Maharashtra State Electricity ... vs Sri City Pvt. Ltd. & Ors

Maharashtra State Electricity ...Appellant Transmission Company Limited (MSETCL) Bearing CIN - U40109MH2005SGC153646 3rd Floor, A wing, "Prakashganga" Plot No. C-19, E Block, BKC, Bandra East Mumbai - 400051, Maharashtra

Versus

1. Sri City Private Limited 85, Kutchery Road, Mylapore Chennai - 600004, Tamilnadu

2. KCR Enterprises LLP G-101, Building No.3, Ilabs Centre No.18 Software Units Layout, Madhapur Hyderabad - 500081, Telangana

3. Sai Wardha Power Generation Ltd. Through Resolution Professional Mr. V. Venkatachalam CIN - U40109TG2005PLC047917 R/o 8-2-293/82/A/431/A, Road No.2 Jubilee Hills, Hyderabad, 500033 Telangana

4. Mr. V. Venkatachalam Resolution Professional of Sai Wardha Power Generation Ltd. CIN - U40109TG2005PLC047917 R/o 8-2-293/82/A/431/A, Road No.2 Jubilee Hills, Hyderabad, 500033 Telangana ...Respondents

Present: For Appellant : Mr. Sudhanshu S. Choudhari, Mr. Yogesh S. Kolte and Mr. Mahesh P. Swnde, Advocates For Respondent : Mr. S. Ranganathan and Mr. Rohit Rajershi, Advocates for R-1 & R-2 Mr. Manish Jha and Ms. Vishrutyi Sahni, Advocates for R-3 & R-4 2

ORDER

03.02.2020 Heard Learned Counsel Mr. Yogesh S. Kolte for the Appellant

- Maharashtra State Electricity Transmission Company Limited. This Appeal

has been filed against Impugned Order dated 17th October, 2019 passed by the

Adjudicating Authority (National Company Law Tribunal), Hyderabad Bench,

Hyderabad by which order the Adjudicating Authority accepted the „Resolution

Plan‟ submitted by the present Respondent No.1 & 2, who submitted the plan

as a Consortium.

2. It is argued and it is claimed in the Appeal that the Appellant had

entered into a Bulk Power Transmission Agreement (in short „BPTA‟) with the

Respondent Corporate Debtor - M/s Sai Wardha Power Generation Limited on

28th February 2012 for allocation of 135.15 MW of Transmission Capacity

Rights through the transmission network of the Appellant for a period of 25

years as per Maharashtra State Electricity Regulatory Commission („MERC‟)

Transmission Open Access Regulation, 2005. It is stated that the Corporate

Debtor had defaulted in making payment of dues of the Appellant. When the

Corporate Insolvency Resolution Process (in short „CIRP‟) proceeding was

initiated against the Corporate Debtor at the instance of Indian Opportunities

III Pte Limited the Appellant had filed claim with the Resolution Professional.

3. It is not disputed by the Learned Counsel for the Appellant and Learned

Counsel for Respondents No.1 to 4 that the claim made by the Appellant was

considered and provisions have been made in the Resolution Plan regarding

the admitted claim. The dispute which is being raised in the present Appeal by

the Appellant is that in the Resolution Plan, there was arbitrary provision in 3

Para 3(s) - (page 67 of Paper Book), amounting to ex-parte termination of the

long term BPTA between the Appellant and Corporate Debtor. According to the

Learned Counsel for the Appellant, in view of Section 81 of the Electricity Act,

2003 and Section 14 of the Electricity Regulatory Commission Act, 1998, the

Maharashtra Electricity Regulatory Commission has been established for the

purposes of Electricity Act, 2003. Learned Counsel claims that the

Maharashtra Electricity Regulatory Commission is the only and appropriate

forum to adjudicate matters pertaining Energy Agreements including

termination of the BPTA. The argument is that as per Section 30(2)(e) of I.B.C.

it is necessary that Adjudicating Authority should ensure that the Resolution

Plan does not contravene any of the provisions of the law for time being in

force. It is stated that the Agreement could have been terminated only by the

parties between themselves or by moving Electricity Regulator.

4. Against this, the Learned Counsel for the Respondents submits that in

view of the Section 238 of Insolvency and Bankruptcy Code, 2016 (in short

„IBC‟) provisions of the Code override other laws. It is stated that considering

the provisions of IBC and judgment of the Hon‟ble Supreme Court in the matter

of "Committee of Creditors of Essar Steel India Limited Vs. Satish Kumar

Gupta" C.A. No.8766-67 of 2019 dated 15th November, 2019 and the

observations in para 67 of the judgment of Hon‟ble Supreme Court, the

Successful Resolution Applicant is entitled to take over with a clean state and

could not be forced to continue with such long term arrangement. It is slate the

„CoC‟ in its commercial wisdom accepted the plan so as not to saddle the

Respondents No.1 & 2 with a liability of such long term Agreement. 4

5. We find ourselves in agreement with submission made by the Learned

Counsel for the Respondents. Keeping in view the judgment in the matter of

"Essar Steel India Limited" (supra) and provisions of Section 238 of IBC, we

find that the Resolution Plan, which has been accepted cannot be found fault

where COC in its wisdom accepted the Plan which terminated the long time

agreement. The plan made provision that the Bulk Power Transmission

Agreement with Maharashtra State Electricity Transmission Company Limited

- Corporate Debtor shall be terminated without any obligation, liabilities or

penalties, to or on the Corporate Debtor or the Resolution Applicant. We do not

find any fault on this count. There is no substance in the Appeal.

6. The Appeal is dismissed. No costs.

[Justice A.I.S. Cheema] Member (Judicial)

[Justice Anant Bijay Singh] Member (Judicial)

[Kanthi Narahari] Member (Technical) pks/md