# In the matter of Kunaparaju Sudharshan Varma Vs Rangrababurao Gaikwad

> NCLAT judgment dated 2022-07-19. Citation: TCN-2022-NCLAT-00348. The case involves an appeal against the dismissal of an application under Section 7 of the…

- **Court:** NCLAT
- **Order date:** 19 Jul 2022
- **Citation:** TCN-2022-NCLAT-00348
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/kunaparaju-sudharshan-varma-vs-rangrababurao-gaikwad-65718e46

## Summary

### Background

The case involves an appeal against the dismissal of an application under Section 7 of the IBC, 2016, filed by Respondent No. 1, which was dismissed due to a lack of privity of contract. The Corporate Debtor (Respondent No. 3) had entered into a Power Purchase Agreement in 2009 but the plant became non-operational. Respondent No. 1 promoted a special purpose vehicle, RSP Energy LLP, and entered into a MoU with the Corporate Debtor in 2016. Subsequently, Respondent No. 1 filed another application under Section 9 of the Code.

## Facts

The Corporate Debtor (Respondent No. 3) entered into a Power Purchase Agreement on January 8th, 2009, to sell electricity. The plant became non-operational. Respondent No. 1 promoted RSP Energy LLP and entered into a MoU with the Corporate Debtor on November 3rd, 2016. Respondent No. 1 initially filed an application under Section 7 of the IBC, which was dismissed due to a lack of privity of contract. Respondent No. 1 then filed an application under Section 9 of the Code, claiming to have supplied raw material (fuel). The Appellant argues that the dismissal of the Section 7 application established a lack of privity of contract, which should also apply to the Section 9 application. The plant was on an operational lease, and the Appellant claims no involvement, stating

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## Issues and analysis

### Issue 1: Whether the dismissal of the application under Section 7 of the IBC, due to lack of privity of …

**Ratio:** The principle of res judicata or issue estoppel may apply if the issue of privity of

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**Reasoning:** The court is considering whether the prior dismissal based on lack of privity of contract

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**Interpretation:** The interpretation hinges on whether the issue of privity of contract was

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**Application:** If the court finds that the issue of privity of contract was indeed

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## Parties

- **Judges:** Rakesh Kuma…; Naresh Sa…
- **Appellants:** Kunaparaju…
- **Respondents:** MS RANGRAO…
- **Advocates:** Yogesh…; D V A S Ravi…; +1 more

## Timeline

- **2009-01-08 — Power Purchase…**: Corporate Debtor (Respondent No. 3) entered into a Power Purchase Agreement to sell…
- **2016-11-03 — MoU with Corporate…**: Respondent No. 1 entered into a MoU with Corporate Debtor (Respondent No. 3) through RSP…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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