Home Case Index All Cases Insolvency and Bankruptcy Insolvency and Bankruptcy + Tri Insolvency and Bankruptcy - 2020 (10) TMI Tri This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (10) TMI 539 - Tri - Insolvency and BankruptcyTermination of Power Purchase Agreement - restraint on respondent No. 1 from taking any steps pursuant to thereto or in consequence thereof and for continuance of PPA - HELD THAT:- he Adjudicating Authority is empowered to decide the priorities as well as question of law and facts in matters concerning insolvency resolution as well as liquidation. The Corporate Debtor is undergoing liquidation. GUVNL has issued Termination Notice dated 30.08.2019 when Corporate Debtor is under liquidation. The termination is being questioned when Corporate Debtor is under liquidation. The right of financial creditor is recognized under Article 12.9 of PPA. The applicant being a secured creditor is questioning the termination notice. Therefore, the applicant can maintain the present application before the Adjudicating Authority under section 60(5)(c) of I&B Code. Jurisdiction of Tribunal to entertain this dispute - whether the applicant has to approach Gujarat Electricity Regulatory Commission by filing application under section 79 of the Electricity Act, but not before this Tribunal? - HELD THAT:- Now the company is under liquidation. When CERC has categorically stated in para 10 of the order that when moratorium under section 14 of the IBC was pending no proceeding lies before CERC. Relying on the decision of the CERC since the Corporate Debtor is under liquidation and by virtue of Article 12.9 of the PPA, the applicant has to approach the Adjudicating Authority under section 60(5)(c) of the I&B Code and not before CERC to decide the dispute. It is true the asset without producing power and supply of power will not meet the object of the Code, viz. maximisation of value of the asset. Termination is not on the ground that power plant is unable to supply power. It is purely on the ground that the Corporate Debtor has gone into liquidation. Therefore, when the unit of the Corporate Debtor is sold as an ongoing concern and then only the object of the Code can be achieved. The Adjudicating Authority has to see the object of the Code, which is maximisation of value of the asset. The financial creditor, who is having security interest be allowed to continue with the secured asset till it is disposed of. Therefore, termination notice dated 30.08.2019 is liable to be set aside to enable the Financial Creditor to dispose of the secured asset as an ongoing concern. The Hon'ble NCLAT further held in the appeal that even during the liquidation PPA cannot be terminated. Termination notice set aside - application allowed.
|