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2.3 Pursuant to the liquidation order dated 27.08.2018, the Respondent No.1 vide e-mail dated 26.9.2018, apprised the Liquidator for realisation of its secured asset under Section 52(1)(b) and Section 52(2) of the IBC. Yes Bank Ltd. initiated the proceedings and took possession of the secured asset under SARFAESI Act. It was stated that the solar power plant, which is an asset in the liquidation proceedings, is functioning and supplying power to Gujarat Urja Vikas Nigam Ltd. in accordance with the Power Purchase Agreement (hereinafter called PPA) dated 29.04.2010 entered into between the corporate debtor and Gujarat Urja Vikas Nigam Ltd. (hereinafter called GUVNL). 2.4 It is also averred by Yes Bank Limited in its application before the Adjudicating Authority that GUVNL issued default notice dated 23.07.2019 in accordance with Clause 9.3 of the PPA which constituted default under clause 9.2.1(e) of the PPAdue to initiation of liquidation proceedings against the corporate debtor. In reply Yes Bank Limited sent a letter dated 07.08.2019 to Company Appeal (AT) (Insolvency) No. 601 of 2020 the GUVNL not to terminate the PPA on the grounds enumerated in clause 9.2.1(e) of the PPA. However, GUVNL sent a notice dated 30.8.2019 for termination of the PPA under clause 9.3.1 of the PPA and thereafter terminated the PPA.

2.5 It is acknowledged by the corporate debtor and the Yes Bank Ltd. that a loan was taken by the corporate debtor in accordance with the Facility Letter and loan agreement which stands in the name of the corporate debtor, and whose repayment is due to the Financial Creditor Yes Bank Limited. 2.6 Yes Bank Limited has claimed in the Interim Application before the Adjudicating Authority that the PPA was terminated by GUVNL without considering the fact that the secured asset is an independent, viable power generating asset and if PPA is allowed to be terminated, it will be an obstacle for the secured creditors in exercising their rights under section 52(1)(b) of the IBC. It is also claimed by Yes Bank Ltd. that GUVNL is posing a hindrance in the sale of the secured asset by the act of termination of the PPA with malafide intention as the corporate debtor has not defaulted on the supply of solar power as required under PPA despite initiation of Corporate Insolvency Resolution Process (CIRP). It is generating power and will be a viable asset, if the existence of PPA is ensured, which will help in maximizing the value of the asset which is a basic requirement in insolvency proceedings. Company Appeal (AT) (Insolvency) No. 601 of 2020 2.7 Yes Bank Limited has also averred that GUVNL cannot be allowed to take undue advantage of the standard contractual provision of clause 9 of the PPA, thereby posing hindrance in the realisation of maximization of value of the asset.

9. The Appellant has also claimed in its arguments that if the Respondent No.1 Yes Bank Limited is unable to realize its outstanding debt by resorting the action under Section 52(1)(b) of the IBC, it can take recourse to action under Section 52(9) of the IBC. It has finally stated that once the Solar Power Plant is sold, Yes Bank Limited or any future purchaser is free to sell power to anyone.

10. The Respondent No. 1 Yes Bank Limited has argued that the Applicant has claimed right to termination under clause 9 of PPA. Clause 12.9 of the PPA has two parts and the second part of the clause mentions that in the event of any default by the power producer under financing document, the financing Company Appeal (AT) (Insolvency) No. 601 of 2020 party can cause the power producer to assign to a third party the interests, rights and obligations of the power producer thereafter arising under this agreement. The Respondent No.1 has, therefore, claimed that interest rights and obligations of the power producers arising under the agreement shall, therefore, be tied with the Solar Power project, which is the plant generating solar power. It has claimed that if the default is only under Section 9 of the PPA, then GUVNL has complete liberty to terminate the PPA, but in the present case the default being a financial default, clause 9.2.1(e) has to be read harmoniously with clause 12.9 of the PPA. Thus, the PPA cannot be seen as divorced and separately from the physical entity of the solar power plant.

15. Section 14.1(b) of the IBC prohibits transferring, encumbering, alienating or disposing off by the corporate debtor any of its assets or any legal right and beneficial interest therein. In this case, the second contracting party to the PPA i.e. GUVNL is admitting to terminate the PPA, which is in the nature of beneficial interest of the corporate debtor in the Solar Power Project. Such an action will have a direct bearing on the assets and their value of the corporate debtor Lanco Infratech Ltd.