Telangana High Court Bscpl Infrastructure Limited vs Reserve Bank Of India And 2 Others on 26 October, 2022 THE HONOURAB SRI JUSTICE K.LAKSHMAN WRIT PETITION No.19924 OF 2019 ORDER: This Writ Petition is filed: a) to declare the action of Respondent No.2 in freezing all the accounts of the petitioner, belonging to the BSC C&C Joint Venture held by Respondent No.2Bank as specified in Annexure P.10, as illegal and set aside the same; b) to declare the action of the IRP/Respondent No. 3 in interfering with and seeking to take coercive steps against the Petitioner and Petitioner's bank accounts in relation to the BSC C&C Joint Venture as illegal and set aside the same; c) to consequently direct the Respondent No.2Bank to restore the operation of all the bank accounts of the Petitioner held by Respondent No.2 belonging to the BSC C&C Joint Venture as specified in Annexure P10; 2. Heard Sri S.Niranjan Reddy, learned Senior Counsel, representing Sri Tarun G. Reddy, learned counsel for the petitioner and Sri C.R.Sridharan, learned Senior Counsel, representing Sri G.V.S.Ganesh appearing for 3rd respondent. Perused the record. Despite filing counter, there is no representation on behalf of 2nd respondent. 3. M/s BSCPL Infrastructure Limited, petitioner herein is a company registered under the Companies Act, 1956. It had entered into Joint Venture Agreement (for short, 'JV Agreement') with C&C 2 Constructions Limited (for short, 'C&C') which is also registered under the Companies Act,1956 on 17.09.2020 for execution of certain road projects on the specific terms and conditions mentioned therein which included terms relating to Formation and Conduct of Business, Obligation to cooperate, Management of the JV, Financing, and operation of JV Bank Accounts. 4. According to the petitioner, as per JV Agreement between the Petitioner and C&C, the projects were undertaken by JV parties in terms of the conditions and clauses as incorporated in the said Agreement. However, with the passage of time, C&C's contribution under JV Agreement and participation had fallen behind and the Petitioner was bearing the brunt of the said failure on part of C&C to adhere to the terms of the JV Agreement. 5. On 10.01.2019, the Petitioner invoked Clause 23 of JV Agreement and took over the projects and bank accounts of JV. In the said letter, dated 10.01.2019, the Petitioner expressed its inability in carrying out the operations of JV in the manner as required for execution of project as C&C failed to contribute as per the JV Agreement. The continuous imbalance in the contribution from C&C had forced the 3 petitioner to continue the projects of JV and take control of the said projects. 6. On 14.02.2019, the National Company Law Tribunal ( for short, NCLT') at New Delhi ordered the initiation of the Corporate Insolvency Resolution Process of C&C under Section 7 of the Insolvency & Bankruptcy Code, 2016 (for short, 'IB Code') filed by ICICI Bank Limited. An Insolvency Professional was appointed as Interim Resolution Professional (for short, 'IRP') of C&C by NCLT. According to the Petitioner, the letter invoking Clause23 of JV Agreement addressed to C&C was issued much prior to the commencement of Insolvency process of C&C. The insolvency process commenced on 14.02.2019. 7. On 26.03.2019, 3rd respondent intimated the Petitioner about the insolvency proceedings against C&C and apprised it of his appointment as the IRP. Vide the said letter, he sought cooperation of the Petitioner and requested for information on JV, if any, to be shared with him as well. Vide an email dated 21.05.2019 addressed to the Petitioner, 3rd respondent made a claim on behalf of C&C that C & C is entitled for 50% of claim awarded in an Arbitration in respect to one of the JV Projects i.e. the Afghan Parliament Project. According to the petitioner, 4 3rd respondent wrongly sought to claim 50% in the arbitration award received in favour of JV under the Afghan Parliament Project. Vide email dated 28.05.2019, Petitioner clarified the said fact to 3rd respondent. On oral enquiries from the Relationship Manager of Respondent No.2Bank, Petitioner vide its letter dated 20.08.2019 addressed to Respondent No.2 clarified the position of JV's bank account and its operation. Respondent No.2 was duly informed of C&C's default under JV Agreement and bona fide of the Petitioner in continuing the existing projects of JV. Without considering the said aspects, 3rd respondent had addressed a letter to 2nd respondent for freezing of the accounts of JV without any authority. The Instructions of IRP