TMI Blog2021 (10) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... djudicating Authority is not given bya specific order by the Adjudicating Authority (NCLT). Similarly, providing power supply through 132 KV supply line is also not granted by a specific order of NCLT. Thus, these requests only remain as proposals which have not been accepted or approved by specific order of the Adjudicating Authority while approving the Resolution Plan - in the absence of any specific orders, the Appellant is not obliged to grant any waiver of payment of security deposit over the next five years for increase in contract demand or supply of electricity by a 132 KV supply line. The parties should take action regarding these or any subsequent dues including security deposit in accordance with the extant and relevant regulations of WBERC. The dues of electricity supplied by DVC to the Corporate Debtor during the CIRP period, if not paid, should be paid from out of CIRP costs and the Resolution Professional should ensure it - any security deposit or other charges for requested increase in contract demand and enhanced supply line for electricity will have to be paid to the discom DVC in accordance with the relevant and extant laws and regulations. The payment of dues ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... meanwhile, a Resolution Plan, as approved and recommended by the Committee of Creditors, was approved vide order dated 11.10.2018 by the Adjudicating Authority. 4. The Successful Resolution Applicant, which had stepped in the role of the Corporate Debtor, requested for increase in the contract demand from 10 MVA to 20 MVA vide letter dated 15.1.2019 and, inter alia, asking for reconnection of electricity supply with waiver of security deposit. In response, vide letter dated 16.4.2019, DVC sought security deposit of ₹ 6.43 crores for increasing the contract demand. Again, through letter dated 22.4.2019, the Corporate Debtor requested for revision of contract demand from 10 MVA to 16 MVA through the existing 33 KV power line. It also requested that its power supply be given through 132 KV line at the earliest. Again, through letter dated 23.5.2019, the Corporate Debtor sought increase of contract demand from 10 MVA to 45 MVA over next five years without any security deposit and installation of 132 KV powerline to supply power to its manufacturing unit without taking any security deposit over the next five years. It also agreed to clear outstanding dues of ₹ 18.8 crore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has reconnected the electricity supply after the approval of the Resolution Plan, wherein an amount of ₹ 24.67 crores was sanctioned as share of the Operational Creditor DVC qua its total demand of ₹ 64.45 crores, and therefore it has already lost a large part of its claim in the resolution of the Corporate Debtor CFAL. He has further stated that the Successful Resolution Applicant is in default of full payment of the share of DVC in the resolution amount. In addition, the Successful Resolution Applicant is also not paying the current electricity bill as per consumption, and as on 13.9.2021, the total dues (which includes the share of the Appellant after resolution of the Corporate Debtor) is ₹ 26.68 crores. He has also claimed that the dues of electricity supplied during the CIRP should also be paid to the DVC as part of CIRP costs. The Learned Counsel for Appellant has argued that the Successful Resolution Applicant has not come with clean hands before this Hon ble Tribunal and hence its claim of waiver of security deposit should not even be considered. 7. The Learned Counsel for Respondent No. 1CFAL has stated that the Resolution Plan, as approved by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pal Liability due) related to Electricity Charges which may arise out of Ongoing Disputes with DVC OR Specific Order to DVC to withdraw the case. Bank Guarantee/Cash as Security Deposit demanded by the Damodar Valley Corporation ( DVC ) for supply of Power Waiver/Stay Approval by specific order by NCLT for Bank Guarantee/Cash as Security Deposit by DVC against regular Power Usage on basis of Contract Demand as per WBERC Regulation (Demand Notice issued in May 2018) or for any Specific reasons (e.g. providing 132 KVA Power Connection with 132 KVA Sanction Load) for next 5 years from the Approval Date of the Resolution Plan by NCLT. Request is being placed for the Waiver/Stay of security deposit of Bank Guarantee/Cash for 5 years as the Corporate Debtor is totally under stress and attempt is being made by the resolution applicant to revive the Corporate Debtor is best possible way under this Proposed Resolution Plan through Optimal Infusion of Debt and efficient Working Capital Management. The Plan is to increase the production with Optimal Working Capital infusion so as to ensure better margins and low Interest Costs. The Demand of Bank Guarantee/Cash immediately ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d with. The plan also provides that repayment of debts of operational creditor (page 33). In para 2(e) of the plan at page 63 states the modalities suggested for management of the affairs of the Corporate Debtor and it also provides mechanism for effective supervision and implementation of the plan. In view of this, I hold that the provisions of section 30(2)(b) and 20(2)(c) of I B Code are complied with. One, Mr. Nitesh Kumar sworn an affidavit on behalf of the resolution applicant stating that the resolution applicant, Consortium of United Tradeco FZC and QVC Exports Pvt Limited does not suffer from any disqualification as stated under section 29A of the I B Code. The plan does not contravene any provisions of law and the same is in conformity with the provisions of I B code. Resolution Professional has produced the certificate under Regulation 39(4) of the I B Code in Form H stating that the plan is in conformity with all legal requirements. The Resolution Plan submitted for approval of this Authority complies with all the requirements stated under section 30(2) of the I B code. Hence, I approve this plan for Corporate Debtor and I proceed to pass the following order: ORDE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontract demand from 10 MVA to 20 MVA from 31.1.2019, on which through letter dated 16.4.2019Appellant sought security deposit of ₹ 6.43 crores for enhancement of contract demand. Then again vide letter dated 22.4.2019,Respondent No. 1 sought revision of contract amount from 10 MVA to 16 MVA at 33 kilovolt power line supply and also a new connection to 132 KV powerline. Thereafter, by another letter dated 23.5.2019 Respondent No. 1 requested for increase of contract demand from 10 MVA to 45 MVA over the next five years without any security deposit and installation of 132 KV powerline without payment of any security deposit over the next five years while agreeing to clear the outstanding dues of ₹ 18.8 crores as contained in the Resolution Plan. On 6.8.2019, Appellant asked Respondent No. 1to deposit security amount and in reply, Respondent No. 1, vide letter dated 19.8.2019 wrote to Appellant to rescind its demand for security deposit, citing the approval of the Resolution Plan in its entirety in support of waiver of any security deposit over next five years. 14. It is clear from the communications cited in the aforesaid paragraph that the contract demand was at the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of resolution amount to Appellant DVC hence a disconnection notice was given to the vide letter dated 30.8.2019 to Respondent No. 1. 17. The Learned Counsel for Appellant has cited the following judgments in support of his case:- (i) Embassy Property Developments Pvt. Ltd. Vs. State of Karnataka reported in (2020) 13 SCC 608 (ii) Telangana State Power Distribution Co. Ltd. Vs- Srigdha Beverages reported in [(2020) 6 SCC 404] (iii) Prasad Gempex Vs. Star Agro Marine Exports Pvt. Ltd. reported in [(2019) 219 Company Case 409] 18. The Learned Counsel for Respondent No. 1 has submitted following citations in support of his contentions: (i) India Resurgence Arc Pvt. Ltd. Vs. Amit Metaliks Ltd. Ors. MANU/SC/0367/2021 dated 13.05.2021 (ii) Essar Steel India Ltd. Vs. Satish Kumar Gupta Ors. (2020) 8 SCC 531 dated 15.11.2019. (iii) Ghanashyam Mishra Sons Pvt. Ltd. Vs. Edelweiss Asset Reconstruction Co. Ltd. reported in 2021 SCC online SC 313 = MANU/SC/0273/2021. 19. The ratio in the judgments cited by the Learned Counsel for Appellant hold that during the moratorium period, no action can be taken to dispose off or alienate the assets o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... might be demanded from the Successful Resolution Applicant (SRA) for supply of any services should be paid by the SRA and no waiver for any period of time for the future is not permissible. 24. It is stated in the written submissions filed by the Appellant (Diary No. 29878 dated 20.9. 2021) that the Respondent No. 1 is in default of payment of electricity bills for the period February 2020 to August 2020 amounting to ₹ 15,94,21,974 (at serial number xii in the Written Submissions of the Appellant). This amount has become due and payable to Appellant after the submission and approval of the Resolution Plan by the Adjudicating Authority on 11.10. 2018. We are of the opinion that the parties should take action regarding these or any subsequent dues including security deposit in accordance with the extant and relevant regulations of WBERC. The dues of electricity supplied by DVC to the Corporate Debtor during the CIRP period, if not paid, should be paid from out of CIRP costs and the Resolution Professional should ensure it. 25. We, therefore, quash and set aside the impugned order and make it clear that any security deposit or other charges for requested increase in contra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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