TaxTMI 
TaxTMI 
2021 (2) TMI 824
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....Bench) in CP (IB) No. 2520/MB/2019, by which Impugned Order, the Adjudicating Authority has admitted the Section 9 Application filed by M/s. Valuelabs LLP (hereinafter referred to as the 'Operational Creditor') observing as follows; "17. Further, upon perusal of the agreed terms of the power purchase agreement, it is clear that the electricity generated by the Petitioner through its solar power plant could be injected into the electricity grid maintained by the DISCOM to be consumed by various consumers. Thereafter, the DISCOM acknowledges the receipt of particular of renewable energy and issues Generation Credit Note (GCN). Then on the basis of energy settlement/Report, the Petitioner raises the invoice as per the units consumed by the end consumer. The Corporate Debtor is liable to pay these invoices raised by the Petitioner whether they are banked units or other units as per to the agreed terms and conditions of the power purchase agreements and addendums executed between the parties. According to the Petitioner the mechanism of the banked units is that the total electricity generated by the generator during a period is more than the electricity actually consumed by the end co....
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....aised by the Operational Creditor under the terms and conditions of the Solar Power Purchase Agreement and addendums thereto. Therefore, neither an intervenor be impleaded as party nor can be allowed to be heard in an application under Section 9 of IBC, 2016. The legislature has envisaged the recourse of workmen/employees during the resolution process. 21. This Adjudicating Authority, on perusal of the documents filed by the Creditor, is of the view that the Corporate Debtor defaulted in paying the outstanding unpaid invoices raised by the Petitioners in terms of the Power Purchase Agreement and addendums thereto and also placed the name of the Insolvency Resolution Professional to act as Interim Resolution Professional and there being no disciplinary proceedings pending against the proposed resolution professional, therefore the Application under of Section 9 is taken as complete, accordingly this Bench hereby admits this Petition..." 2. Learned Counsel appearing for the Appellant contended that the Learned Adjudicating Authority has erred by overlooking the technical nature of the dispute between the parties; that the issue is with respect to interpretation of 'banked energy....
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....nding that the agreed tariff would be Rs. 3.70/- per unit for banked units. Thereafter due to certain unavoidable circumstances, the data/account files of GEPL got corrupted and it was difficult for the Corporate Debtor to reconcile its accounts pertaining to a lot of transactions, including the transaction of the Operational Creditor. As the amounts due, if any, to the Operational Creditor could not be crystalized and ascertained the Corporate Debtor continued to make adhoc payments to the Operational Creditor. Even in their Reply dated 01.06.2018, to the Demand Notice issued by the Operational Creditor, payment of dues was denied as the account reconciliation was still pending. It was only after the reconciliation of accounts that it came to the knowledge of the Corporate Debtor that the billing/invoicing has been done by the Operational Creditor on a wrong premise. 5. Learned Counsel placed reliance on Clauses 3, 4.5, 5 and 6 of the Solar Power Purchase Agreement (SPPA) dated 18.06.2013 and the addendums entered into between the Operational Creditor and Corporate Debtor for the supply of power on a real time, firm, non-banked basis in the capacity of a Solar Power Generator and....
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....ime. He placed reliance on the email dated 13.12.2016 wherein a separate price for Rs. 3.70/- per unit was agreed to be paid for the 'banked' units. Invoice for these banked units was to be raised only after consumption by the end consumer. 8. The Respondent Counsel further submitted that under the SPPA Agreement, the calculation of electricity consumed by the end consumption was done by the DISCOM and Certificate of Settlement Statement of Energy was issued by the Transmission Corporation to both the Operation Creditor and Corporate Debtor. These certificates provide complete details of the period for which it is issued, the name of the generator, total electricity generated, name of the end consumer, electricity consumed by the end consumer, unconsumed electricity to be banked and submitted that as per the agreed billing procedure, the Operational Creditor could raise an invoice only for the months of December 2016, February 2017, March 2017 and May 2017. The Counsel argued that all the invoices covered under the Demand Notice were issued only for actual electricity consumed by the end consumer only; when such banked units are actually consumed, an invoice was raised by the Oper....
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....t located at Nallacheruvu Substation, Nallacheruvu Manadal, Kadiri Taluk, Anantapur District in the State of Andhra Pradesh...." "4.5. The Company agrees to provide schedules on month ahead basis for the entire duration of the contract, based on the weather and yield reports..." "5. Tariff: 5.1. For the solar power supplied, the Facilitator shall pay to the Company a tariff for energy generated and supplied at the rates provided in Schedule A. 5.2. The tariff provided in Clause 5.1 above is inclusive of all taxes, duties, Open Access Charges and / or Open Access Losses, charge, surcharge, wheeling and transmission charges and losses up to the Delivery Point, and it is agreed that all the charges up to the Delivery Point shall be to the account of the Company. It is agreed that in event of any increase in the existing rates of taxes, duties, Open Access Charges and / or Open Access Losses, or Imposition of new taxes, duties, Cross subsidy surcharge, additional surcharge, Open Access Charges, Open Access Losses, charges, post the signing of this Agreement, the Parties shall renegotiate the tariff in good faith, if the affected party gives a notice to the other for such re....
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....will raise the invoice to GEPL to the extent of the units adjusted in the consumer's electricity bill of DISCOM. GEPL will make the payments to ValueLabs within 10 days from the receipt of ValueLabs' invoice to the extent of the units so adjusted only. The transaction is being carried out under the provision of Wheeling and Banking in the State of Andhra Pradesh. As per the provisions of the same, monthly unconsumed energy shall be banked with the DISCOM for ValueLabs and ValueLabs may accordingly sell the energy to any Buyer of its choice. It is hereby agreed between the Parties that GEPL or the consumers shall not be liable to pay any tariff or penalty to the Generator for: 1) Failure to make arrangement with one or more Buyers to offtake the energy made available by ValueLabs. 2) Failure of one or more Buyers to consume energy generated by the Generator. 3) Failure to ensure the credit and / or adjustment of energy to a Buyer. 15. It is the case of the Operational Creditor that the reduced price of Rs. 3.70/kwh was agreed for banked units only. This term 'Banked Units' is used extensively in Renewable Energy Industry and carries a specific meaning and that the p....
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....y feeble legal argument or an assertion of facts unsupported by evidence. The defense is not spurious, mere bluster, plainly frivolous or vexatious. A dispute does truly exist in fact between the parties, which may or may not ultimately succeed, and the Appellate Tribunal was wholly incorrect in characterizing the defense as vague, got-up and motivated to evade liability." "Para 29 of M/s. Innoventive Industries v. ICICI Bank (2018) 1 SCC 407: The scheme of Section 7 stands in contrast with the scheme Under Section 8 where an operational creditor is, on the occurrence of a default, to first deliver a demand notice of the unpaid debt to the operational debtor in the manner provided in Section 8(1) of the Code. Under Section 8(2), the Corporate Debtor can, within a period of 10 days of receipt of the demand notice or copy of the invoice mentioned in Sub-section (1), bring to the notice of the Operational Creditor the existence of a dispute or the record of the pendency of a suit or arbitration proceedings, which is pre-existing i.e. before such notice or invoice was received by the Corporate Debtor. The moment there is existence of such a dispute, the Operational Creditor gets ....
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....ing filed before the receipt of such notice or invoice in relation to such dispute (Section 8(2)(a)). What is important is that the existence of the dispute and/or the suit or arbitration proceeding must be pre-existing - i.e. it must exist before the receipt of the demand notice or invoice, as the case may be. ........" 21. In the said case, the Hon'ble Supreme Court held as to what are the facts to be examined by the Adjudicating Authority while examining an Application under Section 9, which is as follows: "34. Therefore, the adjudicating authority, when examining an application under Section 9 of the Act will have to determine: (i) Whether there is an "operational debt" as defined exceeding Rs. 1 lakh? (See Section 4 of the Act) (ii) Whether the documentary evidence furnished with the application shows that the aforesaid debt is due and payable and has not yet been paid? and (iii) Whether there is existence of a dispute between the parties or the record of the pendency of a suit or arbitration proceeding filed before the receipt of the demand notice of the unpaid operational debt in relation to such dispute? If any one of the aforesaid conditions is lacking, the application....
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....t ultimately succeed' is being addressed to. 25. At this juncture, it is relevant to peruse the email communication between the parties to ascertain whether there is a material dispute, and if the dispute is a 'Pre-Existing' one. Emails dated 03.08.2017 (Annexure R-1/1 [page 15 of Reply]) and 17.03.2018 (Annexure R-1/3 [page 17 of Reply]) addressed by the Corporate Debtor to the Operational Creditor establish that there was a request by the Operational Creditor for payment of balance amounts, but the Corporate Debtor stated that they are unable to 'confirm any balance amount payable as of now' as accounts need to be reconciled. 26. Emails dated 06.04.2018 (page 18 of Reply) and 07.04.2018 (page 19 of Reply) addressed to by the Operational Creditor to the Corporate Debtor evidence that repeated requests have been made by the Operational Creditor seeking for payment of balance amounts. It is significant to mention that in the email dated 06.04.2018, it is categorically stated by the Operational Creditor that all information sought for by the Corporate Debtor was submitted by them. There is no denial of the same. It is not the case of the Corporate Debtor that on account of non-furn....
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....hat the debt is 'due and payable' and has not been paid and there is no plausible contention which requires further investigation and that the 'Dispute' raised is only a patently feeble argument unsupported by evidence. Hence, this Tribunal is of the considered view that the ratio of the Hon'ble Supreme Court in M/s. Mobilox Innovations Pvt. Ltd., reported in 2008 (1) SCC 353 squarely applies to the facts of this case as the Hon'ble Apex Court has laid down that the 'Dispute', if any, should be 'Pre-Existing' and also that it cannot be a feeble argument. Merely contending that accounts were not reconciled for almost a year in our considered opinion, can be construed as a 'feeble and spurious argument'. 30. A perusal of the contents of the reply to the Demand Notice, this Tribunal is unable to find any 'Dispute'. It is seen from the record that at the earliest point of time, the Corporate Debtor did not raise any dispute that existed between the parties. For all the reasons assigned in this instant Appeal, we do not find any illegality or infirmity in the Order passed by the Learned Adjudicating Authority warranting our interference. In fine, this Appeal is dismissed and the Impugn....