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SUPREME COURT OF INDIA
T.S. THAKUR, CJI., R. BANUMATHI, J.
M.C. Mehta - Appellant
Versus
Union of India & Ors. – Respondents
IDBI Bank Limited and State Bank of India – Applicant
I.A. Nos. 363-364, I.A No. 425 In I.A. No. 364 In I.A. Nos. 344, 355, 362 In Writ Petition (Civil) No. 13029/1985
Decided On : 13-05-2016
Facts of the case:
Haryana State Industrial and Infrastructure Development Corporation Limited (HSIIDC) invited bids for developing of 135.650 kms long Kundli-Manesar-Palwal Expressway in the State of Haryana. Three companies viz., M/s. Madhucon Projects Limited, M/s. D.S. Construction Limited and M/s. Appolo Enterprises set up a Special Purpose Vehicle (SPV) named ‘KMP Expressways Limited’ (“concessionaire”) and letter of acceptance was issued on 14.11.2005. The concessionaire and HSIIDC entered into a concession agreement dated 31.01.2006 and the same was for a period of twenty three years and nine months from the appointed date.
The concessionaire raised a loan from consortium of banks comprising of the banks namely IDBI Bank, State Bank of India, the applicants herein and other banks such as State Bank of Mysore, State Bank of Travancore, State Bank of Patiala, Canara Bank, Dena Bank, United Bank of India, UCO Bank, Vijaya Bank and India Infrastructure Finance Company Ltd. The original project cost of Rs.1915.00 crores was proposed to be financed by way of equity capital of Rs.766.00 crores and Rupee Term Loan of Rs.1149.00 crores. The lender banks have disbursed sums aggregating to Rs.1075.03 crores for the project. On 08.01.2007, a loan agreement was executed between the lender banks and concessionaire recognizing and strengthening the lenders’ security interest over the concession agreement. The concessionaire executed the indenture of mortgage dated 09.01.2007 securing the interest of the lenders as per the requirement of the loan agreement. In order to further secure the interest of the lender banks, on the same date i.e. 08.01.2007, a tripartite agreement was also entered into between HSIIDC, the concessionaire and the IDBI Bank as lenders’ agent.
Proposed Kundli-Manesar-Palwal Expressway is being monitored by a special monitoring committee under the chairmanship of Secretary, Ministry of Road Transport and Highways with Chief Secretaries of Delhi, Haryana and U.P., Chairman, NHAI and Chairman, Environmental Pollution Control Authority (EPCA) as members. Also, the progress of the project was being reviewed by a High Powered Committee established under the chairmanship of Chief Secretary, Haryana and others. There was delay in execution of the work and the concessionaire was unable to achieve the commercial operation of the project. Consequently, Supreme Court appointed the Environmental Protection Control Authority Committee (EPCA) to expedite the project. It was agreed that an amicable substitution of the existing concessionaire shall be made so as to expedite the project. HSIIDC issued a notice dated 28.01.2015 to the then existing concessionaire conveying its intention to terminate the Concession agreement, subject to a cure period of one month for curing the defaults.
Subsequently, bid submitted by M/s. KCC Buildcon Pvt. Ltd.-Dilip Buildcon Ltd. (JV) was accepted by HSIIDC on 28.03.2015 for execution and development of the project on ‘Item Rate Mode’ for the said stretch of the road project of 52.33 km (Manesar-Palwal) (Balance Work). Subsequently, in the first week of April, 2015, HSIIDC issued invitation for bids for development of access controlled six lane Kundli-Manesar Section (km 0.00 to km 83.320) valued at Rs.1774.00 crores on ‘BOT’ (annuity basis). After evaluation of the bids from the qualified bidders, HSIIDC accepted the bid of ESSEL on ‘BOT’ (annuity basis) and issued letter of acceptance on 31.07.2015 with a project cost of Rs.1863.00 crores. ESSEL incorporated M/s. Kundli-Manesar Expressways Limited as a limited liability company and the concession agreement was executed by HSIIDC with M/s. Kundli-Manesar Expressways Limited on 03.09.2015 for execution of work of development of access controlled six lane Kundli-Manesar Section km 0.00 to km 83.320 in the State of Haryana on ‘BOT’ (annuity basis). Be it noted, in the tender as well as the concession agreement with the ESSEL, there was neither mention of debts due to the lender banks nor any clause was incorporated to secure the loans of the lender banks.
The lender banks have filed these applications seeking various directions.
Finding of the Court:
Lender Banks’ dues need be addressed.
Result:Interim directions given.
JUDGMENT :
Interlocutory applications No.363 and 364 of 2015 have been filed by the Consortium of Banks seeking direction from this Court that the rights of the Consortium of Banks who has financed the Kundli-Manesar-Palwal Expressway (‘BOT’) in the State of Haryana and has outstanding dues approximately Rs.1419.15 crores as on 28.02.2015 are not prejudiced by this Court’s order dated 30.01.2015 passed in I.As. No. 344, 355 and 362 in W.P.(C) No. 13029 of 1985.
2. Shorn of unnecessary details, facts leading to the present applications are as follows: Haryana State Industrial and Infrastructure Development Corporation Limited (HSIIDC) invited bids for developing of 135.650 kms long Kundli-Manesar-Palwal Expressway in the State of Haryana. Following the bidding process, three companies viz., M/s. Madhucon Projects Limited, M/s. D.S. Construction Limited and M/s. Appolo Enterprises set up a Special Purpose Vehicle (SPV) named ‘KMP Expressways Limited’ (“concessionaire”) and letter of acceptance was issued on 14.11.2005. The concessionaire and HSIIDC entered into a concession agreement dated 31.01.2006 and the same was for a period of twenty three years and nine months from the appointed date.
3. The concessionaire raised a loan from consortium of banks comprising of the banks namely IDBI Bank, State Bank of India, the applicants herein and other banks such as State Bank of Mysore, State Bank of Travancore, State Bank of Patiala, Canara Bank, Dena Bank, United Bank of India, UCO Bank, Vijaya Bank and India Infrastructure Finance Company Ltd. The original project cost of Rs.1915.00 crores was proposed to be financed by way of equity capital of Rs.766.00 crores and Rupee Term Loan of Rs.1149.00 crores. The lender banks have disbursed sums aggregating to Rs.1075.03 crores for the project. On 08.01.2007, a loan agreement was executed between the lender banks and concessionaire recognizing and strengthening the lenders’ security interest over the concession agreement. In terms of loan agreement, concessionaire had inter alia agreed to create security interest over various documents like all project documents which include concession agreement and all other assets and properties of the existing concessionaire. The concessionaire executed the indenture of mortgage dated 09.01.2007 securing the interest of the lenders as per the requirement of the loan agreement. In order to further secure the interest of the lender banks, on the same date i.e. 08.01.2007, a tripartite agreement was also entered into between HSIIDC, the concessionaire and the IDBI Bank as lenders’ agent.
4. Proposed Kundli-Manesar-Palwal Expressway135.650 kms long takes off from NH-1 near Kundli, crosses NH-10 in the west of Bahadurgarh, crosses NH-8 near Manesar and finally joins NH-2 near Palwal. As the project is being developed around the national capital, Delhi, by an order of this Court dated 18.08.2005 in IA No. 182-183 in W.P. (C) No. 13029/1985 titled as ‘M.C. Mehta v. Union of India’ the same is being monitored by a special monitoring committee under the chairmanship of Secretary, Ministry of Road Transport and Highways with Chief Secretaries of Delhi, Haryana and U.P., Chairman, NHAI and Chairman, Environmental Pollution Control Authority (EPCA) as members. Also, the progress of the project was being reviewed by a High Powered Committee established under the chairmanship of Chief Secretary, Haryana and others. There was delay in execution of the work and the concessionaire was unable to achieve the commercial operation of the project. Consequently, this Court appointed the Environmental Protection Control Authority Committee (EPCA) to expedite the project. Several meetings were held between EPCA, HSIIDC, the concessionaire and the lender banks, the details of which may not be relevant for the issue raised before us. Suffice to note that it was agreed that an am
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