State Government undertakings can be subjected to insolvency proceedings under the Insolvency and Bankruptcy Code, but applications may be dismissed if pre-existing disputes exist at the time of the demand notice.

ORDER

Per Balraj Joshi, Member (Technical):

1. This Court is congregated through hybrid mode.

2. Heard the Ld. Senior Counsel, Shri Joy Saha for the Applicant and Ld. Counsel, Shri A.K. Srivastava for the Respondent.

3. This instant application is filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 , for brevity I&B Code/ IBC, read with other provisions of law, by one Ramjee Power Construction Limited, through its Director, Mr. Satish Kumar Das, having its registered office at Kumar Niwas, Bright Lane, Kokar Ranchi, Jharkhand- 834001, hereinafter referred to as “Applicant” (“Operational Creditor”) against M/ s. Jharkhand Bijli Vitran Nigam Limited, through its Managing Director, having its registered office at Engineering Building, H.E.C. Dhurwa, P.S.-Hatia, Ranchi, Jharkhand- 834002 hereinafter referred to as “Respondent” (“Corporate Debtor”) seeking the direction from this Adjudicating Authority to initiate Corporate Insolvency Resolution Process (for brevity “CIRP”) in respect of the Corporate Debtor herein.

4. The Corporate Debtor was incorporated on 23/10/2013, having the Nominal share capital- Rs. 31,08,93,00,000/- in which Paid-up Share Capital of Rs. 31,08,93,00,000/-.

5. The Total amount claimed to be in default is Rs. 6,38,82,813.80/- as on the date of default i.e., 19/09/2018 and Rs. 7,67,81,068.58/- as on the date when the Demand Notice dated 01/10/2021, annexed at Page 143-153 as Annexure -R to this Application, was issued inclusive interest.

6. Submission made by the Ld. Senior Counsel, Shri Joy Saha for the Applicant:

6.1. The Applicant company is a small enterprise registered under the provisions of the MSMED Act, 2006 and the Corporate Debtor, M/ s Jharkhand BijliVitran Nigam Limited is one of the successors of the erstwhile Jharkhand State Electricity Board (JSEB).

6.2. Upon being a successful bidder in the bidding process organized by the JSEB, an agreement dated 10.02.2005 was made between the Operational Creditor and JSEB, (annexed as Annexure “J” at Pages 94-97) to the Application, to execute the work pursuant to the said agreement. In the course of the completion of assigned work, a dispute arose between the parties owing to default and delay in payment against the bills and a sole arbitrator, Mr. Ramayan Pandey was appointed by the JSEB on 24.08.2007 to resolve the dispute between the parties (annexed at Page 98 to the Application).

6.3. An award dated 29.03.2009, has passed in the Arbitration Case No. 02/ 2007 by Mr. Ramayan Pandey, annexed at Annexure “L” at Pages 99-106 to this Application, in favour of the operational creditor and the instant claim arises out of the same “Award dated 29.03.2009” so drawn in favour of the operational creditor.

6.4. Further, a challenge to the said award under Section 34 of the Arbitration & Conciliation Act, 1996 was preferred on 04.11.2010 before the Ld. Subordinate Judge, Ranchi. The Hon’ble Jharkhand High Court vide its order passed on 11/07/2021 in Civil Revision No. 02/2011, (annexed at Page 107-111 to this Application as Annexure “M”), held the petition is maintainable. Aggrieved by the decision, the Applicant herein, preferred an appeal before the Hon’ble Supreme Court of India and vide an order Dated 19.09.2018, Hon’ble Apex Court in SLP (C) No. 1005- 1006 of 2012, (annexed at Page 112-116 to this Application as Annexure “N”) allowed the appeals preferred by the Applicant herein, and set aside the impugned orders passed by the Hon’ble High Court in favour of the Respondent herein, by granting liberty upon the Respondent herein, to pursue such remedies in respect of the loss caused to them as may be advised.

6.5. The Applicant thereafter has served u