- (1.) The Company petition bearing C.P (IB) No. 111/7/HDB OF 2017 is filed by IDBI Bank Limited (herein after referred to as Applicant/ Petitioner/Financial Creditor), against Lanco Infratech Limited (herein after referred to as Respondent/Corporate Debtor) under section 7 of Insolvency and Bankruptcy Code 2016 read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, by seeking to initiate a Corporate Insolvency Resolution Process(CIRP) by admitting the application under Section 7(5)(a) of IBC, 2016; to appoint Sri Vijaykumar V. Iyer as the interim resolution professional in terms of section 16 of the Code; to declare a moratorium in terms of Section 13 and 14 of the Code; to cause public announcement of the Corporate Insolvency Resolution Process be made in terms of Section 13 and 15 of the Code; with other consequential reliefs.
(2.) Brief facts, which are stated in the application/petition and relevant to adjudicate the issue in question, are as follows. a) IDBI Bank Limited (Financial Creditor) was incorporated on September 2004, and thus it is a Company within meaning of the Companies Act 2013, and also a Banking company within the meaning of Banking Regulation Act, 1949. Its registered office is situated at IDBI Tower, WTC Complex, Cuffe Parade, Colaba, Mumbai-400005, Maharashtra, India. b) Lanco Infratech Limited (Respondent/Corporate Debtor) is an existing Company incorporated on March 26, 1993, and its registered office is situated at Plot No.4, Software Units Layout, Hitech City, Madhapur, Hyderabad -500081, in the State of Telangana, India. The authorized share capital of the Corporate Debtor is Rs. 12000,00,00,000/- (Rupees Twelve Thousand Crores Only), having a paid up share capital of Rs.331,40,63,857/- (Rupees Three Hundred Thirty one Crores Forty Lakhs Sixty Three Thousand Eight Hundred and Fifty Seven Only). c) IDBI had granted certain working capital facilities and term loans to the Corporate Debtorfrom time to time, which were restructured on the terms and conditions as set out under the Master Restructuring Agreement dated December 27, 2013 ("Original MRA") entered into inter alia, the Corporate Debtor, IDBI and certain other lenders (collectively, the "JLF Lenders"). d) The Original MRA was amended by an Amendment Agreement to the Master Restructuring Agreement dated June 28, 2014 ("First Amendment Agreement") and a Second Amendment Agreement to the Master Restructuring Agreement dated July 29, 2015 ("Second Amendment Agreement", and together with the Original MRA and the First Amendment Agreement, the "MRA"). e) The Original MRA contemplated the restructuring of various credit facilities granted to the Corporate Debtor by the JLF Lenders (as set out in the MRA), which includes credit facilities granted by IDBI. f) Under the MRA, the total financial exposure of IDBI to the Corporate Debtor is as follows: i) Working Capital Term Loan I of Rs. 84,85,00,000 (Rupees Eighty Four Crores and Eighty Five Lakhs Only), details of which are set out in Part A of Schedule IIA to the MRA (hereinafter referred to as the "WCTLI"); ii) Working Capital Facilities - Fund Based of Rs.90,15,00,000 (Rupees Ninety Crores and Fifteen Lakhs Only), detailed of which are set out in Part A of Schedule IIA to the MRA (hereinafter referred to as the "WC Fund Based Facility"); iii) Working Capital Term Loan II of Rs.71,54,00,000 (Rupees Seventy One Crores and Fifty Four Lakhs Only), details of which are set out in Part B of Schedule IIA to the MRA (hereinafter referred to as the "WCTL II") iv) Working Capital Facilities - Non Fund Based of Rs.593,35,00,000 (Rupees Five Hundred Ninety Three Crores Thirty Five Lakhs Only) comprising of bank guarantee and letter of credit limits and additional working capital facility - non fund based, details of which are set out in Schedule VII to the MRA (hereinafter referred to as the "WC Non Fund Based Facility"); v) Restructured term loan of Rs.66,68,00,000/- (Rupees Sixty Six Crors and Sixty Eight Lakhs Only), details of which are set out in Part C of Schedule IIA to the MRA (hereinafter referred to as the "Restructured Term Loan"); vi) Funded Interest Term Loan Facility of Rs.49,80,00,000/- (Rupees Forty Crores and Eighty Lakhs Only), details of which are set out in Part D of Schedule IIA to the MRA (hereinafter referred to as the "FITL Facility"); and vii) Priority Loan of Rs.277,83,00,000/- (Rupees Two Hundred Seventy Seven Crores and Eighty Three Lakhs Only), details of which are set out in Schedule V to the MRA (hereinafter referred to as the "Priority Loan"). g) The total debt sanctioned by IDBI Bank Limited to the Corporate Debtor under the MRA Facilities is Rs. 1234,20,00,000 (Rupees One Thousand Two Hundred Thirty Four Crores Twenty Lakhs Only) and the total debt disbursed in relation to the MRA Facilities is Rs. 1234,13,00,000/- (Rupees One Thousand Two Hundred Thirty Four Crores Thirteen Lakhs Only). h) In addition to the aforesaid, IDBI has also granted the Corporate Debtor, a long term working capital term loan of Rs. 170,30,00,000 (Rupees One Hundred Seventy Crores and Thirty Lakhs Only) had vide loan agreement dated November 07, 2015 ("LTWC Term Loan"). (The WCTL I, the WC Fund Based Facility, the WCTL II, the WC Non Fund Based Facility, the Restructured Term Loan, the FITL Facility and the Priority Loan will hereinafter be referred to as "MRA Facilities"). The MRA Facilities and the LTWC Term Loan will hereinafter be collectively referred to as "IDBI Facilities". i) The Financial Creditor has also issued the following guarantees ("Guarantees"): i. Corporate Guarantee dated September 06, 2010, in relation to the obligations of Lanco Babandh Power Limited, in favor of IDBI Trusteeship Services Limited (the security trustee) on behalf of inter alia IDBI; ii. Corporate guarantee dated June 25, 2015, in relation to the obligations of Lanco Babandh Power Limited, in favour of IDBI Trusteeship Services Limited (the security trustee) on behalf of inter alia IDBI; iii. Corporate guarantee dated June 30, 2015, in relation to the obligations of Lanco Amarkantak Power Limited, in favour of Power Finance Corporation Limited (the security agent) on behalf of inter alia IDBI; and iv. Corporate guarantee dated January 19, 2016, in relation to the obligations of LancoVidarbha Thermal Power Limited, in favour of PNB Investment Services Limited (the security trustee) on behalf of inter alia IDBI. j) It is stated that in consideration of the financial assistance granted to the Corporate Debtor as mentioned above, the Corporate Debtor has executed several mortgages deeds in respect of several immovable and movable properties by depositing of title deeds, as detailed in the company petition. In addition to the above, the Corporate Debtor has given unconditional, continuing and irrevocable corporate guarantee to pay the amount by the company in the event of the default on part of the company to repay/discharge the amounts payable under MRA facilities dated December 31, 2013.Sri L. Madhusudan Raoand Smt. Ramalaxmamma has also executed unconditional, continuing and irrevocable personal guarantee to repay the amount due with respect of to MRA facilities in the event of failure on the part of Corporate Debtor to pay the amounts due there under vide deed dated 31.12.2013. k) The Corporate Debtor has also made the following share pledges of the company; I. Share Pledge a) Pledge over 25,93,35,059 (Twenty Five Crores Ninety Three Lakhs Thirty Five Thousand Fifty Nine) unencumbered equity shares of the Company/ Corporate Debtor held by Mr. L. Madhusudhan Rao and Lanco Group Limited, created on June 27, 2014; b) Pledge over 11,67,81,798 (Eleven Crores Sixty Seven Lakhs Eighty One Thousand Seven Hundred Ninety Eight) unencumbered equity shares of the Diwakar Solar Projects Limited held by the Company/Corporate Debtor, created on November 24, 2014; c) Pledge over 3,19,33,200 (Three Crores Nineteen Lakhs Thirty Three Thousand Two Hundred) unencumbered equity shares of Lanco Mandakini Hydro Energy Private Limited held by the Company/ Corporate Debtor and Lanco Hydro Power Limited, created on November 24, 2014; d) Pledge over 35,31,00,000 (Thirty Five Crores Thirty One Lakhs) unencumbered preference shares and 42,10,16,000 (Forty Two Crores Ten Lakhs Sixteen Thousand) unencumbered equity shares of Lanco Anpara Power Limited held by Lanco Thermal Power Limited, created on November 24, 2014; e) Pledge over 34,53,10,301 (Thirty Four Crores Fifty Three lakhs Ten Thousand Three Hundred and One) unencumbered preference shares and 53,39,124 (Fifty Three Lakhs Thirty Nine Thousand One Hundred and Twenty Four) unencumbered equity shares of Lanco Vidharbha Thermal Power Limited held by Lanco Thermal Power Limited, Charon Trading Private Limited, Phoebe Trading Power Limited and Regulus Power Private Limited, created on November 24, 2014; f) Pledge over 9,30,51,500 (Nine Crores Thirty Lakhs Fifty One Thousand and Five Hundred) unencumbered equity shares of Lanco Hoskote Highway Limited held by the Company/ Corporate Debtor and Avior Power Private Limited, created on November 24, 2014; g) Pledge over 8,60,24,800 (Eight Crores Sixty Lakhs Twenty Four Thousand and Eight Hundred) unencumbered equity shares of Lanco Devihalli Highway Limited held by the Company/ Corporate Debtor and Avior Power Private Limited, created on November 24, 2014; h) Pledge over 2,00,00,000 (Two Crores) unencumbered preference shares and 22,19,99,900 (Twenty Two Crores Nineteen Lakhs Ninety Nine Thousand and Nine Hundred) unencumbered equity shares of LancoHills Technology Park Private Limited held by the Company/ Corporate Debtor, created on November 24, 2014; i) Pledge over 7,99,17,000 (Seven Crores Ninety Nine Lakhs Seventeen Thousand) unencumbered equity shares of Lanco Amarkantak Power Limited held by the Lanco Thermal Power Limited, created on November 24, 2014; j) Pledge over 91,25,000 (Ninety One Lakhs Twenty Five Thousand) unencumbered equity shares of the Company/ Corporate Debtor held by Lanco Group Limited, created on May 05, 2015; k) Pledge over 26,51,74,603 (Twenty Six Crores Fifty One Lakhs Seventy Four Thousand Six Hundred and Three) unencumbered equity shares of the Company/ Corporate Debtor held by Lanco Group Limited, created on July 28, 2016; In addition to the aforesaid, the Restructured Term Loan is also secured by the following: (i) Pledge over 1,25,79,000 (One Crore Twenty Five Lakhs Seventy Nine Thousand) unencumbered equity shares of the Company/ Corporate Debtor held by Mr. L. Rajagopal and Lanco Group Limited, created on November 10, 2015; and (ii) Pledge over 31,17,000 (Thirty One Lakhs Seventeen Thousand) unencumbered equity shares of Lanco Thermal Power Limited held by Lanco Kondapalli Power Limited, created on November 17, 2015. The particulars of various securities created for inter alia IDBI with respect to the LTWC Term Loan provided by it to the Corporate Debtor have been detailed below: (i) First pari passu charge by way of hypothecation of the Corporate Debtor's movables except assets under exclusive charge but including movable plant, machinery, machinery spares, tools and accessories, present and future created on November 07, 2015; (ii) Pledge over 1,25,79,000 (One Crore Twenty Five Lakhs Seventy Nine Thousand) unencumbered equity shares of the Company/Corporate Debtor held by Mr. L. Rajagopal and Lanco Group Limited, created on November 10, 2015; (iii) Pledge over 31,17,000 (Thirty One Lakhs Seventeen Thousand) unencumbered equity shares of Lanco Thermal Power Limited held by Lanco Kondapalli Power Limited, created on November 17, 2015; (iv) Unconditional, absolute and irrevocable corporate guarantee of Lanco Group Limited inter alia, to pay the amounts payable by Company, in the event of default on part of Company to repay/ discharge the amounts payable under the LTWC Term Loan, dated November 07, 2015; (v) Unconditional, absolute and irrevocable corporate guarantee of Lanco Thermal Power Limited inter alia, to pay the amounts payable by Company, in the event of default on part of Company to repay/ discharge the amounts payable under the LTWC Term Loan, created on November 17,2015; (vi) Unconditional, absolute and irrevocable personal guarantee of Mr. L. Madhusudhana Rao and Smt. L. Ramalaksamamma to repay the amounts due with respect to LTWC Term Loan in the event of failure on part of Company to pay the amounts due thereunder, dated November 07, 2015. l) It is stated that the securities mortgaged (except the corporate and personal guarantees)with the applicant as on 31.03.2016 is estimated approximatelyat Rs. 10,504,00,00,000 (Rupees Ten Thousand Five Hundred Four Crores Only).In addition to the aforesaid, 1,25,79,000 (One Crore Twenty Five Lakhs Seventy Nine Thousand) unencumbered equity shares of the Company/ Corporate Debtor held by Mr. L. Rajagopal and Lanco Group Limited, with respect to which pledge has been created on November 10, 2015 have an estimated value of Rs. 1,51,00,000 (Rupees One Crore and Fifty One Lakh) and the Ramabainagar Land has an estimated value of Rs. 230,00,00,000 (Rupees Two Hundred Thirty Crores Only). m) The Corporate Debtor has failed and/or neglected to make payment of amounts due under the Facilities, when such amounts have became due and payable. As on June 15, 2017, there is an amount of Rs. 234,96,12,889 (Rupees Two Hundred Thirty Four Crores Ninety Six Lakhs Twelve Thousand Eight Hundred and Eighty Nine Only) which is due and payable by the Corporate Debtor to IDBI, particulars whereof are mentioned herein below: It is stated that the devolvement under Working Capital Facilities - Non Fund Based becomes a part of the Working Capital Facilities - Fund Based n) In the above circumstances, the applicant/financial creditor is praying the Adjudicating Authority to initiate Insolvency resolution process and pass necessary order as prayed for.
(3.) Heard Shri Animesh Bisht, Dhanunjay Kumar, Megha Sharma, Divya Datla, 1/b Cyril Amarchand Mangaldas the learned Advocate for the petitioners; and Shri C. V. Mohan Reddy, Senior Advocate with Avinash Desai, Pooja Mahajan, Satya Siva Darshan, Amaljeet Jaiswal, Counsels for the respondents. We have carefully perused all the pleadings made by both the parties along with material documents filed by the respective parties in support of their contentions.;