Central Transmission Utility of India Ltd. Vs Summit Binani (NCLAT Chennai)
NCLAT Chennai held that in the scheme of the IBC, 2016 once a Corporate Debtor is admitted into CIRP, all recovery action for past dues come to a standstill. Thus, held that adjustment of security payment deposit against pre-CIRP dues not allowable.
Facts- KSK Mahanadi Power Company Limited (Corporate Debtor) is a company engaged in business of power generation. The Corporate Debtor was admitted into Corporate Insolvency Resolution Process on 03.10.2019.
Corporate Debtor had entered into a Bulk Power Transmission Agreement dated 24.02.2010 with Power Grid Corporation of India Limited (PGCIL) in terms of the then applicable Regulations for transmission of power to its beneficiaries. The Corporate Debtor had also entered into Transmission Service Agreement (TSA) dated 05.12.2012 with the Appellant.
During the CIRP of Corporate Debtor, PGCIL issued notice for cessation on 31.12.2019 terminating the TSA on account of default. PGCIL accepted the clarification given by the Corporate Debtor and the PGCIL cessation notice became infructuous.
Notably, the Corporate Debtor had made a security deposit for an amount of Rs. 108.44 crores with PGCIL in accordance with its obligations. On 28.03.2020, PGCIL sent an email to the Corporate Debtor stating that it has unilaterally encashed the payment security mechanism maintained by the Corporate Debtor for an amount of Rs. 108.44 crores and adjusted the amount towards transmission charges outstanding.
