TaxTMI 
TaxTMI 
2023 (6) TMI 1006
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....erational Creditor' under Section 9 of the Insolvency and Bankruptcy Code, 2016, (hereinafter referred to as 'The Code'). 2. While dismissing the Section 9 Application, the 'Adjudicating Authority' has observed as follows: "13. With regard to the first issue, it is to be seen that the I&B Code, 2016 is a self-contained Code and all the actions of the parties are to be examined in terms of the Code and the Rules and Regulations made thereunder only. The Hon'ble Apex Court in a catena of cases has categorically stated the various aspects to be considered by the Adjudicating Authority while deciding the applications filed under sections 7 and 9 of the 18B Code, 2016. 14. The Hon'ble Supreme Court in Mobilox Innovations Private Limited vs. Kirusa Software Private Limited, (2018) 1 SCC 353, while dealing with an application filed u/s 9 of the 18B Code, 2016 has inter alia held as under: "25. 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? (ii) Whether the documentary evidence furnished ....
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....arties to the C.P. Therefore, this issue also held against the Petitioner." 3. Learned Sr. Counsel Mr. E. Om Prakash appearing for the 'Appellant'/'Operational Creditor' submitted that Embassy Energy Private Limited/'Corporate Debtor' sought to commission and operate a Solar Photovoltaic Electricity Generation Facility with a minimum capacity of 100MW AC, for which execution, the 'Corporate Debtor' entered into a contract with IL&FS Solar Limited (ISPL), who in turn entered into a contract with IL&FS Energy Development Company Limited (IEDCL), who in turn appointed M/s. Sterling & Wilson Private Limited/the 'Operational Creditor' herein as the sub-Contractor. In pursuance to this arrangement, it is averred that the 'Operational Creditor' and IEDCL entered into several Contracts for the purpose of the works in relation to the Project and several invoices were raised for the period 21.12.2017 till 24.11.2018. It is submitted that IEDCL consistently defaulted in the payments of various invoices totally amounting to Rs.99,75,88,940/- and despite several requests did not make any payments, on account of which, the 'Operational Creditor' issued a letter dated 04.10.2018 suspending the....
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....ubmitted that this letter evidences that the 'Corporate Debtor' had assured that the amounts owed to the 'Appellant' herein would be paid on an immediate basis. Learned Sr. Counsel drew our attention to the Agreement and Clause 6.1.1 which specifies that the Appellant herein is appointed as a sub-Contractor. It is submitted by the Learned Sr. Counsel that Clause 6.1.6 details the terms and conditions with respect to indemnification and other terms: "6.1.6. The Contractor shall ensure that each Sub-Contractor has knowledge of the terms of this Contract (other than the Contractor's pricing information, other than IEDCL, with whom such information may be shared) which are relevant to the Sub-Contractor and the agreement entered into between the Contractor and each Sub-Contractor provides for terms that are in all respects not less stringent than the terms of this Contract (other than the financial terms). The sub-Contractors shall include the following terms: (a) the Sub-Contractors shall be deemed to have knowledge of the terms of this Contract (excluding pricing and commercial terms, other than IEDCL which shall be deemed to have knowledge of such information), the....
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....llant' that the 'Petition' under Section 9 of the Code is not maintainable as there were 'Pre-Existing Disputes' and more so in the absence of any 'Contractual Obligations', merely because the 'letter of comfort' was issued on 17.10.2018, in order to stop the 'revocation of contract', it cannot be said that the 'Respondent' is liable to pay all the amounts which are to be paid by the Contractor to the sub-Contractor. 8. It is also submitted by the Learned Sr. Counsel that except for the letter dated 17.10.2018 there is 'no relationship' between the 'Appellant' and the 'Respondent' herein and that no Proceedings under IBC can be sustained on the basis of a promissory estoppel. 9. Learned Sr. Counsel Mr. Mukherjee also brought to the 'Notice' of this Bench that the 'Appellant'/'Operational Creditor' filed a 'Claim' against ISPL, which is undergoing Corporate Insolvency Resolution Process ('CIRP') and that the Resolution Professional ('RP') therein has admitted the 'Claim'. Assessment: 10. The brief point that falls for consideration in this Appeal is whether the 'Adjudicating Authority' was justified in dismissing the 'Application' filed under Section 9 of the Code on the....
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.... whom such debt has been legally assigned or transferred; (21) "operational debt" means a claim in respect of the provision of goods or services including employment or a debt in respect of the payment of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any local authority;" 14. It is clear from the record that there are no 'goods and services' supplied directly by the 'Operational Creditor' to the 'Respondent' herein and therefore it cannot be said that there is any 'Operational Debt' between the 'Operational Creditor' and the 'Respondent' herein. Merely because the 'owner' had given a bona fide assurance that if IEDCL fails to pay the amount they would pay the same on their behalf, the amount will not fall within the definition of 'Operational Debt' as defined under Section 5(21) of the Code. Learned Sr. Counsel for the Respondent submitted that all payments 'due and payable' by the 'Respondent' towards ISPL were made and discharged. The Hon'ble Supreme Court in the matter of 'Essar Oil Limited' Vs. 'Hindustan Shipyard Ltd. & Ors.' (2015) 10 SCC 642, has held that when a 'principal employer' grants a....
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....yment to the appellant. 27. We are in agreement with the view expressed by the majority of the Arbitral Tribunal. In our opinion, the High Court had committed an error by not considering the above facts and by observing that the appellant will have to take legal action against ONGC for recovery of the amount payable to it. If one looks at the relationship between the appellant and the 'Respondent', it is very clear that the 'Respondent' had given a sub-contract to the appellant and in the said agreement of sub-contract, ONGC was not a party and there was no liability on the part of ONGC to make any payment to the appellant. Moreover, we could not find any correspondence establishing contractual relationship between ONGC and the appellant. In the circumstances, ONGC cannot be made legally liable to make any payment to the appellant. As stated hereinabove, only for the sake of convenience and to get the work of ONGC done without any hassle, ONGC had made payment to the appellant on behalf of the 'Respondent' without incurring any liability to make complete payment on behalf of the 'Respondent'. 28. The learned counsel appearing for the appellant failed to show any d....
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....============ Document 1 EMBASSY ENERGY October 17, 2018 To. Sterling and Wilson Private Limited ("SWPL") 9th Floor, Universal Majestie, P.L. Lokhande Marg. Chembur (W), Mumbai-400 043 Attn.: Parameshwar Hegde Sub: 100 MW AC Solar PV Plant in Karnataka ("Project") - Non-payment of contract dues by IEDCL. Ref: Letter dated October 8, 2018 issued by SWPL to us ("Letter") enclosing therewith SWPL's suspension notice addressed to IEDCL, dated October 4, 2018 on account of non- payment of contract dues ("Suspension Notice"). Dear Sirs, We take note of the Suspension Notice pursuant to receipt of your Letter dated October 8, 2018. We understand that as on date. the amounts payable by IEDCL to you are as follows: Sl. No. Particulars Amounts (in INR. Cr.) 1. Amounts overdue as on October 4, 2018 as set out in the 50.53 annexure to the Suspension Notice 2. Amounts that hecome due by October 8, 2018 5.95 3. Delay interest accrued until October 4, 2018 5.05 TOTAL 57.53 We further understand that invoices to the tune of INR 35 Crore have been certified by IFDCL and these amounts would become due an....