# Vidarbha Industries Power Limited Vs. Axis Bank Limited Civil appeal No. 4633 of 2021

> SC judgment dated 2022-07-12. Citation: TCN-2022-SC-00038. Vidarbha Industries Power Limited (Appellant) appealed against the order of the National Company…

- **Court:** SC
- **Order date:** 12 Jul 2022
- **Citation:** TCN-2022-SC-00038
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/vidarbha-industries-power-limited-vs-axis-bank-limited-civil-appeal-no-4633-of-2-5b98fcd9

## Summary

### Background

Vidarbha Industries Power Limited (Appellant) appealed against the order of the National Company Law Appellate Tribunal (NCLAT) which upheld the National Company Law Tribunal's (NCLT) decision to refuse a stay on the Corporate Insolvency Resolution Process (CIRP) initiated by Axis Bank Limited (Respondent) under Section 7 of the Insolvency and Bankruptcy Code (IBC). The appellant argued that the NCLT should have considered the overall financial health and viability of the company, especially since a favorable order from the Appellate Tribunal for Electricity (APTEL) was pending implementation due to a stay granted in a related appeal before the Supreme Court. The appellant contended that the NCLT has the discretion to reject an application under Section 7(5)(a) of the

…

## Facts

Vidarbha Industries Power Limited (Appellant) is a power generating company that set up a 600 MW coal-fired thermal power plant in Maharashtra. The Maharashtra Electricity Regulatory Commission (MERC) approved a Power Procurement Agreement between the Appellant and Reliance Industries Limited (RIL). The Appellant filed an application before the MERC for truing up the Aggregate Revenue Requirement. The MERC disallowed a substantial portion of the actual fuel costs claimed by the Appellant and capped the tariff for subsequent financial years. The Appellate Tribunal for Electricity (APTEL) allowed the Appellant's appeal and directed MERC to allow the actual cost of coal purchased. However, MERC filed a Civil Appeal in the Supreme Court challenging the APTEL order, which

…

## Issues and analysis

### Issue 1: Whether Section 7(5)(a) of the Insolvency and Bankruptcy Code (IBC) is mandatory or discretionary, …

**Ratio:** The Supreme Court held that Section 7(5)(a) of the IBC confers discretionary power on the

…

**Reasoning:** The Court reasoned that the legislature deliberately used the word 'may' in Section

…

**Interpretation:** The Court interpreted Section 7(5)(a) of the IBC in the context of the overall

…

**Application:** The Court applied the ratio to the facts of the case, holding that the NCLT and

…

## Parties

- **Judges:** INDIRA BA…; J.K. MAHE…
- **Respondents:** Vidarbha Industrie…; Axis Bank L…
- **Other parties:** 7th Edition…; Section…; +7 more

## Timeline

- **2013-02-20 — MERC App…**: Maharashtra Electricity Regulatory Commission (MERC) approved a Power Procurement…
- **2013-06-21 — Amendment to Coal…**: The Cabinet Committee on Economic Affairs (CCEA) amended the New Coal Distribution Policy…

## 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)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/supreme-court-of-india/vidarbha-industries-power-limited-vs-axis-bank-limited-civil-appeal-no-4633-of-2-5b98fcd9