NSL Nagapatnam Power And Infratech Ltd., Through Navneet Kumar Gupta, RP For NSL Nagapatnam Power And Infratech Ltd. vs Mahanadi Coalfields Ltd.

(Hybrid Mode)

In this Company Appeal, there was a belated challenge given by the Appellant, to the impugned order of 12.11.2024, that was passed on IA(IBC)No.538/2023, which was preferred in CP(IB)No.306/10/HDB/2017.

In the proceedings drawn by the Resolution Professional, an application was filed seeking a direction to revoke the cancellation of the 'Letter of Assurance' dated 28.06.2010 issued by the Respondent in favour of the CD and to reinstate the same, on the plea that the act of cancellation violates the moratorium imposed under Section 14 of the I & B Code, 2016, issued in favour of the Corporate Debtor.

When the Application came up for consideration, after the exchange of pleadings, the Ld. Tribunal observed that the Letter of Assurance was given for signing Fuel Supply Agreement (FSA) which was conditional upon commissioning of the project, but the project could not start because the disbursement of the loan for the project was contingent upon the Corporate Debtor, executing the FSA, and therefore the letter of assurance stood cancelled in April 2022, because of inability of the Corporate Debtor to meet the requirement of the letter of assurance to commission the thermal power project within the given deadline, which had been extended up to 31.03.2022. It further observed that Letter of Assurance was not a binding contract and that it was merely an assurance to enter into a contract which was FSA, that LoA does not constitute an agreement to supply essential goods and services to the CD, that the dispute preceded the insolvency of the CD and is not related to insolvency, and NCLT has no jurisdiction if dispute is on grounds unrelated to the insolvency of the CD and accordingly proceeded to pass the impugned order rejecting the application holding thereof that the cancellation of the letter of assurance, is not being an violative of the provisions contained under Section 14 of the I & B Code, 2016, and it is not inclined to venture into the reasoning of the Respondent in cancelling the LoA.

Today when the matter was taken up, the Appellant has submitted that the Resolution Plan as of now has already been approved by the Adjudicating Authority and the Successful Resolution Applicant(SRA) is not interested in pursuing the matter, despite the order being passed by us on 30.03.2026 to bring the SRA on record and the cause for the Appellant/RP to continue with the proceedings as against the impugned order of 12.11.2024, rejecting the application IA 538/2023, wherein he sought for restoration of the letter of assurance, has become redundant owing to the approval of the plan which has attained finality and the unwillingness of SRA to press the Appeal.

Thus, the Company Appeal is not required to be ventured into on merits as the purpose of the Appeal which sought revocation of cancellation of letter of assurance is no more does not survive to be considered on merits. Hence, with the efflux of time and because of the subsequent developments due to approval and implementation plan, the Company Appeal has been rendered infructuous and is accordingly dismissed as having been rendered infructuous.