# In the matter of Lanco Amarkantak Power Limited

> NCLT judgment dated 2024-01-08. Citation: TCN-2024-NCLT-03250. The Resolution Professional (RP) of Lanco Amarkantak Power Limited (Corporate Debtor) filed an…

- **Court:** NCLT
- **Order date:** 8 Jan 2024
- **Citation:** TCN-2024-NCLT-03250
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/lanco-amarkantak-power-limited-600d0357

## Summary

### Background

The Resolution Professional (RP) of Lanco Amarkantak Power Limited (Corporate Debtor) filed an application against South East Central Railway (SECR), seeking a declaration that deductions made by SECR from the Corporate Debtor's Railway Freight (RF) account violated the Insolvency and Bankruptcy Code (IBC). The RP also sought a directive for SECR to cease deductions and refund amounts deducted towards Engine Hire Charges (ENHC) from the RF account. A Tripartite Agreement was executed on 26.11.2009 between SECR, the Corporate Debtor, and State Bank of India (SBI), establishing an E-payment account to facilitate railway freight charge payments. Disputes arose regarding outstanding ENHC dues from January 2010 to February 2018. SECR continued to deduct Historical ENHC from

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## Facts

On 26.11.2009, a Tripartite Agreement was established between South East Central Railway (SECR), Lanco Amarkantak Power Limited (Corporate Debtor), and State Bank of India (SBI) to facilitate payment of railway freight charges through an E-payment account. Disputes arose regarding outstanding Engine Hire Charges (ENHC) from January 2010 to February 2018. After the Corporate Insolvency Resolution Process (CIRP) commenced on 05.09.2019, SECR continued deducting Historical ENHC from the Corporate Debtor's Railway Freight (RF) account. The Resolution Professional (RP) informed SECR about the CIRP and requested cooperation. SECR claimed unawareness of the CIRP and the Creditors' Committee (CoC) meeting. The RP argued that these deductions violated the moratorium under

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## Issues and analysis

### Issue 1: Whether the deductions made by the Respondent (SECR) from the Corporate Debtor's Railway Freight …

**Ratio:** The principle of contractual set-off allows parties to adjust mutual debts against each

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**Reasoning:** The court reasoned that the Tripartite Agreement established a pre-existing right for

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**Interpretation:** Section 14 of the IBC imposes a moratorium on recovery actions against the

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**Application:** In this case, the Tripartite Agreement established SECR's right to collect

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## Parties

- **Judges:** Rajeev Bh…; Sanjay…
- **Appellants:** Axis Ban…
- **Respondents:** Lanco Amarkantak…

## Timeline

- **2009-11-26 — Tripartite Ag…**: A Tripartite Agreement was executed between SECR, the Corporate Debtor, and SBI,…
- **2010-01-01 — Disputes…**: Disputes arose regarding outstanding ENHC…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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