Paschimanchal Vidyut Vitran Nigam ... vs Sandeep Goel Liquidator For Chaudhary ...

IN THE MATTER OF: Paschimanchal Vidyut Vitran Nigam Ltd. ...Appellant

Versus

Sandeep Goyal Liquidator for Chaudhary Ingots Pvt. Ltd. ...Respondent

Present: For Appellant : Mr. Vivek Narayan Sharma, Ms. Prachi Johri, Ms. Abhipsa Sahu, Mr, Abhay Chitravanshi, Ms. Shruti Priya Mishra, Advocates. For Respondent : Mr. Sandeep Goyal, Liquidator in person. Mr. Anil Kumar Bhatia, Mr. Mayank Singhal, Mr. Utkarsh Aswal, Mr. Mukul Bansal, Advocates for Liquidator.

ORDER

(Hybrid Mode)

08.11.2024: Heard learned counsel for the Appellant as well as learned

counsel appearing for the Liquidator. This appeal has been filed against order

passed by the Adjudicating Authority dated 03.04.2024 in IA No.147/2022 by

which the Adjudicating Authority has allowed the application filed by the

Liquidator for refund of the security amount of Rs.1,04,00,000/-. Aggrieved

by the order appeal has been filed by Paschimanchal Vidyut Vitran Nigam Ltd.

2. Learned counsel for the Appellant challenging the order submits that

on commencement of the liquidation the Appellant has filed a claim on

24.12.2021 to the Liquidator for a total amount of Rs.4,04,19,294/- and in

said claim it was mentioned that security amount has been adjusted. It is

Cont'd.../ 2

submitted that no response was given by the Liquidator to the claim

submitted by the Appellant and the Liquidator has filed an application before

the Adjudicating Authority in which impugned order has been passed.

3. Learned counsel for the Respondent opposing the submission of learned

counsel for the Appellant submits that the Adjudicating Authority has rightly

relied on judgment of Hon'ble Supreme Court in Bharti Airtel Ltd. and Another

vs. Vijaykumar V. Iyer and Others and the said adjustment was not

permissible as held by the Hon'ble Supreme Court.

4. We have considered the submissions of learned counsel for the parties

and perused the record.

5. Learned counsel for the Appellant at the onset submitted that Appellant

does not contend that provisions of Electricity Act shall override the IBC and

the said view taken by the Adjudicating Authority is not being contested.

6. In Insolvency and Bankruptcy Board of India (Liquidation Process)

Regulations, 2016, Regulation 29 provides for mutual credits and setoff.

Regulation 29 is as follows:

"29. Mutual credits and set-off.

Where there are mutual dealings between the corporate debtor and another party, the sums due from one party shall be set off against the sums due from the other to arrive at the net amount payable to the corporate debtor or to the other party."

Company Appeal (AT) (Insolvency) No.1081 of 2024 3

7. The claim form which was filed by the Appellant as Annexure A-3 is as

follows:

"SCHEDULE II FORM C

PROOF OF CLAIM BY OPERATIONAL CREDITORS EXCEPT WORKMEN AND EMPLOYEES

(Under Regulation 17 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016)

24-12-2021 To The Liquidator Sh Sandeep Goel Insolvency Professional Regd. Office-410, Pratap Bhawan 5, Bahadur Shah Zafar marg. New Delhi-110002 Regd E-mail-cmasandeepgoel@gmail.com

From Anil Kumar Verma Executive Engineer Electricity urban Distribution Division III Pvval Muzaffarnagar-251001 E-mail-eeeudd3mzn@gmail.com

Subject: Submission of proof of claim in respect of the liquidation of MS Chaudhary Ingot Pvt Ltd. Meerut Road Muzaffarnagar under the Insolvency and Bankruptcy Code, 2016.

Madam/Sir,

Anil Kumar Verma hereby submits this proof of claim in respect of the liquidation of MS Chaudhary Ingots Pvt Ltd. Meerut Road Muzaffarnagar. The details for the same are set out below:

Company Appeal (AT) (Insolvency) No.1081 of 2024 4

1. NAME OF OPERATIONAL PVVNL MEERUT CREDITOR (IF AN INCORPORATED Registered Office - Executive Engineer BODY PROVIDE IDENTIFICATION Electricity urban Distribution Division NUMBER AND PROOF OF III INCORPORATION, IF A Pvvnl Muzaffarnagar - 251001 PARTNERSHIP OR INDIVIDUAL E-mail - eeeudd3mzn@gmail.com PROVIDE IDENTIFICATION RECORDS* OF ALL THE PARTNERS OR THE INDIVIDUAL)

2. ADDRESS OF OPERATIONAL Executive Engineer Electricity urban CREDITOR FOR Distribution Division III - 16 Tikait CORRESPONDENCE Vihar near Vasundhara Residency Muzaffarnagar - 251001

3. TOTAL AMOUNT OF CLAIM, PRINCIPAL : 3,48,44,219 INCLUDING ANY INTEREST, AS AT INTEREST : 55,75,075 LIQUIDATION COMMENCEMENT TOTAL CLAIM : 4,04,19,294 DATE AND DETAILS OF NATURE OF CLAIM

4. DETAILS OF DOCUMENTS BY Electricity bills and detail of Claim REFERENCE TO WHICH THE DEBT amount CAN BE SUBSTANTIATED

5. DETAILS OF ANY DISPUTE AS NA WELL AS THE RECORD OF PENDENCY OF SUIT OR ARBITRATION PROCEEDINGS

6. DETAILS OF HOW AND WHEN Consumer Ms Choudhry Ingot Pvt. Ltd.

DEBT INCURRED did not pay their electricity bill dues

7. DETAILS OF ANY MUTUAL CREDIT, NONE MUTUAL DEBTS, OR OTHER MUTUAL DEALINGS BETWEEN THE CORPORATE DEBTOR AND THE OPERATIONAL CREDITOR WHICH MAY BE SET-OFF AGAINST THE CLAIM

8. DETAILS OF ANY RETENTION OF Security Amount Adjusted in Claim TITLE IN RESPECT OF GOODS OR PROPERTIES TO WHICH THE DEBT REFERS OR ANY OTHER SECURITY 8A. WHETHER SECURITY INTEREST Yes/ No (for secured creditor) RELINQUISHED

9. DETAILS OF ANY ASSIGNMENT OR NONE TRANSFER OF DEBT IN HIS FAVOUR

Company Appeal (AT) (Insolvency) No.1081 of 2024 5

10. DETAILS OF THE BANK ACCOUNT PNB VIKAS BHAWAN MEERUT ROAD TO WHICH THE OPERATIONAL MUZAFFARNAGAR ACCOUNT NO CREDITOR'S SHARE OF THE 6848002100001945 IFSC-

PROCEEDS OF LIQUIDATION CAN PUNB0684800 BE TRANSFERRED

11. LIST OUT AND ATTACH THE (i) Electricity Bills DOCUMENTS RELIED ON IN (ii) Consumer Ledger SUPPORT OF THE CLAIM. (iii) Calculation sheet

Signature of operational creditor or person authorised to act on his behalf (Please enclose the authority if this is being submitted on behalf of the operational creditor)

Name in BLOCK LETTERS ANIL KUMAR VERMA Position with or in relation to creditor EXECUTIVE ENGINEER Address of person signing: Executive Engineer Electricity urban Distribution Division III - 16 Tikait Vihar near Vasundhara Residency Muzaffarnagar - 251001.

*PAN, Passport, AADHAAR Card or the identity card issued by the Election Commission of India.

8. When we look into Clause 8 of the Claim Form, in the claim itself the

security amount was adjusted i.e. said amount was set off. The Adjudicating

Authority in Para 27 of the judgment has referred to judgment of Hon'ble

Supreme Court in Bharti Airtel Ltd. and Another vs. Vijaykumar V. Iyer and

Others, which was a case of the CIRP. However, the judgment which has been

extracted in Para 27 itself indicate that set off of account on mutual dealing

is permitted under Regulation 29. It is submitted that the Adjudicating

Authority has erred in observing that the amount set off by PVVNL against

anticipated claim cannot be permitted. The present is not a case of

anticipated claim but the claim filed by the Appellant is with adjustment of

security claim. The view of the Adjudicating Authority that there could not

have been set off/ adjustment of the claim by the Appellant cannot be

Company Appeal (AT) (Insolvency) No.1081 of 2024 6

approved. We, thus, are of the view that direction of the Adjudicating

Authority to pay Rs.1,15,33,600/- could not be sustained. The Appeal is

partly allowed to the above extent.

[Justice Ashok Bhushan] Chairperson

[Arun Baroka] Member (Technical) Archana/nn

Company Appeal (AT) (Insolvency) No.1081 of 2024