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TMI Blog2018 (10) TMI 195X X X X Extracts X X X X X X X X Extracts X X X X ..... a. (i) Purchase Order # NSL/PD/IVSP/2014/001 Dt: 26.08.2014 ("Supply Agreement") between the Corporate Debtor and the Operational Creditor, whereby the Operational Creditor was required to supply materials inter alia nacelle, hub, rotor blades, tubular tower and transformer for commissioning of the Project. (ii) Work Order # NSL/PD/IVSP/2014/002 dated 26.08.2014 ("E&C Agreement") between the Corporate Debtor and subsidiary of Operational Creditor i.e., Inox Wind Infrastructure Services Limited ("IWISL". A 100% subsidiary company of the Operational Creditor), whereby IWISL was required to inter alia Erect and Commission the Project. (iii) Work Order # NSL/PD/IVSP/2014/004 dated 26.08.2014 ("Development Agreement") between the Corporate Debtor and IWISL whereby IWISL was required to inter alia coordinate/facilitate for procurement/lease of land for the Project. (iv) Work Order # NSL/PD/IVSP/2014/003 dated 26.08.2014 ("Shared Service Agreement") between the Corporate Debtor and IWISL, whereby IWISL was required to inter alia provide power evacuation and shared infrastructure for the Project. (v) Wrap Agreement dated 26.08.2014 ("Wrap Agreement") between the Corporate Debtor, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 24.04.2017. 5. As per the said MoM, Corporate Debtor agreed to make payment of Rs. 7.34 Crore. Out of the said amount of Rs. 7.34 Crore Rs. 2.6 Crore was to be paid by the Corporate Debtor to the Petitioner for reinstatement of operation and maintenance services by the Petitioner to the Project. 6. The Corporate Debtor was supposed to submit two Post Dated Cheques to the Petitioner as security measure for balance due payment of Rs. 4,74,00,000.00/-. But Corporate Debtor failed to submit post-dated cheques of Rs. 4.74 Crores as security instrument for balance due to the Operational Creditor. Corporate Debtor also defaulted in fulfilling its obligations and did not make the due payment of Rs. 4.74 Crores to the Petitioner. Petitioner issued a demand notice U/s 8 of the Insolvency & Bankruptcy Code 2016 to the Corporate Debtor on 24.08.2017 demanding payment of Rs. 4.74 Crores. Corporate Debtor received the Demand Notice at its registered office on 28.08.2017, but Corporate Debtor did not choose to give any reply disputing the amount of Rs. 4.74 Crores. According to the Petitioner a sum of Rs. 4.74 Crores has become due and payable from the Corporate Debtor and debt is towards provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... about Rs. 9,45,00,00 Million in Financial Year, 2017 and Rs. 5,41,00,000. (v) Improper handling of Sub-contractors/Vendors by IWISL resulting in Right of Way issues and unable to attend regular operations and maintenance of WTG's which inturn caused huge loss of generation and revenue to the Corporate Debtor. (vi) Petitioner has consistently giving preference to other customers over the Corporate Debtor. Petitioner is not restoring the WTG's as per the terms of the contract and inordinate delays in restoring the WTG's by IWISL. (vii) Petitioner is not calculating the machine availabilities as per the formula agreed upon between IWISL and the Corporate Debtor and as a result the machine availabilities is shown as higher than actual machine availabilities and thereby IWISL is escaping penalties. (viii) IWISL is considering the non-fore majeure events under Force Majeure Events and blackmailing the Corporate Debtor for money for restoring WTG's moneys stopped due to non-force majeure events. (ix) Lapses and breaches on the part of the petitioner led to loss of confidence among the investors of the Project, thereby severe financial threat to the viability of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also stated that as the Demand Notice was misplaced in the Offices of the Respondent, Respondent could not give reply to the Demand Notice. 12. It is stated in the Counter that in view of the failure on the part of the Petitioner, no obligation is incurred by the Respondent to make the payment of Rs. 4.74 lakhs as alleged by the Petitioner. Respondent was constrained in providing the PDCs to the Petitioner as the requisite time lines for completion of the above mentioned conditions were not provided by the petitioner. 13. Respondent sent e-mail dated 02.10.2017 wherein requested Petitioner to provide milestones for fulfilment of the conditions against which PDCs can be issued. It is also stated that Petitioner has filed application with a mala fide intention to cause harm to the Respondent by indulging in vexatious litigations. 14. Respondent pleaded that it has demonstrated the existence of a bona fide dispute that vitiates the maintainability of the Petitioner. Respondent also pleaded that petitioner suppressed the material facts and made an attempt to mislead this Adjudicating Authority. 15. Learned Counsel appearing for the petitioner contended that non-issuance of PDCs as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e receipt of the demand notice of the unpaid operational debt in relation to such dispute?' If any of the aforesaid conditions is lacking, the application would have to be rejected. 19. Therefore, the Adjudicating Authority when examining the Application under Section 9 of the code will have to determine whether there is operational debt due and payable. 20. Operational Debt is defined in Section:5 (21) "Operational debt" means a person to whom an operational debt is owed and includes any person to whom such debt has been legally assigned or transferred. 21. In the case on hand the claim made by the Petitioner is in respect of the services rendered by him in connection with Corporate Debtors power project. Therefore, the claim can be treated as Operational Debt. 22. The word 'claim' is defined in Section 3(6) which reads as under: 'Claim means' - (a) a right to payment, whether or not such right is reduced to judgment, fixed, disputed, undisputed, legal, equitable, secured or unsecured; (b) right to remedy for breach of contract under any law for the time being in fore, if such breach gives rise to payment , whether or not such right is reduced to j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Petitioner PDC-1 & PDC-2 has to be submitted by the Corporate Debtor to the Operational Creditor as Security measure of balance due payment totalling to a tune of Rs. 4.74 crores. 30. In the case on hand Respondent did not submit even the PDCs. Even before the submission of PDCs there was correspondence between the petitioner and respondent in the form of e-mail which is referred to in page Nos. 39 and 40 of the Counter. There appears to be disputes between the Petitioner and Respondent for non-submission of PDCs as per MoM dated 24.04.2017. Above all whether non-submission of PDCs which are treated as securities creates any liability or obligation in respect of claim which is due from the Corporate Debtor to the Petitioner/Operational Creditor. 31. The non-submission of PDCs by the Respondent to the Petitioner may at best amount to breach of terms of MoM but it cannot be equated with debt due and payable. 32. Pausing for a movement even if PDCs were submitted by the Corporate Debtor to the Operational Creditor, Operational Creditor is not automatically entitled to realise those PDCs unless and until the activities mentioned in payment schedule-2 in respect of PDC-1 and PDC-2 re ..... 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