Paschimanchal Vidyut Vitran Nigam Ltd vs Hsa Traders & Ors

[Arising out of order dated 21.02.2023 passed by the Adjudicating Authority (National Company Law Tribunal), Allahabad Bench, Prayagraj in I.A. No. 219/2022 in CP (IB) No.140/ALD/2017]

IN THE MATTER OF:

Paschimanchal Vidyut Vitran Nigam Ltd. Through its Executive Engineer, Electricity Distribution Division, Khatauli - 251201. Distt. Muzaffarnagar, Uttar Pradesh. ...Appellant Vs.

1. HSA Traders Through Sole Proprietor, Mr. Furqab Ahmed Malik, A-26, Gali No.2, Bhagirathi Vihar, East Delhi, Delhi- 110094.

2. Ezwaste Recycling Private Limited, House No.2, Mohalla Dharampura, Sardhana, Meerut, Uttar Pradesh - 250304. ...Respondents

3. Chanchal Dua, Erstwhile Liquidator of Shashi Oils and Fats Private Limited Having office at 1-A/85/A, Ramesh Nagar, New Delhi- 110015. ...Proforma Respondent

Present:

For Appellant: Mr. Pradeep Misra, Mr. Daleep Dhyani and Mr. Suraj Singh, Advocates.

For Respondent: Mr. Kunal Godhwani, Advocate for R-1 and 2.

Cont'd.../ -2-

JUDGMENT

ASHOK BHUSHAN, J.

This Appeal has been filed against order dated 21.02.2023 passed by

the Adjudicating Authority (National Company Law Tribunal), Allahabad

Bench, Prayagraj in I.A. No. 219/2022 in CP (IB) No.140/ALD/2017. I.A. No.

219/2022 filed by the Respondent, Successful Auction Purchaser having been

allowed by the Adjudicating Authority, Appellant feeling aggrieved by the order

has come up in this Appeal. Brief facts of the case necessary to be noticed for

deciding this Appeal are:

(i) Corporate Insolvency Resolution Process against the Corporate

Debtor, Shashi Oil and Fats Pvt. Ltd. commenced by the Adjudicating

Authority on a Section 7 application filed by a Financial Creditor.

(ii) The order of liquidation of the Corporate Debtor was passed by the

Adjudicating Authority on 21.02.2020.

(iii) The Liquidator published E-auction Sale Notice dated 12.08.2020 on

as is where is basis, as is what is, whatever there is and without

recourse basis.

(iv) E-auction was held on 29.08.2020 and Respondent No.1 was held to

be highest Bidder for an amount of Rs.3,78,00,000/-. The Respondent

No.1 was declared as Successful Auction Purchaser by the Liquidator

by email dated 29.08.2020.

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(v) On 25.09.2020, the Respondent No.1 deposited the entire sale

consideration along with the GST. Sale Certificate dated 28.09.2020

was issued as well as Possession Certificate.

(vi) The Respondent No.1 made an application to the Appellant for new

electricity connection for the premises, which was rejected by the

Appellant on the ground that there is demand of electricity dues of

Rs.39,15,625/- against the erstwhile Corporate Debtor and unless the

said amount is paid no new electricity connection can be given.

(vii) After rejection of the prayer of new electricity connection, the

Successful Auction Purchaser i.e. Respondent No.1 filed an C.A. No.

219/2022 in the CP (IB) No.140/ALD/2017, in which following

prayers were made:

"a) Allow the present application;

b) Kindly, pass an ex parte ad interim order directing Paschimanchal Vidyut Vitran Nigam Ltd. Not to take any coercive steps over the property Khasra No. 38.

Village Sardhan, Budhana Road, Khatauli, District Muzaffarnagar, Uttar Pradesh during the pendency of the instant application;

c) pass an order declaring that Paschimanchal Vidyut Vitran Nigam Ltd. Is not entitled to claim any dues over the property Khasra No. 38, Village Sardhan, Budhana Road, Khatauli, District Muzaffarnagar, Uttar Pradesh.

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d) Consequently, direct Paschimanchal Vidyut Vitran Nigam Ltd. to grant electricity connection to Applicant No.2 i.e. Ezwaste Recycling Private Limited.

e) Pass such other or further order(s) as may be deemed fit and proper the facts and circumstances of the instant case."

(viii) The Appellant filed a counter affidavit to the CA controverting the

contentions raised by the Applicant. It was contended on behalf of the

Appellant that the property was purchased by the Respondent No.1 on

"as is where is, as is what is, whatever there is and without recourse

basis" and if they exercised due diligence, they would have known that

there are electricity dues. They placed reliance on Clause 4.3(f)(i) of

Electricity Supply Code, 2005 and submitted that unless the dues of

erstwhile consumer are paid no new connection can be granted in the

premises.

(ix) The Adjudicating Authority heard both the parties and by the

impugned order dated 21.02.2023 allowed the application. The

Adjudicating Authority after considering the relevant judgments of the

Hon'ble Supreme Court and this Tribunal recorded its conclusion in

Para 15 of the judgment and issued directions in Para 16. The

conclusion and directions of the Adjudicating Authority are as follows:

"15. Relying on the judicial pronouncements as discussed in above para, we hold that right of Paschimanchal Vidyut Vitran Nigam Ltd. to recover outstanding dues of pre-CIRP period is now

Company Appeal (AT) Insolvency No. 527 of 2023 -5-

extinguished due to CIRP process getting completed and liquidation of Corporate Debtor is also done and hence, no pre-CIRP electricity dues can be collected from Applicant No.1 being Successful Auction Purchaser or Applicant no.2 in which Applicant no.1 is a director. If duty is cast under Electricity Act, 2003 to supply electricity then Respondent No.1 being the electricity supplying company is duty bound to provide electricity connection to Applicant No.2 in which Applicant No.1 is director in terms of Electricity Act 2003.

16. As decided above we direct Respondent No.1 as under:

(i) To complete the documentation with Applicants on the basis of Application dated 28.11.2021 submitted by the Applicant No.2 in the office of Respondent No.1 and energise the electricity connection in terms of Electricity Act, 2003 without insisting on the payment of pre- CIRP dues.

(ii) Applicants shall otherwise complete all the requirement in terms of Electricity Act 2003 for getting new electricity Connection."

(x) The Appellant aggrieved by the said order has come up in this Appeal.

2. We have heard Shri Pradeep Mishra, learned counsel for the

Appellant and Shri Kunal Godhwani, learned counsel appearing for

Respondent No.1 and 2.

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3. Learned counsel for the Appellant challenging the impugned order

submits that the Adjudicating Authority committed error in allowing the I.A.

219/2022. He submits that after liquidation process was closed by issuing

Sale Certificate in favour of the Respondent No.1, application 219/2022 filed

by the Respondent No.1 before the Adjudicating Authority was not

maintainable since the Adjudicating Authority has become functus officio. It

is further submitted that the E-auction notice clearly contemplate sale on as

is where is, as is what is, whatever there is and without recourse basis, hence,

the premises was sold along with the liability of electricity dues owed of the

Appellant. It is submitted that as per Clause 4.3(f) of the UP Electricity Supply

Code, 2005, the Appellant is entitled to claim arrears of electricity dues on the

premises for providing new electricity connection. Learned counsel for the

Appellant has relied on judgment of the Hon'ble Supreme Court in

"Telangana State Southern Power Distribution Company Ltd. & Anr. vs.

Srigdhaa Beverages, (2020) 6 SCC 404". Learned counsel for the Appellant

has also placed reliance on judgment of Hon'ble Supreme Court in

"Paschimanchal Vidyut Vitran Nigam Ltd. vs. Raman Ispat Private Ltd.

& Ors., 2023 SCC OnLine SC 842". Learned counsel for the Appellant

referring to judgment of "Paschimanchal Vidyut Vitran Nigam Ltd. vs.

Raman Ispat Private Ltd. & Ors." submits that said judgment is not

applicable in the circumstances of the present case as in the present case

after the liquidation of the Company, the grant of electricity connection shall

be governed by the distribution licence.

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4. Learned counsel for the Respondent refuting the submission of

learned counsel for the Appellant submits that in the liquidation proceeding

of the Corporate Debtor, the Appellant never filed its claim. Learned counsel

for the Respondent submits that the Successful Auction Purchaser is not

liable to pay electricity dues which was payable by the erstwhile Corporate

Debtor. The claim of the Appellant, if any, could have been only considered

in the liquidation proceeding of the Corporate Debtor and no claim having

been filed by the Appellant, Appellant cannot insist for payment of its arrears

of electricity dues. Learned counsel for the Respondent has relied on

judgment of this Appellate Tribunal in "Company Appeal (AT) (Ins.) No. 650

of 2020, Shiv Shakti Inter Globe Exports Pvt. Ltd. vs. KTC Foods Pvt.

Ltd. & Anr.".

5. We have considered the submissions of learned counsel for the

parties and perused the record.

6. There is no dispute between the parties regarding facts of the case.

Electricity dues amounting to Rs.39,15,625/- was owed by the erstwhile

Corporate Debtor - Shashi Oils and Fats Private Limited. E-auction notice

was issued by the Liquidator for sale of the assets. Learned counsel for the

Appellant has relied on Clause (h) of the E-auction notice which dealt with

due diligence. Clause (h) is as follows:

"H. DUE DILIGENCE

The Liquidator shall endeavor to provide necessary assistance, facilitating the conduction of due diligence

Company Appeal (AT) Insolvency No. 527 of 2023 -8-

by interest Bidders. The information and documents shall be provided by the Liquidator in good faith.

The properties and assets of the Company are proposed to be sold on "As Is Where Is, As Is What Is, Whatever There Is and Without Recourse basis" and the proposed sale of assets of the company does not entail transfer of any title, except the title which the Company has on the assets as on date of transfer. All taxes/ maintenance fees/ outstanding rentals/ electricity/ water charge/ annual lease rentals/ unearned income in case of leasehold properties, etc., if any outstanding as on date or yet to fall due in respect of the relevant asset should be ascertained by the E-Auction process applicant and would be borne by the successful bidder."

7. There can be no dispute between the parties that the sale in the

liquidation process was on "As Is Where Is, As Is What Is, Whatever There Is

and Without Recourse basis". 'Due Diligence' Clause also notes that any

outstanding charge was also to be performed in the e-auction process by the

prospective bidder. The question that electricity dues of the Corporate Debtor

who underwent insolvency resolution process/liquidation process can still be

insisted against the Successful Resolution Applicant/ Successful Auction

Purchaser is not res integra. The question has been considered and answered

by this Tribunal as well as by the Hon'ble Supreme Court.

8. Learned counsel for the Appellant has relied on judgment of Hon'ble

Supreme Court in "Telangana State Southern Power Distribution

Company Ltd. & Anr. vs. Srigdhaa Beverages" (Supra). In the above

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judgment, the Hon'ble Supreme Court dealt with auction of a unit under

SARFAESI Act, 2002. The Hon'ble Supreme Court has extracted the terms

and conditions of the said auction and noted that the auction was on 'as is

where is, whatever there is and without recourse basis'. It was held that the

Successful Auction Purchaser was liable to pay the electricity dues. The

Hon'ble Supreme Court laid down following in Para 16.1, 16.2 and 16.3:

"16.1. That electricity dues, where they are statutory in character under the Electricity Act and as per the terms and conditions of supply, cannot be waived in view of the provisions of the Act itself, more specifically Section 56 of the Electricity Act, 2003 (in pari materia with Section 24 of the Electricity Act, 1910), and cannot partake the character of dues of purely contractual nature.

16.2. Where, as in cases of the e-auction notice in question, the existence of electricity dues, whether quantified or not, has been specifically mentioned as a liability of the purchaser and the sale is on "as is where is, whatever there is and without recourse basis", there can be no doubt that the liability to pay electricity dues exists on the respondent (purchaser).

16.3. The debate over connection or reconnection would not exist in cases like the present one where both aspects are covered as per Clause 8.4 of the General Terms & Conditions of Supply."

9. The above judgment having been rendered in a case under

SARFAESI Act, there was no occasion for extinguishment of dues of the power

Company Appeal (AT) Insolvency No. 527 of 2023 -10-

distribution company since it was not under IBC process. The distinguishing

feature in the present case is that the present is a case arising out of IBC

where in liquidation process, the Appellant was required to file its claim

against the electricity dues outstanding towards the Corporate Debtor who

was undergoing liquidation process. The above judgment is thus clearly

distinguishable in the facts of the present case.

10. The Judgment of Hon'ble Supreme Court in "Paschimanchal

Vidyut Vitran Nigam Ltd. vs. Raman Ispat Private Ltd. & Ors." (Supra)

which has been referred by learned counsel for the Appellant was a case where

the Adjudicating Authority has directed District Magistrate and Tehsildar,

Muzaffarnagar to release the property which was attached by Paschimanchal

Vidyut Vitran Nigam Ltd. for realisation of its dues, for enabling the sale under

IBC process. A bill was issued by the Appellant on the Corporate Debtor and

District Magistrate issued notice for recovery of outstanding dues and

attached assets of the Corporate Debtor. The Liquidator pleaded that unless

attachment orders are not set aside, no buyer would purchase the property of

the Corporate Debtor. The Appellate Tribunal directed the District Magistrate

and Tehsildar, Muzaffarnagar to release the property to enable sale of property

and after realisation of the property's value to ensure its distribution to

various stakeholders under the IBC process. Paras 4 and 5 of the judgment

are as follows:

"4. Under the final bill dated 27.01.2017, the total arrears due were Rs.4,32,33,883/-. Of this, the District Collector issued notice for recovery of outstanding dues

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to the tune of Rs.2,50,14,080/-, by auction of movable and immovable properties located at Khasara No.0.4710, on 05.03.2018. The liquidator alleged that unless the attachment orders of the Tehsildar, Muzaffarnagar were set aside by the NCLT, no buyer would District Collector, Muzaffarnagar and purchase the property of the corporate debtor due to uncertainty about the authority of the liquidator to sell the property. The liquidator also took the plea that PVVNL's claim would be classified in order of priority prescribed under Section 53 of the IBC, and PVVNL would be entitled to for rata distribution of proceeds along with the other secured creditors from sale of liquidation assets.

5. The liquidator's position ultimately led the NCLAT to direct the District Magistrate and Tehsildar, Muzaffarnagar to immediately release the attached property in its favour so as to enable sale of the property, and after realisation of the property's value, to ensure its distribution in accordance with the relevant provisions of the IBC. The NCLAT also endorsed NCLT's reasoning that PVVNL fell within the definition off' operational creditor', which could realize its dues in the liquidation process in accordance with the law."

11. An appeal was filed by Paschimanchal Vidyut Vitran Nigam Ltd.

against the judgment of this Tribunal, which appeal was ultimately dismissed

by Hon'ble Supreme Court taking the view that claim of Paschimanchal Vidyut

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Vitran Nigam Ltd. is to be considered in the liquidation process. Paras 59

and 60 of the judgment are as follows:

"59. The record further shows that after the NCLT passed its order, the appellant preferred its claim on 10.04.2018, Based on deat application, the liquidator had filed an application before the NCLT for modification of its order dated 21.08.2018, and contended that PVVNL also came under the definition of 'secured operational creditor in realization of its dues in the liquidation proceedings as per law. The application sought amendment of the list of stakeholders. The application was allowed. In view of these factual developments, this Court does not consider it appropriate to rule on the submissions of the liquidator vis-a-vis the fact of non-registration of charges under Section 77 of the Companies Act, 2013.

V. CONCLUSION

60. For the above reasons, it is held that the appeal deserves to fail. At the same time, the liquidator is directed to decide the claim exercised by PVVNL in the manner required by law. It shall complete the process within 10 weeks from the date of pronouncement of this decision, after providing such opportunity to the appellant, as is necessary under law."

12. The above judgment in no manner support the submission of the

Appellant advanced in this case rather the said judgment mentions it clearly

that claim of the electricity dues of the Appellant is to be raised in the IBC

process when Corporate Debtor is in the liquidation process.

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13. The issue which has arisen in the present case has been recently

considered by this Tribunal in "Company Appeal (AT) (Insolvency) No. 1355

of 2022, Chinar Steel Segments Centre Pvt. Ltd. vs. Samir Kumar

Agarwal". In the above case, an application filed by the Successful Auction

Purchaser seeking direction to Damodar Valley Corporation to energize its

electricity connection, was rejected relying on WBERC Regulation. Appeal

was filed by the Successful Auction Purchaser which appeal was ultimately

allowed by this Tribunal directing that fresh connection be granted without

charging any outstanding dues of the Corporate Debtor. It is relevant to

notice that the submission which has been advanced by the Appellant that

the application filed by the Successful Auction Purchaser was not

maintainable was also considered by this Tribunal in the above case and it

was held that the application was fully maintainable under Section 60(5).

This Tribunal held that application filed by the Successful Auction Purchaser

was fully entertainable under Section 60(5) since it arose out of liquidation

proceeding of the Corporate Debtor.

14. The application which was filed by the Successful Auction

Purchaser being I.A. No. 219/2022 was filed by the Successful Auction

Purchaser who was successful in the liquidation process and when order was

sought against Paschimanchal Vidyut Vitran Nigam Ltd. that it should give a

new electricity connection which connection was earlier granted in favour of

the Corporate Debtor, the stand taken by the Appellant was that there were

electricity dues of Rs.39,15,625/- against the erstwhile Corporate Debtor

which was required to be paid by the Successful Auction Purchaser before

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taking a new connection. The said submission of the Appellant was clearly a

plea with regard to claim of the Appellant, which claim stood extinguished in

the liquidation process of the Corporate Debtor since admittedly no claim was

filed by the Appellant in the liquidation process. The application which was

filed by the Successful Auction Purchaser was clearly an application which

arose out of or in relation to the liquidation proceeding of the Corporate

Debtor, hence, the application is fully maintainable under Section 60(5) and

submission of the Appellant that application is not maintainable since the

Adjudicating Authority had become functus officio cannot be accepted.

15. In the case of "Chinar Steel Segments Centre Pvt. Ltd. vs. Samir

Kumar Agarwal" (Supra), this Tribunal has noticed the judgment of Hon'ble

Supreme Court in "Telangana State Southern Power Distribution

Company Ltd. & Anr. vs. Srigdhaa Beverages" as well as "Eastern Power

Distribution Company of Andhra Pradesh Limited vs. Maithan Alloys

Limited & Ors.- Company Appeal (AT) (Ins.) No.961 of 2021" of this

Tribunal which judgment has also been relied by the Adjudicating Authority

in the impugned order. The Judgment of this Tribunal in "Shiv Shakti Inter

Globe Exports Pvt. Ltd. vs. KTC Foods Pvt. Ltd. & Anr., Company Appeal

(AT) (Ins.) No. 650 of 2020" decided on 25.02.2022 also support the

submission made by learned counsel for the Respondent. This Tribunal took

view that when the Corporate Debtor is sold in the liquidation proceeding,

Corporate Debtor cannot be burdened by any past or remaining unpaid

outstanding liabilities. In Para 22 of the judgment following has been held:

Company Appeal (AT) Insolvency No. 527 of 2023 -15-

"22. It is no longer Res Integra that while approving a 'Corporate Debtor' sale as a 'going concern' in Liquidation Proceedings without its dissolution in terms of Regulation 32(e) of the Liquidation Process Regulations, 2016, it is essential to see that the 'Corporate Debtor' is not burdened by any past or remaining unpaid outstanding liabilities prior to the sale of the Company as a 'going concern' and after payment of the sale proceeds distributed in accordance with Section 53 of the Code. The Impugned Order in I.A. 889 of 2020 is modified to the extent that the sale of the first Respondent as a 'going concern' is upheld and the direction sought for in prayer (c) & (e) in CA No. 1189 of 2019 seeking extinguishment of past/remaining unpaid outstanding liabilities including contingent liabilities, prior to the sale as 'going concern', after payment of sale proceeds distributed in accordance with Section 53 of the Code, is allowed."

16. The issue raised in the present appeal are fully covered by judgment

of Hon'ble Supreme Court in "Tata Power Western Odisha Distribution

Limited (TPWODL) & Anr. vs. Jagannath Sponge Private Limited, Civil

Appeal No.5556 of 2023" which judgment has also been relied by this

Tribunal in "Chinar Steel Segments Centre Pvt. Ltd. vs. Samir Kumar

Agarwal" (Supra). It shall be sufficient to quote Para 37 and 38 of the

judgment of "Chinar Steel Segments Centre Pvt. Ltd.", where judgment of

Hon'ble Supreme Court date 11.09.2023 in "Tata Power" has also been

Company Appeal (AT) Insolvency No. 527 of 2023 -16-

considered. Para 37 and 38 of the "Chinar Steel Segments Centre Pvt.

Ltd." is as follows:

"37. The issues raised in the present Appeal are fully covered in favour of the Appellant by a recent judgment of the Hon'ble Supreme Court dated 11.09.2023 in Civil Appeal No.5556 of 2023- "Tata Power Western Odisha Distribution Limited (TPWODL) & Anr. vs. Jagannath Sponge Private Limited". Appellant in the above case was also insisting for payment of arrears of electricity dues. The Hon'ble Supreme Court relied on the earlier judgment of the Hon'ble Supreme Court in "Paschimanchal Vidyut Vitran Nigam Ltd. vs. Raman Ispat Private Limited & Ors.- 2023 SCC Online SC 842" and has also noted the judgment of the Hon'ble Supreme Court in "Embassy Property Developments Pvt. Ltd." and distinguished the same. It is useful to extract the entire judgment of the Hon'ble Supreme Court dated 11.09.2023, which is to the following effect:-

"In our opinion, the legal issue is covered by the judgment of this Court in "Paschimanchal Vidyut Vitran Nigam Ltd. vs. Raman Ispat Private Limited and Others" and the order of this Court in "Southern Power Distribution Company of Andhra Pradesh Limited vs. Gavi Siddeswara Steels (India) Pvt. Ltd. and Another." The appellant - Tata Power Western Odisha Distribution Limited cannot insist on payment of arrears, which have to be paid in terms of the waterfall mechanism,

Company Appeal (AT) Insolvency No. 527 of 2023 -17-

for grant of an electricity connection. However, the successful resolution applicant will have to comply with the other requirements for grant of electricity connection. The clean slate principle would stand negated if the successful resolution applicant is asked to pay the arrears payable by the corporate debtor for the grant of an electricity connection in her/his name.

In "Embassy Property Developments Private Limited vs. State of Karnataka and Others", this Court clarified that a decision by public authority etc. may fall within the jurisdiction of the tribunals constituted under the Code, where the issue relates to or arises out of the dues payable to an operational or financial creditor, by observing:

"37...It will be a different matter, if proceedings under statutes like Income Tax Act had attained finality, fastening a liability upon the corporate debtor, since, in such cases, the dues payable to the Government would come within the meaning of the expression "operational debt" under Section 5(21), making the Government an "operational creditor" in terms of Section 5(2). The moment the dues to the Government are crystallised and what remains is only payment, the claim of the Government will have to be adjudicated and paid only in a manner prescribed in the resolution plan as approved by the adjudicating authority, namely, the NCLT."

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The above-quoted observations from Embassy Property Developments Private Limited (supra) would confer jurisdiction on the tribunal constituted under the Code insofar as the appellant - Tata Power Western Odisha Distribution Limited is insisting on payment of the dues of the corporate debtor for restoration/grant of the electricity connection. The dues of the corporate debtor have to be paid in the manner prescribed in the resolution plan, as approved by the adjudicating authority. The resolution plan is approved when it is in accord with the provision of the Code. Thus, the issue of corporate debtor's dues falls within the fold of the phrase 'arising out of or in relation to insolvency resolution' under section 60(5)(c) of the Code.

Therefore, we do not find any good ground and reason to interfere with the impugned judgment(s)/order(s) and hence, the present appeals are dismissed.

Pending application(s), if any, shall stand disposed of."

38. In view of the law laid down by the Hon'ble Supreme Court in "Tata Power Western Odisha Distribution Limited" (supra), submission advanced on behalf of the Respondent- Damodar Valley Corporation cannot be accepted. The Respondent cannot insist that unless the arrears of the electricity dues which dues

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were payable by the Corporate Debtor prior to disconnection are paid by the Appellant only then communication can be issued. The stand taken by the Respondent is contrary to the law laid down by this Tribunal as well as the Hon'ble Supreme Court as noted above."

17. The Hon'ble Supreme Court in "Tata Power" (Supra) clearly held

that Tata Power cannot insist on payment of arrears for granting electricity

connection. This Tribunal in "Chinar Steel Segments Centre Pvt. Ltd."

after noticing the judgment of Hon'ble Supreme Court and this Tribunal has

ultimately allowed the appeal and issued directions in Para 39 of the

judgment, which are to the following effect:

"39. In view of the foregoing discussions, we are satisfied that the Adjudicating Authority committed error in rejecting IA No. 984 of 2021 as not maintainable. We hold that the application is fully maintainable under Section 60(5) for the reasons as indicated above. The Appellant has made out a case for grant of reliefs as claimed in the application. In result, we allow the Appeal in following manner:-

The impugned order dated 01.09.2022 is set aside. IA No.984 of 2021 is allowed. Respondent No.1 to grant fresh connection of electricity after taking all necessary charges for fresh connection except outstanding dues of the Corporate Debtor which stood satisfied and extinguished as per the liquidation proceedings against the Corporate Debtor."

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18. We, thus, are of the view that submission raised by learned counsel

for the Appellant that Successful Auction Purchaser was liable to pay the

arrears of electricity dues which were dues of the erstwhile Corporate Debtor

and without payment of said dues electricity connection cannot be granted

are not in accord with the statutory scheme of IBC. The Adjudicating

Authority did not commit any error in issuing direction in Para 16 of the

impugned order, as extracted above, to energise the electricity connection

without insisting on the payment of pre-CIRP dues. It is made clear that the

Successful Auction Purchaser shall be liable to pay all dues for getting the

new connection except the arrears of the electricity dues of Rs.39,15,625/- as

was being claimed by the Appellant.

19. In view of the foregoing discussion, we do not find any ground to

interfere in the impugned order of the Adjudicating Authority. There is no

merit in the Appeal. Appeal is dismissed.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical) NEW DELHI

5th December, 2023

Archana

Company Appeal (AT) Insolvency No. 527 of 2023