# In the matter of Lanco Amarkantak Power Limited IA No. 560-2020 in CP (IB) No. 420-7-HDB-2019

> NCLT judgment dated 2020-09-21. Citation: TCN-2020-NCLT-00561. M/s NRSKS Mines and Minerals Private Limited filed an Interlocutory Application (IA…

- **Court:** NCLT
- **Order date:** 21 Sept 2020
- **Citation:** TCN-2020-NCLT-00561
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/lanco-amarkantak-power-limited-ia-no-560-2020-in-cp-ib-no-420-7-hdb-2019-95119140

## Summary

### Background

M/s NRSKS Mines and Minerals Private Limited filed an Interlocutory Application (IA No.560/2020) in CP (IB) No.420/7/HDB/2019 under Section 60(5) of the IB Code, 2016, against the Resolution Professional of M/s Lanco Amarkantak Power Limited. The applicant sought a declaration that the Resolution Professional's actions of inviting fresh tenders were arbitrary and illegal. The applicant had existing contracts for coal transportation with the Corporate Debtor, which they claimed were being unfairly terminated by the Resolution Professional's actions. The applicant argued that the Resolution Professional was required to honor the existing contract terms and provide a 180-day notice before termination, as per the Indian Contract Act, 1872.

## Facts

M/s NRSKS Mines and Minerals Private Limited (Applicant) had contracts with M/s Lanco Amarkantak Power Limited (Corporate Debtor) for coal transportation. The Corporate Debtor was admitted into CIRP on 05.09.2019, and a Resolution Professional (Respondent) was appointed. The contracts between the Applicant and the Corporate Debtor were governed by the Indian Contract Act, 1872, with a validity period from 1st April 2019 to 31st March 2020, extendable to 31st March 2021 based on performance. The Corporate Debtor floated a tender on 21.03.2020 for coal transportation for the year 2020-21. The Applicant was informed of a three-month extension of their existing contracts until 30.06.2020. The Applicant later objected to the fresh tender process, claiming the Resolution

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## Issues and analysis

### Issue 1: Whether the steps taken by the Resolution Professional for inviting fresh tenders with dubious …

**Ratio:** The principle is that contracts are extendable based on satisfactory performance and

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**Reasoning:** The court reasoned that the Resolution Professional had already extended the applicant's

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**Interpretation:** The interpretation of the contract's validity clause is that it is not

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**Application:** In this specific case, the court applied the principle that the contract was

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## Parties

- **Judges:** Shri. K. Anantha…
- **Appellants:** M/s NRSKS Mines…
- **Respondents:** M/s Lanco…; Saurabh Kumar…

## Timeline

- **2019-01-30 — Tender F…**: Corporate Debtor floated a tender vide Tender No. LAPL/COAL/TRANS/2019-2020/01 for…
- **2019-02-18 — Work Orders…**: Corporate Debtor executed two work orders/contract each (for Units I and II separately)…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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