9911796707
TMI Blog2023 (6) TMI 1006X X X X Extracts X X X X X X X X Extracts X X X X ..... nsolvency and Bankruptcy Code, 2016, (hereinafter referred to as 'The Code'). 2. While dismissing the Section 9 Application, the 'Adjudicating Authority' has observed as follows: "13. With regard to the first issue, it is to be seen that the I&B Code, 2016 is a self-contained Code and all the actions of the parties are to be examined in terms of the Code and the Rules and Regulations made thereunder only. The Hon'ble Apex Court in a catena of cases has categorically stated the various aspects to be considered by the Adjudicating Authority while deciding the applications filed under sections 7 and 9 of the 18B Code, 2016. 14. The Hon'ble Supreme Court in Mobilox Innovations Private Limited vs. Kirusa Software Private Limited, (2018) 1 SCC 353, while dealing with an application filed u/s 9 of the 18B Code, 2016 has inter alia held as under: "25. Therefore, the adjudicating authority, when examining an application under Section 9 of the Act will have to determine: (i) Whether there is an "operational debt" as defined exceeding Rs. 1 lakh? (ii) Whether the documentary evidence furnished with the application shows that the aforesaid debt is due and payable and has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Prakash appearing for the 'Appellant'/'Operational Creditor' submitted that Embassy Energy Private Limited/'Corporate Debtor' sought to commission and operate a Solar Photovoltaic Electricity Generation Facility with a minimum capacity of 100MW AC, for which execution, the 'Corporate Debtor' entered into a contract with IL&FS Solar Limited (ISPL), who in turn entered into a contract with IL&FS Energy Development Company Limited (IEDCL), who in turn appointed M/s. Sterling & Wilson Private Limited/the 'Operational Creditor' herein as the sub-Contractor. In pursuance to this arrangement, it is averred that the 'Operational Creditor' and IEDCL entered into several Contracts for the purpose of the works in relation to the Project and several invoices were raised for the period 21.12.2017 till 24.11.2018. It is submitted that IEDCL consistently defaulted in the payments of various invoices totally amounting to Rs.99,75,88,940/- and despite several requests did not make any payments, on account of which, the 'Operational Creditor' issued a letter dated 04.10.2018 suspending the works in relation to the Project. 4. It is submitted that the 'Respondent'/'Corporate Debtor' issued a letter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be paid on an immediate basis. Learned Sr. Counsel drew our attention to the Agreement and Clause 6.1.1 which specifies that the Appellant herein is appointed as a sub-Contractor. It is submitted by the Learned Sr. Counsel that Clause 6.1.6 details the terms and conditions with respect to indemnification and other terms: "6.1.6. The Contractor shall ensure that each Sub-Contractor has knowledge of the terms of this Contract (other than the Contractor's pricing information, other than IEDCL, with whom such information may be shared) which are relevant to the Sub-Contractor and the agreement entered into between the Contractor and each Sub-Contractor provides for terms that are in all respects not less stringent than the terms of this Contract (other than the financial terms). The sub-Contractors shall include the following terms: (a) the Sub-Contractors shall be deemed to have knowledge of the terms of this Contract (excluding pricing and commercial terms, other than IEDCL which shall be deemed to have knowledge of such information), the Project Documents and the Scope of Works; (b) each Sub-Contractor shall observe, perform and comply with the terms and conditions of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecause the 'letter of comfort' was issued on 17.10.2018, in order to stop the 'revocation of contract', it cannot be said that the 'Respondent' is liable to pay all the amounts which are to be paid by the Contractor to the sub-Contractor. 8. It is also submitted by the Learned Sr. Counsel that except for the letter dated 17.10.2018 there is 'no relationship' between the 'Appellant' and the 'Respondent' herein and that no Proceedings under IBC can be sustained on the basis of a promissory estoppel. 9. Learned Sr. Counsel Mr. Mukherjee also brought to the 'Notice' of this Bench that the 'Appellant'/'Operational Creditor' filed a 'Claim' against ISPL, which is undergoing Corporate Insolvency Resolution Process ('CIRP') and that the Resolution Professional ('RP') therein has admitted the 'Claim'. Assessment: 10. The brief point that falls for consideration in this Appeal is whether the 'Adjudicating Authority' was justified in dismissing the 'Application' filed under Section 9 of the Code on the ground that there was no 'Contractual Relationship' between the 'Appellant' and the 'Respondent' herein. For better understanding of the case, the relationship between the 'Appellant' and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r any law for the time being in force and payable to the Central Government, any State Government or any local authority;" 14. It is clear from the record that there are no 'goods and services' supplied directly by the 'Operational Creditor' to the 'Respondent' herein and therefore it cannot be said that there is any 'Operational Debt' between the 'Operational Creditor' and the 'Respondent' herein. Merely because the 'owner' had given a bona fide assurance that if IEDCL fails to pay the amount they would pay the same on their behalf, the amount will not fall within the definition of 'Operational Debt' as defined under Section 5(21) of the Code. Learned Sr. Counsel for the Respondent submitted that all payments 'due and payable' by the 'Respondent' towards ISPL were made and discharged. The Hon'ble Supreme Court in the matter of 'Essar Oil Limited' Vs. 'Hindustan Shipyard Ltd. & Ors.' (2015) 10 SCC 642, has held that when a 'principal employer' grants a contract to a Construction Company the sub-Contractors cannot sue the 'principal employer' for any issues, if payable, as there is no 'privity of contract' between the sub-Contractors and the 'principal employer'. The Hon'ble Suprem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to take legal action against ONGC for recovery of the amount payable to it. If one looks at the relationship between the appellant and the 'Respondent', it is very clear that the 'Respondent' had given a sub-contract to the appellant and in the said agreement of sub-contract, ONGC was not a party and there was no liability on the part of ONGC to make any payment to the appellant. Moreover, we could not find any correspondence establishing contractual relationship between ONGC and the appellant. In the circumstances, ONGC cannot be made legally liable to make any payment to the appellant. As stated hereinabove, only for the sake of convenience and to get the work of ONGC done without any hassle, ONGC had made payment to the appellant on behalf of the 'Respondent' without incurring any liability to make complete payment on behalf of the 'Respondent'. 28. The learned counsel appearing for the appellant failed to show any document in the nature of a contract entered into between the appellant and ONGC whereby ONGC had made itself liable to make payment to the appellant. Even when the payment had been made by ONGC, it was very clear that the payments were made on behalf of the 'Respo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
