The National Company Law Appellate Tribunal (NCLAT) has dismissed two appeals filed by Maharashtra Airport Development Company (MADC), upholding the sale of the assets of Abhijeet MADC Nagpur Energy Pvt Ltd (AMNEPL), a joint venture power company established to supply electricity to the MIHAN Special Economic Zone (SEZ) in Nagpur. 
The appellate tribunal upheld the earlier order passed by the Mumbai Bench of the National Company Law Tribunal (NCLT), which had validated the sale certificate issued in favour of Rankini Power Generation, the successful auction purchaser, along with certain concessions. 
A two-member bench of the NCLAT held that the liquidator of AMNEPL had acted within the powers granted under the Insolvency and Bankruptcy Code (IBC) while selling the company's leasehold assets. The tribunal rejected MADC's argument that, as the owner of the land, it had the authority to prevent the sale. 
In its order, the tribunal stated that it found no valid reason to interfere with the decisions passed by the NCLT and, accordingly, dismissed both company appeals. 
At the same time, the NCLAT clarified that MADC's rights under the Build-Operate-Transfer (BOT) agreements would continue to remain protected. It also directed that the successful auction purchaser would be bound by the contractual obligation to transfer the project facilities in the same manner that the corporate debtor was originally required to do under the BOT arrangement. 
MADC, a Maharashtra government-owned company established in 2002, was created to accelerate the development of airport infrastructure across the state, including the Multi-modal International Cargo Hub and Airport at Nagpur (MIHAN). The company received approval to develop a Special Economic Zone spread across approximately 2,086 hectares in the MIHAN region. 
To ensure a dedicated power supply for the MIHAN project, MADC had invited bids for the construction, operation and maintenance of a coal-based thermal power plant on around 62.50 hectares of land under a BOT concession for a period of 33 years. 
Following the bidding process, Abhijeet Infrastructure Nagpur emerged as the successful bidder and incorporated a special purpose vehicle, Abhijeet MADC Nagpur Energy Pvt Ltd (AMNEPL). Under the joint venture arrangement, MADC acquired a 26 per cent equity stake in the company in exchange for leasing the project land. 
The project, however, ran into financial distress. AMNEPL entered the corporate insolvency resolution process in 2017 and subsequently went into liquidation in 2018 after resolution efforts failed. As part of the liquidation process under the IBC, the company's business undertaking and legal entity were auctioned separately. The assets were sold through public auctions in 2020 for more than INR 100 crore, and the sale proceeds were distributed among creditors in accordance with Section 53 of the Insolvency and Bankruptcy Code. 
During the proceedings, MADC argued that it had only granted the corporate debtor an exclusive licence to develop and operate the project and that ownership of both the land and project facilities was contractually required to revert to it after the concession period. Based on this, it claimed that the transfer of assets without its approval was not legally valid. 
The appellate tribunal disagreed with this interpretation. It held that the leasehold rights granted to the corporate debtor qualified as both "property" and "assets" under Sections 3(27) and 18(1)(f) of the Insolvency and Bankruptcy Code and were therefore rightly included in the liquidation estate for sale by the liquidator. 
The tribunal also observed that MADC's 26 per cent equity stake had been treated as consideration for the lease premium. It further noted that, under the shareholders' agreement, the stake was already required to be transferred at the end of the concession period. In addition, the tribunal pointed out that MADC never exercised its contractual right to terminate the concession agreement after the appointment of the liquidator, which weakened its challenge to the asset sale. 
The NCLAT further noted that MADC's claims as a creditor had earlier been rejected by both the liquidator and the adjudicating authority. Since those decisions were never challenged before a higher forum, they had attained finality and could not be reopened during the present appeals. 
Source PTI