JUDGEMENT

(Dated: 17.1.2023) [Per.: Dr. Alok Srivastava, Member (Technical)] This appeal has been filed by the South Delhi Municipal Corporation (in short ‘SDMC’) under section 61 of the Insolvency and Bankruptcy Code, 2016 (hereinafter called ‘IBC’) against the judgment and order dated 8.10.2021 (hereinafter called Impugned Order) passed by the Adjudicating Authority (National Company Law Tribunal, Mumbai) in Company Petition No. IB 246/MB/2021, whereby an application under 9 of the IBC filed by SDMC against the Respondent MEP Infrastructure Developers Ltd. (in short MEP Infrastructure) was rejected and, the Interlocutory Application being IA 1670 of 2021 filed by MEP Infrastructure challenging the maintainability of CP No. IB 246/MB/2021 was allowed.

2. In brief, the facts of the case, as stated and argued by the Appellant. are that the Appellant entered into an agreement called ‘Toll Tax and ECC Collection Agreement’ (in short ‘Toll Tax Agreement’) on 28.9.2017 for collection of Toll Tax and Environment Compensation Charge (in short ‘ECC’) at border points from specified vehicles entering Delhi. The Appellant has further stated that by virtue of clause 12.1(A)(a) of the said Toll Tax Agreement, the MEP Infrastructure was required to remit an amount of Rs. 23,12,87,671 on weekly basis to the SDMC, which was the proportionate weekly remittance amount out of the total payment of Rs.1206 crores per annum, payable for a period of 5 years by the contractor MEP Infrastructure in accordance with the said Toll Tax Agreement.

3. The Appellant has further stated that during the contract period, MEP Infrastructure repeatedly made delayed remittances to SDMC and consequently the SDMC imposed penalty agreed as per the Toll Tax Agreement, and MEP Infrastructure never disputed the imposition of penalty and deposited Rs. 3,63,07,683/- as penalty amount imposed on account of delayed remittance of ECC as per clause 12.1(B)(c) of the said Toll Tax Agreement. The Appellant has added that when the Respondent MEP Infrastructure failed to make regular payments and to deposit penalty amounts, multiple demand notices and intimations with respect to the outstanding pending payments and penalty amounts were issued by the SDMC to the MEP Infrastructure through letters starting from 3.11.2017, and at regular intervals till 18.11.2019. In the meanwhile, the Respondent made an assurance that the outstanding dues will not exceed the security amount available with SDMC, while promising that weekly remittances will be made henceforth through RTGS/NEFT on regular basis.

4. The Appellant has stated that while the Respondent continued to default in making payments, it made certain claims upon SDMC due to reduced toll tax and ECC collection leading to loss of revenue, and these claims were referred to a High Level Committee constituted by the Commissioners of South Delhi Municipal Corporation (in short ‘SDMC’), North Delhi Municipal Corporation (in short ‘NDMC’) and East Delhi Municipal Corporation (in short ‘EDMC’) for examination, and after examination of the said claims, certain recommendations were made to the Standing Committee of SDMC for consideration. The Appellant has further stated that the loss in in toll tax collection was due to mismanagement by MEP Infrastructure and in this connection the National Highways Authority of India vide letter dated 25.4.2018 had once noted that there is gross mismanagement at the Toll Plaza, and as a result thereof regular traffic jams are taking place.

5. The Appellant has further stated that after the Respondent’s claims were considered and not acceded to, and when the overdue amounts became large, the Appellant issued a demand notice no.

ABC/TT/HQ/2019/D-932 dated 18.11.2019 to the Respondent MEP Infrastructure for payment of outstanding principal amount of Rs.4,50,69,73,096 and penalty amount equal to @ 0.1% per day within a period of 7 days, whereafter the Respondent preferred a writ peti