The Delhi bench of the National Company Law Appellate Tribunal(NCLAT) has held that settlement entered by Kiratpur Ner Chowk Expressway Limited (KNCEL) and National Highways Authority of India (NHAI) for foreclosure of the concession agreement relating to Kiratpur was by approved resolution framework about Infrastructure Leasing & Financial Services Ltd. (IL&FS)
Indian Bank, the Appellant challenged the order (Impugned Order) of the National Company Law Tribunal, Mumbai Bench (NCLT). The Impugned Order has been passed by NCLT, Mumbai by exercising jurisdiction under sections 241-242 of the Companies Act, 2013 (Companies Act) whereby an NHAI and KNCEL have been approved resulting in the foreclosure of the Concession Agreement regarding the construction of Kiratpur – Ner Chowk section of National Highway.
A Concession Agreement was signed between the NHAI, the concessions Party and KNCEL, the Concessionaire for constructing the Kiratpur-Ner Chowk section of the National Highway in 2012 on a Design, Build, Finance, Operate and Transfer (DBFOT) basis. This project was taken up by NHAI through a Special Purpose Vehicle (SPV) KNCEL which is a subsidiary of IL&FS Transportation Network Limited (ITNL), which in turn is a subsidiary of IL&FS.
During the implementation of the project, a dispute arose between NHAI and KNCEL and there were claims and counterclaims filed by both KNCEL and NHAI against each other after long-drawn series of communications between the two parties it was mutually decided to foreclose the Concession Agreement under the guidelines issued on 9.3.2019 by the Ministry of Road Transport & Highways (MoRTH) titled ‘Guiding Principles for Resolution of Stuck National Highways Projects’ (MoRTH Guidelines).
It was stated that due to disputes that arose between the two parties, termination notices were issued by both parties, and KNCEL terminated the Concession Agreement. During the negotiations between the parties, the value of work done in the project was assessed at Rs.1027.79 crores by Independent Engineers (IE).
The Appellants have further stated that the amount of “Debt Due” was assessed to be Rs. 787.11 crores by NHAI. The Appellants have added that KNCEL proposed foreclosure of the Concession Agreement on payment of compensation of Rs.735.56 crores, which was recalculated by NHAI and it proposed a compensation amount of Rs.708.40 crores to KNCEL and after recoveries of Rs.35.78 crores, a net compensation amount payable to KNCEL was arrived at Rs.672.62 crores as ‘full and final settlement’ by NHAI.
In the case of Navayuga Bengalooru Tollway Pvt. Ltd. v. NHAI, OMP (I) (CPMM) 152 of 2021, it was held that it would serve the requirement of justice if the money that is available as assets of the Concessionaire is distributed in terms of the Revised Distribution Framework approved by the NCLT vide order dated 12.3.2022.
“The settlement entered into by KNCEL and NHAI for foreclosure of the Concession Agreement relating to the Kiratpur – Ner Chowk Project under the MoRTH Guidelines is by the approved Resolution Framework about the ILF&S and its group entities which are correctly approved by the NCLT by the Impugned Order.” Justice Ashok Bhushan, Chairperson and Dr. Alok Srivastava, Member (Technical) held.
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