Sanctioned rehabilitation scheme binds recovery claims, but a voluntary deposit for power restoration was not refundable.

A sanctioned rehabilitation scheme treated as an approved resolution plan was held binding in its terms, including waiver of penal interest, compound interest and similar charges up to the sanction date; the later recovery order was therefore not sustainable against the applicant-company. The order of de-registration was read as preserving implementation of the unimplemented portion of the sanctioned scheme, so the respondent-board could not recover electricity dues inconsistently with that scheme. By contrast, the claim for refund of the deposited sum failed because the amount was paid pursuant to an undertaking during appeal proceedings to secure restoration of power supply, and the record did not show payment under protest. The disposal was thus partly in favour of the applicant-company.

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Issues: (i) Whether the respondent-board was bound by the sanctioned rehabilitation scheme and barred from recovering electricity dues in terms of the later recovery order. (ii) Whether the applicant-company was entitled to refund of the sum of Rs. 5,00,000 deposited during the earlier appeal proceedings.

Issue (i): Whether the respondent-board was bound by the sanctioned rehabilitation scheme and barred from recovering electricity dues in terms of the later recovery order.

Analysis: The sanctioned scheme under the sick-company framework was treated as an approved resolution plan by operation of the insolvency law transitional provision. The sanctioned scheme had not been challenged, and the scheme itself required waiver of penal interest, compound interest, liquidated damages and similar charges up to the date of sanction. The scheme period had run its course, but the order of de-registration specifically preserved implementation of the unimplemented portion of the sanctioned scheme. In that view, the respondent-board remained bound by the scheme and could not enforce recovery contrary to it.

Conclusion: The issue was decided in favour of the applicant-company. The respondent-board was held bound by the sanctioned scheme and its recovery order was held not sustainable.

Issue (ii): Whether the applicant-company was entitled to refund of the sum of Rs. 5,00,000 deposited during the earlier appeal proceedings.

Analysis: The record showed that the amount was deposited pursuant to an undertaking given in the appeal process for restoration of power supply. The material on record did not establish that the payment was made under protest. Since the deposit was voluntary and linked to the benefit of reconnection, no basis was made out for refund.

Conclusion: The issue was decided against the applicant-company. The claim for refund of Rs. 5,00,000 was rejected.

Final Conclusion: The applicant-company obtained relief against the respondent-board's attempted recovery, but its separate monetary claim for refund failed, resulting in a partly favourable disposal.

Ratio Decidendi: A sanctioned rehabilitation scheme that is deemed to be an approved resolution plan must be given effect to according to its terms, but a voluntary payment made to secure restoration of a service cannot be refunded merely because related recovery claims are later disallowed.

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