Tribunal rules on liability for pre/post-CIRP electricity dues under Insolvency and Bankruptcy Code

The Tribunal held that the Successful Auction Purchaser is not liable for pre-CIRP and post-CIRP electricity dues of the Corporate Debtor. It emphasized that the liability for these dues rests with the Corporate Debtor under Section 53 of the Insolvency and Bankruptcy Code. The Tribunal also ruled that the General Terms and Conditions of Supply cannot override the IBC provisions, giving precedence to the latter. The Tribunal distinguished a Supreme Court judgment cited by the Appellant, stating it does not apply due to the different statutory contexts. The Tribunal upheld the Adjudicating Authority's order regarding electricity connection and costs, granting liberty for further applications if needed.

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Issues Involved:
1. Liability of the Successful Auction Purchaser for pre-CIRP and post-CIRP electricity dues.
2. Applicability of Regulation 8.4 of the General Terms and Conditions of Supply.
3. Interpretation of Section 53 of the Insolvency and Bankruptcy Code (IBC), 2016.
4. Relevance of the Supreme Court judgment in 'Telangana State Southern Power Distribution Company Ltd. & Anr. vs. M/s Srigdhaa Beverages' to the present case.

Issue-Wise Detailed Analysis:

1. Liability of the Successful Auction Purchaser for pre-CIRP and post-CIRP electricity dues:
The Tribunal examined whether the Successful Auction Purchaser (Respondent No. 1) is liable to pay the electricity dues of the Corporate Debtor accrued both before and during the Corporate Insolvency Resolution Process (CIRP). The Tribunal concluded that the liability for these dues lies with the Corporate Debtor and not with the Successful Auction Purchaser. The dues incurred before the CIRP are considered operational debts and must be settled according to Section 53 of the IBC. The dues during the CIRP are treated as insolvency process costs, also payable under Section 53. Thus, the Successful Auction Purchaser is not liable for these dues.

2. Applicability of Regulation 8.4 of the General Terms and Conditions of Supply:
Regulation 8.4 states that the seller of the property should clear all dues to the electricity company before selling the property. The Tribunal found that this regulation cannot override the provisions of the IBC. The IBC, being a special statute with an overriding effect under Section 238, takes precedence over the General Terms and Conditions of Supply. Therefore, the Appellant (electricity provider) cannot demand the Successful Auction Purchaser to clear the dues of the Corporate Debtor.

3. Interpretation of Section 53 of the Insolvency and Bankruptcy Code (IBC), 2016:
Section 53 of the IBC outlines the order of priority for the distribution of proceeds from the sale of the liquidation estate. The Tribunal emphasized that the Appellant's claims for pre-CIRP and post-CIRP dues must be settled according to this section. The Tribunal noted that the Appellant had already filed its claim with the Liquidator, and these claims would be addressed as per the statutory scheme of the IBC.

4. Relevance of the Supreme Court judgment in 'Telangana State Southern Power Distribution Company Ltd. & Anr. vs. M/s Srigdhaa Beverages' to the present case:
The Appellant cited this Supreme Court judgment to argue that the Successful Auction Purchaser should be liable for the electricity dues. However, the Tribunal distinguished the present case from the Supreme Court case, noting that the latter involved an auction under the SARFAESI Act, 2002, with specific terms making the purchaser liable for dues. In contrast, the present case involves a sale under the IBC, where the statutory scheme for settling claims under Section 53 must be followed. The Tribunal held that the Supreme Court judgment does not apply to the present case due to the different statutory contexts.

Conclusion:
The Tribunal upheld the Adjudicating Authority's order directing the Appellant to energize the electricity connection for the Corporate Debtor and refund the balance amount after retaining the security deposit. The Tribunal granted liberty to the Appellant to file an appropriate application before the Adjudicating Authority regarding its entitlement to pre-CIRP and post-CIRP costs if not already filed. The appeal was disposed of accordingly.

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