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Informist, Friday, Jan. 3, 2025

 

NEW DELHI – Pulling up the National Highways Authority of India for going in appeal to the National Company Law Appellate Tribunal in an insolvency case after a delay of 229 days, the Supreme Court said the government needs to do some introspection. It said if the authority had acted swiftly and filed the appeal in time, it would have stood a good chance of success.

 

A bench headed by Chief Justice of India Sanjiv Khanna said it was strange for the government to request the court to condone the 229-day delay. Everyone else is adhering to the timelines, so why not the government, the chief justice asked.

 

The court dismissed the authority's challenge to the resolution plan for debt-ridden IVRCL Chengapalli Tollways Ltd. "We do not find good grounds and reason to interfere with the judgment (of the National Company Law Appellate Tribunal) which holds that the appeal preferred by NHAI was barred by limitation," the court said. "Accordingly, the appeal is dismissed. There is something seriously wrong. Please do some introspection."

 

The highways authority and IVRCL Chengapalli had entered into a concession agreement in 2010. Thereafter, in 2015, IVRCL Chengapalli began collecting the user fee. It was expected to pay INR 360 million per annum to the highways authority, but the company did not make a single payment.

 

Initially, the highways authority deferred the payment of premium by IVRCL Chengapalli in 2016. It withdrew the deferment in 2021 on account of non-adherence to the terms of the approval letter of deferment. Consequently, it asked IVRCL Chengapalli to pay the entire outstanding premium as per the original schedule. 

 

In 2022, the Hyderabad bench of the National Company Law Tribunal admitted a petition to start insolvency proceedings against IVRCL Chengapalli. Thereafter, the highways authority submitted its claim to the tune of INR 4.45 billion. The resolution professional of IVRCL Chengapalli admitted a claim of INR 4 billion in the category of "creditors other than financial creditors and operational creditors". 

 

The highways authority said that despite being an "operational creditor" with a debt of not less than 10% of the company's total debt, the resolution professional had admitted its claim in the category of "creditors other than financial creditors and operational creditors". By doing so, the resolution professional had deprived the authority of its right to participate in the committee of creditors, it said.

 

In March 2023, the tribunal approved a resolution plan submitted by SPCP Luxembourg Strategies S.A.R.L. for IVRCL Chengapalli. In January 2024, the highways authority moved the appellate tribunal challenging the resolution plan, saying the plan sought to unilaterally amend the long-term concession agreement to the detriment of the authority. In the absence of the petitioner, who should have been acknowledged as an operational creditor, an illegal resolution plan was approved by a single-member committee of creditors, the petition said. Further, it said, the resolution professional, in connivance with the resolution applicant, had ensured that the deferment of premium was revived in the resolution plan and approved by the committee of creditors and the tribunal by keeping them in the dark.

 

In August, the appellate tribunal dismissed the highways authority's appeal on account of delay in filing its case.  End

 

Reported by Surya Tripathi

Edited by Rajeev Pai

 

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