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2023 (11) TMI 420 - AT - Insolvency and BankruptcySeeking direction to Respondent to adhere to the terms of Agreement dated 03.03.2010 and supply immediately the 26 WTGs lying with the Corporate Debtor against the advance payment already made by the Applicant - HELD THAT - From the facts brought on record, it is clear that the RP is claiming payment of dues of about Rs.75 crores from the Appellant, for which arbitration proceedings have been initiated. When the Corporate Debtor has not received the dues from the Appellant for which proceedings are pending, the decision taken by the RP, not to handover the 26 WTGs is as per the wisdom of RP, who is to run the Corporate Debtor as a going concern. The Operational Creditor having filed the claim, which has been already admitted for an amount of Rs.132 crores and odd, the same has to be dealt with as per the CIRP and the Appellant has no right to claim that 26 WTGs lying in the inventory of the Corporate Debtor should be handed over to the Appellant. The decision of the RP refusing to handover 26 WTGs lying with the Corporate Debtor, is a decision which RP is entitled to take as per the scheme of the Code, which decision cannot be said to be contrary to any provisions of the Code or in breach of any right of the Appellant. The Adjudicating Authority has not committed any error in rejecting the IA filed by the Appellant. There are no error in the order of the Adjudicating Authority, rejecting the IA filed by the Appellant - appeal dismissed.
Issues Involved:
The judgment involves issues related to rejection of an application filed in a Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016, regarding the supply of Wind Turbine Generators (WTGs) against advance payment made by the Appellant to the Corporate Debtor. Brief Facts: The Appellant entered into an Agreement with the Corporate Debtor for the supply of WTGs. Upon initiation of CIRP against the Corporate Debtor, the Appellant filed a claim for advance payment made for the WTGs. The Resolution Professional (RP) admitted the claim, and the CIRP proceeded. Subsequently, the Appellant requested the RP to supply the WTGs against the advance payment, which was declined by the RP citing outstanding dues and the need to maximize the assets of the Corporate Debtor. The Appellant filed an application seeking specific reliefs, which was rejected by the Adjudicating Authority, leading to the current Appeal. Appellant's Arguments: The Appellant contended that the RP should honor the existing contract for the supply of WTGs, as the CIRP should not hinder contractual obligations. The Appellant argued that the RP's decision to not supply the WTGs was erroneous and that the Adjudicating Authority wrongly rejected the application, as the CIRP should aim to continue the business operations of the Corporate Debtor. RP's Arguments: The RP argued that the Appellant, being a related party, had significant outstanding dues to the Corporate Debtor. The RP maintained that the WTGs in question were not part of the original contract and that the Appellant's application was an attempt to disrupt the CIRP for preferential treatment. The RP emphasized the need to run the Corporate Debtor as a going concern and defended the decision to not supply the WTGs. Judgment and Analysis: The RP's decision to withhold the WTGs was found to be in line with its duty to protect the assets of the Corporate Debtor and continue its business operations. The Adjudicating Authority's rejection of the application was upheld, considering the Appellant's outstanding dues and the RP's discretion in managing the Corporate Debtor. The Court concluded that the RP's decision was valid under the Code, and the Appellant had no right to demand the WTGs. Therefore, the Appeal was dismissed, finding no error in the Adjudicating Authority's decision. This summary provides a detailed overview of the legal judgment, highlighting the key issues, arguments presented by the parties, and the final decision rendered by the Appellate Tribunal.
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