2019 (7) TMI 1019 - Tri - Insolvency and Bankruptcy

Tribunal approves change from High to Low Transmission power supply for Iron & Steel manufacturer in liquidation

M/s. Sree Ramakrishna Alloys Limited Versus Eastern Power Distribution Company of AP Ltd

The Tribunal granted the interlocutory application, directing the Liquidator to request changing the power supply category from High Transmission to Low ... Change of supply of power from High Transmission category to Low Transmission category for lighting purpose alone to safeguard the assets of the Company - It is the case of Applicant / Liquidator that electricity connection to the Corporate Debtor is only for lighting purpose to safeguard the assets of the Corporate Debtor for which HT Power Service Line is not necessary and thus, prayed this Tribunal to direct the Respondent to change the supply of power from High Transmission Category to Low Transmission Category - HELD THAT:- This Application is filed by Liquidator for a direction to Eastern Power Distribution Company of A.P Limited (APEPDCL) to change the supply of power to M/s Sree Ramakrishna Alloys Limited (Corporate Debtor) from High Tension category to Low Tension category for reasons stated in the Application. The Liquidator is first directed to move the APEPDCL by making necessary application for change of supply of power to Corporate Debtor/ M/s Sree Ramakrishna Alloys Limited from High Tension category to LT category. The procedure if any prescribed for change be first followed by Liquidator. The APEPDCL is directed to respond to the request if any made by the Liquidator on behalf of M/s Sree Ramakrishna Alloys Limited for change of category of supply of power, as requested. Application is allowed directing the Liquidator at the first instance to apply to APEPDCL for change of power supply to the Corporate Debtor / M/s Sree Ramakrishna Alloys Limited from HT category to LT category and in case such request is made and if it is in accordance with the Rules, the APEPDCL is directed to consider the request favourably and effect change from HT category to LT category for the Corporate Debtor / M/s Sree Ramakrishna Alloys Limited. Application allowed. Issues Involved:Interlocutory Application seeking direction to change power supply category from High Transmission to Low Transmission for lighting purpose to safeguard assets of the Company under liquidation.Analysis:The judgment pertains to an interlocutory application filed by the Applicant/Liquidator regarding changing the power supply category from High Transmission to Low Transmission for lighting purposes to protect the assets of the Corporate Debtor, M/s Sree Ramakrishna Alloys Limited, under liquidation. The application was filed under Section 60(5) read with Rule 11 of the NCLT, 2016. The Tribunal considered the circumstances where the Corporate Debtor's factory operations had ceased, rendering the high transmission power line unnecessary. The Applicant highlighted that the Corporate Debtor was receiving substantial electricity bills despite not utilizing the HT connection. The Liquidator sought direction to change the power supply category to LT, emphasizing the cost-effectiveness of LT tariff rates compared to HT rates.The Tribunal acknowledged the situation of the Corporate Debtor being in the Iron and Steel manufacturing business, previously requiring HT power service for operations now ceased. Considering the closure of operations, the Tribunal agreed with the Liquidator's contention that the high transmission power line was no longer essential. The Liquidator was instructed to initiate the process by submitting a request to the Eastern Power Distribution Company of Andhra Pradesh Limited (APEPDCL) for the change of power supply category from HT to LT for M/s Sree Ramakrishna Alloys Limited. The Tribunal directed the APEPDCL to respond to the Liquidator's application and to effect the change if the request complied with the prescribed procedures and rules.In conclusion, the Tribunal allowed the application, instructing the Liquidator to formally request the change of power supply category to LT for the Corporate Debtor. If the application met the regulatory requirements, the APEPDCL was mandated to facilitate the change. Additionally, the Liquidator was advised to seek further directions from the Tribunal if needed during the process. This judgment ensures the efficient management of assets during the liquidation process by optimizing operational costs through appropriate power supply adjustments.