2022 (7) TMI 355 - Tri - Insolvency and Bankruptcy

Validity and admission of claim - seeking admission of claim which was rejected by the Resolution Professional stating that the said quantum of claim relates to future liabilities under GSA which is not duly performed and as such not being covered under the definition of claim - Section 3 (6) of IBC - HELD THAT - Article 2.4 of the GSAs states that the gas sold by the Applicant to the Corporate Debtor shall be tendered to the Corporate Debtor at delivery point, i.e., pipeline connecting the gas transporter s facilities to the Corporate Debtor s plant (hereinafter referred to as Delivery Point ). Further, the Article states that the Applicant shall be responsible for the title to and risk of such loss of gas up to the Delivery Point, and delivery of gas under the GSA will be deemed completed at the Delivery Point and the title and risk of loss of such gas shall pass from the Applicant to the Corporate Debtor at Delivery Point. Therefore, the title of the gas supplied gets transferred to the Corporate Debtor only when the gas reaches the Delivery Point thereby constituting a triggering event for accrual of right to payment. The triggering event for accrual of right to payment is bolstered by the construction of other terms of the GSAs. Under Article 3.1 of the GSAs it is obligatory for the Corporate Debtor to purchase, receive and take the gas at the Delivery Point, and pay for gas at prices determined in accordance with the GSA or pay amounts in respect of TOP Liability in the event the Corporate Debtor fails to receive and take such gas that is supplied in accordance with the Annual Contracted Quantity (ACQ) decided between the Applicant and the Corporate Debtor in terms of Article 6.1 of the GSAs. It cannot be, that the Applicant has generated Annual Statement and claim letter towards the amounts arising till the end of the entire tenure of the GSAs (i.e., 2028 and 2037). In absence of such Annual Statements, the Applicant has itself stated in the computation table annexed as Annexure F to the Application that the claim letter date mentioned in the table is simply a tentative date of issuing claim letter . At the threshold, the amount does not qualify as a claim as there is no basis for claiming such hypothetical amounts which may or may not be payable at a future date by the Corporate Debtor - Notably, the triggering event for accrual of right to payment in respect of TOP Liability it yet to happen at a later point in time, when the gas will be supplied to the Corporate Debtor in the future, i.e., after commencement of CIRP. Therefore, the amount claimed in respect of TOP Liability does not qualify as a claim in terms of the definition of claim under the Code. The conclusion can be drawn from the submissions and the agreement that the TOP liability is calculated annually, the Obligation for TOP liability arises when Annual Contract Quantity is not lifted. The cause of action or triggering point for TOP liability is at the end of every Contract Year during which breach of contract occurred. A suit can be filed wherein TOP liability is required to be ascertained because the said liability cannot be allowed arbitrarily, as TOP liability is calculated annually upon non-lifting of the Annual Contract Quantity. Hence, the TOP liability claimed in the present case is for whole tenure of the contract for which obligation has not arose as the same is not accrued at this point of time. In the present matter, claims made as TOP liability are not accrued yet. Therefore, TOP obligation for entire contract tenure for 3 GSAs total amounting to Rs. 9942,40,44,928/- Crores cannot be admitted. Application allowed in part.

Summary

Issues Involved:
1. Admission of GAIL's claim of Rs. 9,775.19 Crores.
2. Verification and bifurcation of claims between Pre-ICD and Post-ICD amounts.
3. Legal and maintainability of the Resolution Professional's decision.
4. Confidentiality of the Resolution Plan and related documents.
5. Continuation of Gas Sale Agreements (GSAs) under the Resolution Plan.

Issue-wise Detailed Analysis:

1. Admission of GAIL's Claim of Rs. 9,775.19 Crores:
The application filed by GAIL sought the admission of a claim amounting to Rs. 9,775.19 Crores, which was rejected by the Resolution Professional (RP) on the grounds that the claim pertained to future liabilities under the Gas Sale Agreements (GSAs) and did not fall under the definition of "claim" as per Section 3(6) of the Insolvency and Bankruptcy Code (IBC). GAIL argued that the claim was for "Take or Pay" (TOP) obligations, which required the Corporate Debtor to pay for the minimum guaranteed quantity of gas even if not consumed. GAIL had raised claims for unpaid contractual dues under the GSAs, and the RP admitted only Rs. 167.21 Crores as "operational claims," rejecting the rest as future liabilities.

2. Verification and Bifurcation of Claims Between Pre-ICD and Post-ICD Amounts:
The RP's contention was that claims must be bifurcated between Pre-Insolvency Commencement Date (Pre-ICD) and Post-Insolvency Commencement Date (Post-ICD) amounts. The RP argued that claims pertaining to periods after the commencement of the Corporate Insolvency Resolution Process (CIRP) could not be admitted. GAIL provided justifications for the computation of the claim amount, bifurcating it between Pre-ICD and Post-ICD amounts. The RP admitted the Pre-ICD amount of Rs. 1,67,21,36,550/- but rejected the Post-ICD claim.

3. Legal and Maintainability of the Resolution Professional's Decision:
The RP argued that for any amount to be claimed in the CIRP, a creditor must demonstrate a "right to payment" as defined in Section 3(6)(a) of the IBC. The RP contended that the right to payment for TOP Liability arises only after the gas reaches the Delivery Point and the Corporate Debtor becomes the owner of the gas. The RP maintained that the amounts claimed for future periods did not qualify as "claims" under the IBC. The Tribunal concurred with the RP's view, stating that the TOP liability is calculated annually, and the obligation arises at the end of each contract year. The Tribunal concluded that the Post-ICD amounts claimed by GAIL did not qualify as claims under the IBC.

4. Confidentiality of the Resolution Plan and Related Documents:
The RP argued that the Resolution Plan and related documents could not be shared with GAIL due to confidentiality obligations under the IBC and related regulations. The RP cited various provisions and regulations that mandate the confidentiality of the CIRP process and restrict the sharing of sensitive information. The Tribunal upheld the RP's stance, stating that the Resolution Plan and other relevant documents could only be shared with eligible participants as per the IBC.

5. Continuation of Gas Sale Agreements (GSAs) Under the Resolution Plan:
GAIL sought directions for the continuation of the GSAs under the Resolution Plan. The RP argued that the Tribunal could not grant specific performance of contracts during the CIRP or modify the terms of a Resolution Plan. The Tribunal agreed with the RP, stating that the continuation of GSAs could not be mandated by the Tribunal, especially since the Resolution Plan had already been approved by the Committee of Creditors (CoC) based on their commercial wisdom.

Findings:
1. The Tribunal found that the right to payment for TOP Liability arises only after the gas reaches the Delivery Point and the Corporate Debtor becomes the owner of the gas.
2. The Tribunal agreed with the RP that the Post-ICD amounts claimed by GAIL did not qualify as claims under the IBC.
3. The Tribunal upheld the RP's decision to admit only the Pre-ICD amount of Rs. 1,67,21,36,550/- and reject the Post-ICD claim.
4. The Tribunal supported the RP's stance on maintaining confidentiality of the Resolution Plan and related documents.
5. The Tribunal ruled that it could not mandate the continuation of GSAs under the Resolution Plan.

Conclusion:
The Tribunal partly allowed GAIL's application, upholding the RP's decision to admit the Pre-ICD amount and reject the Post-ICD claim. The Tribunal also supported the RP's stance on confidentiality and the non-mandatory continuation of GSAs under the Resolution Plan.