JUDGEMENT

(Virtual Mode) [Per: Shreesha Merla, Member (Technical)] 1. This Appeal is preferred by IFCI Limited under Section 61 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the ‘Code’) against the Impugned Order dated 14/03/2023 passed by the National Company Law Tribunal, Hyderabad Bench - II, Hyderabad in IA(IBC)/1465/2022, whereby the Adjudicating Authority has dismissed the Application filed by the Appellant herein challenging the rejection of its Claim by the 1st Respondent/ the Resolution Professional (RP).

2. Briefly put, the facts as mentioned in the Application, which was dismissed by the Adjudicating Authority, are that IVRCL Limited had won the bid for undertaking Construction, Operation and Maintenance of a Project under ‘National Highway Authority of India’ (“NHAI”) in April 2009, subsequent to Comp App (AT) (CH) (Ins) No. 108/2023 which the concession Agreement dated 25/03/2010 was entered into between NHAI and ‘IVRCL Chengapalli Tollways Limited’ (“ICTL”) for execution of the Project. IFCI agreed to provide financial assistance to the Corporate Debtor through ‘Compulsorily Convertible Debentures’ (“CCDs”) and subsequently the ‘Letter of Intent’ (“LOI”) / ‘Sanction Letter’, dated 28/09/2010 was issued and the Applicant/ Financial Creditor agreed to subscribe to the CCDs amounting to Rs. 125,00,00,000/- vide a ‘Debenture Subscription Agreement’ (“DSA”) dated 14/10/2011.

3. IFCI, IVRCL and ICTL entered into a Share Buy Back Agreement, dated 14/10/2011, wherein the terms and conditions of the buy back of CCDs subscribed by the Applicant were detailed. The Applicant by exercising this option agreed to buy back Rs. 12.5 Crore CCDs any time between the end of the 3rd year and the 6th year from the date of issue of CCDs and in the event of default on behalf of ICTL, the Applicant would be at liberty to sell the CCDs to a third party. While so, ICTL sought restructuring of the terms of repayment of the CCDs vide letter dated 21/11/2014 and the Applicant had approved restructuring of the CCD Facility, vide letter dated 05/12/2014. ICTL Project has achieved Provisional Commercial Operations on October 2016 and started generating revenue. Still it sought extension of time from NHAI beyond the period mentioned in the Concession Agreement and NHAI, on receipt of the revised premium on Rs. 59.10 crores, granted extension as sought for. Comp App (AT) (CH) (Ins) No. 108/2023 4. On 22/02/2017, ICTL suggested a ‘One Time Settlement’ (“OTS”) and the Applicant agreed to the same, vide letter dated 22/03/2017 on the condition that the amount of Rs. 135 crores shall be paid by 31/03/2017. As there was a default in honouring the terms of OTS, the Applicant addressed a letter dated 19/02/2017 to the ICTL, revoking the Concession granted under restructuring of CCDs and therefore the OTS stood withdrawn. Subsequent to this, Corporate Guarantee of IVRCL was invoked by the Applicant. Subsequently, ‘Corporate Insolvency Resolution Process’ (“CIRP”) was initiated by SBI against IVRCL on 23/02/2018. The Liquidation Proceedings were initiated vide Order dated 26/07/2019. The Applicant had filed its claim for Rs. 663.08 Cores, in relation to IVRCL’s Corporate Guarantee Applications against IFCL’s Facilities provided to ICTL.

5. The Applicant addressed the letter dated 12/10/2021 to NHAI appraising the state of affairs of IVRCL in informing its decision to initiate recovery proceedings against ICTL. While so, the Lenders Consortium assigned the debt, amounting to Rs. 1001.47 Crores, including the interest amounting to ‘Asset Care Reconstruction Enterprise Limited’ (ARCE) for a total amount of Rs. 625 Crores on 10/11/2021.

6. The Applicant filed C.P.(IB) No. 20/2022 on 31/12/2021, whereas ACRE filed C.P.(IB) No. 28/2022 to initiate Insolvency Proceedings against ICTL. The Adjudicating Authority vide Order dated 20/04/2020 admitted Comp App (AT) (CH) (Ins) No. 108/2023 C.P.(IB) No. 28/