Set-off unavailable for escrow funds paid for CIRP electricity supply; adjustment against pre-admission dues rejected.

Escrow funds deposited for electricity supply during the CIRP period were held to be payable to the electricity board, because the deposit was made under interim Tribunal directions as consideration for restoration of supply. The resolution professional could not use the resolution plan to adjust those sums against alleged pre-admission dues, as the money had already been validly paid for current supply and no subsisting mutual obligations existed to support set-off. The proposed adjustment was rejected and the escrow amount was directed to be released to the electricity board.

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Issues: Whether the amount deposited in the escrow account towards electricity bills for the CIRP period was liable to be released to the electricity board, and whether the resolution professional could adjust or set off that amount against alleged pre-admission dues.

Analysis: The amount in escrow had been deposited pursuant to the Tribunal's interim directions as consideration for restoration of electricity supply during the CIRP period. The electricity board was not shown to be a creditor whose dues could be adjusted against any subsisting liability owed by it to the corporate debtor. The resolution plan could not affect money already paid towards pre-admission dues, nor could a unilateral treatment in the plan create a right of adjustment in respect of sums that had already been validly deposited for current supply during CIRP. Set-off was held to be inapplicable in the absence of mutual obligations subsisting between the parties.

Conclusion: The escrow amount was directed to be released to the electricity board, and the proposed adjustment against pre-admission payments was rejected.

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