# In the matter of Lanco Amarkantak Power Limited I.A. No. 28 & 119 of 2023 in CP (IB) No. 420-7-HDB-2018

> NCLT judgment dated 2023-06-08. Citation: TCN-2023-NCLT-03040. The case involves a dispute over the termination of Fuel Supply Agreements (FSAs) between South…

- **Court:** NCLT
- **Order date:** 8 Jun 2023
- **Citation:** TCN-2023-NCLT-03040
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/lanco-amarkantak-power-limited-ia-no-28-119-of-2023-in-cp-ib-no-420-7-hdb-2018-acaa24c5

## Summary

### Background

The case involves a dispute over the termination of Fuel Supply Agreements (FSAs) between South Eastern Coalfields Limited (SECL) and Lanco Amarkantak Power Limited (LAPL), a corporate debtor undergoing Corporate Insolvency Resolution Process (CIRP). Axis Bank Ltd. initiated the CIRP against LAPL under Section 7 of the IBC. The Resolution Professional (RP) filed an application (I.A. No. 28 of 2023) seeking to prevent SECL from terminating the FSAs and invoking bank guarantees provided by LAPL as security deposits. The RP argued that the termination would violate Section 14 of the IBC, which prohibits the termination of essential contracts during CIRP. SECL contended that LAPL failed to meet the conditions precedent under the FSAs, justifying the termination. The Delhi

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## Facts

Axis Bank Ltd. initiated Corporate Insolvency Resolution Process (CIRP) against Lanco Amarkantak Power Limited (LAPL) under Section 7 of the IBC. Saurabh Kumar Tikmani was appointed as the Resolution Professional (RP). LAPL runs a thermal power plant in Korba, Chhattisgarh, divided into three phases: Phase I is fully operational, Phase II is 70% complete, and Phase III is in the nascent stage. For Phase II, LAPL executed two Fuel Supply Agreements (FSAs) with South Eastern Coalfields Limited (SECL) to secure coal allocation. The FSAs stipulated that LAPL should complete construction of Phase II and enter into long-term power purchase agreements (PPAs) within 24 months. Due to industry-wide slowdown, the Ministry of Coal (MoC) extended the deadline to 31/03/2022. LAPL

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## Issues and analysis

### Issue 1: Whether this Tribunal has jurisdiction to adjudicate …

**Ratio:** Section 60(5)(c) of the IBC vests jurisdiction in the Tribunal to dispose of any question

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**Reasoning:** The Hon'ble Delhi High Court directed the applicant to approach this Tribunal. The

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**Interpretation:** The NCLT's jurisdiction extends to matters intrinsically connected with the

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**Application:** The Tribunal has jurisdiction to entertain this application as the applicant

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## Parties

- **Judges:** TELAPROLU…; SH. CHARAN…
- **Appellants:** Saurabh Kumar…
- **Respondents:** Lanco Amarkantak…

## Timeline

- **2019-09-05 — CIRP Init…**: The Corporate Debtor (CD) was admitted into CIRP by this Tribunal and moratorium u/s 14…
- **2022-03-30 — Request for E…**: The applicant addressed a letter to the Respondent seeking further time for fulfilment of…

## 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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