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2019 (7) TMI 977 - Tri - Insolvency and BankruptcyInitiation of Corporate Insolvency Resolution Process - story line in this case is the Petitioner has come before this Bench stating that since the Corporate Debtor (the debtor) has not utilized the power as stated in the letter dated 23.02.2015 - HELD THAT - Since there is no definite agreement or at least any indication reflecting the Debtor agreeing to avail 60,00,000 units per year, this Bench, merely by seeing a letter dated 23.02.2015 and the payment advice dated 19.10.2017 with payment back dated bill i.e., dated 04.09.2017,cannot assume that that this debtor is liable to pay to the power that has not been consumed by it. As long as agreement is not entered into between the parties for consuming 60,00,000 units, this clause will not have any relevance to adjudicate this case, thereby we hereby hold that this clause will not have any bearing on the claim raised by the Petitioner as there is no agreement between the parties obligating the Corporate Debtor to consume 60,00,000 units per year. Petition dismissed as misconceived.
Issues:
1. Initiation of Corporate Insolvency Resolution Process under Section 9 of the Insolvency & Bankruptcy Code, 2016 based on non-utilization of power by the Corporate Debtor as per the Power Purchase Agreement (PPA). Analysis: 1. The Petitioner filed a Company Petition under Section 9 of the Insolvency & Bankruptcy Code, 2016, alleging non-utilization of power by the Corporate Debtor as per the terms of the Power Purchase Agreement (PPA) dated 24.09.2012. The PPA stated the supply of 20,00,000 units of power per year by the Petitioner to the Corporate Debtor, with provisions for additional supply and amendments with mutual consent. 2. The Petitioner claimed an increase in the supply limit to 60,00,000 units per year based on a letter dated 23.02.2015. However, the Tribunal noted that there was no evidence of the Debtor's consent to this increased supply beyond the original 20,00,000 units. The Tribunal emphasized that unilateral communication cannot create an obligation, especially when there is no mutual agreement between the parties. 3. The Debtor contended that it had informed the Petitioner of its intention to terminate the contract upon completion of the five-year term specified in the PPA. The Debtor also highlighted that there was a NIL balance in the account between the parties as of 10.10.2017, indicating that payments for consumed power had been made. 4. The Tribunal observed that the PPA had ended on 23.09.2017, and the Petitioner's claim for payment based on the letter dated 23.02.2015, sent after the PPA term had expired, was not valid. The Tribunal concluded that there was no concrete agreement or indication of the Debtor agreeing to the increased supply of 60,00,000 units, thus dismissing the Company Petition for lack of substantiated debt claim. 5. Additionally, the Tribunal analyzed Clause 6.2 of the PPA, which required the User Member (Debtor) to consume power as per obligation on a cumulative basis, but noted that this clause would only be applicable with a mutual agreement for the consumption of 60,00,000 units. Since no such agreement existed, Clause 6.2 did not impact the case's adjudication, leading to the dismissal of the Company Petition due to the absence of a substantiated debt claim.
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