# In the matter of Cosmic Ferro Alloys Limited I.A (IBC) No. 708-KB-2021 in C.P. (IB) No. 596-KB-2017

> NCLT judgment dated 2022-07-14. Citation: TCN-2022-NCLT-04592. Cosmic Ferro Alloys Limited filed an application under Section 60(5) of the Insolvency and…

- **Court:** NCLT
- **Order date:** 14 Jul 2022
- **Citation:** TCN-2022-NCLT-04592
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-kolkata/cosmic-ferro-alloys-limited-ia-ibc-no-708-kb-2021-in-cp-ib-no-596-kb-2017-050741be

## Summary

### Background

Cosmic Ferro Alloys Limited filed an application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, seeking enforcement of a resolution plan approved by the Adjudicating Authority on October 11, 2018. The applicant alleges that Damodar Valley Corporation (DVC) is not complying with the resolution plan, causing prejudice.

## Facts

Citi Bank NA initiated CIRP against Cosmic Ferro Alloys Limited, and a resolution plan was approved on October 11, 2018.

The resolution plan stipulated that Cosmic Ferro Alloys would pay DVC Rs. 24.67 crores to settle old dues.

DVC submitted a claim of Rs. 64.4456 crores before the Resolution Professional.

Cosmic Ferro Alloys alleges that DVC is demanding an exorbitant sum of Rs. 104.92 crores, which relates to the period before the sanction of the resolution plan.

DVC disconnected the electricity supply to Cosmic Ferro Alloys on August 14, 2020, for non-payment of dues.

DVC issued a revised bill pursuant to orders of the West Bengal Electricity Regulatory Commission, reducing its claim for tariff periods 2006-2009 and 2009-2013 to Rs. 56.67 crore approximately.

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## Issues and analysis

### Issue 1: Whether DVC is entitled to demand amounts exceeding Rs. 24.67 crores from Cosmic Ferro Alloys, …

**Ratio:** Section 31 of the IBC states that once a resolution plan is approved by the NCLT, it is

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**Reasoning:** The resolution plan, once approved, freezes the claims of creditors. DVC's claim was

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**Interpretation:** The approved resolution plan acts as a final settlement of dues, and creditors

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**Application:** DVC is not entitled to demand amounts exceeding Rs. 24.67 crores, as the

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## Parties

- **Judges:** Rohit K…; Harish Chander…; +1 more
- **Respondents:** Cosmic Ferro…; Damodar Valley…
- **Other parties:** CITI BA…
- **Advocates:** Siddhartha…; Sakabda…; +13 more

## Timeline

- **2018-10-11 — Resolution Plan…**: Resolution plan for Cosmic Ferro Alloys…
- **2020-08-14 — Electricity Disconnectio…**: DVC disconnected electricity supply to Cosmic Ferro Alloys Limited for non-payment of…

## 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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