Read Time: 12 minutes
The National Company Law Appellate Tribunal recently urged the Government and the Board to find out whether there are any grounds for considering a change in the legislative scheme towards the payment to the Operational Creditors, which also consist of Government dues and other statutory dues.
A bench of Chairman, Justice Ashok Bhushan, and Technical Member, Justice Shreesha Merla noted, "As the law stand today, no exception can be taken to such Plans, which provide payment to Operational Creditor in accordance with Section 30(2)(b) of the Code. However, the time has come when it should be examined by the Government and the Board."
The bench was hearing an appeal filed by Damodar Valley Corporation, an operational creditor against the Corporate Debtor, Dimension Steel, and Alloys Private Limited who entered into a Power Purchase Agreement with the appellant for the supply of electricity on the premises of the Corporate Debtor.
The Corporate Debtor committed default in making payment of electricity dues. Hence, disconnection notices were issued by the Damodar Valley Corporation to the Corporate Debtor, whereas, on June 7, 2019 the power supply was disconnected.
In this regard, an application was filed by M/s Carbon Resources Pvt. Ltd. under Section 9 of the Insolvency and Bankruptcy Code, 2016, and Corporate Insolvency Resolution Process (“CIRP”) was initiated against the Corporate Debtor by the Adjudicating Authority with its order dated October 18, 2019.
The Interim Resolution Professional (IRP) issued a public announcement on October 19, 2019 in pursuance of which, the Appellant submitted its claim of Rs.36,35,64,214 as pre-CIRP electricity dues. Whereas, the Committee of Creditors decided to go for liquidation as they didn't receive any response even after the extension of the date for submission of the Resolution Plan.
However, CP Ispat Private Limited approached the adjudicating authority seeking direction to the Resolution Professional to accept their Resolution Plan, which was accepted on March 16, 2021. In addition to this, the Resolution Plan submitted was approved by CoC on April 22, 202 with 80.93% voting shares.
The appellant had challenged the order of the National Company Law Tribunal allowing the plea filed by Resolution Professional for approval of Resolution Plan, by which order, Resolution Plan submitted by C.P. Ispat Private Limited was approved.
The bench however considered the following questions for deciding the matter:
However, with regards to this case, the bench noted that they do not find any good ground to interfere with the impugned order approving the Resolution Plan while dismissing the appeal.
Cause Title: Damodar Valley Corporation Vs. Dimension Steel and Alloys Private Limited & Ors.
Please Login or Register