TaxTMI 
TaxTMI 
2018 (1) TMI 1190
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....st, 1996 under the Indian Companies Act, VII of 1913. (2) The Corporate Debtor has approached Operational Creditor for services of Operation & Maintenance for its Power Plant. Pursuant to discussions, Minutes of Meetings were held from 26.07.2011 to 29.07.2011 and during the period 02.08.2011 to 12.08.2011, Corporate Debtor and Operational Creditor finalized terms and conditions. Thereupon, Corporate Debtor issued a Letter of Intent (LOI) dated 24.08.2011 to the Operational Creditor for Operation & Maintenance (O & M) Contract Services of its 2 x 150 MW (Unit#1 & Unit #2) Coastal Thermal Power Project at Thamminapatnam Village, near Krishnapatnam Port, Nellore District, Andhra Pradesh. (3) The Operational Creditor rendered services to Corporate Debtor for Operation and Maintenance of Thermal Power Project as per the terms & conditions described in the O&M Contract and raised Invoices in accordance thereto from 2011 to 2016. (4) The Corporate Debtor has issued a letter dated 06.10.2016 for short closure of the Operation and Maintenance Service Agreement for 2x150 MW, Phase-I and all its subsequent amendments as per clause 16.3 of the O&M Contract i.e. Term....
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....ause 15.3 of the Annexure - I of the O&M Contract, nominating Mr. Justice (Retd.) Vilas Afzalpurkar and requested the Corporate Debtor to appoint its Arbitrator within 30 days. (8) After handing over the O & M charge of 2x150 MW Phase - I to the Corporate Debtor on 30.11.2016, both Corporate Debtor and Operational Creditor have held joint meetings on various dates to settle the claims and dues. Despite the reconciliation talks were going on, Corporate Debtor however vide letter dated 29.12.2016 nominated Mr. Chief Justice (Retd.) V. Eswaraiah of Andhra Pradesh High Court as its arbitrator. (9) Pursuant thereto, on 12.01.2017, the Corporate Debtor and Operational Creditor recorded Minutes of Meeting that the Corporate Debtor had accepted all the invoices of the Operational Creditor in final reconciliation. As the parties resolved and settled all issues and disputes between them, they gave a go-bye to arbitration, by settlement arrived between them. Accordingly, after considering the final reconciliation as per Annexure 1 the total outstanding payment agreed by both the party is Rs. 15,96,19,780/-. This however excludes the following: (a) Applicable interes....
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....from the Corporate Debtor towards the outstanding dues and requested to release the balance outstanding payments. In response thereto, the Corporate Debtor vide email dated 28.03.2017 informed its inability to clear the dues as per the commitment given of 3-4 months starting from February 2017 due to very severe cash crunch from the state Governments and debtors. (14) After waiting for a period of five (5) months, the Operational Creditor has issued demand notice under section 8 of the Insolvency and Bankruptcy Code, 2016 (IBC) on 17.08.2017, and the same has been served on the Corporate Debtor on 22.08.2017. In response to the demand notice, the Corporate Debtor vide reply letter dated 26.08.2017 has falsely denied its liability towards the outstanding payment, in spite of having admitted execution of contract, services rendered and invoices raised by the Operational Creditor from time to time. The ground of pending of arbitration proceedings as alleged by the Corporate Debtor in their response of 26.08.2017 is nothing but a ruse to avoid payment of the dues and/or frustrate these proceedings, particularly when there is no arbitral dispute pending between the parties cons....
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....he parties have consented to nominate Hon'ble Justice Shri P. Venkatram Reddy, former Judge of Supreme Court of India as Umpire in the Arbitration. Therefore, the petitioner has come to the Tribunal with unclean hands. He has also relied upon the judgment of the Hon'ble Supreme Court in the case of Dalip Singh v. State of UP [2010] 2 SCC 114. (2) It is contended that as per section 5(6) of IBC, Dispute' includes a suit or arbitration proceedings as referred under section 9(5)(ii)(d) of Code. Therefore the operational creditor cannot go for forum hunting by invoking more than one jurisdiction when an existing remedy in the form of Arbitration has already been resorted to for the same debt. It is also pointed out that operational creditor still has not withdrawn the notice invoking arbitration before filing the present petition. On the contrary, the Arbitral Tribunal has already been constituted, and both the parties have to appear before the Arbitral Tribunal to resolve the dispute in question. He has also relied upon the judgment of the Hon'ble Supreme Court in the case of Mobilox Innovations Private Ltd. v. Kirusha Software Private Limited and NCLAT judgment in Annapurna ....
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....espondent/Corporate Debtor, while reiterating contentions as raised in CA No. 186 of 2017, has further contended that in pursuance to the demand notice in question dated 17th August, 2017 issued by the Operational Creditor, the Corporate Debtor by its reply dated 26 August, 2017 by inter alia denying that they are liable to pay the amount in question and also informed that they have appointed Chief Justice (Retd.) V. Eswaraiah as its arbitrator, and both the arbitrators have to appoint third Arbitrator to complete the constitution of Arbitral Tribunal, which would adjudicate the claims and counter claims arising out of the agreement in question. It is also informed that they would file their claim before the Arbitration proceedings. Therefore they have stated that issuing of a demand notice in nothing but an act of forum shopping, mala fide, afterthought and abuse of process of law. In support of his case, he has relied upon the cases namely; 1. Mobilox Innovations (P.) Ltd. v. Kirusa Software (P.) Ltd. [2017] 144 SCL 37 (SC) 2. Annapurna Infrastructure (P.) Ltd. v. SORIL Infra Resources Ltd. [Company Appeal (AT) (Insolvency) No. 32 of 2017, dated 29-8-2017] ....
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....rdingly, in view of disputes having arisen between the parties hereto, we are hereby invoking arbitration in terms of clause 15.3 of Annexure-1 of our contract and accordingly, we nominate Mr. Justice (Retd.) Vilas Afzalpurkar as our nominee Arbitrator, and request you to appoint your arbitrator within 30 days of receipt of this notice, who shall then proceed to appoint the third Arbitrator. In pursuance to the above letter, Meenakshi Energy/Corporate Debtor, vide its letter dated 29th December, 2016 has nominated Chief Justice (Retd.) V. Eswaraiah as its member Arbitrator of Arbitration Tribunal to resolve disputes pertaining to the Agreements. Subsequently, Justice V. Eswaraiah has addressed a letter dated, 14th October, 2017 to Justice Vilas V. Afzalpurkar regarding appointment of third (presiding) arbitrator namely Hon'ble Justice P. Venkataram Reddy by asking them to confirm it. Therefore, admittedly, there is an arbitration proceeding pending between the parties. And it is not the case of either party that invoked arbitration in question came to an end in settling the issue. And the contention of the Operational Creditor that due to lapse of time, and payment Rs. 2 c....