NCLT Delhi Directs Restoration Of Power To Ansal's Sushant Golf City Golf Course, Subject To Dues Payment

The National Company Law Tribunal (NCLT) at New Delhi Bench has directed restoration of electricity supply to the golf course at Ansal Properties and Infrastructure Ltd's Sushant Golf City project in Lucknow. The relief is subject to the operator paying ₹2 lakh within three days and the balance ₹33.75 lakh within two months, while the Tribunal adjudicates a dispute over termination of its operating agreement during the company's insolvency proceedings.

A bench of Judicial Member Ashok Kumar Bhardwaj and Technical Member Atul Chaturvedi prima facie held that where the resolution professional terminates the agreement, the challenge would lie before the Tribunal.

“Ex facie we are of the view that when the Agreement is terminated by RP, who himself is the creation of the IBC, his act needs be challenged before this Tribunal only and not elsewhere.”, the tribunal observed.

The dispute concerns a Golf Course Operation and Management Agreement dated August 29, 2022 between Ansal Properties and Infrastructure Ltd (APIL) and Evergreens Leisure Club & Resorts LLP for operation of the golf course at Sushant Golf City.

Evergreens approached the Tribunal alleging that the resolution professional had terminated the agreement and that electricity supply to the golf course had been discontinued during APIL's corporate insolvency resolution process. The applicant sought protection against coercive action, restoration of electricity supply, and setting aside of the termination.

Appearing for the resolution professional, counsel said Evergreens had defaulted on payment obligations of more than ₹1 crore under the agreement. This included ₹65.27 lakh allegedly due before commencement of CIRP and another ₹33.75 lakh thereafter, which, according to the RP, justified termination of the contract.

The Tribunal, however, prima facie found that the agreement required a cure notice to be issued before termination could take effect. It observed that the RP's stand that the agreement already stood terminated through a legal notice appeared inconsistent with the contractual terms.

The RP also raised a maintainability objection, citing the Supreme Court's rulings in Embassy Property Developments, Gujarat Urja Vikas Nigam, and Tata Consultancy Services. The argument was that Evergreens' remedy lay outside the insolvency process and not before the NCLT.

Prima facie declining to accept the objection at this stage, the Tribunal distinguished those rulings, observing that the present challenge concerned an action taken by the RP during CIRP, while noting that it would examine the issue in greater detail.

The NCLT granted the RP two weeks to file a reply on merits and directed restoration of electricity supply forthwith, subject to Evergreens paying ₹2 lakh within three days and the remaining ₹33.75 lakh within two months, with the amounts to be deposited in APIL's CIRP account.

In proceedings heard a day earlier, the Tribunal had observed that the golf course property was deteriorating and generating no revenue for either the corporate debtor or the applicant due to the power disconnection.:

For Applicant: Senior Advocate Aparna Bhat and Advocate Karishma Maria

For Resolution Professional: Advocates Abhishek Anand, Karan Kohli, Palak Kalra, and Ridhima Mehrotra