Court rules Official Liquidator not required to disclose outstanding electricity dues to bidders

The Court dismissed both applications, ruling that the Official Liquidator was not obligated to inform bidders about outstanding electricity dues or include specific terms in sale advertisements regarding such dues. The Court held that the existing terms and conditions for the sale of assets already covered liabilities, making additional notifications unnecessary. The Court emphasized that the prayers of the applicants were not in accordance with the Companies Act and relevant rules, and that the provisions of the Gujarat Electricity Regulatory Commission did not apply to the liquidation process.

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Issues Involved:
1. Whether the Official Liquidator should inform bidders about outstanding electricity dues.
2. Whether the Official Liquidator should include specific terms in sale advertisements regarding outstanding electricity dues.
3. Whether the prayers of the applicants are in accordance with the Companies Act and relevant rules.
4. Applicability of the Gujarat Electricity Regulatory Commission (GERC) Notification and Supply Code to the liquidation process.

Detailed Analysis:

Issue 1: Informing Bidders About Outstanding Electricity Dues
The applicants, Torrent Power Ltd. and Paschim Gujarat Vij Company Ltd., requested that the Official Liquidator inform potential bidders about outstanding electricity dues. They argued that new connections would not be provided unless these dues, with interest, were fully paid. The Official Liquidator contended that the applicants had no locus under the Companies Act, 1956, and were at most preferential creditors. The Court noted that the terms and conditions for the sale of assets already provided that purchasers would be liable for all local dues and taxes, making additional notification unnecessary.

Issue 2: Including Specific Terms in Sale Advertisements
The applicants sought to include specific terms in sale advertisements that stated new electricity connections would not be granted unless outstanding dues were paid. The Official Liquidator argued that this was not required under the Companies Act or the Companies (Court) Rules, 1959. The Court agreed, stating that the existing terms and conditions already covered the necessary liabilities and that the applicants should lodge their claims through the appropriate process. The Court emphasized that the sale was on an "as is where is and whatever there is basis," and the purchasers were already informed of their liabilities.

Issue 3: Prayers in Accordance with the Companies Act and Relevant Rules
The Court examined whether the prayers of the applicants were in accordance with the Companies Act and the Rules. It found that the applicants' requests were contrary to the provisions of the Act and the Rules. The Court highlighted that the Official Liquidator's duties and the process of asset disposal were governed by Sections 429, 429A, 457, 529, 529A, and 530 of the Act, and Rules 149, 272, and 273. The Court concluded that the applicants' prayers were not supported by any provision in the Act or the Rules.

Issue 4: Applicability of GERC Notification and Supply Code
The applicants argued that the GERC Notification and Supply Code, specifically Regulation 4.1.11, required that new connections not be provided if dues were outstanding. The Court held that the provisions of the Indian Electricity Act, 2003, and the Supply Code did not apply to the liquidation process under the Companies Act. The Court noted that the electricity companies had already disconnected the connections for non-payment and that any new connection would be a matter between the purchaser and the electricity company, not the Official Liquidator.

Conclusion:
The Court dismissed both applications, stating that the applicants were not entitled to the reliefs sought. It held that the Official Liquidator was not required to include specific terms about outstanding electricity dues in sale advertisements and that the existing terms and conditions already adequately informed purchasers of their liabilities. The Court emphasized that the liquidation process must adhere to the provisions of the Companies Act and the Rules, and the applicants' requests were outside the scope of these provisions.

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