# In the matter of Monnet Ispat & Energy Ltd. MA 17-2018 IN CP No. 1139-I&BP-NCLT-MAH-2017

> NCLT judgment dated 2018-01-16. Citation: TCN-2018-NCLT-01930. This case involves a Miscellaneous Application filed by the Resolution Professional seeking to…

- **Court:** NCLT
- **Order date:** 16 Jan 2018
- **Citation:** TCN-2018-NCLT-01930
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/monnet-ispat-energy-ltd-ma-17-2018-in-cp-no-1139-ibp-nclt-mah-2017-13e8d3ba

## Summary

### Background

This case involves a Miscellaneous Application filed by the Resolution Professional seeking to quash the operation and effect of a termination letter dated 30.12.2017, which terminated the Coal Mines Development and Production Agreement (CMDPA) dated 2.3.2015 and a vesting order dated 23.3.2015. The termination was issued by the Government of India, Ministry of Coal, concerning the Gare Palma IV/7 Coal Mine. The applicant argues that the termination is in violation of Section 14(1)(d) of the Insolvency & Bankruptcy Code (IBC), 2016, due to the moratorium declared on 18.7.2017 following the initiation of the Corporate Insolvency Resolution Process (CIRP) against Monnet Ispat & Energy Ltd (Corporate Debtor) by State Bank of India.

## Facts

State Bank of India initiated Corporate Insolvency Resolution Process (CIRP) against Monnet Ispat & Energy Ltd (Corporate Debtor) under Section 7 of Insolvency & Bankruptcy Code, 2016. The NCLT declared a moratorium on 18.7.2017. The Corporate Debtor was allocated a coal mine under the Coal Mines (Special Provisions) Ordinance 2014. A Coal Mines Development and Production Agreement (CMDPA) was entered into between the Corporate Debtor and the Government of India on 2.3.2015, followed by a vesting order dated 23.3.2015. The Corporate Debtor failed to comply with post-vesting obligations, including commencement plan, payment of upfront amount, and execution of mining lease. The Corporate Debtor also failed to renew a performance bank guarantee. The Government of

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## Issues and analysis

### Issue 1: Whether the termination order dated 30.12.2017 issued by the Respondent is hit by Section 14(1)(d) …

**Ratio:** Section 14(1)(d) of the Insolvency & Bankruptcy Code, 2016 prohibits the recovery of

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**Reasoning:** The court reasoned that no mining lease had been executed between the Corporate Debtor

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**Interpretation:** The court interpreted Section 14(1)(d) as applying only when the corporate

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**Application:** The court applied the ratio to the facts by noting that the Corporate Debtor

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## Parties

- **Judges:** B.S.V. Prakash…; V. Nallasen…
- **Appellants:** Interim Resolution…
- **Respondents:** Monnet Ispat &…; Government of…

## Timeline

- **2015-02-03 — CMDPA Da…**: Coal Mines Development and Production Agreement (CMDPA) was entered into between the…
- **2015-03-23 — Vesting Orde…**: Respondent issued a vesting order under Section 6 of Coal Mines (Special Provisions)…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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