NCLAT upholds Adani group firm's takeover of Dighi Port

The National Company Law Appellate Tribunal (NCLAT) has upheld the Adani Group firm - Adani Ports & Special Economic Zone's take-over plan of the debt-ridden Dighi Port.

A three-member NCLAT bench dismissed the plea filed by promoter Vishal Vijay Kalantri challenging the order passed by the Mumbai bench of National Company Law Tribunal (NCLT), which had approved the Rs 650-crore resolution plan by Adani Ports & Special Economic Zone (APSEZ) on March 5.

The appellate tribunal rejected Kalantri's submissions contending that NCLT has failed to consider objections raised by it over the resolution plan submitted by APSEZ and rejected the settlement proposal submitted by his company Balaji Infra Projects Ltd (BIPL).

"All objections raised qua the action of the 'Resolution Professional' during Corporate Insolvency Resolution Process (CIRP), approval of 'Resolution Plan' of 'APSEZ' by the Committee of Creditors and its subsequent approval by the Adjudicating Authority being unfounded are hereby repelled.

"There is no merit in this appeal and the same is dismissed," said the NCLAT bench headed by Acting Chairperson Justice B L Bhat.

The appellate tribunal also observed that all "possible endeavours are made by the promoters to frustrate the CIRP and thwart all attempts at resolution" of the corporate insolvency and revival of Dighi Port, thereby jeopardising the legitimate interests of all stakeholders and defeating the object of the legislation.

"At the very outset, we may observe that the instant case is yet another instance of the promoters not letting the goose escape from their dragnet, though it no more lays golden eggs," said NCLAT.

It further said: "We say so as in the instant case this is the third attempt to stall the process, the earlier two efforts on the part of promoters having fizzled out.”

The NCLAT also observed that due procedures were followed while approving APSEZ’s resolution plan.

"It is not disputed that the fair value and liquidation value was determined by the duly appointed registered valuers and the approved resolution plan was considered with regard to its viability and feasibility in terms of the provisions of the ‘I&B Code’ and CIRP Regulations.

"Nothing has been brought to our notice to demonstrate that the approved resolution plan of ‘APSEZ’ contravenes any provisions of law,” it said in its order passed on July 24.

The only issue raised is that the settlement offer emanating from the promoter is better, as regards maximisation of the value of the assets of the company and subserves the interest of all stakeholders.

"This argument, in the nature of such settlement offer being superior to the approved Resolution Plan of 'APSEZ' in the context of a financial matrix, viability and feasibility, cannot be accepted for the simple reason that the decision regarding feasibility and viability of a Resolution Plan qua the intended objective of ‘I&B Code’ is essentially a business decision resting upon commercial wisdom of the CoC and is not amenable to judicial review,” NCLAT said.

Dighi Port, which is being developed by BIPL, promoted by industrialist Kalantri, in the Raigad district of Maharashtra, owes over Rs 3,000 crore to the lenders and is going through the corporate insolvency resolution process.

The promoter, through the holding company BIPL, had offered Rs 680 crore to the financial creditors besides Rs 50 crore towards the CIRP costs and payment to operational creditors, which was rejected in September 2019.

The resolution plan submitted by 'APSEZ' was approved by the 'Committee of Creditors' with an overwhelming majority of above 99.68 percent votes on September 19, 2019.

Earlier, bids by JNPT, APSEZ and Veritas Consortium were considered by the Committee of Creditors initially but finally went with APSEZ, as the flagship company of the Adani Group, came up with the highest bid.

The NCLT had started insolvency proceedings against the Dighi Port Ltd on March 25, 2018, allowing the plea of one of its operational creditor - DBM Geotechnics and Constructions Ltd - for non-payment of construction of multi-purpose berth.