2019 (8) TMI 1561

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....ted 20.11.2018 of this Bench and was further extended by 90 days on 16.05.2019. 3. That the Respondent was restrained from terminating the Power Purchase Agreement vide an interim order dated 31.05.2019 of this Bench. 4. The relevant facts, in a nutshell, are that the Corporate Debtor is engaged in the business of solar power generation and the Respondent is a State Government owned Company registered under Companies Act, 1956. 5. That on the 30th April 2010, the Corporate Debtor entered into a Power Purchase Agreement ("PPA") with the Respondent for purchasing solar power. 6. That the Corporate Debtor is reportedly a Special Purpose Vehicle (SPV) set up only for generation of solar power in the State of Gujarat. The Respondent is the only purchaser of power generated by the Corporate Debtor's Plant, therefore, the PPA is very critical to the "going concern" status of the Corporate Debtor. 7. That on getting the knowledge of the CIR Process, the Respondent had issued two default notices, both on 01.05.2019 to the Corporate Debtor for terminating the Power Purchase Agreement on the ground of breach of clauses 9.2.1(a) and 9.2.1(e) and gave time of 90 days and 30 d....

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.... a Default Notice has been issued with respect to an Event of Default, which requires the co-operation of both GUVNL and the Power Producer to remedy, GUVNL shall render all reasonable cooperation to enable the Event of Default to be remedied without any legal obligations. 8. It is submitted that by the applicants that the agreement was signed on the 30th April 2010 between the parties when the provisions of IBC 2016 had not come into existence. 9. The Ld. RP informs that he had replied to the default notices vide their letter dated 10.05.2019, where he informed the Respondent about the remedial steps taken for revival of Corporate Debtor. 10. That the Ld. RP submits that he had fixed a meeting with the General Manager (IPP) of the Respondent Company on 21.05.2019 for explaining his submissions in person. He added that during the meeting, the General Manager (IPP) of the Respondent Company confirmed that the default in respect of O&M stands cured. 11. It is submitted by the Ld. RP that if the relief sought above is not granted, great prejudice shall be caused to the Corporate Debtor. It is further submitted that Corporate Debtor has only one PPA with the Respondent and ....

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....d 30.10.2010 is inconsistent with Section 238 of IBC 2016 or not. 17. That the Ld. Counsel for the Respondent had placed reliance on the Judgement of Hon'ble NCLT Mumbai bench in the matter of Rajendra K. Bhutia v. MHADA dated 02.04.2018 in MA 96/2018 in C.P. No. 1061/1& BC/2017, where it was held that: "37. It is also trite law that whenever any section is with overriding effect or prohibiting in nature, it has to be applied strictly to the ambit that has been mentioned under the section. It cannot be liberally used to apply to something that is not mentioned in the section. Therefore, when a party exercises its right of termination it will not fall within the ambit of section 14(1)(a), here there is no scope to apply the object or purpose of Code or purpose of the section to extend the purview of this section..." "41. Therefore, onerous duty is cast upon the Adjudicating Authority to examine into as to which issue is hit by section 238 which is not, if that discretion is not properly exercised, then it will jeopardise the rights of the parties. One must not get lost sight of the fact that the rights vested with the parties will not be extinguished by a st....

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....ded under Section 2(b) of Notaries Act, 1952 : "Section 2(b): "instrument" includes every document by which any right or liability is, or purports to be, created, transferred, modified, limited, extended, suspended, extinguished or recorded;" 25. Further, the Bombay Stamp Act, 1958 defines the term 'instrument' in Section 2(1) as follows : "Section 2(1): "instrument" includes every document by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded, but does not include a bill of exchange, cheque, promissory note, bill of lading, letter of credit, policy of insurance, transfer of share, debenture, proxy and receipt;" 26. That the Merriam-Webster Dictionary defines the word 'instrument', inter alia, as: "a formal legal document (such as a deed, bond or agreement)" 27. Since, the rights and liabilities of parties have been created in the Power Purchase Agreement and such an agreement is enforceable by law and the word 'instrument' inter alia, includes an 'agreement', we are of the view, that the Power Purchase Agreement i.e., PPA is an Instrument' for ....