Resolution plan extinguishes pre-plan electricity dues, but fresh supply restoration may still require lawful security deposit.

An approved resolution plan under insolvency law binds stakeholders and extinguishes pre-plan electricity dues, so a distribution company cannot pursue post-approval recovery for those liabilities. However, the plan does not override independent statutory conditions governing fresh or restored electricity supply; a lawful security deposit may still be required for restoration of a high-tension connection. The insolvency framework gives the corporate debtor a fresh start, but it does not permit bypassing applicable electricity-law requirements for supply restoration. Accordingly, the pre-plan dues claim was disallowed, while the insistence on fresh security deposit for restoration was upheld.

---

---

Issues: (i) Whether the approved resolution plan extinguished past electricity dues claimed by the distribution company and barred its demand after approval of the plan; (ii) Whether restoration of high-tension electricity connections could be directed without insisting on fresh security deposit.

Issue (i): Whether the approved resolution plan extinguished past electricity dues claimed by the distribution company and barred its demand after approval of the plan?

Analysis: The approved resolution plan under the insolvency code has binding effect on all stakeholders and is intended to give the corporate debtor a fresh start by settling past liabilities. The overriding clause in the insolvency code operates in the insolvency field, which is distinct from the operation of the electricity law relied upon by the distribution company. The demand raised after approval of the plan could not be sustained against the corporate debtor or resolution applicant in respect of pre-plan dues.

Conclusion: The claim for past electricity dues after approval of the resolution plan was not maintainable.

Issue (ii): Whether restoration of high-tension electricity connections could be directed without insisting on fresh security deposit?

Analysis: Restoration of supply was sought after the connections had remained disconnected for years, and security deposit under the electricity regime was treated as a lawful precondition for a high-tension connection. Approval of the resolution plan does not authorize non-compliance with other applicable laws, and the concept of essential supply under insolvency law could not override the requirement of security deposit for a fresh or restored industrial power connection. The plan could not be used to bypass statutory conditions for obtaining electricity supply.

Conclusion: The direction for restoration without fresh security deposit was declined.

Final Conclusion: The application was rejected in substance, with the distribution company's entitlement to insist on security deposit upheld and the post-plan claim for past dues disallowed.

Ratio Decidendi: An approved resolution plan binds stakeholders and extinguishes pre-plan liabilities, but it does not override independent statutory conditions governing fresh or restored utility supply, including lawful security-deposit requirements.

---