Case Law Details
State Bank of India and Ors Vs Consortium of Mr Murari Lal Jalan and Mr Florian Fritsch and Anr (Supreme Court of India)
Supreme Court rejected the NCLAT order allowing adjustment of last tranche against the Performance Bank Guarantee issued by Successful Resolution Applicant as accordingly to condition of State Bank of India the same was required to be paid by Successful Resolution Applicant.
Facts- This batch of appeals arises from three orders of the National Company Law Appellate Tribunal. A Resolution Plan was submitted under the Insolvency and Bankruptcy Code, 2016 by a consortium of Murari Lal Jalan and Florian Fristch in respect of the Corporate Debtor (Jet Airways Limited). The Plan was voted upon and approved by the Committee of Creditors on 17 October 2020. The Resolution Professional then filed an application before the Adjudicating Authority to seek approval of the Resolution Plan. The Plan received the imprimatur of the Adjudicating Authority – the National Company Law Tribunal – on 22 June 2021.
The Successful Resolution Applicant and the consortium of lenders represented by the State Bank of India were not ad idem on whether the conditions precedent were fulfilled. The SRA took the position that all conditions precedent had been duly fulfilled.
Notably, clause 9.4 of the Resolution Plan specifically contemplates that the performance guarantee provided by the Resolution Applicant can be invoked in terms of RFRP. NCLAT has permitted the SRA to adjust the last tranche of Rs 150 crores by adjusting the PBG of Rs 150 crores. This forms the subject matter of appeal in this Court.
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