# In the matter of Embassy Energy Private Limited CP (IB) No.411-BB-2019

> NCLT judgment dated 2022-03-08. Citation: TCN-2022-NCLT-03861. Sterling and Wilson Private Limited, the Operational Creditor, filed a Company Petition under…

- **Court:** NCLT
- **Order date:** 8 Mar 2022
- **Citation:** TCN-2022-NCLT-03861
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/embassy-energy-private-limited-cp-ib-no411-bb-2019-aea22f24

## Summary

### Background

Sterling and Wilson Private Limited, the Operational Creditor, filed a Company Petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Embassy Energy Private Limited, the Corporate Debtor. The petition was based on the Corporate Debtor's alleged default on a total outstanding principal amount of Rs.99,75,88,940/-, excluding interest, with a default date of 31.01.2019. The Operational Creditor had entered into contracts with IEDCL, who was contracted by IL&FS Solar Power Limited (ISPL), which in turn was engaged by the Corporate Debtor. The Operational Creditor claimed that the Corporate Debtor promised to pay the amounts due from IEDCL, leading to the Operational Creditor

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## Facts

Embassy Energy Private Limited (Corporate Debtor) intended to build and operate a solar photovoltaic electricity generation facility in Karnataka. The Corporate Debtor contracted with IL&FS Solar Power Limited (ISPL), who in turn contracted with IL&FS Energy Development Company (IEDCL). IEDCL appointed Sterling and Wilson Private Limited (Operational Creditor) as a sub-contractor. The Operational Creditor and IEDCL entered into several contracts for the project. The Operational Creditor raised invoices on IEDCL between 21.12.2017 and 24.11.2018. IEDCL defaulted on payments, leading the Operational Creditor to issue a letter dated 04.10.2018 suspending works. In response, the Corporate Debtor issued a letter dated 17.10.2018, stating that it would clear the

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## Issues and analysis

### Issue 1: Whether the principle of promissory estoppel has …

**Ratio:** The principle of promissory estoppel cannot be used to establish a debt, either financial

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**Reasoning:** The Adjudicating Authority stated that the IBC is a self-contained code, and all actions

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**Interpretation:** The court interpreted the IBC as requiring a concrete basis for establishing a

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**Application:** The court applied this principle to the facts, finding that the letter dated

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## Parties

- **Judges:** Ajay Kumar…; Manoj Kumar…
- **Appellants:** Sterling and…
- **Respondents:** Embassy Energy…

## Timeline

- **2017-11-07 — Agreement for Civil…**: Clause 6.1.3 of the Agreement for Civil Works and Construction dated 07.11.2017 stated…
- **2017-11-07 — Agreements for Erection, Testing, and…**: Similar clauses are contained in Clause 6.1.3 of the Agreement for Erection, Testing and…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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