Resolution plan extinguishes pre-CIRP electricity dues and overrides contractual and regulatory barriers to reconnection.

Approval of a resolution plan under the Insolvency and Bankruptcy Code extinguishes pre-CIRP claims not included in the plan, because Section 31(1) binds all stakeholders and Section 238 gives the Code overriding effect. The earlier electricity dues, not lodged in the CIRP, therefore did not survive and could not be enforced after approval. Contractual terms and State supply regulations could not override the Code, and the distribution licensee remained bound by its statutory duty to supply electricity on request. The attempt to refuse reconnection on the basis of stale dues was thus untenable.

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Issues: (i) Whether the appellant's pre-CIRP electricity dues survived after approval of the resolution plan under the Insolvency and Bankruptcy Code, 2016. (ii) Whether the appellant could insist on payment of the old dues or rely on the earlier agreement and supply regulations to refuse electricity connection after the resolution plan was approved.

Issue (i): Whether the appellant's pre-CIRP electricity dues survived after approval of the resolution plan under the Insolvency and Bankruptcy Code, 2016.

Analysis: The electricity dues related to the period before commencement of CIRP and the appellant had not lodged any claim before the resolution professionals. Once the resolution plan was approved, Section 31(1) made it binding on all stakeholders, and Section 238 gave the Code overriding effect. The settled position applied was that claims not forming part of the approved resolution plan stand frozen and are extinguished on approval.

Conclusion: The pre-CIRP dues did not survive and stood extinguished. This finding is in favour of the assessee.

Issue (ii): Whether the appellant could insist on payment of the old dues or rely on the earlier agreement and supply regulations to refuse electricity connection after the resolution plan was approved.

Analysis: The earlier contractual clause and the State supply regulations could not override the scheme of the Insolvency and Bankruptcy Code once the resolution plan had been approved. The appellant's reliance on Section 56 of the Electricity Act, 2003 and the supply code regulations could not defeat the Code's overriding effect. At the same time, Section 43 of the Electricity Act, 2003 casts a duty on the distribution licensee to supply electricity on request, and the respondent offered to pay fresh connection charges.

Conclusion: The appellant could not refuse reconnection on the basis of the extinguished past dues, and it was bound to provide electricity connection. This finding is in favour of the assessee.

Final Conclusion: The approved resolution plan wiped out the appellant's earlier recoverable claim, and the statutory duty to supply electricity could not be denied by invoking stale dues or inconsistent State regulations. The writ appeal was therefore liable to fail.

Ratio Decidendi: On approval of a resolution plan, all pre-resolution claims not included in the plan stand extinguished, and inconsistent contractual or subordinate regulatory conditions cannot be used to defeat the statutory duty to supply electricity where the governing insolvency law has overriding effect.

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