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2023 (6) TMI 1006 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , CHENNAIMaintainability of Application for CIRP filed under Section 9 of I&B Code - Sub-contractor of the main contractor - Contractual Relationship between the Appellant and the Respondent or not - privity of contact - whether proceedings under IBC can be sustained on the basis of a promissory estoppel? - HELD THAT:- IEDCL had sub-Contracted the work to the ‘Appellant’/’Operational Creditor’ herein. IEDCL is one of the subsidiaries of IL&FS Solar Power Limited (ISPL)/ the main Contractor which had entered into a contract with ‘Embassy Energy Private Limited’/the ‘Respondent’ herein for operation of the Solar Power Project. It can be seen from the ‘Agreement for Civil Works and Construction’ entered into between Embassy Energy Private Limited/’Respondent’, the owner and ISPL that except for Clause 6.1.1 which deals with the name of the sub-Contractor, any ‘Contractual Obligation’ with the ‘Appellant’ herein is not established by way of any Written Agreement. From the agreement it is clear that a sub-Contractor shall not have any Contractual Relationship with the owner and shall not be entitled to prefer any Claims against the owner. The material on record establishes that there is no Operational Relationship between the Appellant and the Respondent herein and it is pertinent to mention that the Respondent is not even a party to the Agreements entered into between ISPL and IEDCL and ISPL and the Appellant/Operational Creditor. It is clear from the record that there are no goods and services supplied directly by the Operational Creditor to the Respondent herein and therefore it cannot be said that there is any Operational Debt between the Operational Creditor and the Respondent herein. Merely because the owner had given a bona fide assurance that if IEDCL fails to pay the amount they would pay the same on their behalf, the amount will not fall within the definition of Operational Debt as defined under Section 5(21) of the Code. The Hon’ble Supreme Court in the matter of Essar Oil Limited Vs. Hindustan Shipyard Ltd. & Ors. [2015 (7) TMI 373 - SUPREME COURT], has held that when a principal employer grants a contract to a Construction Company the sub-Contractors cannot sue the principal employer for any issues, if payable, as there is no privity of contract between the sub-Contractors and the principal employer. This Tribunal is of the considered view that any promise made in the letter dated 17.10.2018, specifically having regard to Clause 6.1.4 of the Agreement for Civil Works and Construction entered into between Embassy Energy Private Limited and ISPL, whereby and whereunder, it was clearly specified that the sub-Contractor, would not have any contractual relationship with the owner and would not be entitled to prefer any Claims against the owner, these amounts claimed cannot fall within the definition of acknowledgement of debt in the absence of any contractual relationship between the Operational Creditor and the Respondent herein. The Respondent is a commercially solvent Company and the scope and objective of the Code is not to send a commercially Solvent Company to Insolvency specifically having regard to the facts of the attendant case on hand - Appeal dismissed.
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