Pre-CIRP dues cannot block restoration of essential services after resolution plan approval, and a pending appeal without stay does not suspend it.

Pre-CIRP electricity dues were held extinguished on approval of the resolution plan under the Insolvency and Bankruptcy Code, so the supplier could not insist on payment of those dues as a condition for restoration of supply. The Court also held that a pending appeal against approval of the resolution plan, without an express stay, did not bar implementation of the plan or restoration of electricity supply; the recorded undertaking was confined to contempt proceedings and did not waive the right to seek relief. Restoration was directed subject to reconnection charges and the result of the pending appeal.

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Issues: (i) Whether the pre-CIRP electricity dues stood extinguished on approval of the resolution plan, so that the supplier could not insist on their payment as a condition for restoration of supply; (ii) Whether the pendency of the appeal against approval of the resolution plan, and the alleged undertaking before the appellate tribunal, barred the writ petitioners from seeking restoration of electricity supply.

Issue (i): Whether the pre-CIRP electricity dues stood extinguished on approval of the resolution plan, so that the supplier could not insist on their payment as a condition for restoration of supply.

Analysis: The Court held that the disconnection had taken place prior to commencement of the CIRP, and the dues claimed by the supplier related to that pre-CIRP stage. Once the resolution plan was approved, all pre-CIRP debts stood extinguished by operation of the Insolvency and Bankruptcy Code. The supplier's powers under the electricity law to recover dues and withhold reconnection did not survive in practical effect because there were no enforceable dues left to be cleared. The Court also held that the supplier's acceptance of the amount tendered under the approved resolution plan supported waiver of any further right to insist on old dues.

Conclusion: The pre-CIRP dues did not survive the approval of the resolution plan, and the supplier could not lawfully withhold restoration of electricity supply on that basis.

Issue (ii): Whether the pendency of the appeal against approval of the resolution plan, and the alleged undertaking before the appellate tribunal, barred the writ petitioners from seeking restoration of electricity supply.

Analysis: The Court held that mere pendency of an appeal does not operate as a stay in the absence of an express stay order. It further held that the undertaking recorded before the appellate tribunal was confined to not initiating contempt proceedings and did not amount to a waiver of the right to seek implementation of the approved resolution plan. The Court also relied on the balance of convenience, observing that restoration of supply was necessary to give effect to the approved resolution plan and revive the business, while causing no irreparable prejudice to the supplier.

Conclusion: The pendency of the appeal and the alleged undertaking did not bar relief, and the petitioners were entitled to seek restoration of electricity supply.

Final Conclusion: The writ petition succeeded, and the supplier was directed to restore electricity supply to the petitioner-company within the time stipulated, on payment of reconnection charges, subject to the result of the pending appeal.

Ratio Decidendi: Pre-CIRP debts extinguished by approval of a resolution plan cannot be enforced as a condition for restoration of essential services, and a pending appeal without stay does not suspend the legal effect of the approved plan.

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