeting employee payment obligations in accordance with the NCLAT order dtd. 21.10.2022 upheld by this Court – Conditional on compliance with the three conditions, SBI stated that it would be willing to withdraw the company appeals pending before the NCLAT as well as the Civil Appeals pending before this Court – The offer made by SBI on behalf of the lenders had to be complied with as it stood in the event that the SRA sought the benefit of the offer – According to the SRA, the PBG was liable to be released on adjustment in terms of the Resolution Plan – This is a matter which would have to await an adjudication by NCLAT in the pending appeal – Impugned order allowing the plea of the SRA for adjustment and consequential release of the PBG at the interlocutory stage prima facie would not be in accordance with the tenor of the affidavit filed by SBI – Infusion meant that the third tranche has to be paid in the same manner – Adjustment of the PBG was not permissible – NCLAT not justified in holding that the last tranche of Rs 150 crores which was to be paid would be adjusted against the PBG – The SRA having deposited the first two tranches each of Rs 100 crores must comply with the remaining obligation of depositing Rs 150 crores (to make up a total payment of Rs 350 crores) – Having by its conduct accepted the terms set up by SBI it must be obligated to comply with the entirety of its obligations – It must do so in strict compliance with the time schedule as set out – Directions issued. [Paras 20-22 and 25]
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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