U.P. Jal Vidyut Nigam Limited vs Ashish Chhawchharia

(Arising out of the Order dated 01.11.2021 passed by the National Company Law Tribunal, Principal Bench, New Delhi in IA NO. 2785 OF 2021 in C.P. (IB) No. 863/PB/2020.

U.P. Jal Vidyut Nigam Limited Pipri, P.O. Turra District: Sonebhadra Uttar Pradesh -231221 ...Appellant

Versus Mr. Ashish Chhawchharia (IBBI/IPA-001/IP-P00294/2017-18/10538) Resolution Professional of Essar Power M.P. Limited Grant Thornton 10 C Hungerford Street ...Respondent Kolkata - 700017 Present

For Appellants: Mr. Krishnendu Datta, Sr. Advocate along with Ms. Pallavi Kumar, Ms. Priya Chauhan, Ms. Kavya Jha, Ms. Niharika Sharma, Mr. Harsh Gurbani, Mr. Harshit Chaudhary, Advocates.

For Respondent: Mr. Ritin Rai, Sr. Advocate along with Mr. Diwakar Maheshwari, Ms. Pratiksha Mishra & Mr. Vishnu Shriram, Advocates for R-1.

Mr. Sandeep Singhi, Ms. Ruby Singh Ahuja, Mr. Vishal Gehrana, Ms. Aakriti Vohra, & Ms. Varsha Himatsingka, Advocates for R-2. JUDGEMENT

( 11.12.2025)

NARESH SALECHA, MEMBER (TECHNICAL)

1. The present appeal has been filed by the Appellant i.e., U.P. Jal Vidyut

Nigam Limited ('UPJVNL') who is an operational creditor of Essar Power M.P.

Limited under Section 61 of the Insolvency and Bankruptcy Code, 2016 ('Code')

against 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 Page 2 of 40 a surcharge of seven paise per hundred rupees per day on overdue amounts,

without prejudice to disconnection rights after 15 days' notice.

3. The Appellant contended that invoices were duly raised from April 2012

to October 2020 for water drawl, late payment surcharges from August 2013 to

November 2020, and generation loss charges, supported by reminder letters dated

April 3, 2013; September 28, 2013; August 6, 2014; October 10, 2014; January

28, 2015; and June 11, 2020. The Appellant further submitted that the Corporate

Debtor cleared invoices up to February 2013 but defaulted thereafter, including

April-November 2012 dues, leaving crystallized operational debt of Rs.

12,08,64,637 as on September 29, 2020.

4. The Appellant submitted that the Agreement expired on October 22, 2019,

yet at Corporate Debtor 's request, it permitted continued water drawl, with

Corporate Debtor seeking renewal vide letters dated September 17, 2019, and

October 3, 2019, for a further 10-year term from October 23, 2019, thereby

extending the Agreement by mutual conduct. The Appellant contended that

monthly invoices continued post-expiry based on meter readings, reflecting

ongoing usage and liability, with total post-CIRP dues reaching Rs. 5,74,61,202

up to November 2021. The Appellant further submitted that letters dated June 2,

2014; August 14, 2014; December 18, 2014; and January 28, 2015, warned

Corporate Debtor of violations and demanded payment for escalating dues till

June, November, and December 2014 respectively.

Page 3 of 40

5. The Appellant contended that Corporate Debtor's past payments till

February 2013 unequivocally acknowledge water drawl from Rihand Reservoir

under the Agreement, negating any subsequent denial. The Appellant submitted

that rising meter readings in sequential invoices irrefutably prove consumption,

as water quantity is measured via meters installed and controlled by the Appellant

per Clause 7(a) of the Agreement.

6. The Appellant submitted that upon public announcement post Adjudicating

Authority's CIRP initiation order dated September 29, 2020, it filed Form B on

December 28, 2020, claiming Rs.12,08,64,637 as operational creditor, annexed

with invoices and records. The Appellant contended that supplementary claims

followed via letters dated March 10, 2021 (Rs. 4,10,63,874 till February 2021);

May 25, 2021 (Rs. 5,07,60,568 till April 2021); and June 14, 2021 (Rs.

5,17,21,063 till 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.

Page 4 of 40

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 full admission and

revised list, yet RP replied on May 25, 2021, reiterating contingency. The

Appellant further submitted that RP overstepped by adjudicating, exceeding

collation/verification powers under the Code & Regulations. The Appellant

contended that RP lacks quasi-judicial/adjudicatory authority, possessing merely

administrative powers to verify/collated claims, as held by Supreme Court

in Swiss Ribbons Pvt. Ltd. v. Union of India [(2019) 4 SCC 17].

9. The Appellant submitted that Section 14(2) of the Code and Regulation 31

CIRP Regulations mandate RP to make payment for essential services on month-

to-month basis to sustain going concern, not free supply. The Appellant

contended that this Appellate Tribunal in the matter of Dakshin Gujarat Vij Co.

Ltd. v. ABG Shipyard Ltd. (CA(AT)(Ins.) 334/2017) held that current charges

for essential services like water/electricity form Insolvency Resolution Process

costs, payable without moratorium bar, waiving surcharges conditionally but

affirming liability.

10. The Appellant contended that generation loss is legitimate as per Clauses

7-8, as Rihand Reservoir water constitutes stored energy, with Appellant

Page 5 of 40 incurring upkeep costs, charged at 189.256198 gallons per rupee (2009-2013,

escalating 10% every five years) as per Office Memorandum formula from April

3, 1999, meeting.

11. The Appellant submitted that Adjudicating Authority lacked jurisdiction

over pre-CIRP contractual dispute, sub-judice in Allahabad High Court, erring in

directing 12-month water supply/land use continuation or till High Court

decision, foisting renewal on unwilling Appellant. The Appellant contended this

contravenes Supreme Court rulings: Jaypee Kensington Boulevard Apartments

Welfare Assn. v. NBCC (India) Ltd. [(2021 SCC OnLine SC 253)] prohibiting

resolution plan alterations to statutory contracts sans governmental consent per

Regulation 37 CIRP Regulations; and Sangyong Engineering & Construction

Co. Ltd. v. NHAI [(2019) 15 SCC 131] on public policy limits. The Appellant

further submitted that impugned order overlooked records proving drawl and

therefore, clear liability of the Corporate Debtor to make payments to the

Appellant.

12. Concluding his arguments, the Appellant requested this Appellate

Tribunal to allow the present appeal.

13. Per contra, the Respondent No.1 denied all averments made by the

Appellant as misleading 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

Page 6 of 40 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

in the Writ Petition has been issued to the Appellant, and the matter remains sub-

judice since issuance of the Admission Order. The Respondent No. 1 had filed an

application before the Allahabad High Court praying for urgent listing of the Writ

Petition.

16. The Respondent No. 1 submitted that Regulation 14(1) of the CIRP

Regulations, provide: "Where the amount claimed by a creditor is not precise due

to any contingency or other reason, the interim resolution professional or the

resolution professional, as the case may be, shall make the best estimate of the

amount of the claim based on the information available with him." Based on

Page 7 of 40 information/documents available, the legality and validity of the Impugned

Invoices are sub-judice before the Allahabad High Court. Accordingly, the

question of the Corporate Debtor's liability to make payments under the

Impugned Invoices is contingent on the outcome of the Writ Petition. The Hon'ble

Supreme Court in Essar Steel (supra) has upheld the conduct of a Resolution

Professional in admitting such claims at a notional value of Rs. 1 and classifying

balance as "contingent." Thus, in the instant case, the Respondent No. 1's conduct

in recording the Appellant's claim against the Corporate Debtor as the best

estimate that could be arrived at.

17. The Respondent No. 1 submitted that even if assuming (and not conceding)

that the averments in the Appeal in entirety are correct, a plain reading thereof

does not make out any ground whatsoever for granting the relief prayed for by

the Appellant i.e., treatment of its claims as crystallised claim, as doing so would

usurp the jurisdiction of the Hon'ble Allahabad High Court.

18. The Respondent No. 1 submitted that the State of Madhya Pradesh was

allocated 5.25 MAF water from the Son River under the terms of the Bansagar

Project Agreement dated 16.11.1973 (Bansagar Project) entered into amongst the

States of Madhya Pradesh, Bihar, and Uttar Pradesh. Out of this share, the State

of Madhya Pradesh could utilise 0.78 MAF water from the Rihand Reservoir,

which was under the control of the State of Uttar Pradesh. Under the terms of the

Bansagar Project, no allocation was made to the State of Uttar Pradesh from the

Rihand Reservoir.

Page 8 of 40

19. The Respondent No. 1 submitted that subsequently, the Corporate Debtor

was allocated 0.058 MAF per annum of water by Madhya Pradesh 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 the Appellant to cancel the

invoices raised by it considering that it was drawing water from the share of the

State of Madhya Pradesh in the Rihand Reservoir. As such, the claim of Appellant

under the said invoices remained in dispute from the very first day.

Page 9 of 40

21. The Respondent No. 1 submitted that it is evident that there are some pre-

existing disputes between the Appellant and the Corporate Debtor relating to the

locus of the Appellant to levy charges on the water drawn from Rihand Reservoir

as the water allocation is from the share of the State Government of Madhya

Pradesh and accordingly, the charge for the same is being levied by the

Government of Madhya Pradesh under the terms of the Agreement for Supply of

Water to Industrial/Power Plant dated 16.02.2010 for the water being utilised by

the Corporate Debtor under the said Agreement, and the charges are being

regularly paid to the Government of Madhya Pradesh by the Corporate Debtor in

terms of the said 16 February Agreement.

22. The Respondent No. 1 contended that on 20.06.2013, the Corporate Debtor

addressed a letter to the Appellant intimating that both the Appellant and the

MPWRD have been raising invoices on the Corporate Debtor for the same

quantum of water drawn from the Rihand Reservoir. Accordingly, the Corporate

Debtor requested the Appellant to cancel the invoices raised by the Corporate

Debtor in relation to the water drawn from the Rihand Reservoir.

23. The Respondent No. 1 submitted that additionally, on 21.11.2013, the

Corporate Debtor addressed a letter to the Appellant intimating that the Corporate

Debtor has raised the issue referred to in the above sub-paragraph with the State

of Madhya Pradesh. Further, the Corporate Debtor annexed a cheque for an

amount of Rs. 10,51,227 towards the invoices raised by the Appellant and

Page 10 of 40 categorically stated that said payments are being made to the Appellant under

protest.

24. The Respondent No. 1 contended that furthermore, the Respondent No. 1

states that in relation to the foregoing, the Corporate Debtor had filed Writ

Petition No. 1724 of 2015 before the Hon'ble Madhya Pradesh High Court on

02.02.2015 wherein it had challenged the levy of water charges by the Appellant

since the water is allocated from the share of the State of Madhya Pradesh and

the charge for the same is levied by the Government of Madhya Pradesh. The

Respondent 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

Page 11 of 40 Debtor has inter alia challenged the right of the Appellant to levy and recover

charges for drawl of water and for loss of power generation from the Corporate

Debtor under the Agreement. The Respondent No. 1 submitted that the said Writ

Petition was first listed for hearing on 14.08.2020 i.e., before the Admission

Order of the Adjudicating Authority and has been sub-judice before the

Allahabad High Court since then. In other words, the Writ Petition was already

sub-judice as on the date of the Admission Order.

27. The Respondent No. 1 contended that subsequently, pursuant to

appointment of the Respondent No. 1 as the Resolution Professional of the

Corporate Debtor, vide a letter dated 05.11.2020 had 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, and to submit its claim with proof for the pre-CIRP period.

28. The Respondent No. 1 submitted 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 purportedly in terms of the 23 October, 2019 Agreement, which

had already expired. As stated above, 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 State of Madhya

Pradesh. In any case, the Appellant's right to claim such charges is pending

Page 12 of 40 adjudication before the Hon'ble High Court of Allahabad and the Appellant could

not have unilaterally issued invoices on the Respondent No. 1 for generation loss.

29. The Respondent No. 1 contended that on 10.03.2021, the Appellant wrote

a letter to the Respondent No. 1 claiming that a sum of Rs. 4,84,53,332/-

pertaining to the charges for drawl of water by the Corporate Debtor between

October 2020 till February 2021 which is outstanding and is payable.

30. The Respondent No. 1 contended that in view of the fact that the liability

towards Appellant has always been disputed, and that the payment is being

consistently made to MPWRD, the question of payment to the Appellant for the

same quantum of water drawn during CIRP or pre-CIRP admittedly from the

share of water allocated to Madhya Pradesh would not arise. The Respondent No.

1 submitted that further, the issue of entitlement of the Appellant to claim any

amount in relation 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

Page 13 of 40 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 Authority vide its Impugned Order, which is in conformity with

the provisions of the Code read with the CIRP Regulations.

33. Concluding his pleadings, the Respondent No.1 requested this Appellate

Tribunal to dismiss the appeal with cost.

34. The Respondent No.2 also denied all averments made by the Appellant as

frivolous.

35. The Respondent No. 2 submitted that the contingent classification of the

Appellant's claim, denial of payments for alleged services during the CIRP of

Essar Power M.P. Limited (Corporate Debtor), and the concession for continued

water drawl and land use in the Approved Resolution Plan, is devoid of merit and

liable to dismissal in limine. The Respondent No. 2 contended that the Appellant's

grievances arise from the sub-judice recoverability of its claim before the Hon'ble

High Court of Judicature at Allahabad in Writ Petition No. 12331 of 2020,

instituted prior to CIRP admission on 23.07.2020, precluding any adjudication

herein as an encroachment on superior judicial jurisdiction.

Page 14 of 40

36. The Respondent No. 2 contended that the principal issues raised by the

Appellant, that is, mandatory full admission of the claim, entitlement to CIRP-

period payments, and illegality of the 12-month or till-Writ-disposal concession,

do not arise from the facts but constitute a contrived narrative of the Appellant.

The Respondent No. 2 submitted that the Resolution Professional rightly

classified the claim as contingent under Regulation 14 of the Insolvency and

Bankruptcy Board of India (Insolvency Resolution Process for Corporate

Persons) Regulations, 2016, as the Corporate Debtor challenged the Appellant's

levy of water drawl and generation loss charges through Writ Petition No. 1724

of 2015 before the Hon'ble High Court of Madhya Pradesh, obtaining interim

relief on 30.03.2015. The Respondent No. 2 contended that the said petition was

disposed on 27.02.2020 solely on jurisdictional grounds, directing recourse to the

Allahabad High Court, where the matter remains pending, rendering

recoverability contingent on its outcome.

37. The Respondent No. 2 submitted that even if reclassified as operational

debt, the Appellant's entitlement under the Resolution Plan dated 11.05.2021

(Approved Resolution Plan) is Nil, with operational creditors subject to uniform

haircuts. The Respondent No. 2 contended that the Form B filed 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

Page 15 of 40 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 20.06.2013 and paying Rs. 10,51,227 under protest on 21.09.2013,

while consistently settling dues with Madhya Pradesh. The Respondent No. 2

contended that the Madhya Pradesh High Court granted stay against coercive

action from 30.03.2015 until 27.02.2020, apprising the Appellant of the contested

nature of its claims on Madhya Pradesh-allocated water.

39. The Respondent No. 2 submitted that post-expiry, the Appellant's

unilateral invoicing for generation loss during CIRP lacks legal foundation, as

water supply qualified as essential under Section 14(2) Code to preserve the

Corporate Debtor's going-concern status; the Resolution Professional's letter

dated 05.11.2020 sought non-interruption and pre-CIRP claim submission, which

Page 16 of 40 the Appellant ignored without substantiating charges. The Respondent No. 2

contended that for October 2020 to February 2021, the monthly bills aggregated

Rs. 46,34,274/-, contra the Appellant's exaggerated demand of Rs. 4,84,53,332/-

vide letter dated 10.03.2021, revealing inflated arrears; likewise, March to

November 2021 bills totalled Rs. 90,07,870/- with irregular escalations, limiting

any viable CIRP claim to Rs. 1,36,42,144/- at best, subject to Allahabad High

Court resolution and precluded by prior Madhya Pradesh remittances.

40. The Respondent No. 2 submitted that the Impugned Order dated

01.11.2021 evaluated submissions, confirming the Appellant's operational

creditor status, recognizing CIRP-period claims and abstaining from jurisdiction

over sub-judice matters. The Respondent No. 2 contended that no CIRP payment

default subsists, as charges were directed to the appropriate authority, and the

Adjudicating Authority correctly deferred to the Allahabad High Court on the

underlying dispute. The Respondent No. 2 submitted that the concession of the

Impugned Order, permitting continuation of moratorium-period arrangements for

12 months or until Writ disposal (whichever earlier), aptly underscores water and

land's pivotal role in revival, consonant with Swiss Ribbons Pvt. Ltd. v. Union of

India, (2019) 4 SCC 17, and Section 31(2) IBC.

41. The Respondent No. 2 contended that the Approved Resolution Plan

entails infusion of Rs. 1,102 Crores, repayment of Rs. 2,500 Crores to secured

creditors, and remediation of defaults as per Schedule 2, Serial No. 3; leveraging

its stature as India's largest private thermal power producer with 12,450 MW

Page 17 of 40 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 the financial background of the case in terms of claim

filed, admitted claims and the claim provided in the Resolution Plan. We note

that Secured Financial Creditors filed total claims of Rs. 12,439 Crores (approx..)

out of which claims of Rs. 12,012 Crores (approx.) were admitted. The

Page 18 of 40 Resolution Plan provide for Rs. 2,500 Crores which is 20.69% of the amount

claimed.

Similarly, we note that Unsecured Financial Creditor filed claims for

Rs. 497.59 Crores out of which claims of Rs. 545.91 Crores were admitted. The

Resolution Plan provide for NIL which is 0% of the amount claimed.

We further note that Operational Creditors filed claim of Rs. 7,272 Crores

out of which claims of Rs. 6,560 Crores were admitted. The Resolution Plan

provide for NIL which is 0% of the amount claimed.

Thus, the grand total of claims made by all creditors was Rs. 20,209 Crores

admitted claims was Rs. 12,736 Crores (approx.). The Resolution Plan provide

Rs. 2,500 Crores (approx.) which is 12.37% of the amount claimed.

45. We need to take into consideration that the claims of Unsecured Financial

Creditor of Rs. 497.59 Crores as well as claims of Operational Creditors of

Rs. 7,272 Crores have been completely wiped out and nil payment has been

provided. Here, we would like to note that the total claims of the Appellant was

Rs. 12.09 Crores (Approximately), which is in percentage terms a very

minicular zize of 0.0006% of total claim. At this stage, we would like to state

that all claims are required to be equally important, however, the claims are

considered w.r.t. Resolution Plan amount approved by CoC and Adjudicating

Authority and in this context the Resolution Plan provide nil payment to the

Appellant alongwith all Unsecured Financial Creditor and Operational Creditor.

Page 19 of 40

46. We take note that the total fair value of the Corporate Debtor was disclosed

as Rs. 2657.2 Crores and the liquidation value of the Corporate Debtor was

disclosed as Rs. 1733.4 Crores.

47. We also note that several I.A.'s were filed by various objectors opposing

the Resolution Plan proposed by the CoC during adjudication for approval of

Resolution Plan by the Adjudicating Authority. The Appellant herein also filed

an I.A. No. 2785 of 2021 for his claims. In the said I.A. 2785 of 2021, the

following reliefs were sought by the Appellant :-

(i) Direct the Resolution Professional of the Corporate 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

Page 20 of 40 (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. 2785 of 2021 which reads as

under :-

"54. That the necessary of going into the Prayer (i) and (ii) made by U.P Jal Vidyut Nagar Limited is not required since undisputedly the U.P Jal Vidyut Nagar Limited, is falling under the category of the Operational Creditor. That irrespective of the claim amount the Operational Creditor are awarded 'nil' value in the resolution plan.

55. That with respect to Prayer (iii) and (iv) the U.P Jal Vidyut Nagar Limited has raised its claim which as per it is arising during the CIRP Period.

64. That in our view the dispute with regard to the charges levied by UPJVNL existed between the Corporate Debtor, UPJVNL and State of Madhya Pradesh, much prior to the initiation of CIRP. Further the litigation went to the Hon'ble High Court of Madhya Pradesh, by filing Writ Petition, which got dismissed on the jurisdictional ground. Further the Writ Petition was filed before the Hon'ble Allahabad High before the commencement of the CIRP.

65. Here it is not the case where no payment, whatsoever made by the Corporate Debtor during the CIR Process for using the water, as the payment has been made to the Madhya Pradesh Government. Since the right of UPJVNL to levy

Page 21 of 40 charges for supplying water to the Corporate Debtor is already under challenge, prior to the initiation of the CIRP before the Hon'ble Allahabad High Court, therefore we are of the considered view that this Adjudicating Authority has no jurisdiction to adjudicate the dispute or any claim arising out of such transaction which is subject matter of Writ Petition before the Hon'ble Allahabad High Court.

66. That Accordingly we are of the view that Prayer (iii) and

(iv) made in IA 2785 of 2021 requires no consideration.

Hence IA 2785 of 2021 is dismissed."

(Emphasis Supplied)

49. At this stage, it is sufficient to note that the prayers of the Appellant herein

were not considered favourable by the Adjudicating Authority and against which

the Appellant has filed the present appeal before us.

50. In the present appeal, following relief has been sought:-

"In view of the facts mentioned in paragraph 7 above, points in dispute and questions of law set out in paragraph 8, the Appellant most respectfully prays that this Hon'ble Appellate Tribunal be pleased to:

(a) To set aside the Impugned Order dated 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

Page 22 of 40 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 whole

Impugned Order but has requested this Appellate Tribunal to set aside the

Impugned Order 01.11.2021 passed in I.A. No. 2785 of 2021. The other prayers

are related with the same i.e., direction to RP to admit the entire claims of

Rs. 12,08,64,637/- and also to admit outstanding claims of Rs. 5,17,21,063/- for

the period from October 2020 to May 2021.

52. The Appellant raised the issue primarily on the account that the then RP

decided to categorised the claims of the Appellant as contingent and admitted

only Rs. 1 against Rs. 12,08,64,637/- filed by the Appellant. The Appellant is also

aggrieved that the Corporate Debtor did not make other payment and payment

Page 23 of 40 made were "under protest". It is also the case of the Appellant that Impugned

Order failed to appreciate the fact of drawl of water which is stated to have been

admitted by the RP and further pointed out that contention of Corporate Debtor

i.e., Corporate Debtor is not drawing water from U.P. Jal Vidyut Nigam Limited

is contrary to the record.

53. The Appellant is also aggrieved by the fact that the Impugned Order failed

to consider that the Corporate Debtor was liable to make payment for "loss of

generation" on account of drawl to water and further the Appellant was not bound

to supply water in view of the failure of the Corporate Debtor to make the

payment.

54. The Appellant has also challenged that the RP did not have any

adjudication power and thus, categorisation of his claims as contingent claims

was not in accordance with law.

55. Since, these issues are inter-connected, inter-related and inter- dependent,

we shall discuss these issues in conjoint matter in the following discussions.

56. As regard, the contentions of the Appellant that the RP did not have

adjudicating power in relation to admission of claims, we need to take into

consideration the provisions as provided in Section 18 of the Code along with

Regulation 10 and 13 (1) of CIRP Regulation. These reads as under :-

" Section 18 of the Code : Duties of interim resolution professional.

Page 24 of 40 *

18. The interim resolution professional shall perform the following duties, namely:--

(a) collect all information relating to the assets, finances and operations of the corporate debtor for determining the financial position of the corporate debtor, including information relating to--

(i) business operations 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;

Page 25 of 40 (iii) tangible assets, whether movable or immovable;

(iv) intangible assets including intellectual property;

(v) securities including shares held in any subsidiary of the corporate debtor, financial instruments, insurance policies;

(vi) assets subject to the determination of ownership by a court or authority;

(g) to perform such other duties as may be specified by the Board.

Explanation.--For the purposes of this 1[section], the term "assets" shall not include the following, namely:--

(a) assets owned by a third party in possession of the corporate debtor held under trust or under contractual arrangements including bailment;

(b) assets of any Indian or foreign subsidiary of the corporate debtor; and

(c) such other assets as may be notified by the Central Government in consultation with any financial sector regulator.

Regulation 10: Substantiation of claims.

10. The interim resolution professional or the resolution professional, as the case may be, may call for such other evidence or clarification as he deems fit from a creditor for substantiating the whole or part of its claim.

Regulation 13: Verification of claims.

13. (1) The interim resolution professional or the resolution professional, as the case may be, shall verify every claim, as on the insolvency commencement date, within seven days from the last date of the receipt of the claims, and thereupon maintain a list of creditors containing names of creditors

Page 26 of 40 along with the amount claimed by them, the amount of their claims admitted and the security interest, if any, in respect of such claims, and update it.

Regulation 14: Determination of amount of claim.

14. (1) Where the amount claimed by a creditor is not precise due to any contingency or other reason, the interim resolution professional or the resolution professional, as the case may be, shall make the best estimate of the amount of the claim based on the information available with him.

(2) The interim resolution professional or the resolution professional, as the case may be, shall revise the amounts of claims admitted, including the estimates of claims made under sub-regulation (1), as soon as may be practicable, when he comes across additional information warranting such revision.

(Emphasis Supplied)

57. Thus, Section 18 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. Page 27 of 40 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 other reason, the RP shall make the best

estimate of the amount of the claim based on information available to him.

60. In this connection, we note that the Appellants claim pertains to the pre-

CIRP which was sub-judice before Allahabad High Court contingent. In the

Appeal, the Appellant admits that the Corporate Debtor has challenged the

legality and validity of the invoices raised from 5 December 2012 till | May 2020

by the Appellant before the Allahabad HC vide writ petition being Writ Petition

(Civil) No. 12331 of 2020. The said Writ Petition was first listed for hearing on

14 August 2020 i.e., before the Admission Order and the Allahabad High Court

has already issued notice to the Appellant. Therefore, the matter has been sub-

judice before the Allahabad HC since then.

61. It has been brought out by the Respondents that based on information and

documents available with the then RP as taken into consideration that the legality

and validity of the invoices raised by the Appellant were sub-judice before the

Allahabad High Court.

Page 28 of 40

62. Thus, it become clear that the issue whether the Corporate Debtor was

liable to make payments as claimed by the Appellant with relation to impugned

invoices or not, was contingent on the outcome of the pending writ petition before

the Allahabad High Court. We reiterate that the total claim of the Appellant is Rs.

12,08,64,637/- and against which the then RP admitted claim of the Appellant as

Rs. 1/- as contingent claim.

63. We would like to take into consideration the said treatment which reads as

under : -

Page 29 of 40

64. Thus, the note No. II clearly stipulate that fact that if amount claimed by

creditor is not precise due to any contingency or reason, the RP shall make best

estimate of the amount of claim based on the information available to him and

shall revive the amount of claim admitted including the estimation of claim as

soon as may be practicable when he come across additional information

warranting such division. From section II above, it is seen that the Appellant's

claims were mentioned in full, however, the amount of Rs. 1/- was admitted as

contingent and note No. II was mentioned noted earlier.

65. It is the case of the Appellant that since his claims were crystalised and

based on invoices the same should have been provided for in full. In this

connection, we have already noted that the claims of the Appellant were subject

matter of pending Writ Petition No. 12331 of 2020 before Allahabad High Court. Page 30 of 40 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 abovementioned respondents. We therefore hold that this part of the impugned judgment deserves to be set aside on the ground that the resolution professional was correct in only admitting the claim at a notional value of INR 1 due to the pendency of disputes with regard to these claims."

(Emphasis Supplied)

66. In terms of the above judgement, the RP is required to admit the claims of

the Appellant notionally @ Rs. 1/- on the ground that disputes are pending before

Page 31 of 40 various authorities irrespective of the amount claims. In the present case, although

amount claims by the Appellant is Rs. 12,08,64,637/-, however, the then RP

admitted claim at nationally at Rs. 1/- as contingent claim and reflected amount

as contingent liability.

We need to take into consideration the fact that since vires and legality of

the claims of the Appellant is admittedly subjudice before the Allahabad High

Court for the adjudication and outcome therefore, remain uncertain. Thus, we are

of opinion that the then RP had no choice but to admit the claims of the Appellant

as contingent claims. In view of these facts and law laid down by the Hon'ble

Supreme Court of India, we do not find any error in treating the Appellant's

claims as discussed above.

67. We carefully consider the submission of Respondent No.1 that even if

assuming (and not conceding) that the averments made in the Appeal in entirety

are correct, the plain reading of the averments in the Appeal still does not make

out any ground whatsoever for granting the relief prayed for by the Appellant i.e.,

treatment of its claims as a crystallised claim, as doing so would usurp the

jurisdiction of the Hon'ble Allahabad HC, and therefore, the Appeal deserves to

be dismissed in limine. We find force in the logic in the argument of the

Respondent no. 1, thus we are not able to align ourselves with the pleadings of

the Appellant on this ground.

68. During, hearing it has been brought to our notice that the State of Madhya

Pradesh was allocated 5.25MAF water from the Sone River under the terms of

Page 32 of 40 the Bansagar Project Agreement dated 16 September 1973 ("Bansagar Project")

entered into amongst the States of Madhya Pradesh, Bihar and Uttar Pradesh. Out

of this share, the State of Madhya Pradesh could utilise 0.78 MAF water from the

Rihand Reservoir which was under the control of the state of Uttar Pradesh. It is

relevant to note that under 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

various heads, including charges for drawal of water, loss of power generation,

late payment surcharge etc. The Corporate Debtor in response, addressed

Page 33 of 40 correspondences in the said period calling upon the Appellant to cancel the

invoices raised by it considering that it was drawing water from the share of the

State of Madhya Pradesh in the Rihand Reservoir. As such, the claim of Appellant

under the said invoices remained in dispute from the very first day.

70. Thus, it is the case of the Respondent No.1 that there were some pre-

existing disputes between the Appellant and the Corporate Debtor relating to the

locus of the Appellant to levy charges on the water drawn from Rihand Reservoir

as the water allocation is from the share of the State Government of Madhya

Pradesh and accordingly, the charge for the same is being levied by the

Government of Madhya Pradesh under the terms of the Agreement for Supply of

Water To Industrial /Power Plant dated 16 February 2010 ("16 February

Agreement") for the water being utilised by the Corporate Debtor under the said

Agreement and the charges are being regularly paid to the Government of

Madhya Pradesh by the Corporate Debtor in terms of the said 16 February

Agreement.

71. We have noted submission of the Respondent No.1 that in relation to the

foregoing the Corporate Debtor had filed Writ Petition No. 1724 of 2015 before

the Madhya Pradesh High Court on 2 February 2015 wherein it had challenged

the levy of water charges by the Appellant since the water is allocated from the

share of the State of Madhya Pradesh and the charge for the same is levied by the

Government of Madhya Pradesh. The Madhya Pradesh High Court vide an order

dated 30 March 2015 had granted a stay against any coercive action after hearing

Page 34 of 40 the Corporate Debtor's argument at length. The Respondent No.1 states that on

27 February 2020, the Writ Petition was disposed of by the Madhya Pradesh High

Court only on the ground of territorial jurisdiction with a liberty to pursue remedy

before the appropriate jurisdiction. It is further case of the Respondent No. 1 &

2 that the interim protection granted by the Madhya Pradesh High Court vide

order dated 30 March 2015 had been in operation till 27 February 2020. As such,

the Appellant has been aware that the Corporate Debtor had, at all relevant 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. 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

Page 35 of 40 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 state of Madhya Pradesh. In any case, the Appellant's right to claim such

charges is pending adjudication before the Hon'ble High Court of Allahabad.

73. The Respondent No.1 emphasized that in view of the fact that the liability

towards Appellant has always been disputed, and that the payment is being

consistently made to MPWRD, the question of payment to the Appellant for the

same quantum of water drawn during CIRP or pre-CIRP admittedly from the

share of water allocated to Madhya Pradesh would not arise. The issue of

entitlement of the Appellant to claim any amount in relation to the water drawn

by the Corporate Debtor is already subject-matter of adjudication before the

Allahabad High Court.

74. We find logic in the arguments of the Respondent No. 1 that if the very

subject itself was sub-judice, the conduct of the Respondent No. 1 was correct in

given circumstances. The main point of disputes and treatment of such claims

had already been discussed by us in the preceding paragraphs and shall not repeat

the same as the logic remains the same.

75. The Adjudicating Authority has rightly pointed out correct position of law

as stated in para 65 of the Impugned Order while recording that It "has no

jurisdiction to adjudicate the dispute or any claim arising out of such transaction

which is subject matter of a writ petition before the Hon'ble Allahabad High

Court". We tend to agree with the observations of the Adjudicating Authority.

Page 36 of 40

76. The Appellant has also pleaded that the agreement expired between the

Appellant and the Corporate Debtor on 22.10.2019, however, even after expiry

of the said agreement, at the request of the Corporate Debtor, the Appellant

allowed the Corporate Debtor to continue to drawl water and accordingly, the

Appellant sent invoices for monthly payment and for delayed surcharge. The

Appellant further pointed out that the Respondent No. 1 issued letter on

05.10.2020 requesting for continuation of essential services in terms of Section

14 of the Code and as such, the Corporate Debtor should have made the payments

to the Appellant of the amount dues.

77. The Appellant also brought out that Appellant issued letter dated

10.03.2021 to the RP to claim balance outstanding of Rs. 4,10,63,874/- for drawl

of water by the Corporate Debtor from period between October, 2020 to February

2021. It is further the case of the Appellant 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

Page 37 of 40 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 the Impugned

Invoices is currently sub-judice before the Allahabad HC.

78. The Respondent No.1 reiterated that the sole reason why the Corporate

Debtor addressed correspondences to the Appellant requesting not to disrupt the

supply of water, being an essential good to the Corporate Debtor was because in

spite the water drawn by the Corporate Debtor was from the share allocated to

the State of Madhya Pradesh, the Rihand Reservoir wherein the pump house was

built by the Corporate Debtor to draw water is under the control of the Appellant.

79. We note that Respondent No.1 has recorded the claim of the Appellant as

a contingent claim in accordance with the provisions of Code as well as the law

laid down by the Hon'ble Supreme Court from time to time. The Impugned Order

has also recorded detailed reasoning while dealing with this subject and justify

the continuation of essential services to the Corporate Debtor. We do not find any

error in the Impugned Order on this ground.

80. We put a pointed query to the Appellant, that when all Operational Creditor

have got nil in the Resolution Plan, how the rights of the Appellant have been

Page 38 of 40 prejudice when he is also getting nil payment. We further asked the Appellant

that even if the RP would have admitted his claims in full instead of putting claims

as contingent at notional value of Rs. 1, how situation would have changed. It is

the case of the Appellant that if its claim would have been reflected in full of Rs.

12,08,64,637/-, perhaps CoC might have taken other decision. We do not find

this logic convincing. We have already noted the financial facts and the context

of the case earlier. To reiterate, it is pointed out that the total claims filed by

Unsecured Financial Creditor and Operational Creditor's are of

Rs. 77,698,782,161/- and their entire claim have been wiped out and provided as

nil in the Resolution Plan. Keeping this fact and background into consideration,

it is quite different to consider the plea of the Appellant that had his claim of Rs.

12,08,64,637/-, would have been provided in full in the list of claims instead as

contingent claim @ Rs. 1, fate of the appeal would have been different.

81. We do not find any merit in the argument of the Appellant and reject the

same.

82. We further note that in terms of the extend provisions of the Code and the

Regulation, creditor is entitled to the extend of maximum as available with

reference to the liquidation value. In the present case also on this parameter, the

Appellant would have got NIL.

83. Based on above detailed discussions, we do not find any merit on any issue

raised by the Appellant. We further hold that the Impugned Order has correctly

Page 39 of 40 dealt the issue raised by the Appellant in I.A. No. 2785 of 2021 in C.P. (IB) No.

863/PB/2020 and we do not find any error in the Impugned Order.

84. Thus, the appeal is devoid of any merit and stand rejected. I.A., if any, are

closed. No Costs.

[Justice Mohammad Faiz Alam Khan] Member (Judicial)

[Mr. Naresh Salecha] Member (Technical)

Sim

Page 40 of 40