Orissa High Court
Tata Steel Bsl Limited vs East Coast Railways on 11 October, 2021
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P. (C) No. 32146 of 2021
And
I.A. No.14786 of 2021
Tata Steel BSL Limited .... Petitioner
Mr. A.K. Parija, Sr. Counsel along with
Mr. S.P. Sarangi, Adv.
-Versus -
East Coast Railways, .... Opposite Parties
Bhubaneswar Mr. S.R. Pattnaik, Adv.
CORAM:
DR. JUSTICE B.R. SARANGI
JUSTICE SAVITRI RATHO
ORDER
11.10.2021
Order No. This matter is taken up through hybrid mode.
2. The petitioner has filed this writ petition seeking to quash
the orders dated 27.03.2019 and 27.09.2021 under Annexure-1
series, by which the termination of LTTC Agreement dated
17.08.2017 has been done in terms of Article-9 of the agreement
and also the irregular extension of benefits of agreement after its
termination resulted in under charge of freight of Rs.25.19 Crores
has been awarded against the petitioner, and further seeks direction
to the opposite parties to restore the second LTTC agreement dated
17.08.2017 for the remainder of its term.
3. Mr. A.K. Parija, learned Senior Counsel appearing along
with Mr. S.P. Sarangi, learned counsel for the petitioner contended
that long term tariff contracts (LTTC) has been executed with M/s
Bhusan Steel Limited using pre-determined price escalation on
17.08.2017, of which clause-2.5.1 provides that validity/term of the
contract shall be for a mutually agreed period which can range
from three to five years starting from the
commencement/implementation date of operation of the contract,
i.e. from 01.07.2017. During subsistence of that agreement,
resolution was executed on 03.02.2018 under the provisions of the
Insolvency and Bankruptcy Code, 2016. Sub-clause (i) of Clause-
8.6.7. of Contractual Arrangements to Continue provides that all
agreements/arrangements/purchase orders/work orders, etc.
between the company and any person shall continue in full force
and effect and shall remain valid and binding against the company
and the relevant counterparties (notwithstanding that corporate
insolvency resolution proceedings have been initiated against the
company and/or a change the control of the company has been
effected), provided that all claims (whether pending, contingent or
otherwise) made against the company by the counter parties to
such agreement/arrangements/purchase orders/work orders, shall
stand abated, withdrawn, settled and/or extinguished, and the
company shall have no liability towards such counterparties
relating to the period prior to the closing date. It is contended that
National Company Law Tribunal, New Delhi, Principal Bench in
C.A. No.244 (PB)/2018, C.A. No. 186 (PB)/2018, C.A. No.217
(PB)/2018 and C.A. No.176 (PB)/2018 in C.P. (IB)-201(PB)/2017,
passed order under Section 7 of Insolvency and Bankruptcy Code,
2016 on 15.05.2018 stating inter alia that the NCLT has accepted
and approved the CoC resolution plan of H1 Resolution Applicant-
TSL and also approve the appointment of monitoring agency from
the date of the approval of the CoC approved resolution plan to
function until the closing date i.e., the date on which the
implementation of the steps set out in Annexure-5 to the said
application of the CoC approved resolution plan would be
completed. This question has also considered by the apex Court in
the case of Ghanashyam Mishra and Sons Private Limited
through the Authorized Signatory v. Edelweiss Asset
Reconstruction Company Limited through the Director and
others, 2021 SCC OnLine SC 313, wherein in paragraph-58
reference has been made to Section 31 of the I&B Code and the
apex Court held that once the resolution plan is approved by the
Adjudicating Authority, after it is satisfied, that the resolution plan
as approved by CoC meets the requirements as referred to in sub-
section (2) of Section 30, it shall be binding on the Corporate
Debtor and its employees, members, creditors, guarantors and
other stakeholders. As such, while concluding the same, in
paragraph-95 of the judgment, it has been held that once a
resolution plain is duly approved by the Adjudicating Authority
under sub section (1) of Section 31, the claims as provided in the
resolution plan shall stand frozen and will be binding on the
Corporate Debtor and its employees, members, creditors, including
the Central Government, any State Government or any local
authority, guarantors and other stakeholders.
5. Mr. A.K. Parija, learned Senior Counsel appearing for the
petitioner lay emphasis on the word other stakeholders and
contended that if for operation of law, CoC approved the resolution
plan, the opposite party could not and should not have take any
coercive measure under Annexure-1 for termination of agreement
and consequential order on 27.09.2021. It is further contended that
similar matter had come up for consideration before this Court in
W.P.(C) No.26022 of 2019 and W.P.(C) No.10626 of 2021 and
while issuing notice in the said matters, this Court protected the
interest of the petitioners therein.
6. In the opinion of this Court, the matter requires
consideration.
7. Issue notice to the opposite party.
8. Since Mr. S.R. Pattnaik, learned counsel has already
entered appearance for the opposite party, let one extra copy of the
writ petition be served on him enabling him to obtain instructions
or file counter affidavit.
9. As an interim measure, it is directed that there shall be
stay operation of the order dated 27.03.2019 under Annexure-1 and
consequential order dated 27.09.2021 till 02.11.2021.
10. List along with the records of W.P.(C) No.26022 of 2019
and W.P.(C) No.10626 of 2021.
Issue urgent certified copy as per rules.
(Dr. B.R. Sarangi)
Vacation Judge
Ashok (Savitri Ratho)
Vacation Judge
