THE HON’BLE SRI JUSTICE C. V. BHASKAR REDDY WRIT PETITION No.25060 of 2024

ORDER:

This Writ Petition is filed seeking the following relief:-

“…to issue a writ order direction in the nature of Mandamus declaring the action of:

a. The Respondent Nos.3, 5 and 7 through the Respondent Nos. 2, 4 and 6 or independently to file an application for consolidation of CIRP of KSK Mahanadi Private Limited, KSK Water Infrastructures Private Limited and Raigarh Champa Rall Infrastructure Private Limited before the Learned NCLT, Hyderabad Bench for effective adjudication of this issue;

b. The Respondent Nos.2, 4 and 6 i.e. the resolution professional of KSK Mahanadi Private Limited, KSK Water Infrastructures Private Limited and Raigarh Champa Rail Infrastructure Private Limited to provide all such information as may be necessary for the Learned NCLT, Hyderabad to adjudicate upon the issue of consolidation of CIRP of KSK Mahanadi Private Limited, KSK Water Infrastructures Private Limited and Raigarh Champa Rail Infrastructure Private Limited;

c. The Respondent Nos.1 and Respondent No.8 to analyse and investigate the conduct of the Respondent No. 3, Respondent No. 5 and Respondent No. 7 i.e. the committee of creditors of KSK Mahanadi Private Limited, KSK Water Infrastructures Private Limited and Raigarh Champa Rail Infrastructure Private Limited from the perspective of whether these respondents have failed miserably in discharging the fiduciary duty foisted upon them by the IBC.

d. The Respondent Nos.1 and 8 to expeditiously come up with a framework for group insolvencies to prevent any situation like the present.

e. The Respondent Nos. 2, 4 and 6 and Respondent Nos. 3, 5 and 7 i.e. the respective Resolution Professional and Committee of Creditors of all Corporate Debtors to not take any action including seeking approval of resolution plans for these companies till the pendency of the present writ petition…”

2. Considered the submissions of Sri B.Chandrasen Reddy, learned Senior Counsel representing Sri Amir Bavani, learned counsel appearing for the petitioner; Ms.N.V.R.Rajya Lakshmi, learned counsel representing Sri Gadi Praveen Kumar, learned Deputy Solicitor General of India, appearing for respondent No.1 and Sri Krishna Grandhi, learned counsel appearing for respondent Nos.5 and 7 and with their consent this writ petition is disposed of at the admission stage.

3. It is stated that the petitioner is a Company incorporated under the provisions of the Companies Act, 1956 and it is primarily responsible for distribution of the electricity in the State of Uttar Pradesh. It is further stated that respondent No.2-KSK Mahanadi Power Company Limited (“KSKMPCL”) being represented by its Resolution Professional Mr.Sumit Binani, is a public company currently undergoing Corporate Insolvency Resolution Process (“CIRP”) in terms of the Code as per the order, dated 03.10.2019 passed by the National Company Law Tribunal, Hyderabad (“NCLT”). Respondent No.3 is the Committee of Creditors of KSKMPCL being represented by Aditya Birla ARC Limited having 33.369% of the voting rights in the committee of creditors in KSKMPCL. Respondent No.4-KSK Water Infrastructures Private Limited (“KSKWIPL”). It is further stated that after initiation of Corporate Insolvency Resolution Process against the Corporate Debtors, one of the creditors of KSKMPCL i.e., Punjab National Bank has filed I.A.No.32 of 2020 in CP(IB) No.492/07/HDB/2019 on the file of NCLT seeking consolidation of CIRP of Corporate Debtors with two other companies. The said application was rejected by the NCLT vide order, dated 12.02.2021, wherein it was observed as follows:

“We being Adjudicating Authority, if direct CoC and RP of different Companies to sit together to resolve insolvency of different Corporate Debtors together then there will be chaotic situation relating to consolidation of assets and liabilities of all the Companies. In fact, inherent jurisdiction state in Rule 11 of the NCLT Rules cannot be used to