2021 (6) TMI 1095 - Tri - Insolvency and Bankruptcy

Tribunal Orders Resumption of Water Supply to Corporate Debtor, Cites Insolvency Code

The Tribunal directed the Respondents to resume water supply to the Corporate Debtor, emphasizing adherence to Section 14(2A) of the Insolvency and ... Seeking to give directions to the Respondents to resume uninterrupted flow of water to the Corporate Debtor so as to enable the Corporate Debtor to generate electricity, which is the business of the Corporate Debtor - HELD THAT:- The Law is very clear that supplier of goods or provider of service of the Corporate Debtor cannot stop such supply or stop to provide service but the RP has to pay the expenses to procure such supply or services to keep the Corporate Debtor as going concern. The Respondents are directed to restart the water supply subject to payment of the transport charges as claimed as per 2014 water supply agreement and as per invoices raised by the Respondent. Application allowed. Issues: Application for directions to resume uninterrupted water supply to Corporate Debtor due to non-payment of water transport charges. Interpretation of Section 14(2A) of the Insolvency and Bankruptcy Code, 2016.Issue 1: Application for directions to resume uninterrupted water supply to Corporate Debtor due to non-payment of water transport charges.The application filed by the RP of M/s. KSK Mahanadi Power Company Limited sought directions for the Respondents to resume the uninterrupted flow of water to the Corporate Debtor to facilitate electricity generation, crucial for the Corporate Debtor's business operations. The Respondent had halted water supply citing non-payment of water transport charges, posing a threat to the Corporate Debtor's viability as a going concern.Issue 2: Interpretation of Section 14(2A) of the Insolvency and Bankruptcy Code, 2016.The Tribunal deliberated on Section 14(2A) of the Insolvency and Bankruptcy Code, 2016, which mandates that the supply of goods or services essential for preserving the value of the corporate debtor and managing its operations as a going concern should not be terminated during the moratorium period. The law stipulates that the supply of goods or services to the Corporate Debtor cannot be discontinued, provided the RP pays the necessary expenses to maintain the Corporate Debtor's operations. The Tribunal emphasized adherence to the law without further elaboration.In light of the legal provisions, the Tribunal directed the Respondents to recommence the water supply to the Corporate Debtor, contingent upon settling the transport charges as per the 2014 water supply agreement and the invoices issued by the Respondent. The application was allowed, and the matter was disposed of accordingly.