# In the matter of Sikkim Power Investment Corporation Ltd. vs. Umesh Garg & Ors.

> NCLAT judgment dated 2024-07-26. Citation: TCN-2024-NCLAT-00293. The case involves an appeal against an order dated 09.04.2024 passed by the National Company…

- **Court:** NCLAT
- **Order date:** 26 Jul 2024
- **Citation:** TCN-2024-NCLAT-00293
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/sikkim-power-investment-corporation-ltd-vs-umesh-garg-ors-1d517955

## Summary

### Background

The case involves an appeal against an order dated 09.04.2024 passed by the National Company Law Tribunal (NCLT), New Delhi Bench, concerning the Corporate Insolvency Resolution Process (CIRP) of Athena Demwe Power Ltd. The appellant, Sikkim Power Investment Corporation Ltd., challenges the NCLT's decision regarding the approval of its resolution plan. The core issue revolves around the appellant's failure to submit a Performance Bank Guarantee (PBG) as required by the Request for Resolution Plan (RFRP). The NCLT allowed applications by the State of Arunachal Pradesh and THDC to submit resolution plans, directed the CoC to invite fresh Expression of Interest (Eol), and extended the CIRP period.

## Facts

Athena Energy Ventures Pvt. Ltd. was awarded a project to develop a 1750 MW Hydro Electric Power Project. Athena Demwe Power Ltd. was incorporated as a Special Purpose Vehicle (SPV) for the project. Due to the Corporate Debtor's failure to repay availed facilities, Indian Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016. The Adjudicating Authority initiated the Corporate Insolvency Resolution Process (CIRP) on 28.09.2017. The Resolution Professional (RP) issued Form-G, and two resolution plans were submitted, one by the Appellant (Sikkim Power Investment Corporation Ltd.) and another by Navayuga Engineering Company Ltd. (NECL). The Committee of Creditors (CoC) disqualified NECL under Section 29A and approved the Appellant's

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority was justified in rejecting the Appellant's resolution plan due …

**Ratio:** The RFRP Clause 1.9.3 mandates the submission of a Performance Bank Guarantee (PBG)

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**Reasoning:** The Appellant failed to submit the PBG despite numerous reminders from the Resolution

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**Interpretation:** The requirement of submitting a PBG is a critical aspect of the resolution plan

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**Application:** In this case, the Appellant's failure to submit the PBG, despite repeated

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## Parties

- **Judges:** Ashok Bh…; Barun M…
- **Appellants:** Sikkim Power…
- **Respondents:** Athena Demwe…; THDC Indi…

## Timeline

- **2017-09-28 — CIRP Init…**: Adjudicating Authority initiated the Corporate Insolvency Resolution Process (CIRP)…
- **2018-01-11 — Form-G I…**: Resolution Professional…

## 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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