Tribunal Upholds Impugned Order in Insolvency Case, Rejects Appeal

The Tribunal dismissed the Appeal, affirming the Impugned Order admitting the Petition under Section 9 of the Insolvency and Bankruptcy Code. It held there was no 'Pre-Existing Dispute', validated the Operational Creditor's invoices as compliant with the Solar Power Purchase Agreement, and rejected the intervention application.

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Issues Involved:
1. Existence of a dispute under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016.
2. Interpretation of 'banked energy' under the Solar Power Purchase Agreement (SPPA).
3. Validity of invoices raised by the Operational Creditor.
4. Procedural compliance by the Corporate Debtor.
5. Intervention application under Rule 31 read with Rule 11 of the NCLAT Rules, 2016.

Detailed Analysis:

1. Existence of a Dispute:
The main point for consideration was whether there was any 'Existence of a Dispute' and whether the Appellant had raised a plausible contention requiring further investigation. The Tribunal examined whether the dispute was 'Pre-Existing'. The Appellant contended that the Learned Adjudicating Authority overlooked the technical nature of the dispute related to the interpretation of 'banked energy'. The Respondent argued that the dispute was not 'Pre-Existing' and was raised only after the filing of the Petition under Section 9 of IBC. The Tribunal found that the Corporate Debtor did not raise any dispute regarding the 'rate' prior to the issuance of the Demand Notice and the filing of the Petition, and thus, there was no 'Pre-Existing Dispute'.

2. Interpretation of 'Banked Energy':
The Appellant argued that the issue was with respect to the interpretation of 'banked energy'. They contended that the energy banked was consumed by the consumers of APSDCL and adjusted against their electricity bills. The Respondent countered that the SPPA provided only for a single unit rate of electricity and that the whole of the electricity generated fell under banked units. The Tribunal observed that the term 'banked units' was used extensively in the Renewable Energy Industry and had a specific meaning. The Tribunal concluded that the Operational Creditor had not breached any terms of the 'Billing Procedure' as the invoices were raised for electricity actually consumed.

3. Validity of Invoices:
The Appellant contended that the Operational Creditor raised invoices at escalating rates despite the agreed tariff being Rs. 3.70 per unit for banked units. The Respondent argued that the invoices covered under the Demand Notice were issued only for actual electricity consumed by the end consumer. The Tribunal found that the invoices and Settlement Abstracts corresponded to the particulars of 'Operational Debt' and that the Operational Creditor had not violated the 'Billing Procedure'.

4. Procedural Compliance:
The Appellant argued that the Corporate Debtor could not reconcile its accounts due to data corruption and continued to make ad hoc payments. The Tribunal noted that the Corporate Debtor had repeatedly stated that there was a software breakdown and loss of financial data, but there was no mention of any dispute regarding the 'rate' in the email communications. The Tribunal held that the Corporate Debtor's argument of non-reconciliation of accounts was a 'feeble and spurious argument'.

5. Intervention Application:
An application was filed by an intervenor seeking to be impleaded as a party for the purposes of the reliefs prayed for in the present application. The Tribunal rejected the intervention application, stating that the intervenor was not a Necessary or a Proper Party for adjudication of the controversies centering around the Appeal.

Conclusion:
The Tribunal dismissed the Appeal and affirmed the Impugned Order dated 02.12.2019, passed by the Learned Adjudicating Authority, admitting the Petition under Section 9 of IBC. The Tribunal held that there was no 'Pre-Existing Dispute' and that the Operational Creditor's invoices were valid and in compliance with the SPPA. The Tribunal also rejected the intervention application filed by the intervenor.

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