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TMI Blog2023 (9) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... 06.2023 in IA No. 1219 / 2020 in CP (IB) No. 529 / 7 / HDB / 2018 (Filed by the 'Appellant / Petitioner', under Section 60 (5) read with Section 14 of the I & B Code, 2016 and Rule 11 of NCLT Rules, 2016), passed by the 'Adjudicating Authority' ('National Company Law Tribunal', Hyderabad Bench - I), in 'dismissing', the said 'Petition', without costs. 3. While passing the 'impugned order', dated 15.06.2023 in IA No. 1219 / 2020 in CP (IB) No. 529 / 7 / HDB / 2018 (Filed by the 'Appellant / Petitioner'), the 'Adjudicating Authority' ('National Company Law Tribunal', Hyderabad Bench - I), inter alia, at Paragraph Nos. 9 to 11, had observed the following: 9. "In light of the Transmission Agreement dated 31.03.2016 entered into between Power Grid Corporation of India Ltd and M/s Lanco Vidarbha Thermal Power Ltd. (Annexure A-2, pages 87-97) and more particularly Clause-1 thereof, which reads: "The Bank Guarantee shall be encashed by Powergrid in case of adverse progress of work under the scope of 'LVTPL' assessed during Joint Coordination Meeting. However, the validity of Bank Guarantee shall be extended by 'LVTPL' as per the requirement to be indicated during Joint Coordination Me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Senior Counsel for the Appellant / Petitioner contends that the 'Adjudicating Authority' / 'Tribunal', should have appreciated that the 1st Respondent, never proceeded to implement its part of the obligation, for 'Construction of Transmission Lines', as agreed, under the 'Transmission Agreement', dated 31.03.2016, as the 'Bidding Process', for the 'Construction of the Transmission Lines', had neither commissioned nor the 1st Respondent, had made any 'Capital Investment' for the same. Moreover, the 1st Respondent, had already encashed 'Bank Guarantees' of Rs.30 Crores and want to unjustly enrich themselves, by another Rs.36 Crores, without making any investments themselves. 5. It is represented on behalf of the Appellant, that the 'Adjudicating Authority' / 'Tribunal', should have take note of the fact that 'CEA', itself had recorded in its 'Meeting', held on 04.12.2018 that there was 'no progress', in 'resolution' of the 'financial issue', by the 'Developer' of the 'Corporate Debtor', and as such, the 'Bidding' of the Scheme, was put on hold, and that, 'No Work', was started by the 1st Respondent'. 6. The Learned Counsel for the Appellant, takes a stand that the 'Adjudicating A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ready under 'Liquidation'. Also that, the 'Maximisation of the Value of the Assets of the Corporate Debtor', cannot be ignored nor it can be ignored, that the same should balance all the 'Stakeholders'. 12. The Learned Counsel for the Appellant, points out that the 1st Respondent, had never proceeded to implement its 'Part' of the 'Obligation' of 'Construction of Transmission Lines', as agreed under the 'Transmission Agreement', as the 'Bidding Process' for the Construction of the Transmission Lines', was never done and was kept in abeyance, as early as October 2017, when the 'LITL', who was 'Promoter', and 'EPC Contractor' of the 'Corporate Debtor', was admitted under Section 7 of the 'Code', and even request for 'Qualification', was not published for the 'Construction of Transmission Line', by the '1st Respondent', and these were not taken into account by the 'Adjudicating Authority / Tribunal', at the time of passing of the 'impugned order'. 13. At this juncture, a plea is raised on behalf of the Appellant, in the 37th Meeting of the 'Empowered Committee' on 'Transmission', that took place on 24.10.2017, of 'CEA - Power System Planning and Appraisal Division - Ministry of Powe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the 'Appellant / Petitioner', agreed by the Letters dated 17.12.2020, issued by the 1st Respondent to Respondent Nos. 2 to 7, seeking to invoke the following Bank Guarantees and they are mentioned as under: Bank Impugned Letters Ref and Date BG No. Amount Rs. In Cr. IDBI Bank C/CTU/CBG ENCASH/ IDBI / LVTPL Dt. 17.12.2020 1601331BGP00255 dated 26.05.2016 8.76 Punjab National Bank C/CTU/CBG ENCASH/ PNB Bank / LVTPL Dt. 17.12.2020 46151LG000217 dated 28.02.2017 2.25 UCO Bank C/CTU/CBG ENCASH/ UCO Bank / LVTPL Dt. 17.12.2020 1945IGFIN002116 dated 08.08.2016 6.94 UCO Bank C/CTU/CBG ENCASH/ UCO Bank / LVTPL Dt. 17.12.2020 1945IGFIN00717 dated 07.04.2017 1.06 Bank of Baroda (e-Dena Bank) C/CTU/CBG ENCASH/ BANK OF BARODA / LVTPL Dt. 17.12.2020 116216IGPER0032 dated 24.05.2016 3.44 Bank of Baroda (e-Dena Bank) C/CTU/CBG ENCASH/ BANK OF BARODA / LVTPL Dt. 17.12.2020 116217IGPER0011 dated 10.02.2017 0.53 Union Bank of India (e-Corporation Bank) C/CTU/CBG ENCASH/ Corpn Bank / LVTPL Dt. 17.12.2020 2016/67 dated 25.06.2016 5.13 Union Bank of India (e-Corporation Bank) C/CTU/CBG ENCASH/ Corpn Bank / LVTPL Dt. 17.12.2020 2017 / 25 dated 18.02.2017 0.79 Un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'Respondent Nos. 2 to 7, as required in terms of the 'Transmission Agreement', are run as under: Bank Guarantees Date of Open Rs. in Crores Bank 160133IBGP00255 26-05-2016 8,76,00,000 IDBI 4615ILG000217 28-02-2017 2,25,00,000 PNB 1945IGFIN002116 08-08-2016 6,94,00,000 UCO Bank 1945IGPER000717 07-04-2017 1,06,00,000 UCO Bank 116216IGPER0032 24-05-2016 3,44,00,000 Bank of Baroda (e-Dena Bank) 116217IGPER0011 10-02-2017 53,00,000 Bank of Baroda (e-Dena Bank) 2016/67 25-06-2016 5,13,00,000 Union Bank of India (e-Corporation Bank) 2017/25 18-02-2017 79,00,000 Union Bank of India (e-Corporation Bank) 008416IGPER0018 27-05-2016 3,45,00,000 Union Bank of India (e-Andhra Bank) 0717BG002417 12-04-2020 53,00,000 Punjab & Sind Bank 0717BG007716 20-07-2016 3,44,00,000 Punjab & Sind Bank Total 363,200,000 21. To put it pinpointedly, as per Clause 1.0 (d) of the 'Transmission Agreement', the said 'Bank Guarantees', shall be encashed by the 1st Respondent, in case of 'adverse progress' of work, under the scope of 'Corporate Debtor' / 'LVTPL', assessed during the 'Joint Co-ordination Meeting'. Also that, it was categorically mention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r-State Transmission System'. 27. To be noted, that the 'Central Electricity Regulatory Commission' (Grant of Connectivity, Long Term Access and Medium Term Open Access in Inter-State Transmission and related matters) Regulations, 2009, had notified a detailed procedure under Regulation of the Connectivity Regulations. Continuing further, the 1st Respondent, was notified as 'Nodal Agency', to whom the 'Applications for Grant of Connectivity and Open Access to ISTS are required to be made'. 28. It comes to light that the 'Corporate Debtor' was desirous of putting up a Thermal Power Station with an installed capacity of 1320 (2 X 260) MW at District Wardha, State of Maharashtra, and applied to the '1st Respondent / Power Grid Corporation of India Limited', for grant of connectivity into the ISTS, to enable 'Evacuation of Power', to be generated form the Project, which was granted by the 1st Respondent to the 'Corporate Debtor', on its 'generation switchyard', with effect from December 2017 or availability of Transmission System for connectivity, whichever was later. 29. It is not in dispute that the 'Corporate Debtor', had executed a 'Transmission Agreement', dated 31.03.2016 with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 'Adverse Progress of the Corporate Debtor', was a magnitude arising from the applicable 'Regulations' of the 'Central Commission', and added further, arising out of a resultant effect, arising from and out of the 'Transmission Agreement'. 34. The 1st Respondent / Power Grid Corporation of India Limited, took a stance before the 'Adjudicating Authority / Tribunal' that in Joint Co-ordination Committee Meetings, the progress of the Project and Transmission System was reviewed in a periodical manner at regular intervals, from 26.07.2016 till on 28.09.2020, where in 29th JCC Meeting of Generation Projects connectivity / LTA in Western Region was granted. 35. It appears that the 1st Respondent / Power Grid Corporation of India Limited, because of the 'Adverse Progress of the Generation Project of the Corporate Debtor', had taken an 'appropriate action', as per 'Regulations of the Central Commission', and hence, according to the 1st Respondent / Power Grid Corporation of India Limited, no fault can be found fault with it, in 'Invoking' the 'Bank Guarantees'. 36. Coming to the aspect of Section 14 of the I & B Code, 2016, this 'Tribunal', points out that Section 14 of the 'Code', is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k Guarantee', does not fall under 'Moratorium', in terms of Section 14 of the I & B Code, 2016. 40. As far as the present case is concerned, in the various 'Joint Co-ordination Meetings', it was categorically observed that there was an 'Adverse Progress', 'as regards the Construction of Generating Station', by the 'Corporate Debtor', who was aware of the same. 41. The 'Transmission Agreement', dated 31.03.2016, entered into between the 1st Respondent / Power Grid Corporation of India Limited and M/s. Lanco Vidarbha Thermal Power Limited (vide Clause 1), unerringly points out that the 'Bank Guarantee', shall be 'encashed', by Powergrid, in case of 'Adverse Progress of Work', under the scope of 'LVTPL' assessed, during the 'Joint Co-ordination Meeting', etc. As such, it is clear that in the event of 'Adverse Progress', 'encashment' of 'Bank Guarantee', is a 'compulsory' one, as per the 'Transmission Agreement', entered into between the 'Parties'. 42. In the light of detailed foregoings, on a careful consideration of contentions advanced on behalf of the 'Appellant', bearing in mind of the well settled legal principle that the 'Bank Guarantee', is neither an 'Asset' nor a 'Liabilit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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