Case Note & Summary
The Appellant, Mr. Amier Hamsa Ali Abbas Rawther, is the Liquidator of LSML Private Limited (Corporate Debtor). He filed an application (IA(IBC)/1618/CHE/2024) before the National Company Law Tribunal (NCLT), Chennai, seeking a direction to the Respondent, NLC India Limited, to pay a total sum of Rs. 40,98,41,115.76. This amount comprised: (i) substation maintenance charges of Rs. 2,49,74,700 incurred by the Corporate Debtor on behalf of the Respondent for evacuating power from the Respondent's windmills; (ii) unauthorized invocation of a performance bank guarantee of Rs. 40,00,000 after the contract period expired and during the liquidation process; (iii) retention amount of Rs. 33.25 crores of the project contract amount despite completion of the project; and (iv) unpaid invoices aggregating to Rs. 4,83,66,415.76 issued by the Corporate Debtor to the Respondent for the Operation and Maintenance (O&M) contract. The NCLT dismissed the application, leading to the present appeal before the National Company Law Appellate Tribunal (NCLAT), Chennai. The NCLAT noted that a contract was executed on 15.11.2013 between NLC India Ltd. and LSML (India) Pvt. Ltd. for the erection, commissioning, testing, and subsequent operation and maintenance of 34 units of 1.5 MW wind turbine generators. The Appellant argued that the amounts claimed were due and payable prior to the commencement of liquidation and that the Liquidator is entitled to recover them under the Insolvency and Bankruptcy Code (IBC). The Respondent contended that the claims were not maintainable. The NCLAT, after hearing both sides, held that the claims arose before the liquidation commencement date and that the Liquidator is entitled to recover the amounts. The Tribunal set aside the NCLT's order and allowed the appeal, directing the Respondent to pay the claimed amounts.
Headnote
A) Insolvency and Bankruptcy Code - Liquidation - Recovery of Dues - Section 60(5) IBC, 2016 - The Liquidator sought recovery of Rs. 40,98,41,115.76 from the Respondent for pre-liquidation contractual dues including substation maintenance charges, retention amount, and unpaid invoices - The NCLAT held that the claims arose prior to the liquidation commencement date and are recoverable, as the Liquidator is entitled to realize assets and recover dues under the IBC - The NCLT's dismissal was set aside, and the appeal was allowed with directions to the Respondent to pay the amounts (Paras 1-6).
Issue of Consideration
Whether the Liquidator is entitled to recover amounts due under contracts executed before the commencement of liquidation, including substation maintenance charges, performance bank guarantee, retention amount, and unpaid invoices, from the Respondent.
Final Decision
The appeal is allowed. The impugned order of the NCLT is set aside. The Respondent is directed to pay the amounts claimed by the Appellant as per the prayers in the IA.
Law Points
- Liquidator's entitlement to recover pre-liquidation contractual dues
- Claims arising before liquidation commencement date are recoverable
- Section 53 IBC does not bar recovery of dues from third parties
- NCLT's power to adjudicate claims under Section 60(5) IBC
