NCLT Mumbai: Post-Facto Arbitration Invocation Not Valid Defence, Admits Tata Power EV Charging’s Insolvency Plea Against Cab-Eez Infra
Pranav B Prem
The National Company Law Tribunal (NCLT), Mumbai Bench, comprising Shri Sameer Kakar (Technical Member) and Shri Nilesh Sharma (Judicial Member), has admitted Tata Power EV Charging Solutions Limited’s application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) against Cab-Eez Infra Tech Limited, holding that post-facto invocation of arbitration cannot constitute a valid defence once debt and default are established.
Background
Tata Power EV Charging Solutions Limited, an operational creditor engaged in providing electric vehicle (EV) charging infrastructure and related services, filed the petition seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Cab-Eez Infra Tech Limited for default of ₹1.91 crore, including contractual interest. The claim arose under a Master Service Agreement (MSA) originally executed between the corporate debtor and Tata Power Company Limited (the parent company) for providing unmanned EV charging services.
Later, the services were transferred to Tata Power EV Charging Solutions Ltd., which began directly raising invoices from December 2022. Despite continuous service provision and part-payments, Cab-Eez failed to clear outstanding dues. The company also acknowledged its liability in several emails between July and November 2024 but did not make full payment. A legal notice and demand notice were subsequently issued under Section 8 of the IBC.
Defence of the Corporate Debtor
Cab-Eez Infra denied the debt and argued that disputes existed regarding inflated invoices, electricity charges, and malfunctioning chargers. It also claimed that it had invoked the arbitration clause under the MSA in February 2025, calling upon the applicant to nominate an arbitrator under the Arbitration and Conciliation Act, 1996, and thus, the matter was not maintainable before the NCLT. It further alleged that the applicant imposed unjustified Minimum Usage Guarantee (MUG) charges, billed for non-functional chargers, and unilaterally revised tariff rates. Cab-Eez contended that these disputes were genuine and existed prior to the demand notice, constituting a “pre-existing dispute” under the IBC.
Findings of the Tribunal
After reviewing the documents and correspondence, the NCLT held that the operational creditor had successfully demonstrated the existence of debt and default. The tribunal noted that the MSA, though undated, was binding as both parties had acted upon it. The bench observed that emails exchanged between the parties clearly established acknowledgment of liability by the corporate debtor, which also sought time to discharge dues. These acknowledgments amounted to valid recognition of debt under Section 18 of the Limitation Act.
Rejecting Cab-Eez’s contention, the bench ruled that the arbitration notice dated February 2025 was issued after the demand notice (December 2024) and thus did not amount to a pre-existing dispute. The tribunal relied on the Supreme Court’s decision in Indus Biotech Pvt. Ltd. v. Kotak India Venture Fund [(2021) 6 SCC 436], which clarified that the pendency of arbitration proceedings does not bar NCLT’s jurisdiction where debt and default are otherwise established. The NCLT observed: “Post-facto invocation of arbitration is not a valid defence to Section 9 proceedings.” It further held that the defence of Cab-Eez was illusory and an afterthought, as its own communications reflected repeated acknowledgments and partial payments towards undisputed dues.
Finding that the operational creditor met all statutory requirements under Section 9 of the IBC, the bench admitted the petition and initiated CIRP against Cab-Eez Infra Tech Ltd. A moratorium under Section 14 of the IBC was declared, and Mr. Manish Lalji Dawda (IBBI/IPA-001/IP-P-02506/2021-2022/13797) was appointed as the Interim Resolution Professional (IRP). The tribunal directed the operational creditor to deposit ₹3,00,000 towards initial CIRP expenses and instructed the IRP to issue a public announcement and manage the affairs of the corporate debtor in accordance with the IBC.
Appearance
For Applicant: Adv. Amir Arsiwala i/b Adv. Vidit Divya Kumat
For Respondent: Adv. Surjendu Sankar Das
Cause Title: Tata Power EV Charging Solutions Ltd. v. Cab-Eez Infra Tech Ltd.
Case No: C.P. (IB)/478/MB/2025
Coram: Shri Sameer Kakar (Member-Technical), Shri Nilesh Sharma (Member-Judicial)
