TMI Blog2021 (1) TMI 1155X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 9 of the Code. The inability of the Corporate Debtor in servicing the debts or the reason for committing a default is alien to the scheme of the Code. The averments made in the instant Application would indicate that various factors apparently hindered the Corporate Debtor from carrying on its business. There were disputes between the Corporate Debtor and the recipient of energy as well as the change in supply chain management of the recipient of the energy may also have contributed to the lack of confidence between the entities - The decision in the matters pending before the Hon'ble Apex Court and other authorities would hardly have any bearing and impact on the issues involved in the present Company Petition under Section 7 of the Code. This Authority is required only to see whether there has been a debt and the Corporate Debtor defaulted in making the repayments. These two aspects when satisfied would trigger Corporate Insolvency - there has been a considerable delay in disposal of the Company Petition. The Application be and the same is rejected on contest. - IA No. 570 of 2020 in CP (IB) No. 264/MB/2020 - - - Dated:- 29-1-2021 - Janab Mohammed Ajmal and Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riff revision. The Corporate Debtor carried the matter in Appeal before the Appellate Tribunal for Electricity (APTEL). The APTEL by its order dated 3rd November 2016 inter alia directed the MERC to allow the Corporate Debtor the actual cost of Coal purchased during the relevant period. The Corporate Debtor filed an Application on 8th December 2016 for implementation of the order of APTEL dated 3rd November 2016. MERC however, challenged the order before the Hon'ble Supreme Court in Civil Appeal No. 372 of 2017. The Hon'ble Court have stayed the order dated 3rd November 2016. The matter is still pending for the consideration before the Hon'ble Court. 7. The Corporate Debtor despite being eligible to procure Coal under a Fuel Supply Agreement (FSA) in respect of one of its units was not able to make any headway on account of Government apathy. The Corporate Debtor moved an Application under Article 226 of the Constitution of India in WPC no. 10614 of 2017 before the Hon'ble Delhi High Court seeking a direction to the Coal India Limited (CIL) for entering in to a FSA and supply Coal to its units. The learned Single Bench by order dated 31st January 2018 directed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to set off any amount remaining unpaid by RIL to AEML. AEML thereafter proceeded to set off three months' invoices of the Corporate Debtor in violation of the undertaking and terms of the PPA. As a consequence of under recovery of fuel costs over an extended period, owing to the long pending legal proceedings and set offs effected by the AEML the cash flow into the Corporate Debtor was severely impaired. 11. The Corporate Debtor was thus forced to shut down its plant of 17th January 2019. AEML by its letter dated 20th April 2019 terminated the PPA. The situation did not improve despite various correspondence between them. The Corporate Debtor then filed Case No. 247 of 2019 on 30th August 2019 before the MERC inter alia seeking to set aside the termination of the PPA. The Financial Creditor (Respondent) herein was also made a party in the said proceeding and it supported the Applicant's plea. The MERC by order dated 16th December 2016 held that the termination letter was valid and granted liberty to the lenders to exercise their right of substitution under the PPA. 12. The Corporate Debtor challenged the order dated 16th December 2019 before the Appellate Tribunal in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch extended various facilities to the Corporate Debtor. The Respondent had extended foreign currency term loan, working capital facility and Rupee term loan respectively aggregating to One Hundred Fifty Million US Dollars and INR Nine Hundred Thirty Four Crores. The Corporate Debtor has been in default in respect of each of the facilities since 31st March 2019 which prompted the Financial Creditor to approach this Authority through the Company Petition under Section 7 of the Code. The stay Application essentially focuses on events and proceedings as well as disputes between the Corporate Debtor and other entities. Causes of default are completely irrelevant for admission of a Petition of under Section 7 of the Code. The Adjudicating authority under the Code is required to assess the existence of the debt and default. It need not consider other factors in a Petition for admission. The issues raised by the Corporate Debtor before various other forms relating to disputes with other entities have no bearing on the issues relevant to the Company Petition. 17. The Application is intended to deflect the attention of the Tribunal from the blatant default in repayment of its debts. The C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... default is alien to the scheme of the Code. The averments made in the instant Application would indicate that various factors apparently hindered the Corporate Debtor from carrying on its business. There were disputes between the Corporate Debtor and the recipient of energy as well as the change in supply chain management of the recipient of the energy may also have contributed to the lack of confidence between the entities. Be that as it may, the dispute of the Corporate Debtor with the Regulator or the recipient would be extraneous to the matters involved in the Company Petition. The decision in the matters pending before the Hon'ble Apex Court and other authorities would hardly have any bearing and impact on the issues involved in the present Company Petition under Section 7 of the Code. 22. This Authority is required only to see whether there has been a debt and the Corporate Debtor defaulted in making the repayments. These two aspects when satisfied would trigger Corporate Insolvency. Therefore, the decision of the Authorities as well as of the Hon'ble Apex Court would not affect the proceedings before this Authority one way or the other. Therefore, we are of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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