# In the matter of Vidarbha Industries Power Limited IA No. 570 of 2020 in

> NCLT judgment dated 2021-01-29. Citation: TCN-2021-NCLT-03200. The case involves an application filed by Vidarbha Industries Power Limited (VIPL), the…

- **Court:** NCLT
- **Order date:** 29 Jan 2021
- **Citation:** TCN-2021-NCLT-03200
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/vidarbha-industries-power-limited-ia-no-570-of-2020-in-34ced3a0

## Summary

### Background

The case involves an application filed by Vidarbha Industries Power Limited (VIPL), the Corporate Debtor, seeking a stay on the company petition filed against it under Section 7 of the Insolvency and Bankruptcy Code, 2016 by Axis Bank Limited, the Financial Creditor. VIPL, a coal-based thermal power plant, faced financial difficulties due to various factors, including disputes with Reliance Infrastructure Limited (RIL) and Adani Electricity Mumbai Limited (AEML) regarding power purchase agreements (PPA) and tariff revisions. VIPL also encountered challenges in procuring coal under a Fuel Supply Agreement (FSA) due to government apathy, leading to litigation before the Delhi High Court. The financial distress was further exacerbated by RIL's defaults in payment and

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## Facts

Vidarbha Industries Power Limited (VIPL) is a coal-based thermal power plant located in Nagpur District, Maharashtra. VIPL was awarded the Group Captive Power Project (GCPP) and supplied electricity to Reliance Infrastructure Limited (RIL). The Maharashtra Electricity Regulatory Commission (MERC) approved the procurement of power from VIPL by RIL, subject to certain conditions. A Power Purchase Agreement (PPA) was executed between VIPL and RIL. VIPL commenced supply of power to RIL. Disputes arose between VIPL and RIL regarding tariff revisions and payments. RIL's Mumbai Distribution Business was transferred to Reliance Electric Generation and Supply Limited (REGSL), which was later acquired by Adani Electricity Mumbai Limited (AEML). AEML set off three months'

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## Issues and analysis

### Issue 1: Whether the application filed by the Corporate Debtor seeking a stay on the company petition is …

**Ratio:** The primary consideration for admitting a company petition under Section 7 of the IBC is

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**Reasoning:** The NCLT reasoned that the Code is a special legislation with the chief object of

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**Interpretation:** Section 7 of the IBC provides a mechanism for initiating the corporate

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**Application:** In this case, the Financial Creditor, Axis Bank, claimed that the Corporate

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## Parties

- **Judges:** Janab Mohammed…; Ravikumar…; +1 more
- **Respondents:** Vidarbha Industrie…; Axis Bank L…
- **Advocates:** Chetan Ka…; Manini Bh…; +1 more

## Timeline

- **2013-02-20 — MERC App…**: MERC granted approval for power…
- **2013-05-28 — MIDC NOC…**: MIDC granted No…

## 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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