Section 9 Insolvency Petition Fails Without Debtor-Creditor Relationship: NCLAT Delhi

Rahee Jhajharia E to E JV Vs MB Power (Madhya Pradesh) Ltd. (NCLAT Delhi)

Summary: The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, dismissed the appeal filed by Rahee Jhajharia E to E JV against MB Power (Madhya Pradesh) Ltd., upholding the NCLT Indore Bench’s order dated 25 September 2024 rejecting an application under Section 9 of the Insolvency and Bankruptcy Code, 2016. The appellant sought recovery of approximately Rs.16.08 crore arising from railway siding construction work associated with MB Power’s thermal power project in Anuppur, Madhya Pradesh. The central question was whether the project owner could be treated as the corporate debtor when the purchase orders, work orders and invoices related to another company within the same corporate group.

The appellant contended that MB Power had initiated the tender, issued preliminary contractual communications, participated in meetings, arranged financial instruments, supervised project execution and signed the completion certificate. It also argued that MB Power had funded the project and ultimately owned the completed infrastructure. Relying on these circumstances and the Supreme Court’s judgment in Arcelormittal India Private Limited v. Satish Kumar Gupta & Ors., (2019) 2 SCC 1, the appellant submitted that the corporate veil of Hindustan Thermal–EPC should be lifted to establish MB Power’s liability.

MB Power disputed the existence of any debtor-creditor relationship. It maintained that the purchase order and work order were issued by Hindustan Thermal–EPC, that the appellant raised its invoices against that company and that the principal payments were also made by Hindustan Thermal–EPC. MB Power further submitted that the appellant had initially served a demand notice on Hindustan Thermal–EPC concerning 92 invoices, withdrawn that notice after receiving a disputed reply, and subsequently proceeded against MB Power using the same invoices. According to the respondent, project ownership and participation in correspondence did not transfer another company’s contractual liabilities to it.

The NCLAT examined the contractual records and agreed with the NCLT that no privity of contract or debtor-creditor relationship had been established between the appellant and MB Power. It held that the respondent’s involvement in project supervision, reconciliation discussions and execution of a completion certificate did not establish liability for invoices issued to a separate legal entity. The Tribunal also examined correspondence from Hindustan Thermal–EPC raising objections concerning delays, quality issues, price variation and substantial counterclaims. These communications demonstrated a pre-existing dispute concerning the underlying work.

The Appellate Tribunal further held that even if contractual privity between the appellant and MB Power were hypothetically assumed, the Section 9 application would still fail because of the pre-existing dispute and counterclaims. It therefore declined to accept the appellant’s corporate-veil argument as a basis for admitting insolvency proceedings. The appeal was dismissed, the rejection of the Section 9 petition was affirmed, and the appellant was granted liberty to pursue remedies available under applicable law. No order as to costs was passed.

Cases Discussed

• Arcelormittal India Private Limited v. Satish Kumar Gupta & Ors., (2019) 2 SCC 1 (Supreme Court) — Relied upon by the appellant to support lifting the corporate veil. The NCLAT was not persuaded that the argument overcame the absence of contractual privity and the established pre-existing dispute.

FULL TEXT OF THE NCLAT JUDGMENT/ORDER

That the present Appeal is being preferred under Section 61 of the Insolvency 85 Bankruptcy Code, 2016 (for short the “Code”) against the impugned order dated 25.09.2024 passed by the National Company Law Tribunal, Indore Bench (for short “Adjudicating Authority”) in TP 47 of 2019 [CP(IB) No. 187 of 2019] filed under Section 9 of the Code. The petition was dismissed primarily on the ground of no privity of contract between the Appellant and the Respondent-MB Power with respect to the operational debt.

Submissions of the Appellant:

2. As contended by the Appellant- RAHEE JHAJHARIA E TO E JV (Rahee in short), the matter pertains to a railway contract awarded by the Respondent, in relation to its project located in Jaithari, Anuppur District, Madhya Pradesh. The Appellant had filed a petition under Section 9 of the IBC, 2016 for the recovery of an operational debt amounting to Rs. 16,08,00,000 (Rupees Sixteen Crores Eight Lakhs). The Appellant contends that there was indeed a privity of contract between the Appellant and the Respondent, the petition was wrongly dismissed.

3. It is contended by the Appellant that the Respondent-MBPMPL had created SPV for the project in the name of Hindustan Thermal – EPC (HTEPCCPL)¹, which is another group company of the Moser Baer group. The Respondent and Hindustan Thermal – EPC are part of the same Moser Baer group.

The Appellant highlights several key events and documents to substantiate the claim of privity of contract between the Appellant and Respondent and that the Respondent was the ultimate beneficiary of the project. Some of these events and documents are as highlighted below:

4. Basis above events and the documents, which were executed by the Respond-ent-Corporate Debtor-MB Power, it indicates that the Respondent was the beneficiary of the project. It not only actively participated in the execution of the contract and also issued various letters/communications. The AA has failed to take note of these events with respect to the Respondents’ complicity in the work contract. The privity of contract thus exists be-tween the Appellant-OC-Rahee and the Respondent.

5. The Appellant contends that the letter of intent issued on 21st April 2012, stated that the contract would be executed through its subsidiary/sister company. The said letter is at Page No. 1743 of the APB. The relevant portion states that: “The detailed order covering all the terms & conditions shall be issued to you shortly. The Order may be issued from any of our subsidiary/ sister company.”

6. Furthermore, the Letter of Award issued by Hindustan Thermal on 06.2012 acknowledges the ongoing relationship between the Appellant and the Respondent, thereby reinforcing the existence of a contract between the parties and refer-ring the previous communication that has taken place between the Appellant and the Respondent. The same is being reproduced herein below: (Pg 1451-1460 of the present APB)

“This is with reference to our above Enquiry, your techno-commercial offer and subsequent discussions we had with you. We, Moser Baer Constructions Private limited, MBCPL (here-inafter referred as “EPC Contractor”) are pleased to place Letter of Award (“LOA”) on M/s Rahee-Jhajharia-EtoE JV (hereinafter referred as “Contractor”), a Consortium between M/s Rahee Infratech Limited, M/s Jhajharia Nirman Private Limited and M/s E to E Transporta-tion Infrastructure Private Limited with M/s Rahee Infratech Limited as Lead Member as per the following terms and conditions.”

7. Additionally, the Balance sheets for the financial years 2014-15 and 2015-16 of the Respondent reflect the financial involvement in the project, further confirm-ing its ownership and participation. These financial details are summarized as follows:

8. The Appellant had also referred to definitions of IBC, 2016 for the operational debt that clarifies that it is regarding the supply of the goods and services from the operational creditor. In the present case, the services were availed by the Respondent from the Appellant. This statutory reference cannot be overlooked, while looking into the privity of contract relationship between the parties.

9. The Appellant claims that there was a clear privity of contract between the Appellant and Respondent, and also relies on the following Section 3 (6)² of the IBC Code. The Appellant had further submitted that even otherwise there is no re-quirement to have a formal contract in case of operational debt as mentioned in Section 5(21)² of the Code. Even though it may be required in a case of financial con-tract in a petition under Section 7 of the IBC, 2016, but such is not the case in case of oper-ational debt. The Respondent-Corporate Debtor-MB Power is covered as per the definition of the Corporate Debtor in terms of Section 3(8)³ of the Code which means a corporate person who owes or debt to any person. Further, in terms of Section 3(6)⁴ of the IBC, 2016, the petition can also be filed in case of breach of a contract.

10. The Appellant submits that the AA’s finding that by merely issuance of invoices by the Respondent for payments via Hindustan Thermal – EPC absolves the Respondent of liability was incorrect. The Respondent, being a part of the same corporate group, remains responsible for the debt incurred under the contract, regardless of the involvement of a subsidiary. The Appellant had also demonstrated that it is the Respondent, who had funded entire project and is ultimately the beneficiary of the assets. It was the Appellant, who was acting as per the instructions of the Respondent.

11. It is contended that the Respondent has availed services from the Appellant and is, therefore, liable to pay the outstanding operational debt The Respondent has invested funds in the project which is evident from the balance sheets of the Respondent for the year ending 31.03.2015 and March 2016. The same is reproduced herein below:

12. The Respondent-Corporate Debtor-MB Power has admitted that it is the owner of the project. In the reply filed by the Respondent, it indicates itself as the owner of the project which is reproduced herein below: –

“It is submitted that the employees of the Corporate Debtor who was principal employer were also monitoring the project progress and some correspondences were done with the Applicant by the Corporate Debtor’s employees. That the Corporate Debtor is the owner hence all these assets are part of its books.”

Not even that, the balance sheet of the Respondent-Corporate Debtor-MB Power Respond-ent-Corporate Debtor-MB Power was also reflecting the reference of the work contract being awarded to the Appellant. All such events have been completely overlooked by the Adjudi-cating Authority, while deciding on the issue of the privity of contact.

13. The Appellant-OC-Rahee claims that the Respondent-Corporate Debtor-MB Power was acting as a guarantor for releasing of the payment of Hindustan Thermal in terms of the work completion certificate issued with its co-signature indicating the outstanding amount. Therefore, it cannot be said that there was no privity of contract between the Appellant and the Respondent.

14. The AA has failed to consider the judgment of Hon’ble Supreme Court of India in Arcelormittal India Private Limited vs. Satish Kumar Gupta & Ors. re-ported in (2019) 2 SCC 1 in which the principles had been laid down that the corporate veil can be lifted in the cases related to the Code. The Appellant, submits that it’s the Respondent who owes an amount of Rs.16.08 Cr. to the Appellant. If the Corporate Veil of Hindustan Thermal – EPC is pierced, it will be found that the Respondent is the ultimate beneficiary.

15. The Code is evolving on day to day basis. The AA cannot shut its eyes in such cases where the beneficiary of the project is evading the liabilities on technical grounds and whereas the beneficiary of the contract can definitely be liable for the payments to the creditor. Merely on technical issue, the beneficiary cannot be allowed to evade from its financial responsibility/ obligation.

16. During the proceedings before the AA, the Appellant elucidated the structural dynamics of the Moser Bear Construction (P) group. This structure, com-prising of subsidiary companies, has been used by the Respondent group to obfuscate and evade their legitimate debts in default.

17. In the facts of the circumstances, the appellant prays to set aside the impugned order dated 29.05.2024.

Submissions of the Respondent:

18. Basis the materials placed in the APB, we note the submissions of the Respond-ent as before the AA in the proceedings are noted herein.

19. The Purchase Order with Reference No. MBCPL/ MP/ LOA/RS/12-13/10006 and also the work order MBCPL/MP/WO/RS/12-13/10006 was issued to the Appellant by Hindustan Thermal – EPC for supply, erection, testing and commissioning of equipments/ ma-terial/ accessories for complete/ Composite Railway Siding from Jaithari Railway Station of Bilaspur Division to Anuppur Project Site including Road Bed, Major and Minor Bridges, Buildings works, Tracks/Rails supply, Signaling and Telecom and Overhead Electrification and associated equipment for the safe completion of the project for 2 x 600 MW Anuppur Thermal Power Plant at Anuppur District, Madhya Pradesh. All the invoices were issued by the Appellant to Hindustan Thermal only. The CD and Hindustan Thermal Respondent No.2 are separate legal entities. The CD has neither issued any purchase order / work order to the Appellant. Even the Appellant has never raised any invoice upon the CD for the alleged payments of its outstanding dues. Therefore, filing of the present application under Section 9 of the IBC against the CD is nothing but a sham exercise of the Appellant to illegally and which itself and cost of the CD.

20. The letters dated 09.10.2018 and 23.10.2018 written by Hindustan Thermal – EPC show that there is an existence of dispute between the Appellant and the Hindustan Thermal. The Appellant had initially issued a notice under Section 8 to Hindustan Thermal – EPC and thereafter issued an under Section 8 of the Code to the CD and thereafter filed the application under Section 9 of the IBC. From the records, it is seen that Hindustan Thermal – EPC vide their letter dated 09.10.2018 and 23.10.2018 denied the allegations levelled against Hindustan Thermal – EPC and on the contrary claimed that the appellant is liable to pay an amount of Rs. 20.10 crores (approx.) to Hindustan Thermal – EPC towards compensation in terms of purchase and work orders executed between them. Thus, their exist a dispute between the appellant and Hindustan Thermal – EPC. Section 8 and thereafter Section 9 filed by the Appellant against the CD is nothing but an afterthought. This was done upon realising that the Appellant cannot initiate Section 9 proceedings against Hindustan Thermal – EPC.

21. Respondent has been wrongly described as the CD by the Appellant and the ap-pellant has also wrongly described itself as the Operational Creditor of the answering re-spondent. There exists no such relationship of the Debtorcreditor between the Appellant and the Corporate Debtor.

22. The Appellant has placed on record forged and fabricated ledger account as re-gards the Corporate Debtor. Same invoice number as well as cheque number for identical amount cannot be for two separate companies i.e. Corporate Debtor and Hindustan Ther-mal – EPC. Neither any invoices were raised in the name of the CD nor any payment has been made by the CD against any of the invoices as stated in the ledger account annexed as Annexure A-2 deals with the company name “Moser Baer power (MP) Limited” (Moser Baer). As per records of the Registrar of Companies, there is no such company ex-isting by the said name and the CD is a distinct entity as compared to the said name.

23. The Appellant does not fall in the category of OC of the CD as per the definition provided under Section 5(20) r/w 3(23) of the Code. The Appellant is a Special Purpose Ve-hicle (SPV) and SPV is an association of the person and does not fall within the definition of the OC as provided in the code. Therefore, the application was legally itself untenable.

24. Appellant is not an operational creditor of the CD in terms of Section 5(20) r/w Section 5(21) of the Code also.

25. Default in the payment of the outstanding dues by the CD is a sine qua non for initiating any proceeding under Section 9 of the IBC. The default can only take place when invoices raised by the OC to the CD is not paid. Since no invoices were raised by the Appel-lant upon the CD. The present application under Section 9 is illegal.

26. A demand notice can be submitted either in Form No. 3 or in Form No.4 as per the Rule 5(1) of the Insolvency and Bankruptcy Application to Adjudicating Rules, 2016. However, both the forms cannot be issued simultaneously. In this case, both forms have been issued, therefore, the petition itself needs to be dismissed on this ground.

Appraisal

27. Heard the counsel of the Appellant and have also gone through the material on record.

28. Brief issue before us is whether the dismissal of Section 9 Petition under the Code by the Adjudicating Authority on the ground of non-existence of privity of contract be-tween the Appellant and the Respondent is correct or not.

29. The claim of the Appellant-OC-Rahee is that the Corporate Debtor-MB Power is liable to pay the outstanding amount to the Operational Creditor for the following reasons:

a) Letter of Creditor/ Letter of intent-/ letter of acceptance/ Bid document and work order received from Hindustan Thermal – EPC at the behest of the Corporate Debtor.

 b) Bank Guarantee was issued by the Appellant-OC-Rahee in the name of the Cor-porate Debtor-MB Power.

 c) Third party supervision and quality control for the assigned task was done by the either the Indian Railway or RITES organisation, who further addressed the work status to the Corporate Debtor-MB Power.

d) Several invoices were raised to the Hindustan Thermal – EPC at the behest of the Corporate Debtor-MB Power.

e) Several emails exchanged between the Appellant-OC-Rahee and the Corporate Debtor-MB Power for the assigned work.

f) Various letters sent by Hindustan Thermal – EPC at the behest of the Corporate Debtor-MB Power for the assigned work.

30. The Appellant had attempted to persuade us that it is the Respondent- MB Power, who had invited bids, issued LOI, issued bank guarantee, issued LC for materi-al, held meetings with the Appellant during entire execution of project, issued completion certificate, asked for reconciliation of payment, arranged material for projects and funded entire project and was ultimately beneficiary of the assets and it was the Appellant, who was acting as per the instruction of the Respondent-MB Power.

31. Per contra the Respondent-MB Power in the proceedings before the NCLT had filed a Reply in which the following grounds were taken to controvert the Section 9 Petition were taken:

a) There was no Privity of Contract between the Appellant and the Respondent.

b) The Appellant has referred to a false and fabricated ledger.

c) The Appellant has no locus to file the Petition against the Respondent.

d) The Appellant is not eligible to file Petition under Section 9 of the Code.

32. From the materials on record, we delve deeply in the case and find that initially the Appellant had sent Form 3 Demand Notices to the Hindustan Thermal – EPC on 05.11.2018 for 92 invoices. Vehemently denying, Hindustan Thermal – EPC sent a Reply to the Demand Notice to the Appellant on 14.11.2018 and also raised counter claim and dispute. Basis this Reply the Appellant withdrew the Demand Notice on 05.12.2018 and called it a “Redundant Notice”.

33. We also note that the invoices are not addressed to the CD-Respondent-MB Power, and are raised upon a company namely Moser Baer Construction Pvt. Ltd. (now re-named as Hindustan T-EPC), which is a different legal entity than the Respondent. A De-mand Notice under Section 8 of IBC upon a Corporate Debtor basis the dues of a sister-concern/ group company cannot be held to be valid and an application basis such Demand Notice therefore cannot be accepted.

34. Separately, around the same time on 04.12.2018 the Appellant issued a fresh Demand Notice to the Respondent-MB Power for the same 92 invoices, which was refuted by the Respondent on 20.12.2018. The relevant paras of the Reply dated 20.12.2018 are extracted below:

“….

2. It is most respectfully submitted that from the perusal of the documents submit-ted by you, it is amply clear that a Purchase Order bearing Reference No. MBCPL/ MP/ LoA/ RS/ 12-13/ 10006 (hereinafter referred to as the “Purchase Order”) was issued to you by a Company by the name of Moser Baer Construction Private Limited (name changed to Hin-dustan Thermal- EPC Company. Private Limited (hereinafter referred to as the “HT EPCCPL”)) for supply for equipment/material/accessories for complete Composite Railway Siding from Jaithari Railway Station of Bilaspur Division to Anuppur Project Site including Road Bed, Major and Minor Bridges, Buildings works, Tracks/Rails Supply, Signaling, & Telecom and Overhead Electrification and associated equipment for the safe com-pletion of the Project for 2 x 600 MW Anuppur Thermal Power Plant at Anuppur District, Madhya Pradesh.

3. It is further relevant to mention herein that all the alleged invoices which are claimed to be due and payable in the notice under reply were also raised by you to HT EPCCPL. It is most respectfully submitted that our Client and HT EPCCPL are two separate legal entities. The alleged liabilities, if any, of HT EPCCPL can’t be saddled on Our Client in absence of any specific undertaking by Our Client. It is stated that in the instant case nei-ther any goods nor services being supplied to Our Client nor any invoices raised to our Cli-ent. Further even the ledger as appended with the Notice under reply also reflects payment by HT EPCCPL. Thus no case can be made out against Our Client in absence of any debtor-creditor rela-tionship between the parties herein.

4. It is most respectfully submitted that there is no privity of contract between our Client and your Client. It is submitted that our Client has neither issued any purchase order to your Client nor has your Client ever raised any invoice upon our Client for the alleged payment of its outstanding dues. Therefore, issuance of the Demand Notice under reply to our Client is nothing but a sham exercise of your Client to illegally enrich itself at the hands of our Client. It is submitted that not just your Client is trying to abuse the process of law but has also not informed you the above facts and has got the instant Notice under reply issued by you by distorting the original facts which is in grave violation of law.”

……

7. It is also submitted without prejudice that to the limited knowledge of our client there is in fact “existence of dispute” between your Client and/ HTEPCCPL and it is only because there is an existence of dispute between your Client and HT EPCCPL that you have manifestly issued the captioned notice to our Client just to illegally enrich itself by dis-torting true facts. Hence, issuance of the present notice is nothing but an afterthought with a view to illegally enrich your Client at the cost of our Client.”

(emphasis supplied)

35. Initially a Section 8 Notice was issued to the Hindustan Thermal – EPC,
which was later on withdrawn and fresh Section 8 and 9 Notices were issued against the Respondent. We fail to understand that, on one hand the Appellant had raised invoices against Hindustan Thermal – EPC and then later on for unknown reasons it started proceed-ings under Section 8 against Respondent-MB Power for the same set of invoices. We are inclined to agree with Respondent that it is an afterthought. It is also seen that Hindustan Thermal – EPC vide their letter dated 09.10.2018 and 23.10.2018 had denied the allega-tions levelled against Hindustan Thermal – EPC and on the contrary claimed that the Appel-lant is liable to pay an amount of Rs. 20.10 crores (approx.) to Hindustan Thermal – EPC towards compensation in terms of purchase and work orders executed between them.

36. From the materials on record, we note that there is no privity of contract or any sort of Debtor-Creditor relationship between the Applicant and CD and also the quality issues and delay in completion of work as regards works executed by the Applicant was duly notified by Hindustan T-EPC to the Applicant in their letter dated 09.10.2018 and 23.10.2018, some of which are noted as below:

• Counter claim of Rs.1,44,78,749/- was made by Hindustan T-EPC on account of price variation.
• Debit note of Rs.5.95 Crores vide letter dated 03.07.2015.
• Demand of Rs.20,10,66,736/- was made by Hindustan T-EPC from the Appli-cant on 09.10.2018 itself.
• Letter dated 12.02.2014 issued by Hindustan T-EPC whereby the Applicant was notified that it had failed to its commitments in relation to the project.
• Letter dated 04.02.2016 issued by Hindustan T-EPC notifying the Applicant of delay in the project despite repeated assurances from the Applicant.

37. Thus, we find that there was a pre-existing dispute between the Appellant and Hindustan Thermal. Even though there is an issue of pre­existing dispute also, but the AA dismissed the Petition basis mainly on the maintainability of the petition. It will be worth-while to note the relevant paras 13 to 15 which are as below:

“……

13. Considering the above, the issue here is whether the application filed under sec-tion 9 of the Code against the respondent is maintainable or not. We find that the invoices were raised by the applicant in the name of group concern of the respondent i.e. Hindustan Thermal for an amount of Rs. 105,62,05,167/ out of which Hindustan Thermal made the majority payment leaving the outstanding amount to Rs. 16,08,00,632/ -. Here, since the invoices were raised by the applicant against Hindustan Thermal, the payment (major) were received by the applicant from Hindustan Thermal and even the Work Order was received by the applicant from Hindustan Thermal, then we fail to un-derstand as to for what reason the applicant has filed the present application against the respondent instead of filing the same against Hindustan Thermal even after sending the demand notice under section 8 of the Code. Merely because the respondent tried to reconcile or settle between the applicant & Hindustan Thermal or merely because the work completion was signed by the respondent being the owner of the project does not entitle the respondent to be liable for the outstanding amount. There is no privity of contract between the applicant and the respondent.

14. Be that as it may, without going into any other details as to whether there is pre-existing dispute between the applicant and Hindustan Thermal; or, whether or not there was any delay in completion of the work by the applicant, we are of the considered view that the present application against the respondent is not maintainable and is liable to be rejected.

15. In view of the above, we pass the following order:

ORDER

The application TP 47 of 2019 [CP(IB) 187 of 2019] filed under Section 9 of the Code stand rejected and disposed of.”

(emphasis supplied)

38. We find that the Adjudicating has rightly concluded that since the invoices were raised by the Appellant against Hindustan Thermal – EPC, the majority payment was received by the Appellant from Hindustan Thermal – EPC and even the work order was re-ceived by the Appellant from Hindustan Thermal – EPC and the reasons for Appellant to file the Application against the Respondent were not understood. AA has also noted that mere-ly because the Respondent tried to reconcile or settle between the Hindustan Thermal – EPC or merely because the work completion was signed by the Respondent, being the owner of the project does not entitle the respondent to be liable for the outstanding amount. There-fore, it did not find any privity of contract between the Appellant and the Respondent. We do not find any infirmity in the findings and the conclusions of the Adjudicating Authority.

39. The Appellant claims that Respondent is the ultimate beneficiary and therefore corporate veil of Hindustan Thermal – EPC needs to be lifted. In its support the Appellant has cited the judgment of Arcelor mittal India Private Limited (supra). We are not persuaded to agree with the arguments of the Appellant when we find pre-existing dispute as noted earlier. Presuming a hypothetical scenario that there was a privity of contract between the Appellant and the Respondent, we proceed to deter-mine the prayer of the Appellant for Section 9 Petition. We find that the same set of invoices were used against Hindustan Thermal – EPC in the initial Demand Notice and later on they were used for issuing a Demand Notice and Petition against the Respondent-MB Power. The Appellant claims that the Respondent, being a part of the same corporate group, re-mains responsible for the debt incurred under the contract, regardless of the involvement of a subsidiary. Hindustan Thermal – EPC had raised counter claims and the dispute. We note that if a dispute and counter claim was raised by Hindustan Thermal – EPC, it will continue to remain a dispute for the same reasons as noted above for the Respondent-MB Power al-so as the ground situation remains the same. Therefore, even after presuming that there was privity of contract between the two parties, The Appellant will not get any support in the case. And the Petition, even if it was maintainable due to privity of contract, will have to be rejected basis pre-existing dispute.

40. In the facts and circumstances of the case, we find that the Application filed un-der Section 9 of the Code is not maintainable for there being no Debtor-Creditor relation-ship between the Appellant and the CD, the facts and circumstances of the present case clearly establish that no invoices were raised by the Ap-plicant to the CD, also no payments have been made by the CD to Applicant and as such there exists no privity of contract between the parties.

Orders:

41. As noted above, in the facts and circumstances of the case the Appeal is therefore, dismissed. The Appellant is at liberty to pursue remedies as available to him under applicable laws. No orders as to costs.

Notes:-

1’Names used interchangeably: Hindustan Thermal — EPC or HTEPCCPL or Hindustan Thermal

² Section 5(21): operational debt means a claim in respect of the provision of goods or services including employment or a debt in respect of the pay-ment of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any local authority;

³ Section 3(8): “corporate debtor” means a corporate person who owes a debt to any person;

⁴ Section 3(6): “claim” means–

(a) a right to payment, whether or not such right is reduced to judgment, fixed, dis-puted, undisputed, legal, equitable, secured or unsecured;

(b) right to remedy for breach of contract under any law for the time being in force, if such breach gives rise to a right to payment, whether or not such right is reduced to judg-ment, fixed, matured, unmatured, disputed, undisputed, secured or unsecured;

⁵ Under section 8(2) of the Code