This judgment clarifies that disputes involving the implementation of resolution plans under the IBC should be resolved by the specialized forums established under the Act.

JUDGMENT :

SUBRAMONIUM PRASAD, J.

1. The present writ petition has been filed by the Petitioner seeking a relief in the nature of writ of mandamus against the Respondent No. 1, thereby restricting it to take any illegal actions and initiate parallel recovery proceedings against its subsidiaries before different forums, which will defeat the purpose of Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “IBC”).

2. The facts leading to the filing of the present writ petition are as follows –

a. The Petitioner is a company incorporated on 03.12.1990 under the provisions of the Companies Act, 1959. The Petitioner is an Engineering, Procurement and Construction (EPC) commission contract company, which mostly operated on Building Operate-Transfer (BoT) models in India.

b. National Highways Authority of India (hereinafter referred to as “NHAI”) has issued tenders for the construction, maintenance and operation of three highway segments i.e., Bareilly-Sitapur section of NH-24 (hereinafter referred to as “Project A”); Muzaffarnagar-Haridwar section of NH-58 (hereinafter referred to as “Project B”); and Delhi-Haryana Border to the Rohtak section of NH-10 (hereinafter referred to as “Project C”).

c. The Petitioner participated in the bidding of the aforesaid projects and after being declared as successful bidders, the NHAI has issued a Letter of Awards for each project, wherein the Petitioner was obligated to incorporate Special Purpose Vehicles (hereinafter referred to as “SPV”) for the execution of the aforementioned projects.

d. Accordingly, the Petitioner has incorporated three SPVs as subsidiaries for the execution of the projects, which are as follows –

i) Bareilly Highway Project Limited (hereinafter referred to as “Respondent No. 3”)

ii) Haridwar Highway Project Limited (hereinafter referred to as “Respondent No. 4”)

iii) West Haryana Highway Project Limited (hereinafter referred to as “Respondent No. 5”)

e. After the incorporation of Respondent No. 3-5, the SPVs started executing the contracts. The details of the work to be executed by Respondents No.3-5 is as under:

Bareilly Highway Project Limited/Respondent No. 3

i. Respondent No. 3 and NHAI have entered into a Concession Agreement on 22.06.2010 for the completion of Project A. However, being a parent company, the Petitioner has also entered into an EPC Agreement on 24.12.2010 with Respondent No. 3 to comply with the terms of the Concession Agreement.

ii. In order to complete its work pertaining to Project A, the Respondent No. 3 has availed various loans from different banks, with Petitioner being the Guarantor. The same has been encapsulated in Clause 5.2.6 of the Facility Agreement dated 16.12.2010, which was entered into by the Respondent No. 3, State Bank of India (SBI) and Union Bank of India.

iii. Project A could not be completed. Concession Agreement dated 22.06.2010 was terminated on 03.05.2019, due to which the EPC Agreement dated 24.12.2010 also got terminated.

iv. Aggrieved by the termination of the Agreements, Respondent No. 3 invoked the arbitration clause against NHAI claiming an amount of Rs.98,19,18,30,276/-. The arbitral proceedings with respect to the same has already reached the stage of conclusion, with Arbitral Tribunal reserving its award vide Order dated 22.08.2024.

v. Thereafter, an application under Section 7 of the IBC was filed by the SBI against the Respondent No. 3 and vide order dated 23.09.2024, the NCLT has admitted the Respondent No. 3 into Corporate Insolvency Resolution Process (CIRP). However, when the said order was challenged, the NCLAT had stayed the CIRP proceedings against the Respondent No. 3 vide order dated 15.10.2024.

vi. While the said appeal was still pending, the Consortium of Lenders (CoL) of the Respondent No. 3 assigned its debt in favour of Respondent No. 1. Respondent No. 1 is a Public Sector Undertaking which