NCLT lacks jurisdiction to adjudicate disputes solely arising from contractual matters unrelated to the insolvency process.

ORDER

IA (IBC) NO. 4622 OF 2024

1. The present Application has been filed under Section 60 (5) of the Insolvency and Bankruptcy Code , 2016 (“IBC”), inter alia seeking directions from this Tribunal in relation to the Grid Connectivity earlier granted and subsequently unilaterally and wrongfully cancelled by Respondent No. 1.

2. The Applicant, Fabtech Sugar Ltd., is a company incorporated under the Companies Act, 2013, and is engaged in the business of sugarcane processing.

3. Respondent No. 1, Maharashtra State Electricity Transmission Company Ltd. (MSETCL), is a company incorporated under the Companies Act, 1956 and is responsible for operating the electricity transmission network across Maharashtra.

4. Respondent No. 2, Shri Gini Rajat Naidu, is an Insolvency Resolution Professional registered with the IBBI. He was appointed as the Resolution Professional (“RP”) of the Applicant during its Corporate Insolvency Resolution Process (“CIRP”), which commenced on 13 May 2021 and concluded on 9 February 2024.

5. The present dispute arises out of the cancellation of the Grid Connectivity granted to the Applicant by MSETCL during the subsistence of the CIRP, despite the Applicant having committed no default. It is submitted that the cancellation seriously jeopardises the revival of the Applicant under the resolution plan approved by this Tribunal.

6. The Applicant is a sugarcane processing company. In 2015, it proposed to set up its own Bagasse Biomass Co-generation Plant (“Co-generation Plant”) at Nandur, Mangalweda, Solapur, for generating renewable energy. The electricity generated was to be used for the Applicant’s plant operations, and the surplus was intended to be sold to Maharashtra State Electricity Distribution Company Ltd. (MSEDCL). The project contributes to renewable energy generation and reduces dependence on coal-based power.

7. Accordingly, the Applicant and MSEDCL entered into an Energy Purchase Agreement (EPA) dated 04.08.2015 (Exhibit “A”) for sale of surplus electricity from the Co-generation Plant. One of the preconditions for supply of electricity under the EPA was Grid Connectivity from MSETCL. Therefore, the Applicant applied to MSETCL for the same. To achieve Grid Connectivity, the Applicant was required to construct a 132 KV SCDC line from its plant to the Nimbhoni Sub-Station. Simultaneously, MSETCL was to construct a separate 132 KV line to the same sub-station. Grid Connectivity could only be achieved upon completion of both lines.

8. While the Applicant completed its portion of work on schedule, MSETCL’s work was delayed due to Right of Way (ROW) issues. The Applicant accordingly sought an extension of time vide letter dated 11.01.2018. MSETCL granted the first extension on 31.01.2018 (Exhibits “B” and “C”).

9. Further, after utilizing the first extension, the Applicant completed its scope of work. However, as MSETCL continued to face ROW issues, the Applicant requested a second extension on 08.10.2018. MSETCL granted the same on 06.12.2018 and expressly recorded that the Applicant had completed its entire scope of work (Exhibits “D” and “E”).

10. The Applicant thereafter addressed a letter on 18.01.2019 (Exhibit “F”), reiterating that its work was complete and that power could be exported immediately upon commissioning. However, commissioning was stalled solely because MSETCL had not completed its line due to ROW issues. The Applicant thus sought extension till MSETCL completed its work. Before MSETCL completed its scope of work, the Applicant was admitted into CIRP on 13.05.2021 (Exhib