# In the matter of Hindustan Zinc Limited vs. Mahindra Susten Pvt. Ltd. Company Appeal (AT) (Insolvency) No. 34 of 2023

> NCLAT judgment dated 2023-05-29. Citation: TCN-2023-NCLAT-00482. The appeal challenges the order dated 28.11.2022 passed by the Adjudicating Authority…

- **Court:** NCLAT
- **Order date:** 29 May 2023
- **Citation:** TCN-2023-NCLAT-00482
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/hindustan-zinc-limited-vs-mahindra-susten-pvt-ltd-company-appeal-0b0c0eb1

## Summary

### Background

The appeal challenges the order dated 28.11.2022 passed by the Adjudicating Authority (National Company Law Tribunal), Jaipur Bench, regarding an application filed under Section 9 of the Insolvency and Bankruptcy Code (IBC) by Mahindra Susten Pvt. Ltd. (Operational Creditor) against Hindustan Zinc Limited (Corporate Debtor). The dispute arose from an agreement for the supply and installation of a Solar Photovoltaic Power Generation System, where Hindustan Zinc was obligated to pay anti-dumping and safeguard duties. The Corporate Debtor sought to terminate the contract due to the amount of Safeguard Duty exceeding Rs. 5 Crore. The Operational Creditor filed a Section 9 application claiming Rs. 17,24,06,024/-. The Adjudicating Authority directed the Corporate Debtor to

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## Facts

Hindustan Zinc Limited (Appellant) and Mahindra Susten Pvt. Ltd. (Respondent) entered into an agreement for the supply and installation of a Solar Photovoltaic Power Generation System on 30.04.2018. The agreement stipulated that Hindustan Zinc would pay anti-dumping and safeguard duties, if applicable. Safeguard Duty was imposed from 30.07.2018 to 29.07.2020. Hindustan Zinc sought to terminate the contract on 03.08.2018, citing the amount of Safeguard Duty exceeding Rs. 5 Crore. Hindustan Zinc challenged the Safeguard Duty before the Orissa High Court and filed a Writ Petition before the Rajasthan High Court. The Corporate Debtor issued a letter of undertaking on 21.08.2018, promising to pay the Operational Creditor the safeguard duty levied by the Customs Authority.

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority was justified in directing the parties to settle amicably after …

**Ratio:** The Adjudicating Authority has the power to direct parties to settle amicably. However,

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**Reasoning:** The court reasoned that once the principal amount of the operational debt was paid, there

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**Interpretation:** The interpretation is that while amicable settlements are encouraged, the IBC

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**Application:** In this case, the principal amount was paid before the final order. Therefore,

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## Parties

- **Judges:** Ashok Bh…; Barun M…
- **Respondents:** Hindustan Zinc…; Mahindra Susten…
- **Advocates:** Krishnan Ve…; U. N. T…; +5 more

## Timeline

- **2018-04-30 — Agreement…**: Agreement between Hindustan Zinc Limited and Mahindra Susten Pvt. Ltd. for supply and…
- **2018-07-30 — Safeguard Duty…**: Safeguard Duty imposed for the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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