India Power : Disclosure under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”) regarding admission of Petition by Financial Creditor for initiation of the Corporate Insolvency Resolution Pr

Ref: IPCL/SE/LODR/2026-27/CIRP 16th May, 2026

Bandra (E), Mumbai- 400 051. Scrip Symbol: DPSCLTD

Building A, Unit 205A, 2nd Floor, Piramal Agastya Corporate Park,

L.B.S Road, Kurla West, Mumbai - 400 070

Scrip Symbol: DPSCLTD

Dear Sir (s),

Pursuant to Regulation 30 of the SEBI Listing Regulations, we hereby inform that a Petition for initiation of the Corporate Insolvency Resolution Process under Section 7 of the Insolvency and Bankruptcy Code, 2016 filed against India Power Corporation Limited ("Company") by State Bank of India ("Financial Creditor") has been admitted against the Company by the Hon'ble National Company Law Tribunal, Hyderabad Bench -I ("NCLT") vide its order dated 15.05.2026 and Ms. Medarametla Srinivasa Manoranjani (having registration no. IBBI/IPA-001/IP-P00736/2017-2018/11235) has been appointed as Interim Resolution Professional by the NCLT. Copy of Order is attached.

You are requested to take the above information on record and acknowledge the same. Thanking you,

Dhananjoy Karmakar

Digitally signed by Dhananjoy Karmakar Date: 2026.05.16 19:16:43

+05'30'

Encl: as above

CIN: L40105WB1919PLC003263

[formerly DPSC Limited]

Registered Office: Plot No. X1- 2&3, Block-EP, Sector -V, Salt Lake City, Kolkata - 700 091 Tel.: + 91 33 6609 4308/09/10, Fax: + 91 33 2357 2452

Central Office: Sanctoria, Dishergarh 713 333, Telephone: (0341) 6600454/457 Fax: (0341) 6600464

E: [email protected] W: www.indiapower.com

IN THE NATIONAL COMPANY LAW TRIBUNAL HYDERABAD BENCH - 1

VC AND PHYSICAL (HYBRID) MODE

ATTENDANCE CUM ORDER SHEET OF THE HEARING HELD ON

IN THE MATTER OF:

Company Petition IB/205/2021

u/s. 7 of IBC, 2016

State Bank of India …Financial Creditor

AND

India Power Corporation Ltd …Corporate Debtor

SH. RAJEEV BHARDWAJ, HON'BLE MEMBER (JUDICIAL) SH. SANJAY PURI, HON'BLE MEMBER (TECHNICAL)

O R D E R

Item No. 1

Present: Mr. Shivansh, Learned Counsel for the Petitioner.

Mr. Anirban Bhattacharya, Learned Counsel for the Respondent.

Orders pronounced, recorded vide separate sheets.

In the result, this Company Petition IB/205/2021 is admitted.

Sd/- Sd/-

MEMBER (T) MEMBER (J)

Manohar

IN THE NATIONAL COMPANY LAW TRIBUNAL

HYDERABAD BENCH - I

CP (IB) No.205/7/HDB/2021

[Under Section 7 of the Insolvency and Bankruptcy Code, 2016 read with Rule 4

of Insolvency and Bankruptcy (Application to Adjudicating Authority Rules), 2016, read with Section 60(2) of the Insolvency and Bankruptcy Code, 2016]

Between:

State Bank of India,

State Bank Bhavan, Madam Cama Road,

Mumbai - 400 021 and acting through

its Branch at Stressed Assets Management Branch, Hyderabad (Branch Code:18359),

D.No.3-4-1013/A, 1st Floor, CAC,

TSRTC Bus Station, Kachiguda,

Hyderabad - 500 027, Represented by

its Authorised Representative Mr.T.Veerabhadra Rao

And M/s.India Power Corporation Limited,

Regd. Office: Centre for Excellence, Plot No.X-1, 2 & 3, Block EP,

Sector V, Salt Lake, Kolkata - 700 091, Represented by its Managing Director.

Coram:

Shri Rajeev Bhardwaj, Hon'ble Member (Judicial) Shri Sanjay Puri, Hon'ble Member (Technical)

Counsel/Parties present:

…Financial Creditor

… Corporate Debtor Date of Order: 15.05.2026

For the Petitioner : Mr. Vivek Reddy, Senior Counsel

along with Mr. Surabhi Khattar and Mr.D.Narender Naik, Advocates.

For the Respondent : Mr. Abhijeet Sinha, Senior Counsel

alongwith Mr. Anirban Bhattacharya and Mr. Shreyan Reddy, Advocates

O R D E R

1. The present Petition has been filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (Code/IBC) by State Bank of India (Financial Creditor/SBI) seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against M/s.India Power Corporation Limited (Corporate Debtor/IPCL), in its capacity as a Corporate Guarantor for the financial facilities availed by M/s.Meenakshi Energy Limited (Principal Borrower/MEL).

2. The present Petition was earlier rejected by this Adjudicating Authority vide Order dated 30.10.2023. Aggrieved thereby, the Financial Creditor preferred an Appeal before the Hon'ble National Company Law Appellate Tribunal (NCLAT), which came to be dismissed. The Financial Creditor thereafter approached the Hon'ble Supreme Court by way of Civil Appeal bearing No. 8178 of 2023. The Hon'ble Supreme Court, vide order dated 14.02.2025, set aside the earlier orders and remanded the matter to this Adjudicating Authority with a direction to consider the case afresh, particularly taking into account the Rejoinder filed by the Financial Creditor.

3. For the sake of convenience, the documents relied upon by the Financial Creditor in the Petition shall be referred to as "Exhibit-1…", and those filed along with the Rejoinder shall be referred to as "Annexure-1…". Similarly, the documents filed by the Corporate Debtor/IPCL shall be referred to as "Annexure-R1…."

   Petition

4. It is the case of the Financial Creditor that a Consortium of Lenders, comprising State Bank of India and its then Associate Banks, namely, State Bank of Bikaner and Jaipur (SBBJ), State Bank of Mysore (SBM), State Bank of Patiala (SBP), State Bank of Hyderabad (SBH) and State Bank of Travancore (SBT) and others (collectively referred as SBI and Associate Banks) sanctioned and disbursed various credit facilities to the Principal Borrower under multiple financing arrangements.

5. The Consortium extended financial assistance aggregating to Rs.552,00,00,000/- under the Common Loan Agreement dated 10.07.2009, as amended from time to time by Amendatory Agreements dated 30.05.2011, 24.01.2014 and 23.09.2016 (Phase I Loan Agreements).

6. The Consortium further extended term loan facilities of Rs.1296,35,00,000/-under the Common Loan Agreement dated 01.10.2010, as amended and restated by Agreements dated 30.01.2014, 26.12.2014 and 23.09.2016 (Phase II Loan Agreements).

7. The details of lender-wise disbursements are set out in Exhibit-4 of the Petition. The summary of total debts sanctioned by the consortium of lenders and disbursed are given in the following table:

   Sr. No.	Facility Agreement	Total amount sanctioned by the consortium lenders (Rs.in crores)	Total amount sanctioned by the Financial Creditor (Rs.in crores)	Amount disbursed (in Rs.)
   1.	Phase I Loan Agreements	Facility: 1057		and

   1. SBI: 302 (including sub-limit of LC facility of 180)

   1. SBI:

      1. Rs.249,87,73,665/-(A/c.No.30919759304;

      2. Rs.50,21,59,235/-(A/c.No.3221650929)

   			Total: 552	Total: Rs.548,29,92,503/-
   2.	Phase II Loan Agreements	Facility:3386.35 (i.e. 2340 by existing lenders and 1046.35 by refinancing lenders)	foreign LC/little of comfort equivalent to 300) foreign LC/ domestic LC equivalent to 50) foreign LC/ domestic LC equivalent to 100) foreign LC/ domestic LC equivalent to 60) foreign LC/ domestic LC equivalent to 100) Total: 1296.35	Total: Rs.1193,95,65,004/-
   3.	Additional Phase II Loan Agreements	Facility: 1131 (i.e. 222.84 - additional facility and 908.16 - standby facility)	Total: 395.77	These facilities were sanctioned but not disbursed

   1. SBH: 100

   2. SBBJ: 50

   3. SBM: 50 (including sub-limit of LC Facility of 50)

   4. SBT: 50

   1. SBH: Rs.99,34,90,586/-

   2. SBBJ: Rs.49,17,62,197/-

   3. SBM: Rs.49,68,07,646/-

   4. SBT: Rs.49,99,99,174/-

   1. SBI: 896.35 (with

   2. SBH: 100 (with

   3. SBBJ:100 (with

   4. SBM: 100 (with

   5. SBP: 100 (with

   1. SBI : Rs.828,14,50,863/-

   2. SBH : Rs.93,09,77,597/-

   3. SBBJ: Rs.89,34,34,333/-

   4. SBM : Rs.92,47,63,415/-

   5. SBP : Rs.90,89,38,796/-

   1. SBI: 197.48

   2. SBH: 50

   3. SBBJ:48.29

   4. SBM: 50

   5. SBP: 50

8. It is noted that the Associate Banks forming part of the lending Consortium were amalgamated with State Bank of India pursuant to a Gazette Notification (Exhibit-1) with effect from 01.04.2017. Consequently, all rights, interests and claims of the erstwhile Associate Banks stand vested in the Financial Creditor.

9. In order to secure the aforesaid facilities, various financing documents came to be executed. The Corporate Debtor executed Deeds of Guarantee dated 23.09.2016 in favour of the Security Trustee, SBICAP Trustee Company Limited, acting on behalf of the lenders, in respect of both the Phase-I and Phase-II facilities, thereby unconditionally guaranteeing repayment of the dues of the Principal Borrower. The relevant financing documents have been placed on record as Exhibit-6. The statement/schedule of default in respect of the Phase-I facility as on 31.01.2020 has been placed on record as Exhibit-5, duly supported by the financial statements.

10. Upon occurrence of default by the Principal Borrower in repayment of the loan amounts in terms of the financing documents, the guarantees executed by the Corporate Debtor came to be invoked by the Financial Creditor. Demand Notices were accordingly issued to the Corporate Debtor, namely:

    1. Demand Notice dated 20.12.2017 (Exhibit-8) calling upon the Corporate Debtor to pay an amount of Rs.93,57,91,585/-; and (ii) Demand Notice dated 07.02.2020 (Exhibit-17) calling upon the Corporate Debtor to pay an amount of Rs.967,21,68,885.68/- in respect of the Phase-I facility. However, despite invocation of the guarantees, the Corporate Debtor failed to discharge its obligations as guarantor.

11. According to the Financial Creditor, the aforesaid failure on the part of the Corporate Debtor to honour its obligations under the Deeds of Guarantee dated 23.09.2016 constitutes a default within the meaning of Section 3(12) of the Code, thereby rendering the Corporate Debtor liable for initiation of CIRP under Section 7 of the Code.

    Counter:

12. The Corporate Debtor has filed its counter affidavit opposing the Petition and disputing the existence of any financial debt and default.

13. Relying upon the judgment of the Hon'ble Supreme Court in Innoventive Industries Ltd v. ICICI Bank (2018) 1 SCC 407, it is contended that in the absence of a legally enforceable debt, the present Petition is not maintainable. The Corporate Debtor has raised the following contentions:

    A. No debt is due in Law

14. While not disputing the availing of financial facilities by the Principal Borrower/MEL, the Corporate Debtor has submitted that MEL had pledged shares held by IPCL, which had acquired approximately 95.07% of the equity shareholding of MEL from its erstwhile promoters around the year 2016. Upon acquisition of the shares of MEL, IPCL, being the holding company of MEL, executed two Deeds of Guarantee dated 23.09.2016, one in favour of SBICAP Trustee Company Limited, acting as Security Trustee in respect of the Phase-I facilities, and another in favour of the lenders in respect of the Phase-II facilities. IPCL and MEL also executed a Share Pledge Agreement dated 23.09.2016 in favour of SBICAP Trustee Company Limited.

15. When MEL defaulted in timely servicing of the principal repayments and interest payments, its account was classified as Non-Performing Assets (NPA) on 28.10.2017. Then, the SBI issued Notice on 07.08.2018 demanding repayments for the outstanding amount as on 31.07.2018 and on account of failure in making such payments by the MEL. Subsequently, the

    SBI recalled the facilities availed by MEL and the entire exposure of SBI in Phase I Project and Phase II project became due and payable by MEL.

16. On 20.12.2017, a Notice of Demand and a Notice of Invocation of Pledge were issued by SBICAP Trustee as Security Trustee for the benefit of Phase I lenders and as agent for the benefit of Phase II lenders. Consequently, the pledged shares of MEL, which were held by IPCL, were sold/transferred to SBICAP Trustee who, on such transfer, became the beneficial owner of the shares.

17. It is claimed that when the pledged shares were invoked and transferred on 02.05.2018, the value of shares was in excess of Rs.6000 crores. The SBI in Form 1 has also declared the value of the assets of MEL at Rs.5400 Crores.

18. The SBI filed an Application under Section 7 of the IBC on 26.03.2019 bearing CP(IB) No.184/7/HDB/2019 for initiating CIRP against MEL. The total amount claimed was Rs.15,97,44,66,368.24. This Application was admitted by this Adjudicating Authority vide Order dated 07.11.2019 and the Order was upheld by the Hon'ble NCLAT in Company Appeal (AT) Insolvency Nos.1220/2019 and 1450/2019.

19. On the aforesaid basis, it is contended that the debt stood sufficiently secured by the pledged shares and that, upon invocation and transfer thereof, SBI allegedly realised value in excess of Rs.3636 crores. It is therefore contended that SBI ceased to be a financial creditor in terms of Regulation 58 of the SEBI (Depositories and Participants) Regulations, 1996 and Clause

    2.6 of the Share Pledge Agreement dated 23.09.2016.

20. The Corporate Debtor has also placed reliance upon Clauses 1.3 and 2.1 of the Share Pledge Agreement dated 23.09.2016 and contended that, upon invocation and transfer of the pledged shares by IPCL in favour of SBICAP Trustee Company Limited on 02.05.2018, the debt liability of MEL stood discharged to that extent and SBI ceased to remain a financial creditor from the said date.

21. In view of the circumstances explained above, the present Petition filed by SBI purporting to be a Financial Creditor of IPCL for the purported default as on 31.01.2020 is not maintainable.

    1. Issue of discharge of MEL is pending before the Hon'ble Supreme Court

22. The issue whether after the invocation of the pledge, debt already stands discharged is pending for adjudication at the final stage before the Hon'ble Supreme Court of India in Civil Appeal Nos. 3307/2020 and 3309/2020.

23. The Corporate Guarantee dated 23.09.2016 is in contravention of Regulation

    5.13.2 of the West Bengal Electricity Regulatory Commission (Licencing and Conditions of Licence) Regulations, 2013 (WBERC Regulations). The Guarantee Agreement is in contravention of Law and resultantly it is void.

    1. Validity of Corporate Guarantee

24. The IPCL is a deemed distribution licensee as per the first proviso to Section 14 of the Electricity Act, 2003 doing business in the area of supply specified in the license as defined under Section 2(17) of the 2003 Act. Thus, the IPCL is regulated entity and is regulated by the Electricity Act and the regulations framed thereunder and particularly, the WBERC Regulations.

25. Regulation 5.13.2 of WBERC Regulations, 2013 for having the written consent from the West Bengal Electricity Regulation Commission (WBERC) is intended to protect the interests of consumers and contravention of the said mandatory regulations make the Corporate Guarantee dated 23.09.2016 void and unenforceable in Law. Regulation

    5.13.2 is in public interest because it has to ensure that the Licensee does not take upon itself any kind of obligation which make for an adverse effect on its regulated business.

26. Therefore, the Corporate Guarantee could not be provided without the prior consent of the WBERC. However, the IPCL was induced to provide the guarantee to the lenders on their specific opinion and advice that the prior approval of WBERC is not required. In this regard, the IPCL has referred to various correspondence/information including letters dated 29.07.2016 (Annexure-2), letter dated 14.09.2016 (Annexure-3), Opinion dated 19.09.2016 (Annexure-4), letter dated 22.09.2016 (Annexure-5), Affidavit dated 23.09.2016 (Annexure-6), WBERC Order dated 09.11.2017 (Annexure-8), letter dated 22.11.2017 (Annexure-9), letter dated 01.12.2017 (Annexure-10), letter dated 13.12.2017 (Annexure-11), letter dated 11.01.2018 (Annexure-12), copy of WBERC Order dated 07.08.2018 (Annexure-13), copy of the Application dated 26.10.2021 filed before WBERC (Annexure-14) and written statement filed by SBICAP Trustee in COS No.266 of 2017 (Annexure-15). These documents clearly show that IPCL did not agree to give Corporate Guarantee citing Regulation 5.13.2 of the WBERC Regulations, but as per lenders legal counsel, such guarantee can be given only to non-regulated assets and surplus from regulated assets. Even the Application of the IPCL to WBERC to give permission for such guarantee was declined vide Order dated 07.08.2018. In these

    circumstances, the lenders allegedly coerced the Director of IPCL to agree to the terms and conditions of the Guarantee Agreement.

27. On the aforesaid basis, the Corporate Debtor has contended that the Corporate Guarantees dated 23.09.2016 are hit by Regulation 5.13.2 of the WBERC Regulations and are consequently void and unenforceable under Section 23 of the Indian Contract Act, 1872.

    1. Effect of statutory prohibition

28. It is a settled Law that an act prohibited by statute, the same is void and the private agreements cannot alter the general law. The purpose behind enacting the Regulation 5.13.2 of the WBERC Regulations renders any giving of the Corporate Guarantee dated 23.09.2016 unenforceable in Law. When this agreement is unenforceable, no Court can lend its aid to a person who founds his cause of action upon an illegal act.

    1. Limited recourse under the Guarantee

29. The Corporate Guarantee dated 23.09.2016 was framed in such a manner as to restrict the recourse of the lenders under the Corporate Guarantee only to the non-regulated assets and surplus assets from the Regulated Assets of the IPCL. In this regard, reference has been made to Clauses 2.1, 2.2 and 2.7.

30. The IBC does not make any distinction between the regulated and non-regulated assets of the Corporate Debtor and therefore, the Corporate Guarantee cannot be enforced in the IBC.

    1. The Petition suffers from Suppressio Veri, Suggestio Falsi

31. The Financial Creditor has withheld the material facts from this Authority by not disclosing that the pledged item 2 mentioned at page 27 of the Petition/Application has been invoked and transferred to SBICAP Trustee being the Security Trustee of the Applicant and other Phase I lenders and the Security Agent of the Phase II lenders. Therefore, the Application suffers from Suppressio Veri, Suggestio Falsi.

    1. The Form 1 is defective with no date of default mentioned in Part IV

32. The Application is defective because date of default has not been mentioned in Part IV.

    Rejoinder

33. In the Rejoinder, the Financial Creditor has reiterated the averments made in the Petition and has sought to respond to the contentions raised in the counter affidavit.

34. It is clarified that the MEL was originally promoted by M/s.Meenakshi Energy and Infrastructure Holdings Private Limited. In 2013, a French Energy Company, Engie Global Developments B.V. (Engie) acquired approximately 89% shareholding in MEL. Subsequently, Engie initiated steps to exit the project. Thereafter, around February 2016, MEL came to be acquired by IPCL, pursuant to a transaction involving a bid cost of USD 1 (One) and a reward of USD 40 million payable by Engie to IPCL for completion of the transaction and further equity infusion of USD 300 million by Engie in MEL.

35. The lenders of MEL, including SBI, accorded their approval for transfer of shareholding from Engie to IPCL, subject to certain conditions.

    1. In this regard, an Unattested Share Pledge Agreement and a Power of Attorney were executed on 23.09.2016 among MEL, IPCL, and SBI Cap Trustee Company Limited for the benefit of Phase-I and Phase-II lenders. Under the said arrangement, IPCL pledged 100% of its shareholding to SBI Cap Trustee Company Limited for the benefit of the lenders. A copy of the Share Pledge Agreement has been marked as Annexure- R1.

    2. Mr. Asok Kumar Goswami, the erstwhile Director of IPCL, filed an affidavit Annexure R-2 dated 23.09.2016 on behalf of IPCL stating that IPCL is a distribution licensee under the WBERC Regulations, and therefore, no prior consent of the Commission was required for the said transaction.

    3. Based on the said affidavit and subsequent discussions, IPCL, along with its group entity, executed a Deed of Guarantee dated 23.09.2016 in favour of the Phase-I and Phase-II lenders. In this context, specific reliance has been placed on Clauses 12, 17 and 18 of the said Deed of Guarantee by the Petitioners.

36. Engie exited MEL on 30.09.2016, pursuant to which IPCL received USD 40 million. However, the said amount was not infused into the Trust and Retention Account (TRA) for the Phase-II project as required under the lender agreements. IPCL, by letter dated 16.11.2016 (Annexure R-3), confirmed receipt of the said amount.

37. Defaults in repayment continued, leading to issuance of a demand notice dated 20.12.2017 (Annexure-R4) by SBI Cap Trustee Company Limited calling upon IPCL to pay Rs.93,57,91,585/- within seven days.

38. On the same day, a Notice under Section 176 of the Indian Contract Act was issued to the Corporate Debtor on behalf of Phase-I lenders for invocation of the pledge of shares of MEL held by IPCL under the Share Pledge Agreement. The total number of pledged shares was stated to be 3,81,15,06,509 (Pledged Shares).

39. MEL and IPCL challenged the invocation by filing COS No. 266 of 2017 before the Court of Hon'ble XXIV Additional Chief Judge-cum-Commercial Court, City Civil Court, Hyderabad, inter alia, seeking a declaration that the Deed of Corporate Guarantee dated 23.09.2016 is null and void (Annexure-R6). The said Civil Suit was subsequently withdrawn on 02.04.2019 without seeking or obtaining liberty to institute a fresh suit (Annexure-R7).

40. It is alleged that on 26.12.2017, MEL, in collusion with IPCL, issued 10,02,34,046 additional shares to IPCL with an intent to dilute the effect of invocation of pledge and defraud creditors. The said act is stated to be in violation of the Companies Act, 2013 and Rule 4(1) (g) of the Companies (Share Capital and Debentures) Rules, 2014, particularly when MEL had already been classified as NPA by the Phase-I lenders.

41. The amount of USD 40 million received from Engie was not infused as equity into the Phase-II project as required under the agreements with the lenders, thereby constituting a breach of contractual obligations. In view of these defaults, the Rural Electrification Corporation (REC) issued a notice

    dated 04.01.2018 (Annexure R-8) declaring an event of default against MEL and IPCL.

42. In the Joint Lenders' Meeting held on 08.02.2018, MEL was directed to cancel the allotment of additional shares, failing which the lenders resolved to initiate legal action. Meanwhile, the pledged shares, upon invocation, were transferred to the demat account of SBI Cap Trustee Company Limited on 02.05.2018.

43. Despite such transfer, the pledged shares allegedly carried only limited voting rights of approximately 3.75%, as a result of which effective management and control of MEL continued to remain with MEL and IPCL. Reliance has also been placed upon various communications dated 18.01.2018, 05.02.2018, 16.02.2018, 25.05.2018, 11.06.2018 and

    10.07.2019 addressed by MEL proposing settlement and negotiations, to demonstrate acknowledgment of the subsisting debt and liability.

44. IPCL filed Writ Petition No. 26999 of 2018 (Annexure-R10) before the Hon'ble High Court of Andhra Pradesh, Vijayawada, challenging the lenders' action for change of management, which was withdrawn on 15.02.2019 (Annexure R-11). Another Writ Petition No. 26977 of 2018 was filed before the Hon'ble High Court for State of Telangana and the State of Andhra Pradesh at Hyderabad challenging transfer of shares to SBI Cap Trustee Company Limited without valuation (Annexure R-12). This Writ Petition was also not pursued by the IPCL. In both the Writ Petitions, IPCL raised grounds similar to those taken in the present reply.

45. MEL also filed Writ Petition No. 30048 of 2018 (Annexure R-13) seeking to restrain coercive steps pursuant to recall notice dated 07.08.2018. Interim relief granted therein was vacated by Order dated 23.01.2019 (Annexure R-

    14), wherein the High Court observed that issuance of additional shares after invocation of pledge did not appear to be justified. Aggrieved thereby, MEL preferred Writ Appeal No. 203 of 2019 before the Division Bench of Hon'ble High Court of Telangana at Hyderabad, which was dismissed by Order dated 17.04.2019.

46. Subsequent to the vacation of interim relief, SBI filed a Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 against MEL before this Authority seeking initiation of CIRP. The said petition came to be admitted by Order dated 07.11.2019 (Exhibit-16). The Admission Order was challenged by IPCL and its independent director, Mr. Debashish Som, by filing Company Appeal (AT) Insolvency Nos. 1220 of 2019 and 1450 of 2019 before the Hon'ble NCLAT, which were dismissed by judgment dated 10.09.2020.

47. Thereafter, IPCL and the said Director filed Civil Appeal Nos. 3307 and 3309 of 2020 (Annexure R-15) before the Hon'ble Supreme Court, which were subsequently withdrawn on 20.05.2020 (Annexure R-16).

48. Then SBI Cap Trustee Company Limited, acting on behalf of the lenders, issued a demand notice dated 07.02.2020 to IPCL in respect of the Corporate Guarantee furnished for the Phase-I facilities extended to MEL. By way of the said notice, IPCL was called upon to pay an amount of Rs.967,21,68,885.68 within a period of seven days from the date of receipt of the demand.

49. Upon failure of IPCL to comply with the said demand, a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 came to be filed on 26.02.2020 seeking initiation of CIRP against IPCL. The said petition was filed on the basis of default arising from invocation of the Corporate

    Guarantee furnished by IPCL in respect of the Phase-I facilities, with the claimed default amount stated to be Rs.500,47,58,255.44.

50. In view of the aforesaid facts, the Petitioners have raised specific grounds to question the bona fides of IPCL/Corporate Guarantor.

    1. Issue of invocation of pledge

51. The stand of IPCL that the debt stands discharged upon invocation of pledge is erroneous and contrary to law. Reliance is placed on the judgment of the Hon'ble Supreme Court in PTC India Financial Services Limited vs. Venkateswarlu U Kari & Anr. (2022 SCC OnLine SC 608) (Annexure R-17), wherein it has been held that invocation of pledge and transfer of pledged shares does not by itself amount to satisfaction of the underlying debt, and the pledgee retains the right to recover the balance dues.

52. Transfer of pledged shares of MEL to SBI Cap Trustee Company Limited upon invocation of pledge was only for the purpose of enabling the trustee, on behalf of the lenders, to exercise its rights as a pledgee under Section 176 of the Indian Contract Act. Such transfer, therefore, does not extinguish the liability of IPCL under the Deed of Guarantee. It is also pointed out that IPCL had withdrawn Civil Appeal No. 3309 of 2020 before the Hon'ble Supreme Court, thereby abandoning its challenge in this regard.

    1. Bar on challenge to Deed of Guarantee

53. IPCL is barred from challenging the validity of the Deed of Guarantee, having earlier raised an identical challenge in COS No. 266 of 2017 before the Hon'ble Additional Chief Judge-cum-Commercial Court, Hyderabad, seeking a declaration that the Deed of Guarantee dated 23.09.2016 is null and void. The said suit was withdrawn on 02.04.2019 without seeking or

    obtaining liberty under Order XXIII Rule 1(3) of the Code of Civil Procedure, 1908 (CPC). Consequently, the issue regarding validity of the Deed of Guarantee has attained finality and cannot be re-agitated.

54. The subsequent conduct of IPCL also disentitles it from raising such challenge. After execution of the Deed of Guarantee, IPCL approached the WBERC in February 2017 seeking approval to issue the Corporate Guarantee for acquiring business activities beyond its licensed area under Regulation 5.13.2 of the applicable Licensing Regulations. The WBERC, by Order dated 09.11.2017, rejected the said request. At the time of making such application, IPCL was fully aware of the defaults committed by MEL and its obligations under the financing arrangements.

55. IPCL did not challenge the said Order dated 09.11.2017. Instead, it filed a fresh application dated 15.05.2018 (Annexure R-18) before WBERC again seeking approval to provide Corporate Guarantee. The WBERC, by Order dated 07.08.2018, observed that the financial position of IPCL did not permit extension of such guarantee and that the same may adversely affect its licensed operations.

56. Even after initiation of proceedings under Section 7 of the Insolvency and Bankruptcy Code, 2016, IPCL once again approached WBERC on 26.10.2021 seeking clarification as to whether prior approval was required for issuance of the Corporate Guarantee. The WBERC, by communication dated 22.12.2021 (Annexure R-19), directed IPCL to explain why action under Section 142 of the Electricity Act, 2003 should not be initiated against it. However, no finding was rendered by WBERC on the validity of the Deed of Guarantee.

57. It is emphasised that even in COS No. 266 of 2017, IPCL had relied upon the WBERC Order dated 09.11.2017 as part of its Cause of Action. Therefore, the subsequent attempt by IPCL to once again approach WBERC on the same issue is contended to be mala fide and a calculated attempt to create a fresh Cause of Action for re-agitating an issue which has already attained finality.

    1. Existence of debt and default already ascertained by this Authority

58. The existence of debt and default has already been adjudicated and established by this Adjudicating Authority in CP (IB) No. 184/7/HDB/2019 filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 against MEL by SBI. The Order of Admission passed therein has attained finality, as the Appeals preferred against the said Order in Company Appeal (AT) Nos. 1220 of 2019 and 1450 of 2019 were dismissed by the Hon'ble NCLAT, and the Civil Appeal Nos. 3307 of 2020 and 3309 of 2020 filed before the Hon'ble Supreme Court were subsequently withdrawn. Accordingly, the issue of existence of debt and default stands conclusively determined.

59. It is further evident that IPCL has, on multiple occasions, acknowledged its liability towards the lenders. In I.A. No. 648 of 2021 filed in CP (IB) No. 184/7/HDB/2019 (Annexures R-20 and R-21), IPCL has, inter alia, admitted that (i) the CIRP against MEL was rightly initiated; (ii) invocation of pledge by SBI Cap Trustee Company Limited does not result in discharge of the underlying debt; (iii) IPCL, as Corporate Guarantor, is liable for the debt of MEL, its liability being co-extensive; and (iv) the Deed of Guarantee is valid, subsisting, and enforceable.

60. Apart from the above, MEL as well as IPCL had, from time to time, submitted proposals for settlement of dues, including communications dated 18.01.2018, 05.02.2018, 16.02.2018, 25.05.2018, 11.06.2018, and

    10.07.2019. These communications further reinforce the acknowledgment of liability and subsistence of debt.

    1. Corporate Guarantee is valid and subsisting

61. The Deed of Corporate Guarantee was executed on 23.09.2016. Prior to its execution, an affidavit dated 23.09.2016 was filed by Mr. Ashok Kumar Goswami, erstwhile Director of IPCL, certifying that IPCL, being a distribution licensee under the applicable regulations of the WBERC Regulations, was not required to obtain prior approval for issuance of the Corporate Guarantee.

62. It is evident that several discussions and meetings had taken place between IPCL and the lenders prior to execution of the Corporate Guarantee. The lenders, including SBI, had accorded their approval for transfer of Engie's stake in MEL to IPCL, subject to the condition that IPCL would step into the position of the outgoing promoter and assume its obligations by providing undertakings and a Corporate Guarantee under the financing documents. The execution of the Corporate Guarantee thus formed a fundamental condition for change in management and substitution of the security earlier provided by the outgoing promoter.

63. The said arrangement was accepted by IPCL as part of the transaction and was not the result of any coercion or undue influence by the lenders. There is no material to suggest that the lenders compelled IPCL to execute the Corporate Guarantee. On the contrary, the execution of the guarantee was a

    commercial decision undertaken by IPCL as part of acquisition of control over MEL.

64. Insofar as the issue of Regulatory Approval is concerned, it is contended that no prior approval of WBERC was required at the time of execution of the Corporate Guarantee, particularly when IPCL proposed to service its obligations from non-regulated revenues and permissible surplus. The Petitioners have also placed reliance on Clauses 2.1, 12, 17, and 18 of the Deed of Guarantee in this regard.

65. It is a settled principle of Law that a party cannot take advantage of its own wrong. Even assuming that IPCL failed to obtain any approval at a later stage, the same cannot invalidate the Corporate Guarantee, particularly when such situation arose due to the conduct and defaults attributable to IPCL itself.

66. It is further noted that IPCL approached WBERC in February 2017 seeking approval under Regulation 5.13.2 of the applicable Licensing Regulations. The said request was rejected by Order dated 09.11.2017. IPCL did not challenge the said Order and instead sought to reagitate the issue by filing a fresh application and subsequently by approaching WBERC again on 26.10.2021 seeking clarification.

67. Such repeated attempts to approach the regulator on the same issue, despite earlier rejection and without pursuing appellate remedies, are indicative of a mala fide attempt to create a fresh Cause of Action and avoid liability under the Corporate Guarantee.

68. In the aforesaid circumstances, it is contended that there is no infirmity in the Deed of Corporate Guarantee executed by IPCL, and the challenge raised is merely an attempt to evade its contractual and legal obligation.

    1. No distinction between regulated and non-regulated assets

69. IPCL has sought to draw an artificial distinction between regulated and non-regulated assets, which is wholly irrelevant for adjudication of the present petition under Section 7 of the Insolvency and Bankruptcy Code, 2016. The Code does not contemplate any such distinction while determining the existence of debt and default.

70. The interpretation advanced by IPCL, if accepted, would render entities engaged in regulated sectors immune from initiation of Insolvency Proceedings under the Code, which could not have been the legislative intent. The Scheme of the Code does not exclude regulated entities from its ambit, and the CIRP framework applies uniformly, subject only to limited sector-specific considerations.

71. It is pertinent to note that several regulated entities have undergone CIRP under the Code, including Companies in Sectors such as Telecommunications and Infrastructure, where core assets are subject to regulatory oversight. Therefore, the mere existence of regulated assets cannot be a ground to avoid insolvency proceedings.

72. Acceptance of the contention of IPCL would lead to an anomalous consequence whereby entities operating in sectors such as power, oil and gas, roads, and telecommunications would effectively stand insulated from insolvency proceedings, which is contrary to the object and purpose of the Code.

    1. Section 7 Petition is complete

73. The present petition under Section 7 is complete in all respects and is supported by all relevant documents, including the demand notices dated 20.12.2017 and 07.02.2020, evidencing default and invocation of the Corporate Guarantee.

    1. Manner of IPCL - Delay and Abuse of Process

74. The conduct of IPCL demonstrates a consistent attempt to delay and disrupt the present proceedings. The mala fide intent is evident from the fact that IPCL has repeatedly initiated multiple proceedings across various Fora, which are stated to be frivolous and aimed at obstructing enforcement of the lenders' rights.

75. It is further alleged that IPCL, in collusion with MEL, caused issuance of 10,02,34,046 equity shares at par to itself on extremely short notice to the shareholders. As a result, the effective voting rights of the pledged shares stood diluted to approximately 3.75%, thereby enabling IPCL to retain control over the composition of the Board and management of MEL, despite invocation of pledge by the lenders.

76. Petitioners have referred to a series of proceedings initiated by IPCL and/or MEL, including COS No. 266 of 2017, W.P. Nos. 26977 of 2018 and 26999 of 2018, Company Petition No. 660/241/HDB/2018, Company Appeal No. 1220 of 2019, Civil Appeal No. 3307 of 2020, various interlocutory applications including I.A. Nos. 586 and 567 of 2021, Transfer Petition No. 81 of 2021 in CP (IB) No. 205/2021, I.A. No. 648 of 2021 in CP (IB) No.

    184/7/HDB/2019, proceedings before Regulatory Authorities, and Money Suit No. 01 of 2022, among others.

77. The multiplicity of such proceedings, raising substantially similar issues, reflects a deliberate strategy to protract litigation and stall the Corporate Insolvency Resolution Process. It is further contended that several of these proceedings have either been withdrawn or dismissed, thereby indicating that the challenges raised were devoid of merit.

78. In the aforesaid circumstances, it is asserted that the conduct of IPCL amounts to an abuse of the process of Law, undertaken with the sole intent to delay the proceedings and evade its liabilities under the financing documents.

    1. IPCL seeking to evade liability by raising untenable defences

79. IPCL is seeking to evade its liability under the Deed of Corporate Guarantee by raising untenable and frivolous defences. It is pertinent to note that IPCL acquired MEL for a nominal consideration of USD 1, as part of a transaction which required, inter alia, infusion of USD 40 million as equity into the Phase-II project.

80. Despite repeated requests from the lenders, IPCL failed to infuse the said amount of USD 40 million into the Phase-II project in terms of the agreed financing structure. Instead, it is alleged that IPCL retained the said funds without complying with its contractual obligations, thereby acting in breach of the agreed terms.

81. Such conduct is relied upon to demonstrate lack of bona fides on the part of IPCL and has, according to the Petitioners, contributed to the financial distress of MEL, ultimately leading to initiation of insolvency proceedings.

82. Further, IPCL has taken inconsistent and contradictory stands at various stages of the proceedings, depending upon its convenience, and the present defence is an afterthought raised only to avoid its liability.

83. It is also noted that IPCL, of its own volition, withdrew Civil Appeal No. 3309 of 2020 before the Hon'ble Supreme Court shortly after the pronouncement of the judgment in PTC India Financial Services Limited vs. Venkateswarlu Kari & Anr. supra, which is relied upon by the Petitioners. Such withdrawal is stated to be indicative of the untenability of the stand now sought to be urged.

    I. IPCL is independently liable under the Indemnity Agreement

84. Without prejudice to the foregoing submissions, it is contended that IPCL is independently liable under the Indemnity Agreement dated 23.09.2016 (Annexure R-24), whereby IPCL undertook to fully indemnify the lenders against any losses, damages, costs, claims, or expenses arising out of the financing arrangements. In this regard, reliance is placed on Clause 1 of the said Indemnity Agreement.

85. The liability under the Indemnity Agreement is distinct and independent. Therefore, even assuming, without admitting, that the Deed of Corporate Guarantee is held to be invalid, IPCL would nonetheless remain liable to indemnify the lenders, including SBI, in terms of the said Agreement.

86. Further, under Section 5(8) of the Insolvency and Bankruptcy Code, 2016, "financial debt" includes any liability in respect of an indemnity. Accordingly, the obligation of IPCL under the Indemnity Agreement squarely falls within the ambit of financial debt.

87. In the present case, since no payment has been made by IPCL towards its indemnity obligations, the liability remains due and payable, thereby constituting a subsisting debt and default.

    Written Submissions of Financial Creditor/SBI

88. The Financial Creditor submits that in 2016, IPCL acquired control of MEL for a nominal consideration of USD 1 pursuant to a structured commercial arrangement involving the exit of the erstwhile promoter, Engie Global Developments B.V. As part of the said Arrangement, Engie infused approximately USD 300 million into MEL and an additional amount of approximately USD 40 million was also made available/received by IPCL, which, according to the Financial Creditor, was required to be infused into MEL. However, IPCL allegedly failed to infuse the said USD 40 million into MEL and also neglected to take necessary steps for operationalisation of the Power Purchase Agreements. At the time of acquisition of MEL, IPCL executed an Unconditional Deed of Corporate Guarantee dated 23.09.2016 guaranteeing repayment of MEL's debts. Reliance is placed upon Clauses 17(ii) and 17(iv) of the Deed of Guarantee, whereby IPCL represented that all necessary Authorisations and Regulatory Approvals had been obtained. Reliance is also placed upon an Affidavit furnished by a Director of IPCL affirming that prior approval of the WBERC was not required for execution of the Corporate Guarantee under the applicable WBERC Regulations.

89. MEL committed default on 31.07.2017. Thereafter, IPCL approached WBERC by communications dated 17.08.2017 and 15.05.2018 seeking to avoid its obligations under the Deed of Guarantee. After issuance of notice in the present Section 7 Petition, IPCL again approached WBERC on 26.10.2021 seeking clarification as to whether prior approval was required

    for issuance of the Corporate Guarantee. However, WBERC, by Order dated 22.12.2021, merely issued a show cause notice to IPCL regarding alleged non-compliance and did not render any finding declaring the Deed of Guarantee invalid.

90. IPCL had also instituted COS No. 266 of 2017 before the Commercial Court at Hyderabad seeking declaration that the Deed of Guarantee was illegal, arbitrary, null and void on the ground that prior approval of WBERC had not been obtained and that IPCL had allegedly been induced by the lenders to furnish the Guarantee. The said suit, however, came to be unconditionally withdrawn on 02.04.2019 without liberty to institute a fresh suit.

91. MEL was admitted into CIRP by Order dated 07.11.2019, thereby crystallising the liability of IPCL as Guarantor. Reference is also made to MS (Com.) No. 48 of 2022 filed by IPCL before the Commercial Court at Alipore challenging the validity of the Deed of Guarantee. In the said proceedings, the Commercial Court, by Order dated 09.09.2022, vacated the exparte ad interim injunction earlier granted in favour of IPCL and observed, inter alia, that IPCL was fully aware of the WBERC Regulations at the time of furnishing the guarantee and that there were no averments disclosing any fraud practised upon IPCL. The Commercial Court further observed that IPCL could not be permitted to take advantage of its own wrong. An appeal preferred before the Hon'ble Calcutta High Court came to be dismissed by order dated 16.05.2023. On the strength of the aforesaid proceedings, it is contended that no Court or Tribunal has, till date, declared the Deed of Guarantee to be invalid. Reliance is also placed upon the rejoinder filed by IPCL in IA No. 648 of 2021 in the CIRP proceedings of MEL, wherein IPCL admitted its status as Guarantor of MEL.

92. It is further submitted that IPCL falls within the definition of "corporate guarantor" under Section 5(5A) of the Code and that the liability of the guarantor is co-extensive with that of the principal borrower. It is contended that under Section 7 of the Code, the scope of inquiry is limited to determining the existence of debt and default and does not extend to adjudication upon the validity of the Guarantee. In support thereof, reliance is placed upon Innoventive Industries Ltd. v. ICICI Bank (2018) 1 SCC 407, E.S. Krishnamurthy & Ors. v. M/s Bharath Hi Tech Builders Pvt. Ltd. (2022) 3 SCC 161, M. Suresh Kumar Reddy v. Canara Bank (2023) 8 SCC 387, Peninsula Holdings and Investments Pvt. Ltd. v. JM Financial Credit Solutions Ltd. & Anr. CA(AT)(I) No. 1393 of 2025, NCLAT Delhi Order dated 29.10.2025, JM Financial Credit Solutions Ltd. v. HEM Infrastructure and Property Developers Pvt. Ltd. C.P.(IB)-90(MB)/C-V/2024, Order dated 14.07.2025, Mauritius Commercial Bank v. Varun Corporation Ltd. 2017 SCC Online NCLT 2424, Baobab Broadband Ltd.

    v. Gemini Communication Ltd. 2018 SCC Online NCLT 32410, Punjab National Bank v. M/s Superior Industries Limited 2023 SCC OnLine NCLT 62, and Yes Bank Limited v. Zee Learn Limited CP (IB) 301/MB/C-1/2022.

93. Further, under Clauses 2.3 and 2.5 of the Deed of Guarantee, IPCL had irrevocably and unconditionally guaranteed payment of the guaranteed obligations and the demand certificate dated 07.02.2020 constituted conclusive evidence of the amount due and payable by IPCL. The debt and default of MEL stood established by Order dated 07.11.2019 and IPCL had also withdrawn its Appeal before the Hon'ble Supreme Court filed against the said Order.

94. It is lastly submitted that IPCL, through its conduct, has admitted its status as Guarantor and is estopped from disputing the validity of the Deed of Guarantee. Reliance is placed upon Deewan Singh v. Rajendra Pd. Ardevi (2007) 10 SCC 528, Satyan Kasturi v. SBI 2022 SCC OnLine NCLAT 4093

    and SREI Equipment Finance v. Rajiv Anand, (2020) 9 SCC 623, to contend that admissions made in pleadings are binding even if the proceedings are subsequently withdrawn. It is lastly submitted that despite the established debt and default of MEL and admission of its status as Guarantor, IPCL has failed to discharge its obligations under the Deed of Guarantee and has filed multiple applications in the present proceedings with the intention of delaying the CIRP proceedings initiated against it.

    Written Submissions of Corporate Debtor/IPCL

95. The Corporate Debtor submits that this Adjudicating Authority, vide Order dated 30.10.2023, had already dismissed the present Section 7 application on merits after considering the pleadings, rejoinder, additional documents and contentions advanced by the parties. Although the Hon'ble Supreme Court, vide order dated 14.02.2025 passed in Civil Appeal No. 8178 of 2023, remanded the matter for fresh consideration, it specifically clarified that no opinion on merits had been expressed. According to the Corporate Debtor, no new facts or averments have been brought on record by the Financial Creditor after remand so as to warrant a departure from the findings previously rendered by this Adjudicating Authority.

96. MEL had entered into the Original Common Loan Agreement dated 10.07.2009 for development of a power project and, thereafter, pursuant to the Share Purchase Agreement executed between Engie Group and IPCL,

    the lenders required IPCL to furnish Corporate Guarantees under the Amendment Agreement dated 23.09.2016. IPCL, being a Regulated Distribution Licensee under the Electricity Act, 2003 and the WBERC (Licensing and Conditions of Licence) Regulations, 2013, was mandatorily required under Regulation 5.13.2 to obtain prior written consent of WBERC before issuance of the Corporate Guarantees. According to the Corporate Debtor, IPCL had raised the issue of prior approval with REC through letters dated 29.07.2016 and 14.09.2016; however, the lenders and their legal advisors represented that no prior approval was required. Reference is made to the legal opinions obtained by the lenders from Justice M. Karpaga Vinayagam, Cyril Amarchand Mangaldas, and Mr. M.G. Ramachandran, Senior Advocate, as well as to the Affidavit dated 23.09.2016 furnished by the Director of IPCL. It is further submitted that IPCL subsequently informed SBI vide letter dated 22.11.2017 that the Corporate Guarantees were unenforceable for want of prior approval from WBERC. Reliance is also placed upon the orders passed by WBERC dated 09.11.2017, 07.08.2018 and 22.12.2021.

97. It is contended that the Corporate Guarantees are void and unenforceable in Law in view of Regulation 5.13.2 of the WBERC Regulations read with Section 146 of the Electricity Act, 2003 and Sections 10 and 23 (a) of the Indian Contract Act, 1872, and consequently there exists no valid contract of guarantee, debt or default under the Insolvency and Bankruptcy Code, 2016. Reliance is placed upon Mannalal Khetan v. Kedar Nath Khetan, AIR 1977 SC 536 and Asha John Divianathan v. Vikram Malhotra & Ors., 2021 SCC OnLine SC 147, to contend that contracts entered into in violation of statutory prohibitions are void. It is further contended that the lenders were aware of the statutory requirement and are therefore in pari delicto.

    Reliance is placed upon Loop Telecom and Trading Limited v. Union of India and Another, (2022) 6 SCC 762 and Holman v. Johnson to contend that no Court or Tribunal will come to the aid of the parties who are at a mutual fault and violation of the statutes. It is also argued that there can be no estoppel against statute and therefore no admission or undertaking by IPCL can validate the guarantees.

98. No default has occurred in terms of the purported Deed of Guarantee dated 23.09.2016. It is contended that while the Section 7 petition mentions the date of default as 31.01.2020, the demand certificates relied upon by the Financial Creditor are dated 20.12.2017 and 07.02.2020, both requiring payment within seven days, and therefore the alleged date of default does not correspond with the invocation notices. Reliance is placed upon Syndicate Bank v. Channaveerappa Beleri & Ors., (2006) 11 SCC 506 and Pooja Ramesh Singh v. State Bank of India, 2023 SCC OnLine NCLAT 193, to contend that in case of an on-demand guarantee, default arises only upon expiry of the period specified in the invocation notice. Reliance is also placed upon Babulal Vardharji Gurjar v. Veer Gurjar Aluminium Industries Pvt. Ltd., (2020) 15 SCC 1 and Royal Construction v. Gannon Dunkerley & Co. Ltd., 2025 SCC OnLine NCLAT 618, to contend that the Adjudicating Authority cannot alter the date of default mentioned in Part IV of the Section 7 application.

99. In response to the submissions of the Financial Creditor, it is contended that reliance placed on Innoventive Industries Ltd. v. ICICI Bank, (2018) 1 SCC 407 is misconceived as the said judgment itself recognises that a debt may not be due if it is not payable in law. Reliance is also placed upon State of Maharashtra v. M.N. Kaul and Ors., AIR 1967 SC 1634; Paschimanchal Vidyut Vitran Nigam Limited v. Raman Ispat Private

    Limited and Others, 2023 SCC OnLine SC 842; Roseland Buildtech Pvt. Ltd. v. Vihaan 43 Reality Pvt. Ltd. and Ors., C.S. (Comm.) 812/2025; Kewal Krishan v. Rajesh Kumar, (2022) 18 SCC 489; and Dena Bank v. C. Shivakumar Reddy, (2021) 10 SCC 330.

100. We have heard Learned Senior Counsels for both the parties and have gone through the entire records including written submissions of the parties.

101. On the basis of the pleadings, documents placed on record, and the submissions advanced by the parties, the following points/issues arise for consideration:

     1. Whether the Deed of Corporate Guarantee dated 23.09.2016 was obtained by fraud, coercion, undue influence or misrepresentation, as alleged by the Corporate Debtor/IPCL?

     2. If Point (i) is answered in negative, whether the said Deed of Corporate Guarantee is void or voidable or otherwise unenforceable?

     3. Whether IPCL is barred from challenging the validity and enforceability of the Deed of Corporate Guarantee in view of its prior conduct, admissions and earlier proceedings?

     4. Whether there exist a financial debt and default on the part of the Corporate Debtor/IPCL within the meaning of Section 7 of the Insolvency and Bankruptcy Code, 2016?

     5. Relief.

        Findings

102. Before adverting to the issues framed for consideration, it would be apposite to briefly notice the broad factual background giving rise to the present proceedings. The present Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 has been filed by SBI against IPCL in its capacity as Corporate Guarantor for the credit facilities availed by MEL. The execution of the Deed of Corporate Guarantee dated 23.09.2016 forms the central basis of the present proceedings.

103. It is not in dispute that MEL had availed substantial financial facilities from a Consortium of Lenders led by SBI under the Phase-I and Phase-II financing arrangements. Subsequently, pursuant to acquisition of control over MEL by IPCL from the erstwhile promoter Engie Group in the year 2016, IPCL executed the Deed of Corporate Guarantee dated 23.09.2016 in favour of the Lenders/Security Trustee in relation to the facilities extended to MEL.

104. Disputes arose after MEL committed defaults in repayment of the financial facilities. Following invocation of the pledge and issuance of demand notices by the lenders, several proceedings came to be initiated by MEL and IPCL before different Fora, including civil suits, writ proceedings, proceedings before WBERC, insolvency proceedings against MEL and the present proceedings against IPCL. The principal defence of IPCL in the present proceedings is that the Deed of Corporate Guarantee is void and unenforceable for alleged non-compliance with Regulation 5.13.2 of the WBERC Regulations and further that the same was procured by coercion, misrepresentation, undue influence etc.

     A. Validity and Voluntary Execution of the Deed of Corporate Guarantee

105. The principal defence raised by the Corporate Debtor under this issue is that the Deed of Corporate Guarantee dated 23.09.2016 was not voluntarily executed and that the same was allegedly obtained by fraud, coercion, undue influence and misrepresentation. However, it is significant to note at the outset that the execution of the said Deed of Guarantee itself has never been denied by IPCL, either in the present proceedings or in the earlier proceedings initiated by it before different Fora.

106. Learned Senior Counsel appearing for the Corporate Debtor has vehemently contended that IPCL was compelled to execute the Corporate Guarantee on the basis of the stand taken by SBI and the Consortium Lenders that prior approval of the WBERC was not required under Regulation 5.13.2 of the WBERC Regulations, 2013. According to the Corporate Debtor, the execution of the Guarantee Deed was not voluntary and was induced by the legal opinions obtained by the lenders regarding the Regulatory requirements.

107. Per contra, Learned Senior Counsel appearing for the Financial Creditor has submitted that the Corporate Debtor had independently obtained legal advice and consciously took a commercial decision to execute the Corporate Guarantee. It is contended that merely because parties relied upon legal opinions while entering into a commercial transaction, the same cannot constitute fraud, coercion, undue influence or misrepresentation within the meaning of the Indian Contract Act, 1872.

108. It is also pertinent to note that the present dispute arises out of a structured commercial transaction involving the exit of Engie Global Developments

     B.V. from MEL and the induction of IPCL as the incoming promoter of MEL, subject to specifically negotiated rights and obligations, including furnishing of the Deed of Corporate Guarantee dated 23.09.2016 (Exhibit-6) in favour of the Consortium Lenders. The material placed on record reflects that IPCL acquired control of MEL for a nominal consideration of USD 1, while the outgoing promoter, Engie, infused approximately USD 300 million (approximately Rs.1994.40 crores) into MEL and additionally provided approximately USD 40 million (approximately Rs.265.40 crores) under the overall transaction structure. It was in the backdrop of this negotiated restructuring arrangement that IPCL furnished the unconditional Corporate Guarantee dated 23.09.2016 securing repayment of MEL's debt obligations. The material on record further indicates that disputes were also raised regarding infusion/utilisation of the amounts contemplated under the transaction structure. The obligations now sought to be avoided were thus consciously undertaken by IPCL as part of a negotiated commercial arrangement entered into between commercially sophisticated entities fully aware of their respective rights, liabilities and commercial interests.

109. It is also relevant to note that contemporaneously with the execution of the Deed of Corporate Guarantee, IPCL had also executed the Indemnity Agreement (Annexure R-24) dated 23.09.2016 as part of the same restructuring and financing framework. The execution of multiple interrelated transaction documents, including the Corporate Guarantee, indemnity obligations and supporting representations, clearly indicates conscious participation by IPCL in the overall commercial arrangement and

     is inconsistent with the subsequent plea that the transaction was involuntary or obtained by coercion or undue influence or fraud.

110. Where commercially experienced entities voluntarily enter into a negotiated Commercial Arrangement after obtaining legal and financial advice, such transaction cannot lightly be invalidated on vague allegations of fraud, coercion or undue influence. Merely because the lenders proceeded on the basis of a legal opinion that prior approval under Regulation 5.13.2 of the WBERC Regulations was not necessary, the same, even if subsequently disputed or found to be erroneous, would not by itself constitute fraud, coercion, undue influence or misrepresentation within the meaning of the Indian Contract Act, 1872, in the absence of any material concealment or intentional deception.

111. It is equally well settled that commercial compulsion or financial pressure arising out of a negotiated Restructuring Arrangement cannot, by itself, amount to coercion under Section 15 of the Indian Contract Act, 1872, unless accompanied by an unlawful threat, prohibited act or domination of will. In the present case, no material has been placed on record to establish any such unlawful conduct on the part of the Financial Creditor or the Consortium Lenders. On the contrary, the surrounding circumstances indicate that execution of the Corporate Guarantee formed an integral part of the overall Restructuring and Financing Arrangement pursuant to which IPCL acquired control and corresponding commercial rights in relation to MEL.

112. Significantly, no contemporaneous protest or objection was raised by IPCL either at the time of execution of the Corporate Guarantee or immediately thereafter alleging fraud, coercion or undue influence. On the contrary, IPCL acted upon the transaction and permitted the arrangement to continue

     without raising any challenge to the validity of the Guarantee Deed. It was only after MEL committed default on 31.07.2017 and enforcement and recovery proceedings came to be initiated before various Fora that IPCL began questioning the validity and enforceability of the Corporate Guarantee. Such belated assertions, raised only after occurrence of default and commencement of enforcement proceedings, materially diminish the credibility of the defence now sought to be advanced.

113. In this regard, reliance may also be placed on the judgments of the Hon'ble Supreme Court in Central Inland Water Transport Corporation Limited v. Brojanath Ganguly, AIR 1986 SC 1571 and Phulchand Exports Ltd. v. OOO Patriot (2011)10 SCC 300, wherein the distinction between unequal bargaining situations and commercial contracts voluntarily entered into between parties with comparable bargaining strength has been recognized. The facts of the present case clearly indicate a negotiated commercial arrangement rather than a transaction induced by coercion or undue influence. The surrounding circumstances, commercial structure of the transaction and subsequent conduct of the parties are all inconsistent with the plea of involuntary execution now sought to be advanced by IPCL.

114. It is well settled that allegations of fraud, coercion, undue influence etc are serious allegations which must be specifically pleaded and strictly proved. The burden lies heavily upon the party making such allegations. Where fraud, misrepresentation, coercion or undue influence is alleged in relation to the execution of a document, particulars thereof must be specifically pleaded and proved. [See Roshan Lal & Ors v. Kartar Chand & Ors., Latest HLJ 2002(HP)]. In Bishundeo Narain and Anr. v. Seogeni Rai and Ors. AIR 1951 SC 280, the Hon'ble Supreme Court held that general

     allegations are insufficient and that full particulars constituting fraud, undue influence or coercion must be specifically set out in the pleadings. Similar principles were reiterated in Varanasaya Sanskrit Vishwavidyalaya v. Dr. Rajkishore Tripathi AIR 1977 SC 615. In Shrisht Dhawan v. Shaw Brothers, (1992) 1 SCC 534, the Hon'ble Supreme Court explained that fraud involves deliberate deception and intentional misrepresentation of fact. However, the pleadings placed on record do not disclose the requisite particulars constituting fraud, coercion, undue influence or intentional misrepresentation as required in law.

115. At this juncture, it would be apposite to refer to the Affidavit dated 23.09.2016 (Annexure R-2) sworn by Mr. Asok Kumar Goswami, Director of IPCL, who had executed the Corporate Guarantee on behalf of the Corporate Debtor. The relevant extract of the Affidavit reads as follows:

     "I, the Deponent, Asok Kumar Goswami, son of Late Murari Mohan Goswami and Director of India Power Corporation Limited ("IPCL"), aged about 69 (sixty nine) years, residing at B-35 Jalvayu Vihar, Saltlake, Kolkata, India - 700 093, do hereby solemnly affirm, declare and say to SBICAP Trustee Company Limited as follows:

     1. That I, Asok Kumar Goswami, am the Director of IPCL and am duly authorised by the board of directors of IPCL to make this declaration.

     2. I am aware of the terms and conditions of the Amendment Agreement dated September 23, 2016 to the Common Loan Agreement dated July 10, 2009 as amended from time to time, executed inter-alia between the Borrower and the Phase I Lenders (the "Common Loan Agreement"); and

     3. That in relation to change in shareholding of MEPL and in accordance with the terms of Common Loan Agreement, IPCL as the new promoter of MEPL is required to furnish a corporate guarantee in favour of the Phase I Lenders ("Corporate Guarantee").

     4. That, I hereby certify, declare and confirm on behalf of IPCL that IPCL is a distribution licensee in terms of the West Bengal Electricity Regulatory Commission (Licensing and Conditions of Licence) Regulations, 2013 and it is not required to obtain the prior consent of the West Bengal Electricity Regulatory Commission for issuing the Corporate Guarantee in accordance with terms thereof.

116. The aforesaid Affidavit assumes considerable significance. Firstly, it clearly demonstrates that the execution of the Corporate Guarantee was a conscious and informed commercial decision taken by IPCL through its Board of Directors. Secondly, the deponent expressly certified and confirmed that no prior approval of the WBERC was required for issuance of the Corporate Guarantee. Thirdly, the Affidavit categorically records that the deponent was fully aware of the terms and conditions of the Amendment Agreement and the Common Loan Agreement. Such declarations made contemporaneously in the course of a commercial financing transaction cannot be lightly ignored.

117. The mere existence of differing legal opinions regarding applicability of Regulation 5.13.2 of the WBERC Regulations cannot, by itself, render the transaction fraudulent or coercive. Commercial parties routinely obtain legal opinions on regulatory issues before entering into financing arrangements. In the present case, the contemporaneous Affidavit dated 23.09.2016 executed by the Director of IPCL, Mr. Asok Kr. Goswami assumes significance and materially militates against the subsequent plea of fraud, coercion or involuntary execution now sought to be raised by the Corporate Debtor.