KSK Mahanadi Power Company Ltd.

Under Section 25(1) of IBC, Resolution Professional is empowered to reject CoC proposal for renewal of Bank Guarantees provided by Corporate Debtor – IDBI Bank Ltd. and Ors. v. Mr. Sumit Binani, RP of KSK Mahanadi Power Company Ltd. – NCLAT Chennai

In this landmark decision, the appellant banks challenged the decision of the RP for non-renewing custom bank guarantee issued by the banks which was dismissed by NCLT, Hyderabad Bench

Hon’ble NCLAT held that:
(i) As per Sections 25(1), 20(1) read with Section 23(2) of the Code, the RP is duty bound to make every effort to preserve the assets and value of the property of the Corporate Debtor Company and manage it effectively as a ‘Going Concern’.
(ii) Section 15(3) of the Code provides that any costs incurred by the RP in running the business of the Corporate Debtor as a ‘Going Concern’ forms part of the CIRP costs.
(iii) Under Section 25(1), the RP is empowered to reject the CoC proposal for renewal of the Bank Guarantees provided by the Corporate Debtor Company, prior to the initiation of the CIRP as renewing those would not consequently lead to any advantage or any valuable gains.

Under Section 25(1) of IBC, Resolution Professional is empowered to reject CoC proposal for renewal of Bank Guarantees provided by Corporate Debtor – IDBI Bank Ltd. and Ors. v. Mr. Sumit Binani, RP of KSK Mahanadi Power Company Ltd. – NCLAT Chennai Read Post »

The dispute regarding exorbitant pricing arising out of the Agreement entered prior to CIRP – Sumit Binani RP KSK Mahanadi Power company Ltd. Vs. V. Venkatachalam RP Raigarh Champa Infrastructure Pvt. Ltd. – NCLAT Chennai

NCLAT held that at this stage, we are not going into delving deep into the merits of the main Appeal and also not expressing any opinion about the merits of the matter, for the reason that this Tribunal cannot decide the contractual matters in a summary jurisdiction. However, taking into consideration, the paramount interest of the parties for the reason that both the Companies i.e. KSK Mahanadi and Raigarh Champa are under CIRP, the supplies are to be made by the Raigarh Champa to the KSK Mahanadi and in turn the KSK Mahanadi has to pay the charges for the supplies to keep both the companies as a going concern. This Tribunal is conscious of the decision of the Hon’ble Supreme Court in re-Tata Consultancy Services (2021) ibclaw.in 167 SC where the Hon’ble Supreme Court held that the NCLT and NCLAT cannot rewrite the terms of Contract Agreement.

The dispute regarding exorbitant pricing arising out of the Agreement entered prior to CIRP – Sumit Binani RP KSK Mahanadi Power company Ltd. Vs. V. Venkatachalam RP Raigarh Champa Infrastructure Pvt. Ltd. – NCLAT Chennai Read Post »

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