(Special Bench Court– II)

C.P. (IB) 338/KB/2021

A petition under section 9 of the Insolvency and Bankruptcy Code, 2016, read with

rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority)

Rules, 2016

In the matter of:

Damodar Valley Corporation [PAN No. ABBCD0541M]

………. Operational Creditor/ Petitioner

-versus-

RS Casting Limited[CIN: U27310WB2004PLC099353]

………….. Corporate Debtor/ Respondent

Date of Pronouncement of the order: 13.08.2024

Coram:

Smt. Bidisha Banerjee, Member (Judicial)

Shri Balraj Joshi, Member (Technical)

Appearances (via video conferencing/physical):

For the Operational Creditor:

Mr. Rishav Banerjee, Adv.

Mr. Prasun Mukherjee, Adv.

Mr. Deepak Agarwal, Adv. For the Corporate Debtor:

Mr. D.N. Sharma, Adv.

Mr. Shailendra Jain, Adv.

Mr. S. Mondal, Adv.

ORDER

Per: Bidisha Banerjee ,Member (Judicial)

1. This Court convened through a hybrid mode.

2. This is a Company Petition under section 9 of the Insolvency and Bankruptcy Code, 2016 (herein after referred as “the Code” or “IBC”) by Damodar Valley Corporation, hereinafter referred to as “Operational Creditor” seeking to initiate Corporate Insolvency Resolution Process (“CIRP”) against RS Casting Limited, hereinafter referred to as “Corporate Debtor”.

3. The Corporate Debtor is a private limited company incorporated on

06.08.2004. The authorized share-capital of the company ₹2,00,00,000/- and the paid-up share capital of the company is ₹1,15,65,000/-.

4. The total amount claimed to be in due to the Operational Creditor, is Rs.

8,27,34,401/-. No date of default has been specified in the Form 5 of the petition.

5. The Operational Creditor has relied on the various documents in support of its claims, including:

a) Power Purchase Agreement, annexed as Annexure A;

b) Order passed by the Supreme Court on 18.01.2017, annexed as Annexure B;

c) Demand Notice dated 21.05.2021, annexed as Annexure G;

d) Retain Tariff order dated 19.03.2020, annexed as Annexure E.

6. Summary of the submissions on behalf of the Operational Creditor

6.1 The case of the Operational Creditor is that in terms of the power purchase agreement, 1Annexure A dated 9^th April 2007 executed between Operational Creditor and Corporate Debtor, the operational creditor had sold supplied and delivered electrical power to the corporate debtor.

6.2 From time to time the operational creditor had raised bills in respect of the electrical energy consumed by the corporate debtor, however, the corporate debtor have failed and neglected to pay electricity bills regularly for the period 2009 to 2013 and thereafter.

6.3 The bills were raised on the basis of provisional tariff order issued by Central Electricity Regulatory Commission (CERC) upon all the consumers of Operational Creditor since the retail tariff was not published by West Bengal Electricity Regulatory Commission (WBERC) for the period since May 2010 to August 2013 till that time.

6.4 The provisional tariff was challenged by various consumers before the High Court at Calcutta and also Jharkhand. In Calcutta the petitions were allowed and in Jharkhand the petitions were dismissed. Ultimately the matter went to the Supreme Court and by an order, 2Annexure B dated 18th January 2017 the Hon’ble Supreme Court set aside the judgments of both the High Courts and closed the matter as infructuous since CERC had fixed the final tariff relating to generation and T&D System. .

6.5 Since from November 2009 to April 2010 the operational creditor has raised bills as per its own tariff and short payments were made by the Corporate Debtor taking advantage of alleged ‘honest calculation’ in terms of the interim order, 3Annexure C dated 08.10.2009 passed by Appellate Tribunal of Electricity (APTEL) in Appeal no 146 of 2009 and the corporate debtor defaulted in making payment of the electricity dues on and from May 2010 when such bills were raised as per the provisional tariff.

6.6 Considering above and due to non-payment of running bills the corporate debtor became a habitual defaulter as a resul