# In the matter of East Coast Energy Private Limited CP(IB)No. 22 & 23-7-HDB-2018

> NCLT judgment dated 2018-04-03. Citation: TCN-2018-NCLT-01604. State Bank of India (SBI) and Power Finance Corporation Limited (PFC) filed CP(IB)…

- **Court:** NCLT
- **Order date:** 3 Apr 2018
- **Citation:** TCN-2018-NCLT-01604
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/east-coast-energy-private-limited-cpibno-22-23-7-hdb-2018-0b55c4c4

## Summary

### Background

State Bank of India (SBI) and Power Finance Corporation Limited (PFC) filed CP(IB) No.22/7/HDB/2018 and CP(IB) No.23/7/HDB/2018 respectively under Section 7 of the IBC Code 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against East Coast Energy Private Limited. The petitions were filed due to defaults in financial debts owed to SBI and PFC. A key issue raised by the Corporate Debtor was the maintainability of the petitions due to questions regarding the authority of the individuals filing the petitions on behalf of SBI and PFC.

## Facts

State Bank of India (SBI) and Power Finance Corporation Limited (PFC) filed separate petitions, CP(IB) No.22/7/HDB/2018 and CP(IB) No.23/7/HDB/2018 respectively, under Section 7 of the Insolvency and Bankruptcy Code (IBC) to initiate Corporate Insolvency Resolution Process (CIRP) against East Coast Energy Private Limited, citing defaults in financial debts. SBI claimed an outstanding amount of Rs. 952.19 crores, while PFC claimed Rs. 1371.5 crores. The Corporate Debtor contested the petitions, arguing that the individuals filing on behalf of SBI and PFC lacked proper authorization. SBI's petition was filed through Mr. A. Srinivas, AGM, authorized by a letter of authority from the Dy. General Manager. PFC's petition was filed through Mr. Praveen Verma, DGM, authorized

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## Issues and analysis

### Issue 1: Whether the petitions filed by SBI and PFC are maintainable given the challenge to the authority of …

**Ratio:** A general authorization by the Financial Creditor in favor of its officers to take

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**Reasoning:** The Adjudicating Authority considered the Board Resolutions and delegation of power

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**Interpretation:** The court interpreted the requirements for authorization liberally, focusing on

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**Application:** The court found that SBI and PFC had adequately demonstrated that their

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## Parties

- **Judges:** BIKKI RAVEENDRA…
- **Appellants:** State Bank of…
- **Respondents:** East Coast Energy…

## Timeline

- **2016-11-09 — PFC Board Res…**: PFC's Board of Directors passed a resolution authorizing the Chairman & Managing Director…
- **2017-08-10 — PFC Board M…**: In the 364th meeting of the Board of Directors of Power Finance Corporation Limited, the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 3(12) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-3)

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