TMI Blog2021 (2) TMI 824X X X X Extracts X X X X X X X X Extracts X X X X ..... the demand notice of the unpaid operational debt , the Application under Section 9 cannot be rejected and is required to be admitted. This Tribunal without going into the merits of the Dispute holds that the documentary evidence furnished with the Application read with the email communication shows that the debt is due and payable and has not been paid and there is no plausible contention which requires further investigation and that the Dispute raised is only a patently feeble argument unsupported by evidence. Hence, this Tribunal is of the considered view that the ratio of the Hon ble Supreme Court in M/s. Mobilox Innovations Pvt. Ltd., [ 2017 (9) TMI 1270 - SUPREME COURT] squarely applies to the facts of this case as the Hon ble Apex Court has laid down that the Dispute , if any, should be Pre-Existing and also that it cannot be a feeble argument. Merely contending that accounts were not reconciled for almost a year in our considered opinion, can be construed as a feeble and spurious argument . A perusal of the contents of the reply to the Demand Notice, this Tribunal is unable to find any Dispute . It is seen from the record that at the earliest point of time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .e. unconsumed electricity will go to the bank and are called banked units. He relied on the energy settlement/Report statement for the month of August 2017 which captures the column of bank units separately. Thus, the Energy Settlement/Report talks about two different units i.e. other units and bank units. Whereas the Corporate Debtor claims that the energy generated by the Petitioner is directed injected to the DISCOM and is banked and agreed and thus, there is no distinction between the normal units and the banked units. 18. There is no provision or discussion regarding the normal units and the banked units in the entire solar power purchase agreement and addendums executed between the parties. Evidently, there has been an agreement of sale of electricity and purchase of electricity by and between the Petitioner and the Corporate Debtor. During the course of business, a new term called banked units were introduced and were agreed to be paid at certain rates/tariffs. The unpaid invoices raised by the Petitioner vide the invoice no. 10027, 10028, 10029 and 10043 dated 07.01.2016, 07.01.2016, 07.01.2016 and 18.01.2017 respectively amounting to ₹ 1,08,77,104/- is outstan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad charged GEPL for normal units and banked units under different rates when the agreed rate was ₹ 3.70/kwh; that GEPL was the facilitator for Andhra Pradesh Southern Power Distribution Company Ltd. (APSDCL) and that the energy banked was consumed by the consumers of APSDCL which in turn adjusted the same against the electricity bills of the consumers; Generation Credit Notes (GCN) were issued by APSDCL to the Respondent for the units of energy injected by the Respondent into the grid of APSDCL and therefore the entire transaction was of banked energy and does not pertain to sale of energy or actual delivery of electricity generated by the Respondent to the end consumers directly. The Learned Counsel submitted that the entire transaction was based on power generated from a renewable source and as the energy cannot be directly dispatched, the entire mechanism is undertaken on the principles of banking of energy and therefore the tariffs charged by the Respondent could only be on the basis of banked energy/power. 3. Learned Appellant Counsel strenuously argued that the Learned Adjudicating Authority did not take into consideration that the demand raised by the Respondent was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enabling the Corporate Debtor to sell the power to consumers directly in real time as per the open access Regulation under the Electricity Act 2003. 6. The Counsel drew our attention to the addendum SPPA dated 09.10.2014 wherein Clause 4.2, refers to Energy Accounting , Clause 5 refers to Tariff and Clause 6 refers to the Billing Procedure . It is the further case of the Appellant that the invoices relied upon by the Respondent Counsel relate to a period subsequent to 13.12.2016 and that though the word Dispute is not referred to except in the Arbitration process which began in January 2018, the intention of the Corporate Debtor wanting to resolve construes that there is a dispute. The Learned Counsel strenuously argued that merely because rate was not referred to the email communication it cannot be said that there was no dispute. 7. Per contra, Learned Counsel appearing for the Respondent strenuously contended that the alleged dispute being raised by the Appellant hereunder is neither a dispute in fact nor in law and is nothing but a feeble argument which is illusory. The Respondent Counsel argued that the so called dispute cannot be construed as a Pre-Existing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional Creditor; that electricity was being supplied from the year 2013 under the SPPA; that the previous invoices have been paid by the Corporate Debtor at the rate of ₹ 5/- to ₹ 5.3/- per unit and that the outstanding amount of the first four invoices pertaining to the period prior to 13.12.2016 is itself excess of rupees one crore. 9. The Learned Counsel for the Respondent further submitted that the Corporate Debtor repeatedly stated that there was a software breakdown and simply asked for time to reconcile the accounts though the pending amounts were separately being demanded to be paid on 03.08.2017, 17.11.2017, 09.01.2018, 17.03.2018, 06.04.2018, 07.04.2018 and finally when the Demand Notice was issued on 08.05.2018. The purported dispute regarding rate of electricity was raised for the first time in the email dated 01.11.2018 after the Petition filed by the Operational Creditor was taken up for hearing by the Adjudicating Authority on 01.11.2018 and therefore, the dispute cannot be said to be Pre-Existing but was raised for the first time with respect to the rate subsequent to the issuance of the Demand Notice and the filing of the Petition. 10. The main ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gives a notice to the other for such re-negotiation. All open access charges including cross subsidy surcharge and/or any other charges for onward supply of electricity after the Delivery Point shall be borne by the Facilitator. However, any increase in levy or additional charges etc. the same will result in renegotiation of the terms of the contract if either of the parties feel that the increase renders the transaction unviable. 5.3. The Solar Project is being set-up under Renewable Energy Certificate (REC) Mechanism and all the RECs will accrue to the account of Company only. 5.4. The Facilitator hereby agrees to pay all taxes duties, Open Access Charges and/or Open Access Losses, charge, Cross Subsidy surcharge, wheeling and transmission charges etc. at full rates so as to enable the Company to be eligible for RECs as presently applicable. 6. Billing Procedure: Company will raise the invoice on the Facilitator after adjustment of units in consumer s electricity bill of DISCOM facilitator and only to the extent of the units adjusted in the consumer bills. Accordingly, the Facilitator will make the payments to Company within 10 days from the receipt of C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ensively in Renewable Energy Industry and carries a specific meaning and that the price agreed for banked units cannot be applied to other units which do not fall within the category of banked units . Giving an example, it is submitted that if 1000 units are produced and only 900 units are consumed, the billing is done for 900 units only and the balance 100 units, the Operational Creditor can sell to any third party or even to the Corporate Debtor failing which the balance 100 units would be banked with DISCOM. 16. A perusal of the Settlement Agreements filed further substantiates the case of the Respondent that the energy units which are not consumed are banked. For better understanding of the case the DISCOMs Generator Settlement Abstract dated 08.06.2017 is reproduced as hereunder; 17. The corresponding invoice is also reproduced as hereunder; 18. The aforenoted Settlement Abstract and the corresponding invoice shows that the quantity of units billed are the ones which are actually consumed. Another invoice dated 14.06.2017 for the Solar Generated Power for the period 01.02.2017 to 28.02.2017 billed for 3,71,209 units also corresponds to the Settlement Ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Corporate Debtor. The moment there is existence of such a dispute, the Operational Creditor gets out of the clutches of the Code. Para 19 of Anshul Vashishtha v. M/s. Jayhind Steel Traders Anr. Company Appeal (AT) (Insolvency) No. 656 of 2020, 2020 SCC Online NCLAT 673: In a case of running account where accounts are yet to be reconciled and settled, an email like 05.02.208 sent before Section 8 demand notice dated 13.06.2018 asking Operational Creditor to take back the rejected material reflect pre-existing dispute in such case Adjudicating Authority cannot sit down to settle the account and calculate the Debt dues. Para 10 of Ramco Systems Ltd. v. Spicejet Ltd. Company Appeal (AT) (Insolvency) No. 31 of 2018, 2019 SCC Online NCLAT 354: There is nothing on the record to suggest that the invoices dated 23rd July, 2014 were forwarded or received by the Respondent Spicejet Limited . Therefore, the Demand Notice issued on 24th April, 2017 as relates to invoice dated 23rd July, 2014, though it cannot be held to be barred by limitation, but in absence of specific evidence relating to invoices actually forwarded by the Appellant and there being a doubt, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id operational debt in relation to such dispute? If any one of the aforesaid conditions is lacking, the application would have to be rejected. Apart from the above, the adjudicating authority must follow the mandate of Section 9, as outlined above, and in particular the mandate of Section 9(5) of the Act, and admit or reject the application, as the case may be, depending upon the factors mentioned in Section 9(5) of the Act. 22. From the aforesaid decision, it is clear that the existence of Dispute must be pre-existing i.e. it must exist before the receipt of the demand notice or invoice. If it comes to the notice of the Adjudicating Authority that the operational debt is exceeding rupees one lakh and the Application shows that the aforesaid debt is due and payable and has not been paid, in such case, in absence of any existence of a Dispute between the parties or the record of the pendency of a suit or arbitration proceeding filed before the receipt of the demand notice of the unpaid operational debt , the Application under Section 9 cannot be rejected and is required to be admitted. 23. The facts in Anshul Vashishtha V/s. M/s. Jayhind Steel Traders Anr. Compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was submitted by them. There is no denial of the same. It is not the case of the Corporate Debtor that on account of non-furnishing of details by Operational Creditor, reconciliation of accounts could not be done. In the 07.04.2018 email communication, Operational Creditor specifically mentioned that the time frame taken by the Corporate Debtor to reconcile their accounts is inordinate and sought for immediate payment. The email dated 17.11.2017 (Annexure R-1/6 [page 63 of Reply]) is of relevance as the price of the banked units was increased from ₹ 3.70/- per unit/kwh to ₹ 4/-. 27. It can be seen from the aforenoted email communication beginning 03.08.2017 onwards even till the Reply to the Demand Notice dated 01.06.2018 (Annexure A-9, [page 77 of Volume I]), that is for almost ten months, the Corporate Debtor has simply stated that there is a software breakdown and loss of financial data because of which he could not reconcile his accounts. There is a bald and bare denial of any amounts due and payable only on the ground of pending reconciliation . It is pertinent to note that there is no whisper of any dispute regarding rate . 28. The email on record evidenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irmity in the Order passed by the Learned Adjudicating Authority warranting our interference. In fine, this Appeal is dismissed and the Impugned Order dated 02.12.2019 in Company Petition (IB) No. 2520/MB/2019 passed by the Learned Adjudicating Authority is affirmed. No order as to costs. 31. I.A. 46 of 2021 is filed by the intervenor Mr. Pradip Krishan under Rule 31 read with Rule 11 of the NCLAT Rules, 2016 seeking the interim reliefs detailed as hereunder; (a) Allow the present application and permit the Applicant to intervene as a party for the purposes of the reliefs prayed for in the present application; and (b) In the interim, direct the Respondent No. 2 through the interim resolution professional to make payments of the lease rent w.e.f. June 2018 till the use and occupation of the premises; and (c) In the alternative, direct the Respondent No. 2 to vacate the premises in view of expiry of the lease deed; (d) for costs of the present Application; and (e) for such further and other reliefs as the circumstances of the case may require. 32. The Applicant submits that he is the owner of the premises given on lease to the Corporate Debtor in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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