Post-Facto Invocation Of Arbitration Not Valid Defense: NCLT Mumbai Admits Tata Power EV Charging's Insolvency Plea Against Cab-Eez Infra

The National Company Law Tribunal (NCLT), Mumbai Bench, comprising Shri Sameer Kakar (Member-Technical) and Shri Nilesh Sharma (Member-Judicial), has admitted Tata Power EV Charging's insolvency plea against Cab-Eez Infra, observing that the post-facto invocation of the arbitration is not a valid defense. Tata Power EV Charging Solutions Ltd. provided the charging infrastructure and services to Cab-Eez Infra Tech Ltd. The master service agreement was originally executed by the Tata Power Company Limited, the parent company of the applicant. The corporate debtor, Cab-Eez, failed to make the payment of Rs. 1.91 Cr., for which the applicant issued a legal notice and subsequently a demand notice. The applicant contended that the corporate debtor Cab-Eez continuously availed itself of the service and also made the part payment of the debt. Per contra, the respondent argued that it denied the alleged debt and questioned the validity of the invoices. It also highlighted that it invoked the arbitration clause under the MSA regarding disputed invoices, inflated electricity bills, excess payments, delays, and breaches in MSA terms, non-functional chargers, revenue losses, arbitrary billing, etc., but the creditor ignored the notice to nominate the arbitrator. Order of the Adjudicating Authority The NCLT Mumbai observed that the invoices and the records of payments clearly establish that the applicant rendered its services to the corporate debtor. Also, even if the MSA did not have an execution date, it is still binding, as both parties acted upon it. The tribunal also observed that the applicant's claim falls within the definition of “operational debt” u/s 5(21) of the IBC and the applicant qualifies as the operational creditor u/s 5(20) of the IBC. The tribunal also noted that the email exchanged between the parties proves that the debtor has acknowledged its liability and sought time to discharge the dues, and that is a valid acknowledgment in the eyes of the law. Furthermore, the bench observed that the invocation of the arbitration clause post receipt of the demand notice cannot by itself amount to a “pre-existing dispute.” The tribunal relied on the ruling of Indus Biotech Pvt. Ltd. v. Kotak India Venture Fund [(2021) 6 SCC 436], where the Hon'ble apex court ruled that the pendency of the arbitration proceedings does not oust the jurisdiction of the NCLT if debt and default are otherwise established. “Post-facto invocation of arbitration is not a valid defense to Section 9 proceedings,” the bench ruled. With the above observations, the bench admitted the application and initiated the CIRP of Cab-Eez Infra Tech Ltd. Case Name: 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) and Shri Nilesh Sharma (Member-Judicial) For Applicant: Adv. Amir Arsiwala i/b Adv. Vidit Divya Kumat For Respondent: Adv. Surjendu Sankar Das Order Date: 15.10.2025 Click Here To Read/Download The Order

Post-Facto Invocation Of Arbitration Not Valid Defense: NCLT Mumbai Admits Tata Power EV Charging's Insolvency Plea Against Cab-Eez Infra

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Post-Facto Invocation Of Arbitration Not Valid Defense: NCLT Mumbai Admits Tata Power EV Charging's Insolvency Plea Against Cab-Eez Infra

Mohd.Rehan Ali

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Mohd.Rehan Ali

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