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Issues: (i) Whether pre-CIRP electricity arrears could be enforced against the successful resolution applicant despite approval and implementation of the resolution plan; (ii) Whether the respondent could insist on payment of those arrears as a condition for granting electricity connection and retain the amount paid under protest.
Issue (i): Whether pre-CIRP electricity arrears could be enforced against the successful resolution applicant despite approval and implementation of the resolution plan.
Analysis: A resolution plan approved under the Insolvency and Bankruptcy Code binds all stakeholders, and once the plan is implemented and management changes hands, the corporate debtor is to be treated as revived on a clean slate. Claims that were not part of the resolution process cannot be subsequently fastened on the successful resolution applicant for a period anterior to approval of the plan. The protection under Section 32A reinforces that the new management is not to be burdened with liabilities arising from the past management, and statutory dues for a pre-resolution period cannot be revived outside the resolution framework.
Conclusion: The pre-CIRP electricity arrears could not be enforced against the successful resolution applicant.
Issue (ii): Whether the respondent could insist on payment of those arrears as a condition for granting electricity connection and retain the amount paid under protest.
Analysis: Although the electricity law permits disconnection and recovery in default, those powers cannot override the binding effect of an approved resolution plan. A stipulation requiring clearance of pre-resolution dues before reconnection could not survive once those dues stood outside the permissible claims under the insolvency resolution process. The amount paid under protest was obtained only to secure reconnection and could not be retained as a recoverable liability of the revived corporate debtor. The allied relief for issuance of a no objection certificate and no dues certificate followed from the same conclusion.
Conclusion: The respondent could not insist on payment of the barred arrears, and the amount paid under protest had to be credited back or adjusted, with consequential issuance of the requested certificates.
Final Conclusion: The application succeeded, and the resolution applicant was granted relief against recovery of the pre-resolution electricity dues from the revived corporate debtor.
Ratio Decidendi: Once a resolution plan is approved and implemented under the Insolvency and Bankruptcy Code, all pre-resolution claims not forming part of that process stand extinguished and cannot later be enforced against the successful resolution applicant or the revived corporate debtor.
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