New Delhi, The National Company Law Appellate Tribunal has dismissed two appeals filed by Maharashtra Airport Development Company challenging the sale of Abhijeet MADC Nagpur Energy‘s assets.
Abhijeet MADC Nagpur Energy Pvt Ltd (AMNEPL) is a joint venture power company set up to supply electricity to the MIHAN Special Economic Zone in Nagpur during liquidation.
A two-member bench held that the liquidator of AMNEPL was well within his rights to sell the leasehold assets of the company to Rankini Power Generation and rejected MADCL’s contention that it, as the land-owning entity, could block the sale.
The appellate tribunal upheld the earlier order passed by the Mumbai Bench of the National Company Law Tribunal (NCLT), which, on March 13, 2024, upheld the sale certificate issued in favour of the successful auction purchaser, along with certain concessions.
“Having regard to all the facts and circumstances of the case and in view of the reasons given by us hereinbefore, we do not find any good ground to interfere in the impugned judgments passed by the Ld Adjudicating Authority (NCLT) and resultantly both the CA (AT) (Ins) Nos. 1355 of 2023 and 939 of 2024 are hereby dismissed,” it said.
The National Company Law Appellate Tribunal (NCLAT), however, clarified that the rights of the MADCL under the BOT agreements (Build-Operate-Transfer) will remain protected, and the Auction Purchaser/successful bidder shall be bound to transfer the facility in the manner as was obligated for the CD, the order said.
MADCL is a government company constituted by the Maharashtra government in 2002 for the specific purpose of speedy development of Airport Projects across the state, including one at MIHAN in Nagpur.
It has obtained approval for setting up a Special Economic Zone (SEZ) in the MIHAN Area of Nagpur in an area of 2086 hectares.
With a view to having a dedicated power source of supply for the MIHAN Project, it had invited proposals for the construction, operation and maintenance of a coal-based thermal power plant on about 62.50 hectares on a BOT basis for 33 years.
Abhijeet Infrastructure Nagpur was selected as the successful bidder and incorporated a joint venture Special Purpose Vehicle (SPV), Abhijeet MADC Nagpur Energy Pvt Ltd (AMNEPL). In this, MADCL holds a 26 per cent stake in lieu of leasing project land to the company.
The company was admitted into insolvency proceedings in October 2017 and later moved into liquidation in August 2018.
Its business undertaking and legal entity were subsequently sold through separate public auctions in December 2020 to a successful bidder for over Rs 100 crore, with the proceeds distributed among creditors under Section 53 of the Insolvency and Bankruptcy Code (IBC).
MADCL argued that it had only granted an exclusive licence to the corporate debtor to operate the project and that ownership of the land and facility was to revert to it after the concession period, and hence the sale of assets without its consent was illegal.
The tribunal, however, held that the leasehold rights created in favour of the corporate debtor constituted “property” and “assets” within the meaning of Section 3(27) and Section 18(1)(f) of the IBC, and were therefore rightly included in the liquidation estate.
It also noted that MADCL’s 26 per cent equity was considered for a lease premium and, under the shareholders’ agreement, was in any case liable to be transferred at the end of the concession period, and that MADCL never exercised its contractual right to terminate the concession agreement upon the appointment of the liquidator.
The tribunal further pointed out that MADCL’s claims as a creditor of the company had already been rejected by the liquidator and the adjudicating authority, and since these findings were never appealed, they had attained finality.
