# In the matter of KSK Mahanadi Power Company Limited

> NCLT judgment dated 2024-08-05. Citation: TCN-2024-NCLT-00883. The application was filed by Power Finance Corporation Limited (PFCL), a member of the…

- **Court:** NCLT
- **Order date:** 5 Aug 2024
- **Citation:** TCN-2024-NCLT-00883
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/ksk-mahanadi-power-company-limited-cf7c313d

## Summary

### Background

The application was filed by Power Finance Corporation Limited (PFCL), a member of the Committee of Creditors (CoC), on behalf of the entire CoC of KSK Mahanadi Power Company Limited (Corporate Debtor). The application seeks the distribution of surplus/idle funds available with the Corporate Debtor to its creditors, in accordance with Section 53 of the Insolvency and Bankruptcy Code (IBC). The CoC had passed a resolution to this effect in its 40th meeting held on 05.01.2024. The Corporate Insolvency Resolution Process (CIRP) was initiated on 03.10.2019 and has been ongoing for nearly five years. The Resolution Professional (RP) has filed a reply to the application, not objecting to the interim distribution of surplus funds. The resolution plans were to be submitted by

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## Facts

Power Finance Corporation Limited (PFCL), representing the Committee of Creditors (CoC) of KSK Mahanadi Power Company Limited (Corporate Debtor), filed an application seeking the distribution of surplus/idle funds available with the Corporate Debtor to its creditors. The CoC had approved this distribution in its 40th meeting on 05.01.2024. The Corporate Insolvency Resolution Process (CIRP) for KSK Mahanadi Power Company Limited was initiated on 03.10.2019 and has been ongoing for nearly five years. The Resolution Professional (RP) filed a reply, not objecting to the interim distribution. As of 21st May 2024, the accumulated funds amounted to approximately Rs 8,821 crores. The resolution plans were to be submitted by the Prospective Resolution Applicants (PRAs) on or

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## Issues and analysis

### Issue 1: Whether the interim distribution of surplus funds of the Corporate Debtor to its creditors is …

**Ratio:** Section 28 of the IBC allows the CoC to approve transactions with at least a 66% majority

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**Reasoning:** The court reasoned that the distribution of surplus funds is permissible under Section 28

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**Interpretation:** Section 28 of the IBC is interpreted to allow the CoC to make decisions

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**Application:** The court applied the provisions of Section 28 and 53 to the facts of the case,

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## Parties

- **Judges:** Rajeev Bh…; Sanjay…
- **Appellants:** Power Finance…
- **Respondents:** KSK Mahanadi…; KSK Mahanadi…

## Timeline

- **2019-10-03 — Initiation…**: Corporate Insolvency Resolution Process (CIRP) was initiated for KSK Mahanadi Power…
- **2024-01-05 — CoC Meet…**: The Committee of Creditors (CoC) passed a resolution to distribute surplus/idle funds to…

## 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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