MPCL (hereinafter referred as 'MPCL/Corporate Debtor') imported goods from China for utilising in the construction of MPCL's Power Plant. Unfortunately, CIRP was initiated on MPCL by the Adjudicating Authority and Resolu

The facts of the question are similar to the case of IDBI Bank Ltd. and Ors. v. Mr. Sumit Binani, RP Decided on 21st December 2023 by NCLAT, Chennai Bench, wherein NCLAT held that as per Sections 25(1), 20(1) read with Section 23(2) of the IBC Code, the RP is duty bound to make every effort to preserve the assets and value of the property of the Corporate Debtor Company and manage it effectively as a 'Going Concern'. Section 15(3) of the IBC Code provides that any costs incurred by the RP in running the business of the Corporate Debtor as a 'Going Concern' forms part of the CIRP costs. When there is no guarantee with respect to the Mega Power Plant (MPP) status of the Non-Operational Units and since there are no goods being imported by the Corporate Debtor Company as it is undergoing CIRP, there is no exemption which the Company can claim for Customs Duty liability and the Corporate Debtor Company need not be burdened with the Commission and renewal charges approximately amounting to ₹70 Crores which would only increase the financial burden of the Corporate Debtor Company with no positive benefits accruing. Under Section 25(1) of the Insolvency and Bankruptcy Code the RP is empowered to reject the CoC proposal for renewal of the Bank Guarantees provided by the Corporate Debtor Company, prior to the initiation of the CIRP as renewing those would not consequently lead to any advantage or any valuable gains. NCLAT concludes that it does not see any substantial grounds to interfere with the well-considered order of the Adjudicating Authority. Hence, the Appeal was dismissed accordingly at the threshold.