TaxTMI 
TaxTMI 
2025 (10) TMI 819
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....udicating Authority has dismissed IA No. 1291 of 2022 filed by the Appellant- Liquidator seeking directions against Respondent No.1 and 2 to recover certain dues from them as payable to the Corporate Debtor. Aggrieved by the impugned order, the present appeal has been preferred by the Appellant. 2. Giving a brief snapshot of the matter at hand, Shri Abhishek Anand, Ld. Advocate for Appellant submitted that Respondent No.1-Uttar Pradesh Rajakiya Nirman Nigam Ltd. ("URNL" in short) had been awarded the project for construction of sub-stations by Respondent No.2-Uttar Pradesh Power Transmission Corporation Ltd. ("UTCL" in short). In turn the Respondent No.1- URNL had sub-contracted the work to the Corporate Debtor-Dev Denso Power Ltd. for which they entered into Letters of Intent ("LoI" in short) for construction of power sub-stations at Khurja, Panwari and Dharampur. The Corporate Debtor was admitted into the rigours of Corporate Insolvency Resolution Process ("CIRP" in short) on 11.06.2019 and eventually on 06.09.2021, liquidation proceedings were initiated against the Corporate Debtor and the Appellant was appointed the Liquidator. The Appellant informed the Respondent No.1 on 1....
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....g amount stood crystallized and such outstanding receivables automatically form part of the liquidation estate and therefore recoverable by the Liquidator for the benefit of stakeholders. Since the Liquidator was duty bound to take requisite steps for recovery of legally enforceable claim qua the Respondents No.1 and 2 and payments for the same was not forthcoming, I.A. No. 1291 of 2022 was filed by the Appellant-Liquidator before the Adjudicating Authority towards recovery of amounts which was due and payable to the Corporate Debtor under liquidation. Since the recovery directly related to the liquidation estate and distribution of liquidation proceedings to stakeholders, the Adjudicating Authority enjoyed full jurisdiction to adjudicate on the said I.A. and could not have absolved themselves from exercising their jurisdictional powers. Hence, the dismissal of I.A. No. 1291of 2022 by the Adjudicating Authority on grounds of lack of jurisdiction is erroneous. 4. Advancing their arguments further, it was submitted that when the outstanding debt amount was not contested nor any contractual dispute raised, this amount clearly formed part of the liquidation estate. Hence its recover....
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....s charted out in the LoI. Since the claim of the Appellant was clearly not maintainable, the Adjudicating Authority had therefore correctly relied on the judgement of the Hon'ble Supreme Court in Gujarat Urja Vikas Nigam Ltd. Vs Amit Gupta in Civil Appeal No. 9241 of 2019 case to hold that since this was a case of contractual dispute it was required to be adjudicated in an appropriate forum. 6. Making his submissions, Mr. Altab Mansoor, Ld. Advocate for Respondent No.2 submitted that Respondent No.2 having no privity of contract with the Appellant, no liability can be fastened on them by the Appellant. Further, echoing the contention raised by Respondent No.1, it was submitted that since the claim of the Appellant is a disputed one, the same cannot be enforced by the Adjudicating Authority in exercise of its jurisdiction under Section 60(5) of the IBC. Since the Appellant has not produced any concrete evidence to buttress the fact that the claims made by them had crystallized and was unequivocally admitted by the Respondents, the Adjudicating Authority had rightly held the claim being a disputed contractual due, the same cannot be decided by the Adjudicating Authority in exercis....
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.... contra it is the contention of the Respondents that Section 35(1)(b) of the IBC does not authorize the Liquidator to enforce disputed receivables directly without pursuing the disputed claims before the appropriate forum of law. This statutory provision is applicable only in situations when the recoveries asserted by the Liquidator are legally enforceable and backed by valid documents. The present stand taken by the Liquidator to directly enforce contested receivables bypassing the contractual remedies of arbitration/civil proceedings is not tenable. The IBC provides for the Liquidator to institute or defend suits and other legal proceedings on behalf of the Corporate Debtor and it is therefore open to the Liquidator to approach the appropriate forum for redressal of their purported unmet claims which are provisional in nature and yet uncrystallised. It has been contended that the Adjudicating Authority has therefore correctly applied the Gujarat Urja judgment which sets out with the boundaries within which the Adjudicating Authority can exercise their jurisdiction under Section 60(5) of the IBC and proceeded to reject I.A. No 1291 0f 2022. 11. At this stage we may capture the ....
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....spondent No.1 and the terms of agreement have not been contested by any of the parties. 13. Having perused the pleadings of the Appellant and heard their contentions, it is one of their principal limbs of argument that the very fact that the audited balance sheet of the Corporate Debtor reflected dues of Rs. 172.58 lakhs, this amount of outstanding receivables formed part of the liquidation estate and hence it was the duty of the Appellant to claim recovery of the said amount. It was also submitted that UPCL-Respondent No.2 had confirmed that they had already released the payments to URNL-Respondent No.1. The Office Memorandum (OM) of UPCL-Respondent No. 1 dated 09.10.2018 when read with letters addressed by URNL-Respondent No.1 on 18.07.2019, 20.12.2019, 16.11.2021 and 28.03.2022 evidences payment made to Respondent No.1 by Respondent No.2. When Respondent No. 1 had already received the payment from Respondent No.2, the amount had crystallised and had become recoverable by the Liquidator. 14. This brings us to the other related argument canvassed by the Appellant that once a Corporate Debtor has been ordered to undergo liquidation proceedings, the appropriate forum for adjud....
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....judgment, it was a case involving adjudication of disputed debts raised by sundry debtors which could not have been adjudicated in a summary manner under Section 60(5) of IBC. On the contrary, in the present case, it was contended that the liability is a crystallized liability which has also been admitted by the Respondents. 16. Coming to our analysis and findings, we find that the amount claimed to be recoverable from the Respondents by the Appellant as part of the liquidation asset in terms of project wise dues was Rs. 89.12 lakh; Rs. 15.90 lakh and Rs. 59.17 lakh alongwith interest @ 18% p.a. in respect of sub-stations at Dharampur, Khurja and Panwari respectively. 17. When we look at the material placed on record, we find that the Respondent No.1 has contended that in respect of Khurja project, a sum of Rs. 15 lakh which was claimed by them related to unapproved variation from the project and that these payments were contingent upon receiving approval of Respondent No.2 in respect of the variations. This does not tantamount to acknowledgement of any pending or crystallized dues payable to the Corporate Debtor. In any case, no final bills had been submitted for the Khurja ....
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.... Subject :- Regarding Delayed Payment of 132/33 K.V. Electric Sub station Dharampur Bulandshahar and Panwari Mahoba Reference: Ms. Pooja Bahry's letter dated 27.06.2019 Sir. Please take reference of Ms. Pooja Bahry's notice dated 27th June, 2019 (photocopy enclosed) vide which it is referred that the payment of Sub-Contractors' pending bills could not be done by the Nirman Nigam due to shortage of funds. We wish to inform that that due to non-payment of the above bills, the concerned contractors have applied for payment of pending amount through National Company Law Tribunal (NCLT), Principal Bench, New Delhi under Insolvency and Bankruptcy Code, 2016. In the above context it is requested that the pending payments detailed as per column no.10 in the enclosed sheet pertaining to the above mentioned electric Sub-Stations aggregating Rs. 150.79 Lacs may please be released so as to enable the Corporation to make payment of the pending bills to the concerned Sub-Contractors. With thanks. Yours faithfully. General Manager (Fin.) 21. In our considered view, basis such internal reconciliation notes regarding project wise ....
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....to the NCLT and NCLAT to ensure that they do not usurp the legitimate jurisdiction of other courts, tribunals and fora when the dispute is one which does not arise solely from or relate to the insolvency of the Corporate Debtor. The nexus with the insolvency of the Corporate Debtor must exist. 72.Therefore, we hold that the RP can approach the NCLT for adjudication of disputes that are related to the insolvency resolution process. However, for adjudication of disputes that arise dehors the insolvency of the Corporate Debtor, the RP must approach the relevant competent authority. For instance, if the dispute in the present matter related to the non-supply of electricity, the RP would not have been entitled to invoke the jurisdiction of the NCLT under the IBC. However, since the dispute in the present case has arisen solely on the ground of the insolvency of the Corporate Debtor, NCLT is empowered to adjudicate this dispute under Section 60(5)(c) of the IBC." 23. In summary, the jurisprudence laid down by this judgement is clear that the Hon'ble Apex Court after examining in details the use of expressions "arising out of" and "in relation to" in Section 60(5) of the IBC h....