M/s. Suman Exports vs Konaseema Gas Power Ltd. & Anr.

The Learned Counsel for the Appellant initially sought for the withdrawal of the Company Appeal, being CA (AT) (CH) (Ins) No. 94/2025 and the same was accordingly dismissed as withdrawn.

However, prior to the rising of the Bench, in the pre-lunch session, a mention was made by the Counsel for the Appellant that, instead of passing an order of withdrawal, an order may be passed on merits of the matter.

The facts which engage consideration in the instant Company Appeal which has been preferred under Section 61, are that the Appellant claims that he happens to be a successful auction purchaser, having been determined so in pursuance to the e-auction, which was conducted on 30.03.2024, for the entire “Konaseema Gas Power Plant Ltd.” (herein after to be called as KGPL Plant). At the time, when the Appellant was determined as to be a successful bidder, the bid was awarded in his favour for the entire KGPL Plant, with Land and Machinery for a sum of Rs. 254,90,00,000/-, as per the provisions of the I & B Code, 2016. The facts, which could be born out from record, are that KGPL Plant has a capacity of 445MW and it suffered financial stress and loss on account of non-availability of the fuel and that the said company set up with an investment of about Rs. 4,000/- Crores, was admitted to the CIRP proceedings in December 2018. Later the plant has drifted into the stage of Liquidation.

Prior to the auction in which he emerged as the successful bidder, the Liquidator had conducted, as many as 14 previous e-auctions of the KGPL plant, without success. However, in the present case, he granted time of 26 days only for making the payment of 15% of the bid value of Rs. 254.90 Crores. The Appellant requested for extension of time to deposit the same; however the Liquidator went ahead and cancelled the Letter of Intent (LOI) on account of non-payment of the said amount and forfeited the EMD of Rs. 5 Crores furnished by him.

The Appellant’s case is that after having been declared as to be a successful bidder, he required at least 2-3 months to make the arrangement of the huge finances of about Rs. 250 Crores. Besides he was also constrained to face various litigations before NCLT and to incur expenses related thereto. On his application, Learned NCLT passed an order on 07.08.2024 setting aside the cancellation of the LOI by the Liquidator, consequent to which the Liquidator vide its email communication dated 21.10.2024, granted an extension of time of 64 days for deposit of the amount, which ended on 26.12.2024. The Appellant was unable to fulfil his commitments of paying the amount as per the extension granted by the Liquidator, despite his efforts to make arrangement for the finances by taking steps even to the extent by mortgaging the property worth Rs. 175 Crores, to ICICI Bank. The ICICI Bank insisted upon site inspection, of the said plant of the Corporate Debtor in order to test its legal and technical viability, before sanction of the requested amount in view of the RBI directions as per Section 21 and Section 35(A) of the Banking Regulation Act, 1949, and in the light of the Judgment of the Hon’ble Apex Court as rendered in the matters of M/s. Pro Knits Vs Board of Directors of Canara Bank.

The ICICI Bank had requested for site inspection of the KGPL Plant, to satisfy the technical and legal compliances, and therefore the Appellant had preferred IA(IBC)294/2025, praying for facilitation of inspection by ICICI Bank of the KGPL Plant as the loan sanction process was on the last stages. However, in the meantime, the Liquidator is said to have issued another e-auction notice on 20.01.2025 for the said plant with land at a reserve price of Rs. 227.61 Crores which is much lower than his bid amount of Rs. 254.90 Crore and that it is against Regulation 32(A) (1) & 39 of IBBI (Liquidation Process Regulations, 2016).

On the IA which was preferred by the Appellant on 31.01.2025, he had prayed for the following reliefs: -

In fact, the relief was confined to facilitate a legal & technical verification by allowing the ICICI Bank, and Applicant, their expert engineers, valuers and consultants to visit the premises of KGPL Plant, and to provide all necessary documents to the ICICI Bank, to its satisfaction so that they can process the loan application. It is contended by the Appellant that, instead of considering the Application on its merit which was preferred on 31.01.2025 and taken up for consideration on 11.02.2025, the Learned Tribunal has proceeded to pass the order fixing a matter to be considered on 27.03.2025. It is this order of the adjournment which is impugned in the Appeal. The Impugned Order is extracted hereunder: -

There cannot be any iota of doubt that Section 61 is quite wide enough to include within itself any order which is passed by a Learned Adjudicating Authority to be put to challenge before this Appellate Tribunal, by any person who is aggrieved by order. What is important is that Section 61 uses the word that the term “order” referred under Section 61, it would relate to an order passed under “this part” of the I&B Code, 2016. The Section 61 itself falls to be under Part-2, Chapter – VI of I & B Code, 2016. The interpretation given to the term “order” has had to be read in consonance to the orders passed under Part 2 of I & B Code, 2016. However, Part 2 of I & B Code, 2016, can be stretched upon to an extent to grant the liberty to the Appellant to even challenge an order, which apart from the fact of being outside the ambit of Part 2 of I & B Code, 2016, happens to be an order, which is in the shape of not deciding a right of the party nor effecting any rights on merits, if simpliciter, an order of fixing of a date as extracted above.

Since the order under challenge will not form to be order falling under Part 2 of I & B Code, 2016, and since it is simpliciter an order of adjournment and fixation of a date of 27.03.2025, it will not be appealable under Section 61 of I & B Code, 2016, as it does not prejudice any of the sustainable rights of the Appellant.

“However, in the interest of justice and value maximization of the Corporate Debtor, NCLT is requested to consider his IA No. 294/2025 within a week on merits. The Appeal is disposed accordingly.”