The National Company Law Appellate Tribunal (NCLAT) has directed IL&FS to disburse Rs 1,925 crore to its financial creditors from the payments received in connection with the Gurgaon Metro project and said it would be subject to the final resolution of the IL&FS companies concerned. Will happen.
The amount is part of termination compensation received from Haryana Urban Development Authority (HSVP) from two IL&FS subsidiaries and special purpose vehicles (SPVs) – Rapid Metro Rail Gurgaon Limited (RMGL) and Rapid Metro Rail Gurgaon South Limited (RMGSL). The three entities and the Haryana Mass Rapid Transport Corporation Limited were part of the concession agreement for the Gurgaon Metro project, but the agreement was later terminated due to differences between the IL&FS subsidiaries and the two entities of the Haryana government.
Rapid Metro Rail Gurgaon Limited (RMGL) and Rapid Metro Rail Gurgaon South Limited received Rs 638.01 crore and Rs 1,287.90 crore respectively from HSVP as interim termination payment in their escrow accounts, following a Supreme Court order. The total amount was Rs 2,407.40 crore.
RMGL has developed Metrorail link from Sikanderpur station of Delhi Metro to NH-8 and RMGSL from MG Road to Sector 56, Gurugram.
In its order, the NCLAT has directed IL&FS to pay Rs 1,925 crore, which is 80 per cent of the amount received from HSVP, as interim termination payment to financial creditors as per the interim disbursement framework.
“We allow interim distribution of the said amount on the proportionate distribution suggested by the Union” India and approved by this Tribunal in paragraph 66 of the judgment dated March 12, 2020. We are of the view that the interim distribution of the amount will be amongst the financial creditors… Interim distribution will follow the final resolution of the ILFS companies after the following. As per the procedure laid down in the ‘Revised Distribution Framework’, the NCLAT order said.
The distribution of the said amount will be on pro-rata basis as suggested by the Government and approved earlier by the NCLAT. The NCLAT order stated that the disbursement of 80 per cent of the debt payable to the escrow account of RMGL and RMGSL would be as per the ‘revised resolution framework’ approved by this tribunal.
It said that RMGL and RMGSL on the one hand and HSVP and HMRTC on the other, are free to agitate on all their issues in respect of the audit reports and all other issues in respect of the respective claims against each other in the arbitration proceedings.
The three-member NCLAT bench passed the order on the petitions of Canara Bank and Union Bank of India, filed on behalf of the consortium of lenders of IL&FS. “In disbursement, an undertaking shall be taken to refund any amount received from the financial creditors in excess of their entitlement, as found in the final resolution of IL&FS companies,” the NCLAT said.
After the completion of the project, IL&FS SPV and HSVP terminated their concession agreement due to several differences. RMGL and RMGSL demanded termination payment as per the terms of the agreement. Later, Justice DK Jain, who has been appointed to oversee the resolution process of debt-ridden IL&FS, directed both the companies to hand over the project to HSVP in September 2019.
However, the termination was challenged by the HSVP before the Punjab and Haryana High Court on September 6, 2019. The High Court asked the Comptroller and Auditor General of India to arrange a team of auditors for financial audit and investigation of the debt due. Scope of audit of debts payable. Subsequently, a loan of Rs 797.52 crore to RMGL and Rs 1,609.88 crore to RMGSL was earmarked by the CAG.
However, HMRTC (Haryana Mass Rapid Transport Corporation Limited) objected to the audit report, following which RMGL and RMGSL approached the Supreme Court in 2021. The top court directed HSVP/HMRTC to deposit Rs 638.01 crore and Rs 1,287.90 crore in the escrow account of RMGL. For RMGSL
On August 18, 2021, RMGL and RMGSL issued notices calling for arbitration in accordance with the concession agreement. Subsequently, on 15 September 2021, HSVP and HMRTC also gave notices calling for arbitration under the concession agreement. With regard to arbitration, the NCLAT said that the parties are free to agitate all their issues with regard to the audit report and other issues and the same should be given due consideration.
The 26-page order said, “The parties i.e. RMGL and RMGSL on the one hand and HSVP and HMRTC on the other are free to agitate on all other issues regarding audit reports and related claims against each other in arbitration proceedings.” ” NCLAT said. “It goes without saying that in the final resolution, due consideration shall be given to the arbitration award and provisions, if any, shall be made to ensure compliance with the award,” the order said.
,With inputs from PTI,
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