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2025 (12) TMI 1009
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.... the Order dated 01.11.2021 ("Impugned Order") passed by the National Company Law Tribunal, Principal Bench ("Adjudicating Authority") in I.A. No. 2785 of 2021 in C.P. (IB) No. 863/PB/2020. Mr. Ashish Chhawchharia, who is the Resolution Professional of Essar Power M.P. Limited ('Corporate Debtor') is the Respondent No.1 herein. Adani Power Limited, is the Respondent No.2 herein. 2. The Appellant submitted that it is a hydro-electric generating company established by the Government of Uttar Pradesh exclusively for the development of small hydroelectric power in the state. The Appellant contended that on October 23, 2009, it entered into a binding Agreement with Corporate Debtor for the supply of water from upstream of Rihand Reservoir to Corporate Debtor 's thermal power plant in Singrauli District, Madhya Pradesh, at rates specified in the Office Memorandum dated February 03, 2001. The Appellant further submitted that Corporate Debtor commenced drawing water pursuant to the Agreement, triggering payment obligations under Clause 9, which mandates billing at the end of each calendar month with payment due within 30 days, and a surcharge of seven paise per hundred rupees ....
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....May 2021), with ongoing invoices till November 2021. The Appellant further submitted that the RP's letter dated November 5, 2020, explicitly recognized water supply as an essential service under Section 14 of the Code and Regulation 32 CIRP Regulations, requesting uninterrupted continuity to run the Corporate Debtor as a going concern. 7. The Appellant contended that this admission of the RP contradicts Corporate Debtor 's Writ Petition (W.P. No. 12331/2020) before Allahabad High Court challenging invoices from December 5, 2012, to May 1, 2020, and removal notice dated January 16, 2020, with no interim relief granted despite listings from August 14, 2020, and pending amendment application dated May 13, 2021. 8. The Appellant submitted that creditor lists dated February 24, 2021, and May 11, 2021, wrongly admitted the claim of the Appellant at Rs.1 as contingent, citing the Writ Petition under Note 2, despite full documentation and RP's own acknowledgment. The Appellant contended that vide objection letter dated April 6, 2021, it highlighted: (i) unpaid invoices per Clause 9 (ii) past payments (iii) increasing meter readings and (iv) RP's admission, demanding f....
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....ding and baseless. 14. The Respondent No. 1 submitted that the Appellant has alleged irregularities in the classification of its claim as "contingent," the Corporate Debtor's failure to make payments for water drawn from Rihand Reservoir during the CIRP, and the concessions in the Approved Resolution Plan lacking continuation of pre-CIRP arrangements for 12 months or until disposal of the Writ Petition. However, these averments are bereft of merit, as the claim's contingent nature stems from ongoing sub-judice proceedings before the Hon'ble High Court of Allahabad, rendering any interference by the Adjudicating Authority or even by this Appellate Tribunal an usurpation of judicial jurisdiction. 15. The Respondent No. 1 submitted that the Appellant's claim pertaining to the pre-CIRP period is admittedly contingent. The Corporate Debtor has challenged the legality and validity of invoices raised by the Appellant from 05.12.12 till 01.05.2020 (Impugned Invoices) before the Hon'ble High Court of Allahabad vide Writ Petition (Civil) No. 12331 of 2020 (Writ Petition), first listed for hearing on 14.08.2020, prior to the Admission Order dated 23.07.2020. Notice i....
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....radesh Water Resources Department (MPWRD) from Rihand Reservoir on 27.07.2006 against Government of Madhya Pradesh's share of water in Rihand Reservoir, which is under the control of the Appellant. Therefore, merely due to the control of the Appellant on the Rihand Reservoir, in order to enable the Corporate Debtor to draw water from the reservoir by building intake pump house in the submergence area in Uttar Pradesh, the Appellant entered into the Agreement dated 23.10.2009 with the Corporate Debtor to enable the Appellant to be able to construct the pump and draw water from the said Rihand Reservoir. 20. The Respondent No. 1 contended that subsequently in April 2012, the Corporate Debtor started drawing water out of the share allocated to it by the State of Madhya Pradesh from the Rihand Reservoir. Between January 2013 to May 2015, the Appellant addressed various correspondences raising invoices on the Corporate Debtor for the water drawn by it from the Rihand Reservoir under various heads, including charges for drawl of water, loss of power generation, late payment surcharge etc. The Corporate Debtor, in response, addressed correspondences in the said period calling upon ....
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....No. 1 submitted that the Hon'ble Madhya Pradesh High Court vide an order dated 30.03.2015 had granted a stay against any coercive action after hearing the Corporate Debtor's argument at length. The Respondent No. 1 contended that on 27.02.2020, the First Writ Petition was disposed of by the Hon'ble High Court of Madhya Pradesh only on the ground of territorial jurisdiction with liberty to pursue remedy before the appropriate jurisdiction. 25. The Respondent No. 1 submitted that the interim protection granted by the Madhya Pradesh High Court vide order dated 30.03.2015 had been in operation till 27.02.2020. As such, the Appellant has been aware that the Corporate Debtor had, at all material times, objected to the liability to make payments towards Impugned Invoices and that issue concerning legality of the said invoices were sub-judice, and continues to be so even thereafter. 26. The Respondent No. 1 contended that consequently, the Corporate Debtor has filed the Writ Petition before the Allahabad High Court wherein the Corporate Debtor has inter alia challenged the right of the Appellant to levy and recover charges for drawl of water and for loss of power generati....
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....ation to the water drawn by the Corporate Debtor is already subject- matter of adjudication before the Allahabad High Court. 31. The Respondent No. 1 contended that it is also apparent that the Order dated 01.11.2021 pronounced by the Adjudicating Authority has already considered all the submissions made herein by the Appellant. It was only after examining the offers of resolution plan and the fact that Allahabad High Court is seized of the issue concerning validity of the Impugned Invoices, for which the charges have already been paid to MPWRD, 32. The Respondent No. 1 submitted that further, on the issue of reliefs and concessions that was sought by the SRA, the Adjudicating Authority found that use of water and land plays a vital role in resolution and thus, relying upon the judgement of the Hon'ble Supreme Court in Swiss Ribbons Pvt. Ltd. & Anr. v. Union of India & Ors., Writ Petition (Civil) No. 99/2018, allowed the concession for continuation of the arrangement between the Corporate Debtor and the Appellant during the moratorium period, for a period of 12 months or until disposal of the Writ Petition, whichever is earlier (Concession) as approved by the Adjudicating....
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....on 28.12.2020 claimed Rs. 12,08,64,637/- for April 2012 to September 2020, but the portion from April 2012 to November 2017 is barred by limitation under Article 137 of the Limitation Act, 1963, and thus inadmissible in CIRP. The Respondent No. 2 submitted that on 27.07.2006, the Government of Madhya Pradesh allocated 0.058 MAF water from Rihand Reservoir to the Corporate Debtor from its 5.25 MAF share under the Bansagar Project Agreement dated 16.09.1973, with payments duly remitted to the Madhya Pradesh Water Resources Department, negating any duplicate liability to the Appellant notwithstanding its reservoir control. 38. The Respondent No. 2 contended that to facilitate drawl via intake infrastructure in the Uttar Pradesh submergence area, the Appellant entered the Agreement dated 23.10.2009, allowing construction and use subject to prescribed charges and restricted under Clause 6(b) to plant operations and colonies; however, this Agreement expired unrenewed on 22.10.2019, well before CIRP initiation on 29.09.2020. The Respondent No. 2 submitted that disputes over the Appellant's levy locus existed ab initio, with the Corporate Debtor protesting dual invoicing on 20.06.20....
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....al power producer with 12,450 MW capacity, the Respondent No. 2's implementation expertise necessitates such interim safeguards to optimize value and avert operational halts. The Respondent No. 2 submitted that the concession advances public interest by forestalling disruptions, faithful to the Code's rehabilitative mandate, without impinging on the Appellant's Writ entitlements. 42. Concluding arguments, the Respondent No. 2 requested this Appellate Tribunal to dismiss the appeal. Findings 43. We have noted the submission of both the parties in detail above. To understand the context of the pleadings, it is important to note the background of the case. We note that the Financial Creditor M/s ICICI Bank filed an application bearing C.P. (IB) No. 863/PB/2020 under Section 7 of the Code for initiation of CIRP against the Corporate Debtor i.e., Essar Power M.P. Limited ('Corporate Debtor') which was admitted by the Adjudicating Authority on 29.07.2020. Subsequently, the then RP made a public announcement in Form A on 10.10.2020 in terms of Regulation 6(1) of IBBI (Insolvency Resolution Process for Corporate Person), Regulation, 2016. 44. It is important to note....
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....te Debtor to admit the entire amount claimed by the Applicant i.e. an amount of INR 12,08,64,637 (Rupees Twelve Crore Eight Lac Sixty Four Thousand Six Hundred Thirty Seven Only), being the total outstanding amount payable till September 29, 2020 i.e, the date of commencement of CIRP; (ii) Direct the Resolution Professional to revise and update the list of creditors uploaded on the website of the Corporate Debtor as per Form B submitted to the Respondent; and (iii) Direct the Resolution Professional to admit the outstanding claim amount of Rs. 5,17,21,063 (Rupees Five Crore Seventeen Lakhs Twenty One Thousand Sixty Three Only) for the period of October 2020 to May 2021 and immediately release payments for the same. (iv) Direct the Resolution Professional of the Corporate Debtor to pay month to month charges to the Applicant towards the drawl of water; and (v) Pass any other or further order(s) as this Hon'ble Tribunal may deem fit and necessary in the facts and circumstances of the given case." (Emphasis Supplied) 48. We take into consideration the relevant portion of the Impugned Order dated 01.11.2021 with reference to the I.A. No. 27....
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....ed November 01, 2021, passed by the Hon'ble National Company Law Tribunal in I.A. No. 2785 of 2021 in Company Petition (IB) No. 863/PB/2020; (b) Direct the Resolution Professional to admit the entire amount claimed by the Appellant i.e. and amount of INR 12,08,64,637 (Rupees Twelve Crore Eight Lac Sixty Four Thousand Six Hundred Thirty Seven Only), being the total outstanding amount payable till September 29, 2020 i.e. the date of commencement of CIRP; (c) Direct the Resolution Professional to admit the outstanding claim amount of Rs. 5,17,21,063 (Rupees Five Crore Seventeen Lakhs Twenty One Thousand Sixty Three Only) for the period of October 2020 to May 2021 and immediately release payments for the same. (d) Direct the Resolution Professional to pay month to month charges to the Appellant towards the drawl of water; (e) Pass an order awarding cost of the present Appeal; (f) Pass such other orders as this Hon'ble National Company Law Appellate Tribunal may deem fit and proper in the circumstances of the case and thus render justice." (Emphasis Supplied) 51. Thus, we note that the Appellant is not seeking to set aside the w....
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....ns for the previous two years; (ii) financial and operational payments for the previous two years; (iii) list of assets and liabilities as on the initiation date; and (iv) such other matters as may be specified; (b) receive and collate all the claimsJ2 submitted by creditors to him, pursuant to the public announcement made under sections 13 and 15; (c) constitute a committee of creditors; (d) monitor the assets of the corporate debtor and manage its operations until a resolution professional is appointed by the committee of creditors; (e) file information collected with the information utility, if necessary; and (f) take control and custody of any asset over which the corporate debtor has ownership rights as recorded in the balance sheet of the corporate debtor, or with information utility or the depository of securities or any other registry that records the ownership of assets including- (i) assets over which the corporate debtor has ownership rights which may be located in a foreign country; (ii) assets that may or may not be in possession of the corporate debtor; (iii) tangible as....
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....of the Code r/w Regulation 10, 13(1) and 14 of CIRP Regulations described the role of the RP to collate and verify based on documents available. It implies that RP is not to adjudicate on the legality or otherwise of the claims filed by any creditors. 58. At this stage, we will like to take into consideration the ratio of Hon'ble Supreme Court of India in the matter of Swiss Ribbons Private Limited and Ors v. Union of India and Ors [(2019) 4 SCC 17] where it was categorically held that while verifying and admitting the claims, a resolution professional has been conferred only with administrative powers and not with quasi-judicial powers. The power to "adjudicate" has been conferred only on the adjudicating authority. Similar observations were also made by the Hon'ble Supreme Court in the matter of Committee of Creditors of Essar Steel India Limited v. Satish Kumar Gupta and Ors., Civil Appeal No. 8766-67/2019. 59. Having noted above, it will also important to understand the implication of Regulation 14 of CIRP Regulation, which we have already noted above and according to Regulation 14, where the amount claimed by the creditor is not precise due to any contingency or othe....
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.... were subject matter of pending Writ Petition No. 12331 of 2020 before Allahabad High Court. Such dispute has been dealt elaborately by the Hon'ble Supreme Court of India in the matter of Committee of Creditors of Essar Steel India Limited v. Satish Kumar Gupta and Ors., and the relevant para No. 155 reads as under :- "155. So far as Dakshin Gujarat Vij Co. (Respondent 11 in Civil Appeal Diary No. 24417 of 2019), State Tax Officer (Respondent 12 in Civil Appeal Diary No. 24417 of 2019), Gujarat Energy Transmission Corporation Ltd. (Respondent 17 in Civil Appeal Diary No. 24417 of 2019) and Indian Oil Corporation Ltd. (Respondent 18 in Civil Appeal Diary No. 24417 of 2019) are concerned, the resolution professional admitted the claim of the abovementioned respondents notionally at INR 1 on the ground that there were disputes pending before various authorities in respect of the said amounts. However, NCLT through its judgment dated 8-3- 20193 directed the resolution professional to register the entire claim of the said respondents. NCLAT in paras 44, 45 and 201 of the impugned judgment upheld7 the order passed3 by NCLT as aforesaid and admitted the claim of the abovementione....
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....er the terms of the Bansagar Project, no allocation was made to the state of Uttar Pradesh from the Rihand Reservoir. 69. Subsequently, the Corporate Debtor was allocated 0.058 MAF per annum of water by Madhya Pradesh Water Resource Department ("MPWRD") from Rihand Reservoir on 27 July 2006 against Government of Madhya Pradesh's share of water in Rihand Reservoir which is under the control of Appellant. Therefore, merely due to the control of the Appellant on the Rihand Reservoir, in order to enable the Corporate Debtor to draw water from the reservoir by building intake pump house in the submergence area in Uttar Pradesh, the Appellant entered into the Agreement dated 23 October 2009 (23 October Agreement) with the Corporate Debtor to enable the Appellant to be able to construct the pump and draw water from the said Rihand Reservoir. Subsequently in April 2012, the Corporate Debtor started drawing water out of the share allocated to it by the State of Madhya Pradesh from the Rihand Reservoir. Between January 2013 to May 2015, the Appellant addressed various correspondences raising invoices on the Corporate Debtor for the water drawn by it from the Rihand Reservoir under var....
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....voices and that issue concerning legality of the said invoices were sub judice, and continues to be so even thereafter. We find force in contentions of the Respondents No. 1 & 2. 72. Now we will take another issue raised by the Appellant that the Appellant could not have been asked to continuous supply of water to Corporate Debtor during CIRP without payment. We note that the resolution professional vide his letter dated 5 November 2020 called upon the Appellant to not interrupt the supply of water to the Corporate Debtor during the CIRP as being essential for the continued existence of the Corporate Debtor as a going concern. It has been the case of the Respondent No.1 that the Corporate Debtor has always maintained a consistent stand and disputed any liability under the Impugned Invoices. However, the Appellant continued raising invoices for generation loss during the CIRP period purportedly in terms of the 23 October Agreement, which had already expired. The Respondent No.1further argued that the Appellant had no right or authority to claim generation loss from the Corporate Debtor since the water being drawn by the Corporate Debtor belonged to the portion allocated to the st....
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....lant that the Appellant issued another letter dated 25.05.2021 and 14.06.2021 to the RP claiming balance outstanding dues of Rs. 5,07,60,568/- and Rs. 5,17,21,063/- respectively for drawl and water by Corporate Debtor between October 2020 till April 2021 and October 2020 to May 2021. The Appellant emphasised that even post the Agreement, the Appellant allowed the Corporate Debtor to draw water from the Rihand Reservoir pursuant to mutual agreement entered into between the Corporate Debtor and the Appellant. As regards the Appellant's submission that the Corporate Debtor is obliged to make payments towards the invoices raised by the Appellant post the expiry of the Agreement for drawing water from the Rihand Reservoir, the Respondent No.1strongly pleaded before us that the water drawn by the Corporate Debtor from the Rihand Reservoir was from the share of water allocated to the State of Madhya Pradesh and not the State of Uttar Pradesh. Furthermore, the Corporate Debtor has been making regular payment to MPWRD for the water drawn by it from the Rihand Reservoir. In any event, the very issue of whether the Corporate Debtor is required to make any payment to the Appellant under....