Going-concern sale in liquidation permits restoration of electricity; pre-liquidation utility dues must go through the insolvency waterfall.

When a corporate debtor is sold as a going concern in liquidation, the purchaser is entitled to restoration of essential utility services needed for continued operations, and the electricity supplier cannot insist on clearance of pre-liquidation dues as a condition precedent to reconnection. The corporate debtor is treated as surviving for business continuity purposes, the Insolvency and Bankruptcy Code prevails over inconsistent recovery demands, and the supplier's past dues must be dealt with through the liquidation waterfall. The purchaser must bear statutory charges and future electricity dues from the date of reconnection, and the connection is to be energised after completion of the required formalities.

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Issues: Whether the successful purchaser of a corporate debtor sold as a going concern in liquidation was entitled to restoration and energisation of electricity connection in the name of the corporate debtor, and whether the electricity supplier could insist on clearance of past dues before such reconnection.

Analysis: The sale was treated as a sale of the corporate debtor as a going concern under the liquidation regulations. On that basis, the corporate debtor was held to survive for the purposes of carrying on business, and the acquirer was entitled to step into the position necessary for continued operations. The order also applied the principle that the Insolvency and Bankruptcy Code has overriding effect, and directed that the electricity connection be restored after the purchaser had already deposited the required amount. The supplier's dues were to be dealt with in accordance with the liquidation waterfall, while the purchaser was required to bear statutory charges and future electricity dues from the date of reconnection.

Conclusion: The application was allowed. The electricity supplier was directed to complete the necessary documentation and energise the connection for the corporate debtor, refund any excess security deposit, and pursue its dues through the liquidation process in accordance with the Code.

Ratio Decidendi: When a corporate debtor is sold as a going concern in liquidation, the acquirer is entitled to restoration of essential utility services needed for continued operations, and pre-liquidation dues of the utility must be addressed through the insolvency waterfall rather than as a condition precedent to reconnection.

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